On 28 August 2026 I wrote to both the New Zealand Labour Party and Opportunity asking what they would do with the major changes made by the Employment Relations Amendment Act 2026.
The question is not simply whether the law is "pro-employer" or "pro-employee". The more important issue is whether New Zealand still has a proportionate employment-law system in which employee wrongdoing can have real consequences while an employer remains accountable where its own conduct is unjustified.
For a detailed explanation of the legislation, see Employment Relations Amendment Act 2026 - what changed and when it applies. I have also written separately about the interpretation of contribution after the amendments: Contribution after the Employment Relations Amendment Act 2026: expect strict interpretation, not a free pass.
What changed in the Employment Relations Act in 2026?
The 2026 Amendment Act made a package of changes affecting personal grievances, remedies, dismissal rights, employee status and collective bargaining. The principal issues I have asked Labour and Opportunity to address are:
- the $200,000 remuneration threshold for unjustified dismissal and dismissal-related disadvantage claims;
- the changes to the section 103A test of justification;
- new sections 123B and 123C dealing with contribution and serious misconduct;
- the amended section 124, allowing remaining remedies to be reduced by up to 100%;
- the new specified-contractor gateway under section 6;
- the removal of the former 30-day collective agreement settings and associated union-information requirements; and
- the amendment to section 67B concerning trial-period dismissals.
The Government's original policy rationale can be read in the Employment Relations Amendment Bill explanatory material. MBIE also published separate regulatory impact statements on personal grievance contribution and remedies, the high-income dismissal threshold, the contractor gateway, and removal of the 30-day rule.
Why the new contribution and remedy rules concern me
Employee misconduct should have consequences. That was already the law before the 2026 amendments. Under the previous section 124 jurisprudence, the Authority and Employment Court considered whether the employee's conduct was genuinely culpable or blameworthy, whether it caused or contributed to the situation giving rise to the grievance, and what reduction was proportionate.
The leading Full Court decision Xtreme Dining Ltd t/a Think Steel v Dewar [2016] NZEmpC 136 reviewed the history of section 124. The Court treated a 50% contribution reduction as significant and recognised that particularly egregious employee behaviour could already result in no effective remedy through the section 123 assessment.
The 2026 legislation changes the consequences. Section 123B prevents any remedy where the employee's contributing action amounts to serious misconduct. Section 123C removes reinstatement and compensation under section 123(1)(c) where qualifying contribution is established. The amended section 124 permits the remaining remedy to be reduced by up to 100%.
The early ERA cases suggest contribution still has a real legal threshold
The first Employment Relations Authority decisions do not support the broadest possible reading that any employee imperfection automatically amounts to contribution. Instead, the Authority is beginning to carry forward the established concepts of culpability, blameworthiness and causation.
McMillan v Qube Ports NZ Ltd [2026] NZERA 262
McMillan was an interim reinstatement case. The Authority held that the new remedy regime applied, but it would not simply accept the employer's characterisation of the conduct. At paragraph [54], it said the evidence needed to be tested and that it was not possible on the untested evidence to conclude that the applicants' conduct was culpable or blameworthy contributory conduct creating or contributing to the situation giving rise to dismissal.
Williamson v Health New Zealand Te Whatu Ora [2026] NZERA 351
Williamson is particularly important. At paragraphs [61]-[64], the Authority considered new section 123C and expressly agreed that "contributed" should be understood consistently with the meaning given to the same word in section 124. It therefore asked whether the employee acted in a culpable or blameworthy way creating the situation that gave rise to dismissal, citing Xtreme Dining.
That is a significant early indication that Parliament changed the consequences of contribution without necessarily wiping away the legal threshold developed under the previous case law.
Waanders v MSX International Australia Pty Ltd [2026] NZERA 411
Waanders provides further guidance. The Authority approached section 123C through the existing section 124 jurisprudence and treated contribution as requiring culpable or blameworthy conduct. The practical importance is that not every action by an employee should extinguish reinstatement. A useful practitioner discussion of the decision is also available from McElroys.
