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Employment Relations Act changes.
Changes took effect on 21 February 2026. We help employers translate these into updated agreements, policies and processes.
Written by
Carlile Dowling Lawyers
General information only — not legal advice.
Erick advises employers on the 2026 Employment Relations Act amendments — the high-income threshold, eligibility shifts, and what they mean in practice.
Why these changes matter
Law changes only matter when they change your documents. The February 2026 amendments affect contractor status, dismissal protections for senior staff, and how remedies are calculated.
We help employers update the right templates and processes, so compliance is built into daily operations.
Contractor vs employee: the gateway test
Businesses using contractors face the most significant shift. A new gateway test now determines contractor status.
If every gateway criterion is met, the worker is a specified contractor. If any criterion fails, status reverts to existing tests.
This matters across trades, consulting, IT, transport and project work.
Your action: Review contractor templates and onboarding. A contract labelled "contractor" is not enough if operations treat the person like staff.
High-income threshold: $200,000+
Senior employees whose total annual remuneration is $200,000 or more under new agreements can no longer bring an unjustified dismissal grievance. Other grievance grounds — including discrimination, sexual harassment and union-related retaliation — remain fully available. The parties can agree in writing to preserve unjustified dismissal protection.
For employees already employed before 21 February 2026, a 12-month transition applies before the threshold takes effect. This affects contract negotiations, exit planning and risk allocation for senior hires.
Your action: Update senior employment agreement templates and exit planning documents.
Remedies: contribution matters more
The Authority and Employment Court must now reduce certain remedies where the employee's conduct contributed. In some cases, remedies can be removed entirely.
Fair process is still essential. But how "contribution" is assessed has changed, and this affects settlement discussions.
Your action: Update investigation notes and decision documents so contribution factors are recorded properly.
What to update first
Where this matters locally
Contractor use is common across construction, trades and project work in the region. Seasonal peaks drive short-notice hiring. Small teams amplify the impact of one employment dispute.
We help Hawke's Bay employers tighten foundations before a problem arrives, not after.
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