The law has changed. Good management hasn’t

Published 20 August 2026 | 3 min read

New Zealand’s employment law landscape shifted significantly in February 2026. The reforms introduced a contractor “gateway test”, changed personal grievance remedies, removed the 30-day collective agreement rule and restricted unjustified dismissal claims for some employees earning $200,000 or more.

For employers, these changes provide greater flexibility. But they do not make careful people management or clear employment documentation optional.

One particularly important change is that a dismissal will not be unjustified solely because of a procedural defect, unless that defect resulted in the employee being treated unfairly. Employee conduct may also reduce, or in some circumstances remove, the remedies available in a personal grievance.

That does not mean employers can dispense with fair process.

Good faith obligations remain, and managers should still make decisions based on reliable information, communicate concerns clearly and give employees a genuine opportunity to respond. Just as importantly, the process followed should align with the employee’s Individual Employment Agreement (IEA) and the organisation’s policies.

Is your IEA still fit for purpose?

As Lane Neave highlighted in its February 2026 overview of the reforms, employers should review their employment agreements alongside their performance, disciplinary and contractor processes.

An outdated IEA can create uncertainty precisely when clarity matters most. It may contain clauses that no longer reflect current legislation, the employee’s actual role or the procedures managers are expected to follow.

A well-drafted, up-to-date IEA provides the foundation for good management. It clarifies expectations, supports consistent decision-making and helps both parties understand their rights and obligations before a workplace issue arises.

For most businesses, however, the greatest risk is not simply a missing or outdated clause. It is the gap between what the agreement or policy says and what managers actually do.

When a performance or conduct issue arises, five practical disciplines continue to matter:

• Be clear about the concern and use specific examples.
• Check whether you are dealing with performance, misconduct or a wider change to the role.
• Listen to the employee’s explanation with an open mind.
• Confirm expectations, support and next steps in writing.
• Seek advice before moving to a warning, dismissal or material change in employment.

The legislation may have shifted the balance of risk, but it has not changed the fundamentals: clear employment terms, timely conversations, fair decision-making and sound documentation remain among an employer’s best safeguards.

A useful question for every employer: If an employment decision were challenged six months from now, would your IEA support the process followed—and could your managers clearly explain what happened?

If the answer is uncertain, now is a good time to review your agreements.

EQ Consultants can help employers identify outdated clauses, compliance gaps and practical improvements before they become workplace problems. Contact us to arrange a review of your employment agreements.

Sources: Employment New Zealand, “Employment Relations Act changes take effect today”, 21 February 2026; Lane Neave, “Major reform to employment law”, 24 February 2026. This article provides general information and is not legal advice.




Amy Lawson,
Director | HR Consulting Manager