The Education and Workforce Select Committee has recommended the Employment Relations Amendment Bill proceed to passage, signalling the most significant changes to New Zealand employment law in years. The report was released ahead of the bill’s expected passage in early 2026.
The legislation proposes four key changes: a contractor “gateway” test, greater emphasis on employee behaviour in personal grievance claims, a $200,000 income threshold for unjustified dismissal claims, and the removal of the 30-day rule for collective agreement coverage. The reforms aim to clarify worker classification, streamline dismissal claims, and adjust collective bargaining rules.
The new gateway test is designed to provide certainty around worker classification, particularly in the gig economy, following the Supreme Court ruling that Uber drivers are employees.
The Select Committee said the test will apply prospectively and clarified that platform-based arrangements can use the test even if workers are not explicitly labelled contractors. Full-time hours do not automatically prevent workers from taking other work.
The report notes that, like previous employment law measures such as 90-day trial periods, the gateway test may face future repeal or reinstatement depending on changes in government, creating some uncertainty for businesses structuring contracting arrangements.
The bill introduces a $200,000 income threshold, based on total remuneration, exempting high earners from unjustified dismissal claims. Employers are given a 12-month transitional period to identify relevant employees and negotiate customised dismissal procedures.
Labour and the Greens oppose the bill, describing it as a “direct attack on the rights and dignity of working people” and part of an “anti-worker agenda.”
The future of the reforms remains uncertain with 2026 an election year. The bill is expected to pass in early 2026 and will take effect immediately after Royal Assent.