What do Employees need to know about the Employment Relations Amendment Act 2026?

The Employment Relations Amendment Act 2026 came into force on 21 February 2026. The amendment updates the long-standing Employment Relations Act 2000, reshaping key parts of how workplaces operate in Aotearoa. For employees, some protections remain strong, but others have been changed or limited. This blog explains what it all means in simple terms, what’s different, and how to protect your rights.

Why Did The Law Change?

The Government says these changes are designed to give employers and workers more clarity and flexibility, reduce red tape in hiring and contracting, and grow confidence for employers to hire and take risks.

What Changed Under the Employment Relations Amendment Act?

There are four key changes that employees should be aware of.

Clearer Employee vs Contractor Rules

Before this amendment, whether someone was an employee or a contractor was decided by looking at the real nature of the relationship and how the work actually happened. That often meant legal fights in the Employment Relations Authority or Courts.

Now, the Act introduces a new “gateway test”. If a working arrangement ticks all the gateway criteria in the contract, that person is treated as a “specified contractor” and is not an employee under the Employment Relations Act.  Key points of the test include:

• Whether there is a written agreement saying the person is an independent contractor, 

• Whether the worker is free to work for others (not restricted), 

• Whether the worker is required to work set hours or can subcontract,

• Whether the job ends just because they refuse extra work, and

• Whether the worker had a fair chance to get independent advice before signing.

It is important to note that if any part of the gateway test isn’t met, the old “real nature” test still applies. So, if you genuinely do the work of an employee but are treated as a contractor because of a written agreement that meets the gateway test, you might not have basic employee rights, including minimum wage, sick leave, holiday pay, and other protections.

You will now need to check how your contract describes your working relationship. If you’re unsure whether you’re an employee or a specified contractor, it’s worth getting advice early.

Changes to Personal Grievance Rights

A personal grievance is a legal claim you can bring when your employer has treated you unfairly, for example, if you’re unjustifiably dismissed or disadvantaged.

Under the new Act employees earning $200,000+ per year cannot bring a personal grievance for unjustified dismissal or unjustified disadvantage related to dismissal under the Act.  If you’re already on an agreement with that pay level when the law came into effect, you usually have a 12-month transition period to renegotiate terms with your employer before this stops applying.  Employers and employees can agree in writing to keep dismissal protections even if pay is above that threshold.

The new Act also means that if you raise a personal grievance, and your own behaviour is found to have contributed to the issue that led to your grievance, certain remedies (like compensation or reinstatement) may be reduced or not available at all.  If your conduct amounted to serious misconduct and contributed to the grievance, remedies may be taken away completely.  The Authority or Court must now take contributory behaviour into account when deciding remedies.

The 30-Day Rule Has Been Removed

Under the old law, when a new employee was hired into a role covered by a collective agreement but did not join the union, their employment agreement still had to reflect the collective agreement terms in their first 30 days.    That requirement has now been removed which means employers and employees can agree on individual employment terms from day one giving more flexibility.  It also means employers cannot automatically place new employees on collective agreement terms for the first 30 days if the employee was not a union member.

Trial Period and Unjustified Dismissal Rules

The Act reinforces rules that if you are dismissed under a valid trial period, you generally cannot bring a personal grievance for unjustified dismissal or unjustified disadvantage relating to that dismissal.  This is consistent with the existing law, but it’s now an explicit part of the way the Act operates.

These changes will affect how employment status, dismissal claims, and grievances are handled in New Zealand. If you face any workplace issue, especially about your classification or dismissal,  it’s important to know your rights under the current law and seek advice if you have any concerns.  .

FAQs

What is the “gateway test” and why does it matter?

The gateway test is a set of written contract criteria that, if met, means you’re a specified contractor rather than an employee. If you’re a specified contractor, you don’t have the same rights as employees under the Employment Relations Act.

 Can an employee earning over $200,000 still raise any personal grievance?

Yes, but only for things other than unjustified dismissal or unjustified disadvantage related to dismissal. You may still raise grievances for discrimination, harassment, or other unlawful employer conduct.

What if my employer misclassifies me as a contractor?

If your work doesn’t genuinely meet the gateway test, you may still be able to argue you’re an employee under the old “real nature of the relationship” test. That’s something you should get advice about early.

The Employment Relations Amendment Act 2026 marks a major change in New Zealand’s employment law. While the Government says the changes increase clarity and flexibility, employees need to be alert to the ways rights have shifted.  Understanding whether you are genuinely an employee or a contractor, knowing your personal grievance rights, and making sure your contract is fair and accurate are more important than ever.

If you’re facing a workplace issue or are unsure how these changes affect you, get advice early. Contact Mathews Walker today for a free consultation.  MathewsWalker.co.nz | 0800 612 355

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