Proposed Change to Remedies : PG : Employment Relations Act.

Change to Remedies

Currently if an Employee is successful in their grievance they may be entitled to a number of remedies such as loss of wages, loss of benefits, reinstatement and hurt and humiliation compensation.

An Employee may face a reduction in a claim for hurt and humiliation due to their own actions or behaviour that may have led to being dismissed. This reduction is calculated as to what proportion of their actions or behaviour contributed to the dismissal.

Proposed change

The reasons given for the proposed changes to the personal grievance process for Employees is to “rebalance” the process, and to not reward bad behaviour. If the Employee’s actions amount to serious misconduct and contribute to the grievance, they will not be able to claim any remedies such as reinstatement, lost wages, lost benefits and hurt and humiliation compensation.

If the Employee’s actions only amount to misconduct, but still contributed to the grievance then they do not receive remedies of reinstatement , loss of benefits or compensation for harm and humiliation. However the Employee may be able to claim loss of wages but that is able to be reduced up to 100%

Impact

These changes are likely to make it very difficult financially for Employees to progress a personal grievance claim. Even if an Employee is successful in proving their dismissal is unjustified, if their conduct is determined to be serious misconduct they are not to be awarded any remedies, or limited remedies if misconduct.

There may be dismissals that do not have a finding of misconduct or serious misconduct, such as for medical incapacity or redundancy which may still allow Employees to be able to claim the full range of remedies available.

Employers may no longer be motivated to settle at mediations if they believe that their financial risk is limited at the Employment Relations Authority [ERA] and court.

The proposed Bill does not define what serious misconduct will look like to prevent an Employee receiving remedies. Instead it is likely the courts will be guided by the Employer’s agreement and policies to see what is written and identified as serious misconduct.

The proposed Bill does not identify what level of contribution is needed from an Employee to prevent them from receiving remedies.

Once it is established there has been some form of misconduct the Employee is likely to lose most, if not all, remedies available in law even if the unjustified action or dismissal is proven.

Advice

Belonging to a Union means greater involvement and oversight into Employers policies and procedures Unions are usually involved as to how disciplinary investigations are conducted, on what grounds, and how issues are resolved.

The Union’s collective agreement with the Employer usually contains agreed processes and may identify what serious misconduct looks like. This can be invaluable to an Employee and reduce the risk of an Employer claiming actions are serious misconduct .

Disclaimer: these are opinions and views of NUPE and should not be substituted for legal advice. If this article has raised any questions or concerns please contact us directly

Public submissions are now being called for the Employment Relations Amendment Bill 2025

The closing date for submissions is 2.00pm on Wednesday, 13 August 2025

Contractor OR Employee?

It has been established through case law a series of tests to determine the true nature of the

employment relationship.

Even with a signed Contractor’s agreement, this alone does not mean a person is a Contractor as in reality they may be treated like an Employee.

Sometimes an Employer may require an Employee to submit invoices or pay with holding tax for accounting purposes and to avoid paying PAYE and ACC levies. They may use this

to claim that person is a Contractor when it suits them, .however in all other matters treat them as an Employee.

There are many areas to consider such as, control, integration into the business, financial, day to day practice what the parties understood they were agreeing to.

Proposed change

The Bill seeks to clarify the definition of a Contractor and Employee by identifying five key areas that will determine if a person is a Contractor or not.

All five requirements must be met to be a Contractor.

The five areas are:

• A written agreement stating the person is an independent contractor; and

• That person can work for another business; and

• That person is not required to be available to work on specific times of day or days, or for a minimum period OR that person can subcontract the work ; and

• The business does not terminate the contract if the worker does not accept an additional task or engagement that is additional to the work the worker agreed to perform under the agreement; and

• That person had a reasonable opportunity to seek independent legal advice before entering into the arrangement.

For example. a person is denied a reasonable opportunity to seek independent advice or the person felt pressured into signing or not told of this right, then they may still seek a declaration that they are an Employee and be able to pursue a grievance as an Employee, and be entitled to claim sick leave, annual leave, kiwisaver etc.

