As 2024 draws to a close, while many are focused on festive celebrations, the Government has been busy crafting key changes in employment law. These significant updates, announced in a late-year flurry, could reshape workplace dynamics in 2025. Let’s explore some of the most notable proposals:
1. Income Threshold for Unjustified Dismissal Claims
In a major development, Minister Brooke van Velden has revealed plans to introduce a $180,000 income threshold for unjustified dismissal claims. Set to take effect in 2025, employees earning above this threshold would no longer be able to raise unjustified dismissal grievances. This measure aims to support employers in selecting the right candidates for high-level leadership roles, bringing New Zealand’s approach closer in line with Australia, which has a similar income threshold. While those above the threshold will still be able to raise other personal grievances, this change may shift how employment contracts are structured for high earners.
2. Contributory Misconduct and Remedy Reductions
The Government is also proposing changes to personal grievances where employees have contributed to their own situation. In cases of serious misconduct—such as theft, violence, or harassment—employees could be disqualified from receiving remedies like compensation or reinstatement. Furthermore, if an employee’s behaviour contributed to the grievance, remedies may be reduced by up to 100%. This shift seeks to provide employers with more clarity and reduce costs, though its practical implications will need further clarification once the Bill is introduced.
3. Partial Strikes and Pay Deductions
On December 9, the Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill was introduced, which would allow employers to deduct pay for employees participating in partial strikes (e.g., reduced work output or refusal to perform certain duties). The Bill proposes two options: a proportional deduction based on a specified method, or a flat 10% pay cut. However, partial strikes related to health and safety will be exempt. With submissions open until January 20, 2025, this Bill is expected to spark significant interest among unions and employers alike.
4. Holidays Act Reform
The long-anticipated reform of the Holidays Act is taking a new direction. After targeted consultations and feedback highlighting concerns about complexity and compliance costs, Minister van Velden has decided to revisit the reform. A simpler, hours-based accrual system for annual leave is now being considered, with the aim to introduce new legislation by the end of the current parliamentary term. Businesses will be closely monitoring these changes as they unfold in 2025.
As we approach the end of the year, these proposed employment law changes could mark a transformative shift in the workplace landscape. Stay tuned for further developments in 2025.
Read more:
When Does A Contract Of Employment Begin?
What Is An Example Of An Unconscionable Contract?
Can I Make My Own Contract Without A Lawyer?