Under the current National-lead coalition, the New Zealand Government has introduced sweeping employment law changes that affect both employers and employees across the country. These reforms cover a wide range of issues including trial periods, collective bargaining, pay equity, personal grievance rights, and sick leave entitlements. With these developments attracting considerable public attention, it’s crucial to understand their implications from a legal perspective. Stuff.co.nz has recently published a useful summary of the employment law changes made to date and what’s on the horizon. Let’s take a look at the issues raised from a legal standpoint.
A New Era for Employment Law
Employment law changes brought in by the current Government are reshaping the workplace landscape. Among the most controversial is the restoration of 90-day trial periods for all businesses—an option previously restricted to small employers. Prime Minister Christopher Luxon defended the move, stating, “We extended 90-day trials to all employees to give businesses the confidence to take a chance on hiring someone new, even if they might not tick all the boxes in terms of skills”.
The repeal of the Fair Pay Agreements Act also marks a significant shift. The legislation had aimed to create sector-wide bargaining systems, but was scrapped before any agreements could be negotiated. This effectively dismantles a key element of collective wage-setting.
Who’s Affected by These Changes?
These employment law changes have immediate and long-term impacts on several key groups:
- Employees in women-dominated industries: Amendments to the Equal Pay Act cancelled 33 pending pay equity claims, affecting over 150,000 workers. The changes also narrow future access to equity-based claims.
- High-earning employees: Future reforms could remove the right to claim unjustified dismissal for those earning over $180,000, limiting their legal protections.
- All employees and employers: Changes to personal grievance rules may make it harder for employees to claim compensation if they contributed to their dismissal, shifting the balance of responsibility.
- Part-time workers: Proposed sick leave reforms could introduce a pro-rata accrual model, replacing the current flat 10-day entitlement, potentially reducing leave for part-time staff.
- Unions and striking workers: New industrial action laws may allow pay docking for partial strikes—actions like “working to rule”—which had not previously been penalised.
These changes signal a broader shift toward employer-friendly regulation, and raise critical legal questions about fairness, balance, and compliance.
What Happens Next?
Some changes are already in effect; others are in draft stages or open to consultation. Employers must prepare for adjustments in employment agreements, policies, and internal HR practices. Employees, especially those in vulnerable roles or industries, should stay informed of their evolving rights.
