The Employment Relations Amendment Act 2026 became law on 21 February 2026. Below is a high-level summary of the key changes and what employers need to know.

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High-income earners

Recent amendments to the Employment Relations Act 2000 introduced a $200,000 remuneration threshold, which significantly alters personal grievance rights for high-income earners who are dismissed.

What are the key changes?

• High-income earners (those earning $200,000 or more) cannot raise a personal grievance for unjustified dismissal.

• The $200,000 threshold includes salary and wages, bonuses, commissions and employee share-scheme benefits. The amount is annualised over the preceding 364 days.

• High-income earners may still bring personal grievances or other claims on grounds unrelated to their dismissal.

When do the changes apply?

A 12-month transition period applies to employees who were employed before the amendments came into force (February 2026). So the amendments will apply to all employees from February 2027.

The new rules apply immediately to new hires.

Where to from here?

• Employers and employees may mutually agree in writing that these dismissal rules will not apply. This allows a high-income employee to retain full personal grievance rights for unjustified dismissal and may be used as a recruitment tool for senior roles.

• In practice, this is unlikely to be attractive to employers.

• High-income employees and their advisers are likely to place greater emphasis on robust contractual protections, such as extended notice periods or no-fault termination clauses.

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Changes to personal grievance remedies

Significant changes have been made in the personal grievance space. Where an employee is dismissed and their conduct amounts to serious misconduct, they are not entitled to any remedies.

Where misconduct is established, the Authority/Court may reduce remedies by up to 100%, including removing compensation for hurt and humiliation and eliminating reinstatement as a remedy, if the employee is found to have contributed to the personal grievance.

Where to from here?

You should review policies and employment agreements to ensure that definitions of serious misconduct remain appropriate and up to date. Lawyers and employees are likely to raise novel arguments about the definition of serious misconduct.

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Section 103A - Test of Justification

The test of justification focuses on whether the employer's actions were those that a fair and reasonable employer could have taken in the circumstances, at the time the decision was made.

The change - a dismissal will not be unjustified solely due to procedural defects unless those defects result in actual unfair treatment. This shifts the focus away from minor technical errors towards the overall substantive fairness.

New test for contractors

The amendments introduce a new 'specified contractor' gateway test for determining whether a worker can claim employee status.

If all criteria below are met, the worker cannot challenge their status:

• A written agreement states the person is an independent contractor and not an employee.

• The worker is not restricted from performing work for others.

• The worker:

  • Is not required to work set days, times or hours; or

  • May subcontract the work

• The arrangement cannot be terminated because the worker declines additional work.

• The worker had a reasonable opportunity to seek independent advice.

If these criteria are satisfied, the individual will be a contractor and cannot challenge that status. If they are not satisfied the worker can still challenge their status under the traditional "real nature of the relationship" test.

Where to from here?

You should review your contractor arrangements.

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Trial periods

An employee cannot bring a personal grievance for unjustified dismissal (that remains the same) but now can't bring a personal grievance for unjustified disadvantage where their employment is terminated under a valid trial period.