The Employment Relations Amendment Act (Act) received Royal Assent on 20 February 2026 and came into force on 21 February 2026.
The Act introduces targeted reforms to contractor classification, personal grievance remedies, dismissal settings for high-earning employees, collective agreement coverage for new hires, and trial period and justification rules. Overall, the reforms change how employment disputes are likely to play out, particularly for contractor engagements, senior employees, and dismissals.
DEFINITION OF EMPLOYEE – SPECIFIED CONTRACTORS
The Act introduces a statutory “specified contractor” gateway. A worker will not be an employee if they:
- perform work for another person, or perform work for a third party that is facilitated by another person;
- have a written agreement stating they are an independent contractor or not an employee;
- are not restricted from performing work for any other person (except while performing work for or facilitated by the principal);
- are either not required to work at specified times, days, or minimum periods, or have a right to subcontract the work (subject to limited vetting requirements);
- cannot have the arrangement terminated solely because they decline additional work beyond what they agreed to perform; and
- had a reasonable opportunity to obtain independent advice before entering into the arrangement.
If these criteria are met, the worker cannot access personal grievance rights or other statutory employment protections under the Employment Relations Act 2000. If the criteria are not met, the existing “real nature of the relationship” test continues to apply. In practice, both the contract and the working relationship will matter.
PERSONAL GRIEVANCE REMEDIES AND EMPLOYEE CONTRIBUTION
The Act strengthens the impact of employee contribution and serious misconduct on personal grievance outcomes.
Where an employee’s conduct contributed to the situation giving rise to the grievance:
- remedies may be reduced by up to 100 percent;
- reinstatement and compensation may be limited;
- remedies against controlling third parties may be restricted; and
- the Authority or Court must refuse remedies if the conduct amounts to serious misconduct.
These changes increase the value of clear evidence and a defensible investigation process. The scope of “serious misconduct” is likely to be tested. Where remedies narrow, employees may place greater emphasis on contractual or discrimination-based claims.
SPECIFIED REMUNERATION THRESHOLD
The Act introduces a remuneration threshold limiting access to certain personal grievance claims for high-earning employees.
If annual remuneration meets or exceeds $200,000 (subject to annual adjustment), calculated using a statutory formula based on amounts paid in the 12 months before notice of dismissal:
- the employee cannot bring a personal grievance for unjustified dismissal or unjustified disadvantage relating to the dismissal;
- other personal grievances remain available; and
- the employer and employee may agree in writing that the threshold does not apply.
In effect, termination settings for senior employees will sit more heavily in the employment agreement, particularly notice, termination provisions, and the definition of remuneration.
COLLECTIVE AGREEMENTS AND NEW EMPLOYEES
The Act removes the 30-day rule. The 30-day rule previously required employers to employ new non-union employees on collective agreement terms for their first 30 days where the role was covered by a collective agreement. Employers may engage new non-union employees on individual terms from the outset.
Employers must still inform new employees about any applicable collective agreement, their right to join the union, and provide a copy of the collective agreement. Union notification of a new individual agreement is required only if the employee agrees. Certain additional bargaining and information-sharing obligations are removed.
This gives employers greater flexibility at the point of hire.
TRIAL PERIODS AND JUSTIFICATION
The Act narrows dismissal-related claims following valid trial period terminations and clarifies the justification test.
Key changes include:
- trial period dismissals cannot be challenged by unjustified dismissal or related unjustified disadvantage claims;
- trial period provisions do not prevent other personal grievances unrelated to the dismissal;
- minor procedural defects will not make a dismissal unjustifiable if the employee was not treated unfairly; and
- the Authority or Court may consider whether the employee obstructed the employer from taking steps relevant to justification.
The focus remains on substantive fairness rather than technical defects.
WHAT BUSINESSES SHOULD DO NOW
Businesses should review contracts and processes now to ensure they align with the new settings, particularly:
- reviewing contractor arrangements against the specified contractor gateway criteria;
- identifying roles near the $200,000 threshold and ensuring remuneration is calculated and recorded consistently;
- auditing investigation and documentation standards in disciplinary processes; and
- updating recruitment templates and onboarding processes to reflect the removal of the 30-day rule.
FOR MORE INFORMATION
For guidance or advice on how the changes to the Employment Relations Act 2000 will affect your business, please contact our Jackson Russell Business Law team.
