New Zealand’s employment law has just undergone its most significant overhaul in over two decades.
The Employment Relations Amendment Act 2026 came into force on February 21, 2026, and the changes are real, practical, and affect businesses of all sizes.
What’s changed and what it means for you
High earners lose unjustified dismissal rights. Employees earning over $200,000 per year can no longer bring a personal grievance claim for unjustified dismissal. If you employ senior staff at this level, your employment agreements and termination processes need updating to reflect this shift.
A clearer test for contractors vs employees
A new statutory “gateway test” now determines whether a worker is genuinely an independent contractor or an employee. This brings long overdue clarity but also means businesses relying on contractor arrangements need to make sure they pass the test. Getting this wrong remains costly.
Conduct now affects grievance payouts
Where an employee’s own conduct contributed to the situation, personal grievance remedies can now be reduced accordingly. This gives employers more confidence in managing performance and misconduct, but good processes still matter.
The 30-day collective agreement rule is gone
New employees can now choose individual employment agreements from day one, even if a collective agreement is in place. Unions can only be notified about new staff if the employee...
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