Employment Relations Act Amendment

On 21 February 2026, the Employment Relations Amendment Act 2025 came into force, bringing significant changes to collective bargaining obligations, worker classification, remedies for personal grievances, and loss of personal grievances for high income earners. This update outlines the key features of the Act. 

Collective Agreements 

The Act retains core requirements for employers when engaging new employees. Employers must continue to inform new employees if a collective agreement covers the work to be performed, advise that the employee may join the relevant union, provide information on how to contact that union, and supply the employee with a copy of the applicable agreement. 

Where multiple collective agreements apply, these obligations attach to the agreement that covers the greatest number of the employer’s current employees performing similar work. Employers must also notify the employee of any other applicable collective agreement. 

A major change is the removal of the 30 day rule, which previously required new employees who were not union members to be employed on the terms and conditions of the collective agreement for their first 30 days.  

Another important change affects the sharing of new employee information with unions. Previously, employers were required to provide this information unless the employee objected. The new Act reverses this presumption: employers must now obtain the employee’s express agreement before notifying the union and must do so as soon as practicable after the employee enters into an individual employment agreement. 

Employee vs Specified Contractor

The Act introduces a new classification, the “specified contractor,” which is excluded from the statutory definition of “employee” under section 6 of the Employment Relations Act 2000. 

A person will be a specified contractor if: 

• they have a written agreement clearly stating they are an independent contractor, not an employee; 
  
  
• they are not restricted from performing work for others (except while actually performing contracted work), noting that contracted hours alone do not amount to a restriction; 
  
  
• they are either not required to work at specified times or may subcontract their work (subject only to lawful vetting requirements); 
  
  
• they cannot be terminated for refusing additional work beyond what was agreed; 
  
  
• they had a reasonable opportunity to obtain independent advice before entering the agreement. 

If these criteria are not met, the Authority or Court must still consider the real nature of the relationship, including the traditional control, financial, and integration tests. 

Remedies for Employees 

The Act materially changes the personal grievance remedies framework. Where a grievance is upheld: 

• all remedies must be denied if the employee’s contributing behaviour amounts to serious misconduct; 
  
  
• reinstatement and compensation must be denied if the employee’s conduct contributed in any way to the situation leading to the grievance; 
  
  
• remaining remedies may be reduced by up to 100%. 

Remuneration Thresholds 

Employees earning $200,000 or more per year (adjusted over time in line with the Quarterly Employment Survey) are subject to modified rights. For such employees: 

• employers are not required to meet good faith procedural obligations relating to termination, including providing relevant information and an opportunity to comment; 
  
  
• employees cannot raise personal grievances for unjustified dismissal or unjustified disadvantage relating to dismissal. 

Parties may contract out of these provisions if they wish. There is a transitional period of 12 months for employees: working for the same employer or a different employer as a result of a restructuring, and who are earning $200,000 or more per year prior to 21 February 2026. 

Test of Justification Amendments 

When assessing employer actions, the Authority or Court must continue to consider established expectations of a fair investigation as well as whether the employee obstructed the employer’s investigative process. 

Additionally, a dismissal or action cannot be found unjustifiable solely because of procedural defects unless those defects resulted in the employee being treated unfairly. The previous distinction between major and minor defects has been removed. 

- Kathryn Dalziel

Kathryn is a senior barrister practising from Christchurch. She is an adjunct professor of practice, Faculty of Law at the University of Canterbury, with 35 years’ experience in civil litigation, employment and privacy law, and is a member of the Bar Association’s Employment Law and Privacy Committee.