Changes impact proposed gateway test and income threshold for raising unjustified dismissal
New Zealand's controversial Employment Relations Amendment Bill has been tweaked following recommendations from Parliament's Education and Workforce Committee.
The government said it refined its proposed gateway test for contractors and agreed to a higher income threshold for raising unjustified dismissal claims.
"I am persuaded by some proposals to refine the Bill to further enhance labour market flexibility and reduce compliance costs," said Workplace Relations and Safety Minister Brooke van Velden.
Proposed gateway test changes
The changes include clarifications on the proposed gateway test, which outlines four criteria that determine whether an individual can be classified as a contractor.
Under the refinements, businesses that do not categorise workers as "independent contractors," such as platform-based arrangements, can still access the gateway test if they specify that the worker is not an employee.
Further refinements to the gateway test include:
- Specifying that contracting someone to work the equivalent of full-time hours does not in itself constitute a restriction on working for others;
- Clarifying that businesses would be allowed to vet sub-contractors for particular qualifications or require a criminal record check of a sub-contractor if justified by the nature of the work.
"I welcome the Committee's recommendations on the gateway test, which provide additional certainty and ensure the test is fit for purpose for contemporary, flexible working arrangements," van Velden said.
Raising the income threshold
Meanwhile, the government is also increasing the proposed income threshold for raising an unjustified dismissal from $180,000 to $200,000 after the Committee's recommendations.
This means employees earning more than $200,000 per annum will no longer be able to raise an unjustified dismissal claim.
"This would cover approximately 2.6% of wage and salary earners and better reflect the policy intent," the committee's recommendation stated.
Van Velden said the recommendations from the committee strengthen the Bill while keeping its core objectives intact.
"I'm looking forward to progressing the Employment Relations Amendment Bill in early 2026 and delivering these important changes for workers and businesses," she added.
'Most anti-worker' bill in history
Meanwhile, the New Zealand Council of Trade Unions condemned the proposed legislation.
"This legislation is one of the most anti-worker bills in New Zealand history, and shockingly the Bill as reported back from select committee will make life for workers even worse than the original draft," said NZCTU President Sandra Grey in a statement.
"These changes threaten every single worker in Aotearoa. No one is safe from the erosion of rights and conditions that this Bill enables."
The union accused van Velden of attempting to please firms, such as Uber, which recently lost at the Supreme Court over the employment classification of four drivers.
"The personal grievance changes are also trying to tie the courts hands and prevent them from establishing justice for workers," Grey added.
"They entrench power imbalances and leave workers facing unjustified dismissal with no statutory protection. The select committee did nothing to improve these provisions."
