Two key changes to the Employment Relations Amendment Bill
Employment law reform continues to progress, with the Select Committee reporting back on the Employment Relations Amendment Bill. The Select Committee report recommended changes to the Bill, we highlight the two key changes Workplace Relations and Safety Minister Hon Brooke van Velden has recommended Cabinet adopt.
- A refined gateway test for contractors
The Minister has sought Cabinet’s approval to adopt the Select Committee’s recommended refinements to the gateway test as follows:
- Requiring a written agreement which either specifies that the worker is an “independent contractor” or “not an employee”.
- Specifying that contracting someone to work the equivalent of full-time hours does not in itself constitute a restriction on working for others.
- Clarifying that businesses can vet a sub-contractor for qualifications or require a criminal record check if that vetting is justified by the nature of the work they are to perform.
The Minister has commented that these changes seek to reduce compliance issues and costs for businesses by mitigating risks of misclassification of workers and ensuring the test aligns with modern, flexible working arrangements.
The gateway test aims to achieve better labour market flexibility by providing greater clarity for contractors and employers. The test is designed to make it easier for businesses and workers to confirm whether someone is in a contracting relationship (i.e. not in an employment relationship).
- Income threshold for personal grievances relating to dismissal increased to $200,000
The high-income threshold barring personal grievances relating to dismissals was originally set at wages and salary totalling at least at $180,000 per annum. The Select Committee recommended replacing references to “wages and salary” with “remuneration”. This will broaden the definition beyond base salary to include forms of remuneration such as bonuses, allowances and share schemes. The Select Committee then recommended raising the remuneration threshold to $200,000.
The Minister confirmed these recommendations were consistent with Cabinet decisions about the income threshold, explaining that the change does not increase the number of employees captured but is more equitable than the previous threshold.
The Bill will return to Parliament to progress in early 2026.
For our earlier commentary on what’s on the horizon for employment law see here.
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