In 2025, New Zealand’s employment law landscape is poised for significant transformations, with several amendments to the Employment Relations Act 2000 (ERA) on the horizon. These changes aim to recalibrate the balance between employer interests and employee rights, introducing new protocols and considerations for both parties.

Key Amendments to the Employment Relations Act 2000

1. Assessment of Employee Remedies in Personal Grievance Claims

   The forthcoming amendments will place greater emphasis on an employee’s conduct when determining remedies in personal grievance cases. Notable changes include:

   • Elimination of Remedies for Serious Misconduct: Employees found guilty of serious misconduct—such as theft, violence, harassment, or significant dishonesty—will no longer be entitled to remedies upon dismissal.
   • Restrictions on Reinstatement and Compensation: If an employee’s behavior has contributed to their dismissal, they will be ineligible for reinstatement and compensation for emotional distress.
   • Consideration of Contributory Conduct: The Employment Relations Authority and Court will assess whether an employee’s actions hindered the employer’s ability to meet their obligations, potentially reducing remedies by up to 100% in cases of contributory conduct.

   These modifications aim to provide employers with clearer guidelines and ensure that employee misconduct is adequately addressed in grievance proceedings.

   dlapiper.com

2. Introduction of an Income Threshold for Unjustified Dismissal Claims

   A significant change is the proposed income threshold of NZD180,000 per annum, above which employees cannot pursue unjustified dismissal personal grievances. This means that high-earning employees will have limited recourse in dismissal situations, promoting greater flexibility for employers in managing senior roles. The threshold will be adjusted annually to reflect changes in average weekly earnings.

   mbie.govt.nz

3. Protected Negotiations for Termination Agreements

   The Employment Relations (Termination of Employment by Agreement) Amendment Bill introduces provisions allowing employers and employees to mutually agree to terminate employment through a settlement agreement. Importantly, offers made during these negotiations will not constitute grounds for a personal grievance claim, provided they are conducted in good faith. This change aims to facilitate open discussions about employment termination without the looming threat of legal repercussions.

   industrialrelationsnews.ioe-emp.org

4. Pay Deductions for Partial Strikes

   The Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill reintroduces the ability for employers to make pay deductions in response to partial strikes. This measure seeks to balance the interests of employers and employees during industrial actions, ensuring that employers can respond proportionately to partial work stoppages.

   parliament.nz

Implications for Employers and Employees

These impending changes underscore the importance of understanding the evolving employment law framework in New Zealand. Employers should review and possibly revise their employment agreements, policies, and procedures to align with the new regulations. Employees, particularly those in higher income brackets, should be aware of how these amendments may affect their rights and remedies in employment disputes.

Staying informed and seeking legal advice when necessary will be crucial for both employers and employees to navigate these significant changes effectively.

Need guidance on the RMA changes or their implications? Contact Core Legal Wellington for expert advice tailored to your needs.