Mitchell v Tasman Rugby Union Inc [2026] NZERA 435
Mitchell was another interim reinstatement decision. The Authority held the new regime applied but did not make final contribution or serious-misconduct findings on evidence that had not yet been fully tested. Our case summary is available here: Mitchell v Tasman Rugby Union - interim reinstatement.
Doyle v New Zealand Steel Ltd [2026] NZERA 536
Doyle demonstrates that contribution and serious misconduct are not the same question. At the interim stage, the Authority considered that Mr Doyle's actions comfortably established contribution on the information then available, but there was insufficient information to determine whether those actions amounted to serious misconduct for section 123B. The more severe statutory consequence therefore required the more severe legal conclusion.
What do the early cases tell us?
- The threshold for contribution still appears meaningful. The Authority is using the established concepts of culpability, blameworthiness and causal connection.
- Serious misconduct remains a separate and higher question. An employer's label does not itself determine section 123B.
- The harshness lies principally in the consequences. Once qualifying contribution is established, Parliament has removed remedies that previously remained available for proportionate assessment.
A useful old-law comparison is Anna Murgatroyd v Xero (NZ) Ltd [2026] NZERA 305. The old regime applied because the relevant events pre-dated the amendments. Contribution resulted in a 20% reduction. That approach recognised employee blameworthiness without erasing the employer's own failures.
The Employment Court's existing authorities also remain relevant. In addition to Xtreme Dining, see Maddigan v Director-General of Conservation [2019] NZEmpC 190, where remedies were reduced by 20% for contribution. As at 28 August 2026, I have not identified a final Employment Court merits judgment squarely determining the substantive operation of new sections 123B and 123C after a full hearing.
The New Zealand Law Society raised significant access-to-justice concerns
The New Zealand Law Society's submission is important because it expressly limited its policy commentary largely to workability, constitutional issues and access to justice. It nevertheless described new sections 123B and 123C as already presenting "significant access to justice issues".
The Law Society also pointed to the existing case law, including Xtreme Dining, under which sufficiently egregious or outrageous employee conduct could already result in no remedy. It warned of a practical risk that an employer confident that serious misconduct occurred might undertake only a brief or inadequate process on the assumption that, even if a grievance were established, no remedies would ultimately be available.
On the high-income dismissal exclusion, the Law Society submission said the exclusion would effectively place affected employees' employment "at will" and raised constitutional and access-to-justice concerns, including the fact that the Employment Relations Act had removed the former common-law wrongful dismissal route.
The Law Association opposed removing proportionality and judicial discretion
The Employment Law Committee of The Law Association of New Zealand opposed proposed sections 123B and 123C. Its committee included practitioners acting for employers and employees, union representatives, in-house counsel and barristers.
The Committee said the existing sections 123 and 124 already gave the Authority and Court discretion to respond to the facts of the individual case. It criticised the proposed reform for eliminating judicial discretion and proportionality, potentially undermining procedural fairness, duplicating existing mechanisms and creating fresh litigation over the meaning of "contribution" and "serious misconduct".
That prediction is particularly interesting now that the early Authority cases are doing exactly what might have been expected: working through the legal meaning of contribution, culpability, blameworthiness and serious misconduct rather than mechanically applying an employer's label.
MBIE itself recorded limited evidence and risks to fair process
The Government's own MBIE Regulatory Impact Statement on personal grievance remedies is also important. MBIE recorded significant data limitations in measuring supposed low-merit claims and said the limited information available suggested the problem was limited. It said the evidence pointed to an increased risk of low-merit claims but did not confirm that this risk had materialised.
The official legislative disclosure statement also identified a behavioural risk created by the reforms: employers could become less incentivised to comply with a fair and reasonable process before dismissal, transferring risks and costs to employees.
Those acknowledgements matter. They show that concerns about incentives, evidence and process were present within the Government's own regulatory analysis, not only in submissions opposing the Bill.
Even BusinessNZ criticised the design of the income threshold
BusinessNZ's submission broadly supported the Bill and strongly supported the personal grievance contribution reforms. That makes its criticism of the income threshold particularly useful as a counterpoint.
