The reforms tackle several pain points in the current system: unclear employment relationships, lengthy dispute processes, and administrative burden on employers. Here’s what’s actually changing in the Employment Relations Amendment Bill:
Clearer Employment Classifications
The most practical change is a new gateway test that distinguishes employees from independent contractors. Previously, this grey area led to countless disputes and uncertainty for both parties. Now there is a clearer framework to determine working relationships upfront, potentially saving everyone time and legal headaches.
Source: Increased certainty for contractors coming | Ministry of Business, Innovation & Employment
Serious Misconduct Consequences
The bill takes a harder line on workplace misconduct. Employees found guilty of serious misconduct will lose access to remedies like reinstatement or compensation for emotional distress. As Minister van Velden put it, this ensures “hardworking New Zealanders don’t see bad behaviour rewarded.. It’s a straightforward accountability measure that should raise workplace standards.
Source: Employment Relations Amendment Bill 175-1 (2025), Government Bill – New Zealand Legislation
Employee Choice from Day One
Gone is the 30-day rule that automatically enrolled new employees in collective agreements for their first month. Instead, workers can now choose their preferred agreement or negotiate individually from the start. Employers still need to inform new hires about available collective agreements and relevant unions, but the automatic enrolment is history.
This change streamlines hiring while giving employees more control over their employment terms from day one.
Source: Employment Relations Amendment Bill 175-1 (2025), Government Bill – New Zealand Legislation
High-Earner Exception
There is a notable carve-out for high-income employees. Those earning $180,000 or more annually will not automatically have the right to file personal grievances for unjustified dismissal—unless their contract specifically includes this protection.
This targets senior roles where employment relationships are typically more complex and where legal disputes can be particularly costly for businesses.
What’s Next
The bill is currently with the Select Committee, where public submissions are being reviewed. This feedback period allows various stakeholders to weigh in before the legislation moves forward. For employers, these reforms could mean less red tape and clearer guidelines. For workers, there is more choice but potentially less automatic protection in certain scenarios. The real test will be how these changes play out in practice once implemented.
At Leap29, we are tracking these developments closely since they will significantly change how businesses approach hiring and employment relationships. As New Zealand’s world of work continues to change, Leap 29 are ready to guide employers through these changes, providing you with confidence to seize new opportunities within the labour market.
Simon Duff – Director at Leap29 shares his perspective on the amendments.
“The Employment Relations Amendment Bill is a decisive step toward modernising New Zealand’s labour market. By introducing clearer worker classifications and cutting unnecessary red tape, the reforms create a more agile and transparent environment for employers and contractors alike. At Leap29, we welcome these changes as they provide greater certainty for global businesses looking to hire in New Zealand”