If these requirements are not met then a person may still seek to be declared an Employee and be covered by the Employment Relations Act,.and other associated Acts such as Wages Protection Act and Holidays Act etc.

Impact

The proposed changes give directions to the ERA and courts as to what will be considered important in determining if a person is an Employee or not.

It is not clear how the existing case law tests will be impacted or integrated into the proposed changes

What is clear is that having a signed written agreement will carry a lot more weight in determining if a person is an Employee or Contractor.

Employers may feel confident in hiring a person as a Contractor as long as they have met the proposed five requirements .

Advice

Contractors are not able to join a Union as they are viewed as being in business for themselves and not an Employee.

Contractors are not covered by other Acts such as Minimum Wage, Wages Protection, Kiwisaver, Holidays Act etc, and take on other obligations such as payment of various taxes, ACC levies, Consumer Guarantee Act, Fair Trading etc.

If a Contractor has a dispute with the Employer, they cannot access the ERA, and will need an agreed alternative dispute resolution system such a paying for private mediation or arbitration, There is no obligation to act in good faith by either party, and breaches of contract are subject to commercial law pursued in District and High courts.

If a person is offered a Contractor’s agreement, they should be encouraged to get advice before signing anything,

If the Employer has advised that person to get independent legal advice and they decide not to , and proceed to sign a Contractor’s agreement, they may find it difficult to argue that they are an Employee and therefore will not be covered by the Employment Relations Act,

Disclaimer: these are opinions and views of NUPE and should not be substituted for legal advice. If this article has raised any questions or concerns please contact us directly

Public submissions are now being called for the Employment Relations Amendment Bill 2025

The closing date for submissions is 2.00pm on Wednesday, 13 August 2025

PROPOSED CHANGES :The 30 Day Rule

When a new Employee starts work they are usually offered an Individual Employment Agreement [IEA]. If the workplace is covered by a Collective Employment Agreement [CEA] then the new Employee is to be covered by the same terms and conditions in the CEA for the first 30 days they are employed.

This means their IEA is the same as the CEA

After 30 days the Employee can decide to join the Union and continue to be covered by the CEA or remain on the IEA.

The Proposed Changes

The Employment Relations Amendment Act 2025 is proposing to remove this rule so that the IEA can have different terms and conditions in it compared to the CEA

The removal of the “30-day” rule is to support an expansion of 90-day trials at the start of employment.

The Employer must give a copy of any CEA’s that an employee may be covered by and told of any Unions that may be active in their workplace. This is so the Employee can be fully informed before deciding what employment agreement they want to be on.

Impact

With the removal of this rule the Employer will be able to include clauses not usually found in a CEA such as 90 day trial period.

When the 90 day trial period was introduced the Government said that Employees and Employers were not obligated to include this clause in the agreements and could negotiate to either not have any trial period, or to have a shorter trial period, less than 90 days.

Even though 90 day trial periods are not compulsory for new Employees, in reality Individual Employment Agreements usually include this clause without any challenge due to the power imbalance between Employees and Employers.

Advice

New Employees can join a Union as soon as they have accepted an offer of work. They do not have to wait 30 days to join a Union

This change may not seem like a big deal,as the Employer is still likely to offer similar terms and conditions as in a CEA however it gives Employers the power to introduce terms and conditions that may be oppressive to the Employee such as restraints and 90 day trial periods.

Currently the 30 day rule places restrictions on the Employer as to how far they can go in what they can demand in an IEA.

A new Employee should ask to see any available CEA’s and talk to the Union if they have questions. It is important for a new Employee to be fully informed and take advice before agreeing to and signing any written agreement as it will be legally binding.

Disclaimer: these are opinions and views of NUPE and should not be substituted for legal advice. If this article has raised any questions or concerns please contact us directly

Public submissions are now being called for the Employment Relations Amendment Bill 2025

The closing date for submissions is 2.00pm on Wednesday, 13 August 2025