BusinessNZ said a simple threshold could "create more issues than it solves", warned of new legal risks and a "them and us" position between people in similar roles, and recommended a substantially higher threshold combined with role-based criteria. The Bill originally proposed $180,000; the select committee later recommended increasing the initial threshold to $200,000.
The NZCTU strongly opposed the personal grievance changes
The New Zealand Council of Trade Unions' submission took the opposite policy position from BusinessNZ. It argued that the amendments would tilt the personal grievance system against workers, deepen existing power imbalances and undermine proportional compensation and effective remedies.
The value of reading the NZCTU submission alongside BusinessNZ, the Law Society, The Law Association and MBIE is that the reader can see both the political disagreement and the more technical areas of concern. This article's criticism of proportionality does not depend on pretending that all major submitters agreed.
Why the $200,000 personal grievance threshold is concerning
Under the enacted sections 67I, 67J, 113A and 113B, an employee whose annual remuneration meets or exceeds the statutory threshold can be excluded from ordinary unjustified dismissal and dismissal-related unjustified disadvantage proceedings, subject to the statutory exceptions and the ability to contract back into protection.
The final threshold is $200,000. The select committee's reported version of the Bill records why the threshold was increased from the original $180,000 proposal.
My concern is that income is a very rough proxy for bargaining power. A person does not become immune from retaliation, predetermination, factual error, personality conflict or an arbitrary dismissal simply because their remuneration crosses a statutory number.
Why the section 103A changes matter
Section 103A remains the core justification test for unjustified dismissal and unjustified disadvantage. The 2026 amendment expressly added consideration of whether the employee obstructed the employer from undertaking the procedural steps and removed the former requirement that a procedural defect be "minor" before it could be disregarded where it did not result in unfair treatment.
Genuine obstruction should plainly matter. An employee should not be able deliberately to prevent an employer from running a fair process and then rely on the resulting defect. But "obstruction" should not become a broad retrospective excuse. An employee may be ill, distressed, confused, poorly represented or legitimately disputing the relevance of what the employer seeks.
Fair process is not merely technical compliance. Investigation, disclosure, an opportunity to respond and genuine consideration are safeguards intended to improve the quality of the decision before dismissal. The danger of hindsight is that, once a later decision-maker thinks the employee probably did something wrong, a serious process failure can too easily be treated as having made no difference.
The specified-contractor gateway raises an access-to-rights issue
The section 6 specified-contractor gateway matters because employee status is the doorway to minimum employment standards, holidays, personal grievance rights and collective rights. The MBIE contractor RIS sets out the Government's case for greater certainty.
The countervailing concern, emphasised by the Law Society and The Law Association, is that a gateway based on contractual criteria can prevent a worker from reaching the traditional full inquiry into the real nature of the relationship. The concern is therefore not the label "contractor" itself; it is the employment rights that turn on status.
The 30-day collective agreement and trial-period changes also matter
The Act removed the former first-30-days collective agreement settings and associated information mechanisms. The Government's reasoning is set out in the MBIE 30-day rule RIS. The practical concern on the other side is information asymmetry at the beginning of employment, when a new worker may know little about a relevant collective agreement or union representation.
Section 67B was also amended so that a valid trial-period dismissal bars an unjustified disadvantage claim to the extent the disadvantage relates to the dismissal. Trial periods already remove an important ordinary dismissal protection, so the boundaries of the exclusion matter. See our 90-day trial period guide and cases.
Labour opposed the Bill - but what would Labour actually repeal?
Labour's opposition is not in doubt. The New Zealand Labour Party's differing view in the select committee report strongly opposed the Bill, including the personal grievance changes, high-income exclusion, contractor gateway and collective-agreement changes. Hon Jan Tinetti also criticised the legislation during the second-reading debate.
Opposition to legislation, however, does not automatically amount to an election commitment to repeal every provision. On 28 August 2026 at 10:33 pm I therefore emailed Jan Tinetti asking Labour to state, item by item, whether it would repeal, retain or amend the main changes.
