The Employment Relations Amendment Bill received Royal Assent on 21 February 2026 and is now law. That’s a significant milestone, but for employers this is not a “take immediate action” moment.
As with many employment law changes, the devil is in the detail. While the direction of travel is clear, how and when these changes apply will depend heavily on your specific workforce, agreements, and timing. Moving too quickly, or assuming the changes automatically apply to everyone, could create unnecessary risk.
Below is an initial summary of the four main changes, what they mean in real terms, and when it’s sensible to pause and get advice before acting. Over the coming weeks we will share more detailed guidance on each of these areas.
1. New “gateway test” for contractors
The Act introduces a new category of worker called a “specified contractor”. If a worker meets the gateway test and the paperwork is right, they will be treated as a contractor and excluded from employee protections.
On paper, this looks helpful for businesses that rely on contractors. In practice, the gateway test is quite prescriptive. It focuses on what is written in the contract, the worker’s ability to refuse work, freedom to work elsewhere, control over hours or subcontracting, and whether they had a genuine opportunity to seek independent advice. Two important cautions apply here. The gateway test is not retrospective. If the gateway test is not met, the common law “real nature of the relationship” test still applies.
Please call us for advice if you are:
- Engaging a new contractor and are not sure they meet the gateway test.
- Relying heavily on contractors for core work.
- Unsure whether existing contractors would pass the new test.
- Considering ending a contractor arrangement and offering employment instead.
This is an area where a small drafting or operational misstep can undermine the protection the new law is trying to give.
2. High-income employees and dismissal rights (the $200k threshold)
Employees earning at, or above, $200,000 in annual remuneration will, by default, no longer be able to bring a personal grievance for unjustified dismissal. Employers will also not be required to follow the usual good faith dismissal process.
However, this is not as simple as “over $200k equals no risk”. Key nuances include:
- Annual remuneration is calculated using a statutory formula and is not always the base salary, nor the value of pay plus all benefits.
- This change does not apply to existing employees before 21 February 2027 unless there is a permitted change to their role or the parties agree otherwise.
- Employers and employees can agree to opt back into the personal grievance regime.
- Policies and contracts may still create procedural obligations.
Please call us for advice if you are:
- Hiring or negotiating terms with a senior leader likely to earn over $200k.
- Reviewing or restructuring senior roles that may cross the threshold.
- Considering a termination involving a high-income employee.
- Wanting to use this change as part of a recruitment or retention strategy.
This is a high-stakes area where getting the contract settings wrong can create confusion or disputes later.
3. Changes to personal grievance remedies
The Act tightens the availability of remedies where an employee’s own conduct is assessed by the Employment Relations Authority or Court as having contributed to the situation, particularly where that conduct amounts to serious misconduct. In some cases, remedies may be reduced to zero, and reinstatement will not be available.
The changes also clarify the position for valid 90‑day trial periods. Where an employee is dismissed during a properly implemented trial period, they now cannot bring a personal grievance for unjustified dismissal or for unjustified disadvantage or action that relates to that dismissal. This addresses a growing trend we have seen where employees attempt to challenge a trial period dismissal by reframing it as a disadvantage claim.
What this does not mean is that employers can ignore process. Trial periods must still be set up correctly from the start, applied genuinely, and not used in a misleading or unfair way. Outside of trial periods, the Employment Relations Authority and Court will still expect fair treatment, especially where findings of serious misconduct are made.
Overall, these changes are more likely to affect how grievances are argued and resolved, rather than removing risk altogether.
Please call us for advice if you are:
- Using, or planning to use, 90‑day trial periods.
- Investigating alleged serious misconduct.
- Facing a personal grievance where the employee’s conduct is central.
- Relying on contributory conduct or a trial period to limit potential liability.
Careful framing, documentation, and evidence will matter more than ever.
4. Removal of the 30-day rule for collective agreements
New employees will no longer automatically start on collective agreement terms for their first 30 days if they are not union members, unless this is a specified term of the relevant collective agreement. Employers will still have clear information-sharing obligations, and the law does not override contractual commitments already in place.
Please call us for advice if you are:
- Updating offer letters or onboarding processes.
- Hiring into roles covered by collective agreements.
- Entering into bargaining.
The bottom line
These changes shift the balance in several areas, but they do not remove the need for judgement, good documentation, or proportionate process. For most employers, the right approach now is to:
- Understand where the changes may affect you.
- Avoid knee-jerk changes to contracts or practices.
- Get targeted advice before acting in higher-risk areas.
If you’re unsure how any of these changes apply to your business, or you’re planning a hire, restructure, contractor engagement, or termination, getting advice early can make a real difference. A short conversation now can prevent a long and expensive one later.