Employment Relations Act: How the changes could affect you
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This RNZ podcast episode examines the recent changes to New Zealand's Employment Relations Act, effective from February 21, 2026, with a focus on the new high-income earner threshold of $200,000. Employment lawyer Charles McGuinness explains that employees earning above this threshold—considering not just salary but also bonuses, fringe benefits, overtime, and share schemes—will lose the right to file personal grievances for unjustified dismissal, regardless of circumstances such as sexual harassment or medical incapacity. The legislation marks a significant shift, described as unprecedented, with far-reaching implications for up to 100,000+ workers. McGuinness also discusses the new 'specified contractor' classification, designed to clarify worker status in cases like Uber, though he notes ongoing ambiguity. He highlights tensions in the public sector, where ethical obligations may conflict with the new law, and warns of potential future reductions in the income threshold due to a ratchet clause. The episode underscores the need for employers to clarify their policies and for employees to understand their rights under the new framework.
Employees earning over $200,000 annually—including bonuses, benefits, and allowances—are now barred from filing personal grievances for unjustified dismissal.
The $200,000 threshold includes non-salary compensation, potentially affecting over 100,000 workers beyond the initial estimate.
Employers no longer need to provide reasons for dismissal or relevant information under good faith obligations for high earners.
Existing employees have 12 months to negotiate reinstatement of dismissal protections, such as through extended notice periods.
The public service may resist using the new law due to conflicting ethical and state sector obligations.
…and 2 more takeaways available in PodZeus
Introduction to Employment Law Changes
Host Catherine introduces Charles McGuinness, an employment lawyer, to discuss recent changes to the Employment Relations Act that came into effect on February 21, 2026.
The $200,000 High-Income Threshold Explained
“It really catches a much larger group of people than just those on a kind of arbitrary 200,000 that will potentially carry a larger group.”
Loss of Unjustified Dismissal Rights
“You can't challenge for the dismissal. So say somebody raises a claim or say somebody is about to be made redundant or they're unwell... they can't bring a claim under the legislation for unjustified dismissal.”
Transition Period and Employer Options
McGuinness explains the 12-month transition window for existing employees to opt back into protections and discusses employer strategies, including negotiating longer notice periods.
Public Sector Implications and Future Risks
“There's a ratchet clause in the legislation for it to go up, you know, price adjusted. But could it come down? It could equally come down.”
“You can't challenge for the dismissal. So say somebody raises a claim or say somebody is about to be made redundant or they're unwell... they can't bring a claim under the legislation for unjustified dismissal.”
“There's a ratchet clause in the legislation for it to go up, you know, price adjusted. But could it come down? It could equally come down.”
“It really catches a much larger group of people than just those on a kind of arbitrary 200,000 that will potentially carry a larger group.”
Host
Guest
Charles McGuinness
person
Employment Relations Act
other
public service
organization
Minister for Workplace Relations and Safety
person
CEs and DCEs
other
state sector obligations
other
Section 120
other
Uber
organization
Smith & Stokes Valley Pharmacy
other
Chief Judge Colgan
person
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