As of 21 February 2026, the Employment Relations Amendment Act (the Act) came into force. The key changes are: 

  • Removal of the 30-day rule for collective agreements. 
  • The introduction of a new ‘gateway’ test for determining whether a worker is classified as a contractor. 
  • An employee may not bring a personal grievance for unjustified dismissal or unjustified disadvantage relating to a dismissal, if their remuneration meets or exceeds $200,000. 
  • Reduction or removal of remedies in circumstances where an employee’s conduct has contributed to their personal grievance. 

In this post we summarise each change briefly and suggest some practical steps employers can take.  

Removal of 30-day rule 

New employees who are not in a union will no longer automatically begin employment on the terms of a collective agreement for their first 30 days of employment. Employees now have the choice to either join the union with the collective agreement or start on an individual agreement from their first day of employment. 

Employers should now:  

  • Ensure new staff are informed about union membership options 
  • Review collective agreements 
  • Update documentation 

Gateway test for contractors 

The gateway test is another method of determining whether a worker is a contractor or employee. To be classified as a contractor under the gateway test, the following criteria must be met: 

  • A written agreement which states they are an independent contractor (or not an employee) 
  • They may work for another person, if this is not at the same time  
  • Flexibility to choose when they wish to work 
  • Ability to subcontract work to a third party 
  • Can decline additional work without the agreement being terminated 
  • They were provided a reasonable opportunity to seek independent advice prior to entering the agreement 

Organisations should now: 

  • Consider whether any contractors may now be classified as employees as of 21 February 2026  
  • Review contracts, to ensure the above criteria are met. 

If a worker is not deemed a contractor under the gateway test, then the current test under s 6 of the Employment Relations Act 2000 applies. This test determines whether the real nature of the relationship is that of a principal/contractor or employer/employee. 

Remuneration threshold for personal grievances 

High-income earning employees ($200,000 or more per year total remuneration) will no longer be able to raise a personal grievance for unjustified dismissal or for unjustified disadvantage claims in relation to dismissal. There will be a 12-month transition period for current employees to renegotiate their employment agreements. High-income earning employees may still raise grievances that do not relate to dismissal. 

The $200,000 threshold will be reviewed using the formula in section 113B(2) but must not increase before 1 July 2027. 

To prepare, employers should: 

  • Consider what approach to take for prospective employees earning over the remuneration threshold. This could include allowing new employees to opt back into personal grievance provisions of the Employment Relations Act 2000. Possible alternatives could include longer notice periods or termination payments. Employers should balance the risk of potentially losing an employee because of not opting in, against the risk of an employee bringing a claim for unjustified dismissal if they opt in. 
  • Discuss the organisation’s approach for current employees earning $200,000 or more. Employers need to negotiate in good faith and may proactively engage with these employees. 
  • Update any relevant policies so they reflect the changes to high earning employees. 
  • When assessing whether an employee is earning $200,000 or more, consideration must be given to all the income and benefits the employee is receiving, not just the employee’s base salary. 

Remedies – Contributory conduct 

If an employee is deemed to have contributed to their personal grievance by the Authority or Court, their remedies will be either reduced or removed. The Authority or Court is now unable to award any remedies if an employee’s behaviour constituted serious misconduct. The Act does not define serious misconduct, and it is not clear whether the Court or Authority will undertake a different investigation. We suggest employers ensure their policies and employment agreements include a non-exhaustive definition of serious misconduct and potential examples. 

We will be releasing a four-part series of articles on our website shortly with further details of the changes and how to implement these into your organisation. If you would like to further understand how these changes affect your organisation, please get in touch with Johanna Drayton johanna@ddelaw.co.nz or Jordan Boyle jordan@ddelaw.co.nz. 

KiwiSaver changes 

Separate from the changes to the Act, changes are being made to KiwiSaver contribution rates. From 1 April 2026, the default contribution rate will raise from 3% to 3.5% for both employers and employees. 

For those employers whose employee’s remuneration packages are inclusive of KiwiSaver, there will be no change to the total remuneration paid. For employers whose employee’s salaries are exclusive of KiwiSaver, there will be a small increase to the total remuneration. Employers may wish to review their remuneration approach for future employees. Please get in touch with us if you’d like to discuss this.  

Further changes to the KiwiSaver contribution rates will occur on 1 April 2028, where the rate will rise from 3.5% to 4%. 

Dyhrberg Drayton Employment Law is available to provide support and advice. Our enquiries email is enquiry@ddelaw.co.nz.