Opportunity has not published a specific employment-relations policy on these changes
Opportunity has published policy across a number of areas, but as at 28 August 2026 I have not identified a specific published employment-relations policy dealing with the 2026 Amendment Act on its current policy page.
On 28 August 2026 at 10:33 pm I emailed Opportunity's policy team asking whether it would retain the changes, repeal them and restore the pre-21 February 2026 law, or adopt a different model.
My view: employment law should preserve accountability on both sides
I do not support a system in which an employee can behave badly and receive the same remedy as an employee who did nothing wrong. Contribution should matter. Serious misconduct should matter more.
But employee wrongdoing and employer wrongdoing remain separate questions.
If an employer follows a fair process, has proper grounds, genuinely considers the employee's explanation and reaches an outcome a fair and reasonable employer could reach, the personal grievance fails. The employer does not need a remedy bar.
Where the employer fails that test, the Authority and Court should retain enough discretion to assess what each side did and reach a proportionate outcome. That was the strength of the previous contribution jurisprudence.
The emerging 2026 cases give some reassurance that the Authority will continue to require legally meaningful contribution. They do not remove the underlying concern that, once the threshold is met, sections 123B and 123C can dictate consequences that are much less sensitive to degree.
The questions I actually sent to Labour and Opportunity
The emails below are the substantive text of the messages sent on 28 August 2026. Standard email-signature contact details are omitted. I will update this article if either party replies substantively.
Email to Labour - sent to jan.tinetti@parliament.govt.nz at 10:33 pm, 28 August 2026
Subject: Labour's position on the 2026 Employment Relations Act changes
Kia ora Jan,
I am looking at the employment-law policies of the parties before the election and would appreciate a clear statement of Labour's position on the Employment Relations Amendment Act 2026.
I can see that Labour opposed the Bill. What I have not been able to find is a clear commitment setting out which of the enacted provisions Labour would actually repeal, retain or amend if elected.
My concern is not that employees should escape responsibility for misconduct. They should not.
My concern is that the new law can remove important rights and remedies even where an employer has itself acted unjustifiably.
Contribution and remedies – ss 123B, 123C and 124
The previous law already dealt with contribution. Culpable or blameworthy employee conduct could result in substantial reductions to remedies.
The new provisions go considerably further.
Section 123B can remove every remedy where contribution amounts to serious misconduct. Section 123C removes reinstatement and compensation for humiliation, loss of dignity and injury to feelings where qualifying contribution is established. Section 124 can reduce remaining remedies by up to 100%.
The early Authority decisions are beginning to show how these provisions may operate.
In Williamson v Health New Zealand [2026] NZERA 351 and Waanders v MSX [2026] NZERA 411, the Authority drew on the established contribution jurisprudence requiring culpable or blameworthy conduct that actually contributed to the situation giving rise to the grievance.
Other recent decisions, including McMillan v Qube Ports [2026] NZERA 262, Mitchell v Tasman Rugby [2026] NZERA 435 and Doyle v New Zealand Steel [2026] NZERA 536, also indicate that allegations of misconduct still need to be legally and evidentially tested.
That suggests the legal threshold for contribution remains meaningful.
But once contribution is established, the statutory consequences are now much harsher and less proportionate.
An employer who acted fairly and reasonably does not need ss 123B or 123C to defeat a personal grievance. Those provisions matter where the employer has already failed the statutory test.
The New Zealand Law Society raised significant access-to-justice concerns about these provisions and questioned whether they were necessary given the existing contribution case law. The Law Association criticised the loss of proportionality and judicial discretion.
Would Labour repeal ss 123B and 123C and restore the previous contribution regime, or does it propose some different model?
The $200,000 remuneration threshold
Employees at or above the threshold can lose ordinary unjustified-dismissal and dismissal-related disadvantage protection.
Labour opposed this change. I would like to know whether that opposition translates into a firm commitment to repeal it.
Income does not protect an employee from an arbitrary, retaliatory, mistaken or procedurally unfair dismissal.
Even BusinessNZ, while broadly supporting the Bill, warned that a simple income threshold could create more issues than it solved.
