New gateway test, income threshold for unjustified dismissal, among other reforms coming to workplaces
Reforms to New Zealand's labour laws have passed third reading, introducing a new gateway test to clarify employment status and an income threshold for unjustified dismissal grievances.
The Employment Relations Amendment Bill passed third reading on Tuesday, with Workplace Relations and Safety Minister Brooke van Velden welcoming the development.
"I am proud to see the Bill pass as law, bringing these reforms to life and fixing what really matters for employers and workers," the minister said.
"This bill is about backing business to hire with increased confidence."
Amendments to labour law
Under the bill, a new "gateway test" is introduced to clarify whether an individual's employment status is a contractor or an employee.
The legislation also sets an income threshold of $200,000 for unjustified dismissal personal grievances, up from the initially proposed $180,000.
Under this change, employers will be allowed to give workers a go in high-impact positions without having to risk a costly and disruptive dismissal process if the arrangement does not work out.
Another notable change is the removal of the 30-day rule for employment agreements, granting employees the power to negotiate their contracts from day one.
The law will also stop pay-outs for employees who are found guilty of serious misconduct, according to the government.
"Rebalancing the employment relations settings, as this law does, brings more choice for businesses and workers to create and enter working arrangements that suit their individual needs," van Velden said.
The government said most of the changes introduced in the bill are expected to take effect after the legislation receives Royal assent.
Businesses welcome changes
Meanwhile, business groups across New Zealand have welcomed the passing of the proposed legislation.
"Overall, the Bill moves employment law closer to the realities of modern work, while maintaining core protections," said Catherine Beard, Director of Advocacy at Business NZ, in a statement.
"These changes will reduce administrative requirements and provide greater flexibility for employers and employees when agreeing employment terms."
The Employers and Manufacturers Association (EMA) also welcomed the bill's passing, saying the changes will provide certainty for employers.
"These changes will help rebalance some of the current inequities facing employers," said Alan McDonald, EMA's Head of Advocacy, in a statement.
