Planned Employment and Health and Safety Changes | March 2025

Employment and workplace health and safety law changes

The Coalition Government has announced a range of potentially far-reaching employment and workplace health and safety law changes. The number and potential impact of these changes for employers is significant. For more information in any of the areas discussed below, please contact me at michaelp@cecc.org.nz. Business Canterbury will keep members informed on the progress of these bills through Parliament. Assuming these bills are enacted into law, we will provide an impact analysis and any recommended actions members will be required to undertake in employment agreements and practices.

Review of Holidays Act

Most employers will be familiar with the challenge of complying with the Holidays Act 2003. Following a targeted consultation in 2024, an “exposure draft bill” was regarded as unworkable with stakeholder feedback indicating the bill was still overly complex, likely to be unworkable and planned changes did not go far enough.

The Government has directed its officials to go back to the drawing board and develop an entirely new direction on which -

• simplicity is prioritised;
• compliance costs are reduced; and
• an hours-based accrual system for annual leave entitlements is applied as the preferred model.

Partial Pay deductions for partial strikes

Partial strikes are strikes where employees continue to perform some of their work, but not all of it. Examples include performing only a proportion of their normal hours or not performing certain tasks while performing their usual hours such as teachers refusing to teach certain year groups on certain days.

Previously, the Employment Relations Act 2000 (ERA) allowed employers to make partial deductions from the pay of employees who were participating in a partial strike. The relevant provisions were repealed in 2018. The proposed Bill introduced December 2024 aims to return to the pre 2018 position where employers can again make partial deductions for partial strikes.

Changes to Personal Grievances Regime

The proposed changes include:

• introducing an income threshold for unjustified dismissal personal grievances; and
• changes to personal grievance remedies.

This change would mean employees earning over an income threshold of $180,000 could not raise an unjustified dismissal personal grievance claim, unless the employer and employee specifically “opt back in” to that regime in the relevant employment agreement.

‘Gateway’ Test for Contractors

The Government is proposing amendments to the ERA to include a “gateway test” that businesses can use when responding to a claim that a person is an employee and not an independent contractor. If the working arrangement satisfies all four criteria set out in the test, then the person is deemed to be a contractor and no further inquiry is required. If the working arrangement does not satisfy the four criteria, then the current test for determining employment status (which is based on an assessment of “the real nature of the relationship”) would apply. 

1. a written agreement with the worker, specifying they are an independent contractor;
2. the business does not restrict the worker from working for another business (including competitors);
3. the business does not require the worker to be available to work on specific times of day or days, or for a minimum number of hours ORthe worker can subcontract the work; and
4. the business does not terminate the contract if the worker does not accept an additional task or engagement, (Contractor Criteria).

New Zealand’s Health and Safety System

Following consultation last year, the Government is reviewing the entire work health and safety regulatory system, which includes the Health and Safety at Work Act 2015 and all supporting regulations, the regulators that implement WHS law, and the organisations that are authorised to certify or license businesses for high risk work.

Other Changes

The Employment Relations (Termination of Employment by Agreement) Amendment Bill would provide employers with an ability to make an offer of an exit settlement to an employee, with the employee not being able to pursue any personal grievance in relation to such an offer; and

The Employment Relations (Employee Remuneration Disclosure) Amendment Bill, would mean that employers could no longer include “pay secrecy” clauses in employment agreements that prohibit employees from discussing their pay with others.