Big employment law changes have arrived
New employment law changes are significant and controversial because they remove important employment rights and protections. The Employment Relations Amendment Bill passed its third reading on 17 February 2026, and the changes take effect the day after Royal Assent (usually within a week). Given that it’s an election year, there's a real possibility these changes may not be permanent.
Outlined below are four key changes and my commentary:
1. High-income employees cannot pursue personal grievances related to dismissal: Employees whose annual remuneration meets or exceeds $200,000 cannot raise a personal grievance in respect of their dismissal. There is a prescribed calculation to work out an employee’s “annual remuneration”, which is more complex than just a employee’s salary. However, an employee and employer may agree in writing, as a term of employment, that those sections do not apply. In addition, certain existing employees have a 12-month grace period to negotiate that the sections do not apply. In my view, it would be difficult for an employee to successfully negotiate that the sections do not apply.
In practice, an increase in remuneration has usually been treated as a permissible unilateral change by an employer (and employees usually don’t object to being paid more). In my view, an increase in remuneration, which could meet or exceed the threshold, should be agreed to in writing by the employee and, in good faith, they should be told that accepting that new remuneration could put them over the threshold and the consequences of that. The sections may result in employees (read: lawyers) exploring novel or different claims. The sections do not prevent an employee from raising other personal grievances (e.g. discrimination, sexual or racial harassment).
2. A “specified contractor” is not an employee: A person with a work arrangement that meets five specified criteria is a “specified contractor” and excluded from the definition of an employee in the Employment Relations Act 2000. In practice, this means they have no entitlement to employment rights or protections. Previously, a person described as a contractor could ask the Authority or the Court to consider the “real nature of the relationship” and determine the person’s employment status.
3. No remedies where contribution and serious misconduct: The Authority and the Court cannot order remedies against an employer (or controlling third party) where the employee contributed to the situation that gave rise to the personal grievance and that action amounts to serious misconduct. The Authority and the Court already had the ability to reduce remedies (including by 100%) where there was contributory conduct on the part of an employee.
4. No “30-day” collective agreement rule: Employers are no longer obliged to employ non-union member employees, whose work falls within the coverage of an applicable collective agreement, on the terms and conditions of that collective agreement for the first 30-days of employment.
If you require legal advice, please get in touch.
Disclaimer: The information contained in this article is current at 18 February 2026, is general in nature, and is not a substitute for obtaining legal advice.