Section 103A
I would also like Labour's position on the changes to the test of justification.
The Act now expressly requires consideration of whether an employee obstructed the employer's process.
Genuine obstruction should be relevant, but an employee may also be ill, distressed, confused, poorly represented or legitimately disputing what an employer is requiring. The provision should not become a retrospective excuse for an inadequate process.
Parliament also removed the previous requirement that a procedural defect be “minor” before it could be disregarded where it did not result in unfair treatment.
Fair procedure is not simply technical compliance. Investigation, disclosure, an opportunity to respond and genuine consideration help prevent the wrong decision being reached in the first place.
Other changes
Could Labour please confirm, preferably item by item, whether it proposes to repeal, retain or amend:
- 1. the $200,000 unjustified-dismissal threshold;
- 2. the 2026 amendments to s 103A;
- 3. ss 123B and 123C and amended s 124;
- 4. the specified-contractor gateway under s 6;
- 5. the 30-day collective agreement and related union-information changes; and
- 6. the amendment to s 67B concerning trial-period dismissals?
Labour's opposition to the Bill is clear. What I am interested in now is what Labour would actually put back in its place if elected.
My view is that employee misconduct should continue to have consequences, but those consequences should be proportionate. Employee culpability should not erase employer accountability where the employer has acted unjustifiably.
A clear statement of Labour's intended position would be very helpful.
Lawrence Anderson
Email to Opportunity - sent to policy@opportunity.org.nz at 10:33 pm, 28 August 2026
Subject: Opportunity's position on the 2026 Employment Relations Act changes
Kia ora Opportunity Policy Team,
I am considering Opportunity's policies ahead of the election but have been unable to find a clear employment-relations policy dealing with the Employment Relations Amendment Act 2026.
I would appreciate knowing whether Opportunity would retain these changes, repeal them and restore the pre-21 February 2026 law, or adopt some other approach.
My concern is not that employees should entirely escape responsibility for misconduct. They should not.
My concern is that the new law can remove important rights and remedies even where an employer has itself acted unjustifiably.
Contribution and remedies – ss 123B, 123C and 124
The previous law already dealt with employee contribution. Culpable or blameworthy conduct could result in substantial reductions to remedies.
The new provisions go much further.
Section 123B can remove every remedy where contributing conduct amounts to serious misconduct. Section 123C removes reinstatement and compensation for humiliation, loss of dignity and injury to feelings where qualifying contribution is established. Section 124 can reduce remaining remedies by up to 100%.
The early Authority cases suggest the new provisions may still be subject to meaningful legal tests.
In particular, decisions such as Williamson v Health New Zealand [2026] NZERA 351 and Waanders v MSX [2026] NZERA 411 draw on the established contribution law requiring culpable or blameworthy conduct that actually contributed to the situation giving rise to the grievance.
Other recent decisions, including McMillan v Qube Ports [2026] NZERA 262, Mitchell v Tasman Rugby [2026] NZERA 435 and Doyle v New Zealand Steel [2026] NZERA 536, also indicate that an allegation of misconduct does not simply determine the contribution or serious-misconduct question.
That is encouraging, but it highlights the problem with the amendments.
The Authority may still have to undertake a careful legal analysis before finding contribution. Once that threshold is crossed, however, Parliament has made the consequences much harsher and less proportionate.
An employer who acted fairly and reasonably does not need ss 123B or 123C to defeat a personal grievance. The employee loses because no grievance is established. These provisions become important where the employer has already failed the statutory test.
The New Zealand Law Society raised significant access-to-justice concerns about these provisions and questioned whether they were necessary given the existing contribution case law. The Law Association also criticised the loss of proportionality and judicial discretion.
The $200,000 remuneration threshold
Employees at or above the threshold can lose ordinary unjustified-dismissal and dismissal-related disadvantage protection.
Income does not protect someone from an arbitrary, retaliatory, mistaken or procedurally unfair dismissal.
Even BusinessNZ, while broadly supporting the Bill, warned that a simple income threshold could create more issues than it solved.
