We continue to see mounting pressure on employers facing multiple personal grievance claims as employees have limited options to move as unemployment continues to rise. Relief is on the horizon with the changes to employment law proposed by the National Government to balance employer and employee interests which include introducing a clear test for independent contractors, reducing remedies for contributory conduct and putting a 180k cap on personal grievance claims. We anticipate changes will be passed by the end of the year and come into force soon afterwards.

What’s changing

Employment Relations Amendment Bill has passed its first reading and submissions have been soughtThe Employment Relations Amendment Bill has had a successful first reading is now being considered by the Education and Workforce Select Committee. The proposed legislation is aimed at delivering on key commitments from the ACT –  National Coalition Agreement, including:

• clarifying the distinction between employment and contracting arrangements, giving greater certainty to both businesses and workers;
• simplifying the personal grievance process, including the removal or reduction of remedies for contributory conduct and the introduction of an income threshold of $180,000, above which unjustified dismissal claims cannot be pursued; and
• removing the 30 day rule, allowing employers and employees to negotiate mutually beneficial terms from the start of employment, reducing compliance burden and increasing flexibility.
  

The date for submissions has closed and the Select Committee's report is due on17 November 2025. Read more from Anthony Harper.

The Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill has received Royal assent

‍The Employment Relations (Pay Deductions for Partial Strikes) Act came into force on 1 July 2025. This Act amends the Employment Relations Act 2000 to allow employers to make pay deductions in response to partial strikes. Employers will be able to either deduct 10% of the employee's pay for the period of the partial strike or make a proportional deduction calculated using the method specified in the legislation. The employer must give notice of a pay deduction to the employee who is, or will be, participating in the partial strike. Read the Amendment Act. Read the Beehive release. In the media.

What’s interesting

Unemployment and labour market

• Foodstuffs confirms 180 roles to go at fire-destroyed New World. Read more.
• One year, 27,850 jobs gone Stats NZ latest data shows. Read more.
• Rise of the underemployed: New Zealanders struggle to find full-time work. Read more.
• Record numbers of people chasing a dwindling number of jobs – Seek. Read more.‍

Stories of interest

• PSA takes legal action against MBIE over flexible working. Read more.

Case highlights

Employer's gesture of goodwill not genuine reason for fixed term

Immediately following Ms Rookes dismissal from Tillmans Fine Furniture during the trial period, Tillmans offered Ms Rookes two months’ fixed term employment as a gesture of goodwill to give her time to find a new job after the Christmas / New Year period. It felt it had a “moral duty” to help her. The Employment Court found that while Tillmans’ intention to help Ms Rookes was genuine, it was not sufficient to satisfy the requirements of a fixed term agreement rendering her dismissal unjustified. The Court reaffirmed that reasons such as avoiding the need to address performance issues or limiting exposure to personal grievances are not “genuine reasons” for a fixed term while covering parental leave or working on a discrete projects are. Tillmans Fine Furniture v Rookes [2025] NZEmpC 152 The decision. In the media.

Director's assault of duty manager could not be 'relitigated' in the Court

Mr Wright was employed by Otira Stagecoach Hotel as a Cook / Duty Manager and claimed that he was constructively dismissed after being assaulted by the company’s director, Mr Rowntree, during an incident at the hotel. Otira challenged the Authority’s determination of unjustified dismissal in the Employment Court, arguing that no assault took place. The Employment Court held that the challenge was an attempt to relitigate facts that had already been determined in the District Court, where Mr Rowntree had been found guilty of assaulting Mr Wright. The Court noted that a party cannot use civil proceedings to relitigate issues that have already been determined in criminal proceedings. Otira Stagecoach Hotel Limited v Wright [2025] NZEmpC 115 The decision. In the media.  

Interim reinstatement declined for firm trust account administrator

TNZ was employed as a Trust Account Administrator at a law firm (Firm A) until being summarily dismissed without notice for alleged serious misconduct after TNZ wrote and delivered an anonymous note to the practice manager of another law firm (Firm B), disclosing confidential information about its recruitment of a solicitor from Firm A. TNZ raised personal grievances, seeking interim reinstatement to their role, non-publication of their name, permanent reinstatement and other remedies. The Employment Relations Authority declined TNZ’s application for interim reinstatement, finding that while TNZ had an arguable case for unjustified dismissal and permanent reinstatement to their role, the balance of convenience only weakly favoured TNZ and the overall interests of justice did not support interim reinstatement. TNZ v JQB [2025] NZERA 345 The decision. In the media.