The Employment Relations Amendment Bill 2025
The Government has introduced the Employment Relations Amendment Bill 2025, which aims to make New Zealand’s employment laws more business friendly by reducing compliance costs, increasing flexibility, and rebalancing the personal grievance system. For employers, particularly SMEs, this legislation could have a significant impact on how employment relationships are managed.
4 Key Changes for Employers:
1. Clarifying the Status of Contractors
The Bill introduces the category of “specified contractor”, making it easier for businesses to engage genuine independent contractors without the risk of them later being deemed employees. The specified contractor will be excluded from the test of employment. This would apply where:
· contractors have a written agreement stating they are independent;
· they are free to work for others, decline work, or subcontract tasks;
· they are not required to be available to work at certain times; and
· the business does not terminate the arrangement for not accepting an additional task.
This is designed to give employers greater certainty when structuring flexible work arrangements.
2. Employee Behaviour Included in Personal Grievances
The Bill claims to rebalances the personal grievance system by strengthening the role of employee conduct in outcomes by:
· removing eligibility to remedies for employees found guilty of serious misconduct;
· allowing the Employment Relations Authority, or Court to remove reinstatement, and compensation for hurt and humiliation and loss of any benefit, and reduce remedies by 100% if an employee’s behaviour contributed to the grievance;
· the Authority and Court will be required to consider whether the employees behaviour obstructed the employer’s ability to meet their obligations to act as a fair and reasonable employer; and
· increasing the threshold for procedural error to narrow the focus solely on whether any errors in the employer’s process resulted in the employee being treated unfairly
This means employers who follow a fair process but face obstructive or poor employee behaviour would have stronger legal backing in a personal grievance for unjustified dismissal.
3. High Income Employee Threshold for Personal Grievance
Employees earning over $180,000 per annum will be excluded from raising a personal grievance for unjustified dismissal (unless the parties agree otherwise in their contract).
This only applies to unjustified dismissal and unjustified disadvantage where the disadvantage relates to dismissal, but still allows grievances on other grounds such as discrimination and harassment.
For employers, this would reduce risk when managing senior or highly paid employees.
4. Removal of the 30 Day Rule and Collective Agreement Terms
The Bill looks to repeal certain obligations for new employees including:
· new hires will have no requirement for their employment agreements to reflect the terms of a collective agreement for the first 30 days of employment; and
· employers would no longer be required to distribute union forms or report employee choices to unions.
This would simplify the onboarding process and supports the Government’s intention for full 90-day trial access to all employers.
What This Means for Employers
For businesses, the Bill represents a shift toward greater flexibility, lower compliance burden, and stronger protections when handling disputes.
This is a Bill, meaning there are many more steps before the law may see any changes. The Employment Relations Amendment Bill has seen its First Reading, and public submissions have just closed.
There may be still be changes to the Bill after public submissions, the select committee, and house of representatives have settled proposed changes. But this signifies the government’s intention to loosen to guardrails for employers and promote flexible working, lower compliance and minimizing risks.
Final Thoughts
If it goes through, the Employment Relations Amendment Bill 2025 is likely to be welcomed by employers, particularly SMEs, as it reduces red tape and provides more certainty in employment relationships.
That said, the changes also place an emphasis on having clear contracts, and well documented processes. Employers who stay ahead of these shifts will be best positioned to take advantage of the increased flexibility while minimising risk.
At Gambit, we’ll continue to monitor these developments closely and help businesses navigate the practical implications for hiring, onboarding, and managing staff.
For more information please see:
· The Employment Relations Amendment Bill 2025.
Thomas Hoksbergen | Founder | 09 355 8324 | thomas@gambitrecruitment.co.nz