Section 103A
I am also concerned about the changes to the statutory test of justification.
The Act now expressly requires consideration of whether an employee obstructed the employer's process.
Genuine obstruction should plainly be relevant. However, an employee may also be ill, distressed, confused, poorly represented or legitimately disputing what an employer is demanding. “Obstruction” should not become an easy retrospective excuse for an inadequate process.
Parliament also removed the previous requirement that a procedural defect be “minor” before it could be disregarded where it did not result in unfair treatment.
Fair process is not simply red tape. Investigation, disclosure, an opportunity to respond and genuine consideration are safeguards against reaching the wrong decision in the first place.
Other changes
I would also appreciate Opportunity's position on:
- the new specified-contractor gateway under s 6;
- removal of the former 30-day collective agreement and associated union-information protections; and
- the amendment to s 67B concerning trial-period dismissals.
Could Opportunity please confirm, preferably item by item, whether it proposes to repeal, retain or amend:
- 1. the $200,000 unjustified-dismissal threshold;
- 2. the amendments to s 103A;
- 3. ss 123B and 123C and amended s 124;
- 4. the contractor gateway;
- 5. the collective-agreement changes; and
- 6. the s 67B trial-period amendment?
My view is that employment law should maintain accountability on both sides.
Employee misconduct should have consequences, and serious misconduct should have serious consequences. But those consequences should remain proportionate, and employee culpability should not erase employer accountability where the employer has acted unjustifiably.
A clear statement of Opportunity's position would be very helpful.
Lawrence Anderson
Frequently asked questions
Does any employee mistake now count as contribution?
The early ERA decisions indicate that the answer is not simply yes. Williamson expressly treated "contributed" in section 123C consistently with the established section 124 meaning, requiring culpable or blameworthy conduct creating the situation that gave rise to dismissal. Waanders also applied the established contribution jurisprudence.
Can contribution remove hurt-and-humiliation compensation?
Yes. If section 123C applies, compensation under section 123(1)(c), including compensation for humiliation, loss of dignity and injury to feelings, is unavailable. If the contribution amounts to serious misconduct, section 123B can prevent any remedy.
Can an employee earning $200,000 or more still bring a personal grievance?
The threshold does not eliminate every possible personal grievance. It principally excludes ordinary unjustified dismissal and dismissal-related unjustified disadvantage proceedings for employees within the threshold regime, subject to statutory exceptions and the written ability to contract back into protection. See sections 67I, 67J, 113A and 113B.
Did Labour oppose the Employment Relations Amendment Bill?
Yes. Labour's differing view in the select committee report strongly opposed the Bill. The question put to Labour on 28 August 2026 is what it would actually repeal or replace if elected.
Has Opportunity promised to repeal the 2026 employment law changes?
I have not identified such a commitment in Opportunity's published policy material as at 28 August 2026. The party has therefore been asked for a specific position.
Has the Employment Court finally interpreted sections 123B and 123C?
As at 28 August 2026, I have not identified a final Employment Court merits judgment squarely determining the new provisions after a full substantive hearing. The most useful early guidance is presently coming from ERA decisions, while the Authority is drawing on established Employment Court authorities such as Xtreme Dining.
Primary sources and submissions
- Employment Relations Amendment Act 2026 - New Zealand Legislation
- Employment Relations Amendment Bill - Select Committee reported version and commentary
- MBIE - Regulatory Impact Statement: personal grievance contribution and remedies
- MBIE - Regulatory Impact Statement: income threshold for unjustified dismissal
- MBIE - Regulatory Impact Statement: contractor gateway
- MBIE - Regulatory Impact Statement: 30-day rule
- Legislative disclosure statement
- New Zealand Law Society submission
- The Law Association Employment Law Committee submission
- BusinessNZ submission
- NZCTU submission
- Hansard - Jan Tinetti on the Employment Relations Amendment Bill, 10 February 2026
- Opportunity - current policy page
This article is legal and political commentary for general information. It is not legal advice about any individual employment matter. Employment law is fact-sensitive and time limits can apply.
