Representing the most sweeping changes to the Employment Relations Act since its inception, the Employment Relations Amendment Bill has received Royal Assent and is in force from 21 February 2026.
In this article from our recently published Litigation Forecast, our team looks ahead to the impact these changes will likely have on the employment law landscape in 2026.
Those changes are summarised at a high level below:
| Change | New legal position |
| “Specified Contractor” Gateway Test | Creates a statutory test that determines when a worker is a contractor and excludes them from employee rights if all five criteria are met. |
| High Income Threshold Removes Unjustified Dismissal Rights | Employees earning NZD $200,000+ in total remuneration cannot bring unjustified dismissal personal grievances. The new framework incorporates a 12 month transition period for parties to opt back into the personal grievance regime or agree bespoke terms. |
| Stronger Misconduct Linked Personal Grievance Reductions | Remedies may be reduced up to 100% if employee conduct contributed to the grievance; serious misconduct can eliminate remedies entirely. |
| Removal of the 30 Day Rule | New employees no longer automatically start on collective agreement terms. They must still be informed of, and receive a copy of, the collective agreement. |
| Transitional Application Rules | Most changes take effect the day after Royal Assent, with exceptions for non retrospective contractor rules and transitional carve outs for high income dismissal changes. |
The other change that have been mentioned (Holidays Act reform and the Private Members Bill regarding termination of employment by agreement) are not covered by this change. We will be monitoring those developments closely and will provide an update on those once more information is available.
If you would like more information on how these reforms may affect your organisation, please contact one of our experts.
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