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employment Relations Amendment Bill: Big Changes for Employment Law
Table of Contents
published: 2025/11/20 10:54:30
Significant changes to employment law in New Zealand are on the horizon,with the government introducing the Employment Relations Amendment Bill to Parliament on June 17,2025.This Bill details the changes previously announced by the Government, and while it still requires passage through the Select Committee stage and parliamentary readings, its core aspects are likely to remain.If enacted, the Bill will considerably shift the balance of employment law in favor of employers.
Key Changes Proposed by the Bill
The “Contractor Gateway” Test
One of the most significant proposed changes is the introduction of a “contractor gateway” test.This new test aims to clarify the distinction between employees and contractors, possibly leading to more workers being classified as contractors. Currently, determining employment status can be complex, relying on a multi-factor test that considers the overall relationship between the worker and the business. The new test will introduce a set of criteria that, if met, will automatically deem a worker a contractor. The specifics of these criteria are crucial, and their impact will be closely watched.
Restricting Collective Bargaining
the Bill also proposes changes to collective bargaining rules. Specifically,it aims to restrict the ability of unions to initiate bargaining where they do not represent a majority of the workforce. This change could make it more arduous for unions to negotiate on behalf of workers in certain situations. Currently, unions can bargain even with minority representation, provided they meet certain thresholds. This proposed change would likely limit that ability, potentially impacting workers’ collective bargaining power.
Changes to Trial Periods
The Bill intends to extend the maximum length of trial periods for new employees. This would give employers more time to assess an employee’s suitability for a role before confirming their employment. Currently, trial periods are typically limited to 90 days. Extending this period could provide employers with greater flexibility, but also potentially increase job insecurity for new hires.
Impact on Businesses and Employees
These proposed changes have significant implications for both businesses and employees.Employers could benefit from greater flexibility in classifying workers, potentially reducing labour costs and administrative burdens. However, employees could face increased job insecurity and reduced bargaining power. The changes to the contractor gateway, in particular, could lead to disputes over employment status, as businesses and workers navigate the new criteria.
Understanding Employment Status: Employee vs. Contractor
The distinction between an employee and a contractor is critical. Employees are entitled to various legal protections, including minimum wage, holiday pay, and sick leave. Contractors, conversely, are generally responsible for their own taxes, insurance, and benefits.The current test for determining employment status considers factors such as control, integration, and economic reality. The new “contractor gateway” aims to simplify this process, but its effectiveness will depend on the specific criteria adopted.
Next steps
The Employment Relations Amendment Bill is now before the Select Committee, where submissions from interested parties will be considered. This is an prospect for businesses, unions, and individuals to provide feedback on the proposed changes. The Select Committee will then report back to Parliament with recommendations, and the Bill will undergo further readings before potentially becoming law. It’s crucial to stay informed about the Bill’s progress and potential impact on your business or employment situation.
Key Takeaways
- The Employment Relations Amendment bill proposes significant changes to New zealand employment law.
- The “contractor gateway” test aims to clarify employment status, potentially leading to more workers being classified as contractors.
- Changes are proposed to collective bargaining rules, potentially restricting unions’ ability to bargain with minority representation.
- The maximum length of trial periods for new employees
Worth a look