1. New Dismissal Rules for High Earners
If you earn over $180,000 per year in your employment, your ability to file an unjustified dismissal claim against your employer could soon be off the table. This proposal—affecting around 3.4% of the workforce—aims to give businesses greater flexibility when hiring or firing top-level employees. However, high earners could still negotiate contractual protections or raise other types of personal grievances such as in the case of workplace discrimination or bullying.
2. Cracking Down on Employee Misconduct
A major shake-up is coming to personal grievance claims, focusing on serious misconduct by employees and remedy adjustments, with the aim to make workplace dispute resolutions fairer and more practical:
- No Compensation for Serious Misconduct: Employees who engage in serious misconduct will no longer receive compensation or be reinstated. This aims to prevent workers from benefiting when their own actions led to their dismissal.
- Reduced Compensation for Misconduct: If an employee contributed to the circumstances of their grievance, their compensation could be reduced by up to 100%. This ensures that both the employer’s and employee’s actions in the context of a personal grievance are considered.
- Accountability for Both Sides: Authorities must now look at whether an employee’s behaviour made it harder for their employer to act fairly. This is to ensure a balanced approach to workplace disputes.
- Less Focus on Minor Mistakes: Employees will find it harder to challenge dismissals over small technical errors made by the employer, if the employer’s actions were fair overall.
3. Minimum Wage Increase
Good news for minimum wage earners! From 1 April 2025, the adult minimum wage will rise to $23.50 per hour—a small but notable increase.
4. Clearer Rules for Contractors
A new "gateway test" will determine who qualifies as an independent contractor. If workers meet conditions such as having a written agreement specifying the relationship is principal-contractor and enjoy work flexibility, they’ll be classified as contractors—potentially reducing costly legal battles over employment status. Click here to read our article on Contractors v Employees.
5. Risk-Free Termination Agreements
A proposed Termination by Agreement Bill could allow employers and employees to mutually agree to end employment without the risk of future legal claims. Pre-termination discussions would also be inadmissible in future disputes—though specific conditions will apply. Updates on this Bill can be followed at Employment Relations (Termination of Employment by Agreement) Amendment Bill.
6. Removal of “Pay Secrecy” Clauses in Employment Agreements
A proposed Employee Remuneration Disclosure Bill will protect an employee’s rights to discuss their remuneration with another employee, or disclose their remuneration to any other person by preventing an employer from engaging in “adverse conduct” as a result. For example, an employer will not be able to dismiss or disadvantage an employee for discussing remuneration and that employee would have a personal grievance. Updates on this Bill can be followed at Employment Relations (Employee Remuneration Disclosure) Amendment Bill .
7. Simplifying Annual Leave with Holidays Act Reform
The government is aiming to cut the complexity of leave entitlements with a new hours-based accrual model for annual leave. While this may delay legislative changes, it’s expected to align with how many payroll systems already operate.
What This Means for You
With these game-changing employment law reforms on the horizon, both businesses and employees need to stay ahead of the curve. Whether you're an employer navigating new dismissal rules or an employee assessing your rights, these updates could have a major impact on your workplace.
Conclusion
These upcoming employment law changes will significantly reshape workplace rights and responsibilities in New Zealand. From stricter rules to govern personal grievances and misconduct claims against employers, to clearer contractor classifications and wage increases, both employers and employees need to be prepared for the evolving legal landscape.
At Burley Castle Hawkins Lawyers, we are closely tracking these developments to help businesses and individuals navigate the changes with confidence. If you have any questions about how these reforms may impact you or your business, our employment law team is here to provide expert guidance and support. Stay informed, stay compliant, and reach out to us for tailored advice on these crucial updates.
By Michael Ritter | Solicitor | 07 571 8076 | michaelr@bchlaw.co.nz
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter.
