Employment law set for significant change in 2025
In the last week the government has announced several changes coming to the Employment Relations Act that will, if implemented, swing the balance a little closer to the interests of employers.
The principal change is that employees whose behaviour amounts to serious misconduct will no longer be able to claim for a payout from their employer in relation to their dismissal. Serious misconduct includes violence, bullying, harassment, theft or fraud, endangering oneself or others, using illegal drugs at work, or dishonesty.
Another major change is the introduction of an income cap for unjustified dismissal claims – employees earning over $180,000 will be unable to raise a personal grievance over their dismissal. Employers would be able to “fire at will”, with no reasons for the dismissal required, or to follow any process other than to give the required period of notice (similar to how 90-day trial periods operate for other employees). The $180K income threshold will then be adjusted annually to match rising wages generally.
Other changes coming include:
• Employees claiming hurt and humiliation, whose behaviour contributed to the situation, will be ineligible for reinstatement and compensation.
• Payouts for personal grievances may be reduced by up to 100% if the employee contributed to the situation.
• The Employment Relations Authority and Employment Court must assess whether employee behaviour hindered the employer’s ability to fulfil their obligations.
• The threshold for procedural error claims will be higher, when the employer’s actions are deemed fair.
A Bill to implement these changes will be introduced to Parliament next year. Only time will tell if the changes announced will be watered down as the bill goes through the Parliamentary process – but watch this space!
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