Coromind - Issue 34 - October25 - Coromandel's Collaborative Magazine - Flipbook - Page 33
A Shifting
Landscape forWorkers
Navigating Employment Laws in Aotearoa NZ
Love them or dislike them, the coalition government's implemented and proposed changes will signi昀椀cantly impact workers across
New Zealand's employment landscape. The National-led coalition, alongside ACT and New Zealand First, has introduced reforms
to enhance employer 昀氀exibility while adjusting employee protections. These changes, some already enacted and others under
consideration, are reshaping workplace dynamics, grievance processes, and contractor classi昀椀cations. This article examines the key
amendments to New Zealand’s employment laws and their implications for workers and employers.
Expanded 90-Day Trial Periods
In December 2023, the Employment Relations (Trial Periods)
Amendment Bill extended 90-day trial periods to all businesses,
removing the previous restriction to employers with fewer than
20 employees. Employers can now terminate new employees
within 90 days without facing unjusti昀椀ed dismissal claims,
provided the trial period is speci昀椀ed in the employment
agreement. Employees retain the right to pursue other claims,
such as discrimination or unjusti昀椀ed disadvantage. Employers
must strictly comply with legal requirements to avoid challenges.
This reform reduces hiring risks for businesses but may increase
uncertainty for new employees.
Repeal of Fair Pay Agreements
By late 2023, the coalition repealed the Fair Pay Agreement
regime, which aimed to improve wages and conditions through
industry-wide bargaining. This halted negotiations in sectors
like hospitality, cleaning, early childhood education, and
supermarkets. The government favors individual and enterpriselevel agreements, potentially weakening collective bargaining
power. Critics argue this undermines wage equity, while
supporters highlight increased business 昀氀exibility.
Minimum Wage Adjustment
E昀昀ective April 1, 2025, the adult minimum wage rose from
$23.15 to $23.50 per hour, approximately $48,880 annually
for a 40-hour workweek. This modest increase aims to help
workers manage in昀氀ation while considering business costs in a
tough economic climate. The government plans moderate annual
adjustments to align with economic conditions.
Income Threshold for Unjusti昀椀ed Dismissal Claims
A proposed amendment to the Employment Relations Act
2000, expected in 2025, would prevent employees earning
over $180,000 annually (base salary, excluding incentives)
from raising unjusti昀椀ed dismissal claims, a昀昀ecting about 3.4%
of the workforce. The threshold will be reviewed annually to
re昀氀ect average earnings. The policy applies to new agreements
immediately and existing ones after a 12-month transition with
mutual consent. High earners can still pursue other grievances,
like discrimination, and negotiate contractual protections. The
proposal has sparked debate over reduced protections for senior
sta昀昀 versus lower employer risks in critical roles.
Personal Grievance Process Reforms
Proposed changes to the personal grievance process aim to
account for employee behavior in remedy awards:
No Remedies for Serious Misconduct: Employees guilty of
serious misconduct, such as violence, bullying, or theft, would be
ineligible for compensation or reinstatement.
Reduced Remedies for Contributory Behavior: Actions like
repeated lateness or poor performance could lead to remedy
reductions of up to 100%.
Employee Obstruction Consideration: Courts and the
Employment Relations Authority would assess whether
employee actions hindered employer obligations.
These reforms seek fairer dispute resolutions but may
disproportionately impact less senior employees and raise
concerns about alignment with international labour standards.
Contractor Classi昀椀cation Gateway Test
To clarify contractor status, a proposed “gateway test” would
classify a worker as a contractor if four criteria are met:
1. A written agreement designates them as a contractor.
2. The business allows work for others, including competitors.
3. No speci昀椀c hours or minimum time is required, or
subcontracting is permitted.
4. The contract cannot be terminated for refusing additional tasks.
If unmet, existing tests determine status. This aims to reduce
misclassi昀椀cation disputes but may limit contractors’ ability to
challenge their status, potentially reducing access to employee
protections.
Termination by Agreement Bill
The Employment Relations (Termination of Employment by
Agreement) Amendment Bill would allow mutual employment
termination agreements without future unjusti昀椀ed dismissal
claims. Pre-termination discussions would be inadmissible
in disputes, subject to conditions. While intended to facilitate
amicable separations, concerns exist about potential coercion,
especially for vulnerable workers.
Removal of Pay Secrecy Clauses
The Employee Remuneration Disclosure Bill would prohibit
adverse actions against employees discussing their pay. This
reform aims to enhance pay transparency, potentially reducing
wage disparities, particularly for women and marginalised
groups, by eliminating “pay secrecy” clauses.
As our employment landscape shifts, staying
informed is essential for navigating these changes
with con昀椀dence.
The Coromandel Workers Council is here to
support you. Whether you’re an employer updating
workplace policies or an employee seeking clarity
on your rights, our team offers expert guidance
tailored to your needs. Have questions about how
these reforms affect you? Contact the Coromandel
Workers Council today for personalised assistance.
www.cwc.org.nz
tautoko@cwc.org.nz
027 296 5276
Coromind.nz | 32
