A set of changes to the Employment Relations Act are now live. The goal is to make some parts of employment law clearer and reduce “gotchas”, while still requiring employers to act fairly and in good faith.
1) Clearer line between contractor vs employee (new “gateway” test)
There’s now a clearer checklist that can help confirm someone is genuinely a contractor from the start (not an employee). In plain terms, a contractor arrangement is more likely to stack up when the person:
has a written contractor agreement
can decide how/when the work is done (more control)
can work for other clients
uses their own tools/equipment (or provides key gear)
invoices and carries some business risk
Practical takeaway: paperwork helps, but what matters most is that the day-to-day reality matches the contract.
2) Personal grievances: more weight on employee behaviour
When a personal grievance is considered, outcomes like compensation (e.g., hurt and humiliation) can be reduced — or in some cases not awarded — if the employee’s own behaviour contributed to what happened.
Practical takeaway: good process still matters, but the focus is more on what was fair overall — and employee conduct is more front-and-centre when remedies are decided.
3) New $200,000+ rule for unjustified dismissal claims (with a transition option)
For employees on $200,000 or more (total remuneration) under new agreements, they generally can’t raise a personal grievance for unjustified dismissal. This threshold will start being adjusted annually from 1 July 2027. There’s also a 12-month transition for many existing arrangements, and employers/employees can agree in writing to keep dismissal protections if they want to.
Practical takeaway: this is mainly relevant for senior/high-income roles — but it’s worth checking any agreements that sit near that level.
4) The old “30-day rule” is gone
If your workplace has a collective agreement, you’re no longer required to apply collective terms to a new non-union employee for their first 30 days. An individual agreement can apply from day one.
Practical takeaway: less admin at the start — but make sure your onboarding paperwork is tidy and signed early.
What we suggest employers do now (quick checklist)
Contractors: check contractor templates + your real-world practices match the new gateway factors.
High earners: if you have senior roles near/over $200k, review the agreement wording and whether you want to opt in/out of protections.
Hiring: update your onboarding pack so the right agreement applies from day one.
