This is an opinion piece for general information. It is not legal advice for your specific situation.
Parliament has changed the remedy rules for personal grievances (PGs) in a way that will change how parties argue cases. The headline is simple: if an employee is found to have "contributed" to the situation that gave rise to the PG, the usual remedy picture can collapse.
I set out the practical details (and the timing question) in my guide here: Employment Relations Amendment Act 2026 - what changed and when it applies . This article is about something narrower: how the Employment Court is likely to interpret and apply the new contribution gatekeepers.
What changed: contribution is now a gatekeeper, not just a discount
Under the old approach, contribution usually meant the Authority or Court set remedies first, then reduced them (sometimes significantly) if an employee's blameworthy conduct contributed. There were hard cases, but contribution was mostly a "how much do we reduce?" question.
The 2026 amendments (commenced 21 February 2026) add two new "switches" before the reduction question even starts:
- Serious misconduct contribution (new s 123B): if an employee action contributed to the situation giving rise to the PG, and that action amounts to serious misconduct, then no remedy is available.
- Contribution (even if not serious misconduct) (new s 123C): if an employee action contributed to the situation, then reinstatement and compensation (humiliation, loss of dignity, injury to feelings) are not available.
- Reduction power increased (s 124): for any remaining remedies, the reduction for contribution can now be up to 100%.
That is not "more discretion". It is a bigger set of consequences, and it shifts contribution into the centre of the case. Employers will argue it in almost every dismissal. Employees will have to contest it in almost every dismissal.
Why Smith v Stokes Valley Pharmacy matters
The best clue to how the Employment Court will handle a remedy-stripping provision is how it handled the other big remedy-stripping provision: trial periods.
In Smith v Stokes Valley Pharmacy (the first major Employment Court decision on the trial period provisions), Chief Judge Colgan emphasised a strict approach to interpretation because trial period dismissals remove a long-standing protection: the ability to challenge a dismissal by personal grievance.
Put another way: where Parliament creates an exception that takes away rights, remedies, or access to dispute resolution, the Court is unlikely to read that exception broadly by implication. The Court tends to insist on disciplined compliance with the statute's conditions, and it tends to hold the line on the limits of the carve-out.
Prediction: the Court will interpret the new contribution bars strictly
No-one has a crystal ball. But we can make a reasonable prediction based on (1) the text of the new provisions, (2) the existing contribution case law, and (3) the Court's instinct in trial period cases.
Here are the practical "guardrails" I expect to see in early Employment Court decisions on the 2026 contribution regime.
1) A tight causal nexus: "contributed to the situation" will not be treated as background fault
The words that matter are not "the employee did something wrong". The words are "contributed to the situation giving rise to the personal grievance". That phrasing invites a causation fight, and the Court is likely to demand a real connection between the employee action and the particular situation that produced the alleged unjustified dismissal or disadvantage.
Expect employees to argue (often successfully) that remote, minor, or unrelated conduct does not meet the contribution threshold, especially where the employer's own decisions and process failures are the real drivers of the grievance.
2) Knowledge and timing will matter: no "hindsight contribution"
Existing contribution principles already lean against using after-acquired information to justify earlier decisions, and I expect that to carry over. If the employer did not know about the alleged contributory conduct at the time, it becomes much harder to say that conduct contributed to the situation that gave rise to the grievance. Otherwise, the contribution bar becomes a hindsight weapon rather than a real-world causal analysis.
3) "Serious misconduct" (s 123B) will likely stay a high threshold
"Serious misconduct" is not defined in the ERA. In ordinary employment law usage, it is conduct of a gravity that can justify summary dismissal. Because s 123B removes all remedies, the Court is unlikely to dilute this threshold into something like "meaningful fault".
The Court will probably look at context: what happened, why it mattered, whether there was intent or recklessness, and what a reasonable employer could fairly treat as relationship-destroying behaviour.
4) Process laundering will be resisted: contribution is not an automatic shield for an unfair process
A predictable employer argument will be: "the employee contributed, so s 123C applies, so compensation is off the table, even if our process was poor." A predictable employee response will be: "my conduct did not cause your unfair process."
I expect the Court to keep these concepts separate. Contribution should not become a mechanism for excusing or sanitising major process failures unless the employee's conduct genuinely created or materially worsened the process problem (for example, obstructing investigation steps).
This is where the amended s 103A (including the new "obstruction" factor) will interact with contribution arguments. If an employer can prove the employee obstructed fair steps, that may strengthen both the justification case and the contribution case. If not, the employer will still wear the consequences of its own process choices.
5) Even with a 100% reduction power, 100% will remain exceptional
The new s 124 allows a reduction up to 100%. That is a big statutory signal. But the older case law repeatedly warned that even 25% is significant and 50% was to be reserved for exceptional cases.
My prediction is the Court will treat "100%" as an extreme endpoint, not a new normal, and will still insist on proportionality between the employee's fault and the remedies otherwise justified.
6) Timing and retrospectivity: courts will be cautious about back-dating remedy removal
If the dismissal or action complained of occurred before 21 February 2026, expect sharp arguments about whether the new remedy bars apply. The Legislation Act 2019 presumption against retrospectivity and the savings provisions on "remedy or relief" are powerful tools for employees. Unless Parliament clearly intended back-dating, courts tend to avoid attaching harsher consequences to events that happened under the old law.
So what does this mean in practice?
For employers
- Do not assume the new contribution rules are a magic shield. A sloppy process can still lose a case.
- Be specific: identify the employee action, identify the "situation", and explain the causal link between the two.
- Keep evidence clean: timelines, contemporaneous records, and a fair opportunity for the employee to respond still matter.
- Do not overreach: calling everything "serious misconduct" will backfire when the Court looks for a high threshold.
For employees
- Force precision on causation: what exactly is the "situation giving rise" to the grievance, and how exactly did your action contribute?
- Separate conduct from process: your conduct may be criticised, but that does not automatically excuse an unfair or predetermined process.
- Challenge "serious misconduct" labels: context matters, and the consequences under s 123B are severe.
- If the events pre-date 21 February 2026, raise the timing issue early and clearly.
Bottom line
The 2026 amendments turn contribution into a gateway fight because the prize is no longer just a percentage reduction. It can be the loss of compensation, reinstatement, or in serious misconduct cases, any remedy at all.
If the Employment Court treated trial periods strictly because they cut across the protective scheme of the ERA, it is realistic to expect the Court to approach these new remedy-stripping contribution provisions with the same discipline: tight causation, high thresholds, and an insistence that the statute is applied only to the extent clearly articulated.
