The Employment Relations Amendment Act came into effect on the 21st February, 2026, bringing with it some significant changes for employers. 

Here, we briefly break down the changes and recommend actions you can take now to ensure compliance. 

1. Clarifying employee vs contractor (“gateway test”)

The Act creates a statutory test to determine when a worker is truly a contractor, meaning they won’t be treated as an “employee” under the law if they meet certain criteria, such as:

• • a written agreement identifying them as a specified contractor;

• • freedom to work for others and no fixed hours or required availability;

• • the arrangement doesn’t end just because the contractor says no to extra work;

• • reasonable opportunity to get independent advice before signing.

2. Personal grievance changes

Personal grievance remedies are more tightly linked to employee behaviour:

• • If a worker’s conduct amounts to serious misconduct, and this is proven, they cannot receive remedies (e.g., compensation or reinstatement).

• • Courts and tribunals can reduce remedies up to 100% where the employee contributed to the grievance situation.

• • There’s a narrowed focus on procedural error – only where there was actual unfair treatment.

3. High-income threshold for unjustified dismissal claims

Employees whose total remuneration exceeds $200,000 will not be able to bring personal grievances for unjustified dismissal.  By making this a ‘total remuneration’ approach it encompasses anything processed via PAYE.  There will be a 12 month transitional period to allow employees captured by this to negotiate whether they wish to opt back into dismissal protections or agree bespoke termination terms.

4. Removal of the “30-day rule” and associated union information requirements

• • Employers are longer be required to employ new hires under the terms of a collective agreement for their first 30 days.

• • New employees must still be informed about the collective agreement and provided a copy,  but they won’t automatically be bound by it unless they choose to.

What to do now:
Practical steps for employers

Review and update contractor engagements

• • Audit your existing contractor agreements to ensure they meet the statutory gateway test if you intend them to be treated as non-employees.

• • Ensure agreements clearly reflect independence, absence of mandated hours, and non-termination for refusing extra work.

Reassess dismissal and grievance provisions

• • Identify your high-income employees and review their employment agreements. Look at any polices that may refer to dismissal and/or personal grievances and assess whether they require updating.

• • Consider how you may want to approach this and whether opting back in, or negotiating alternative terms would be your preferred method.

Amend onboarding and union info processes

• • Look at your current process and determine how you may remove compliance steps tied to the old 30-day rule.

• • Ensure HR communications clearly inform new hires of applicable collective agreements and union contact options.

Monitor implementation timing

• • Plan transitional approaches, particularly for current employees near the remuneration threshold.

Above all, seek expert advice. The changes introduced by this Bill represent a substantial shift in employment law. While some amendments reflect long‑standing requests from employers, the legislation also creates areas of uncertainty that will inevitably be tested in the Courts.

If you would like guidance on how best to navigate these developments within your organisation, our team is here to help. Every business operates differently, and it is important to consider how these changes apply to your specific circumstances.

Need advice? The team at Copeland McAllister is happy to support you with these upcoming changes. Give us a call on 03 211 0153 or email admin@cmalaw.co.nz. 

Disclaimer: This update provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.