The Employment Relations Amendment Act 2026: what employers need to do now

What changed on 21 February 2026?

The Employment Relations Amendment Act 2026 amends the Employment Relations Act 2000. The changes that matter most to employers are:

• Procedural fairness (section 103A): a procedural mistake, on its own, should no longer make a dismissal unjustified unless the error actually led to the employee being treated unfairly.
• A $200,000 remuneration threshold: employees whose total remuneration is at or above $200,000 can no longer raise a personal grievance for unjustified dismissal (this can be contracted back in).
• A contractor “gateway test”: a worker who meets the test is a specified contractor and cannot later claim to be an employee through the Authority or Employment Court.
• Grievance remedies: where an employee’s own conduct contributed to the situation, remedies can be reduced by up to 100%, and serious misconduct that contributed can remove remedies altogether.
• The 30-day rule is removed: new non-union employees no longer have to start on collective-agreement terms for their first 30 days.

The procedural fairness change explained

Under section 103A, dismissals and disciplinary actions are tested against what a fair and reasonable employer could have done in the circumstances. Previously, a genuine but minor procedural slip could still make an otherwise justified dismissal unjustified.

From 21 February 2026, the law confirms that minor procedural errors should not, by themselves, make a dismissal unjustified, as long as the employee was treated fairly overall. The duty to act in good faith under section 4 remains, and substantive fairness still matters. This is not a licence to cut corners: it narrows the risk from small, immaterial mistakes, not from an unfair process.

The $200,000 dismissal threshold

Employees earning total remuneration at or above $200,000 a year can no longer bring a personal grievance for unjustified dismissal. “Total remuneration” includes salary plus items such as bonuses and commissions. Employers and high-earning employees can agree in writing to opt back into unjustified-dismissal protection if they choose.

For these roles, some of the good-faith procedural steps that normally apply to a dismissal (such as consultation on redundancy) may no longer be legally required, though a considered process is still good practice and other grievance grounds, like discrimination, still apply.

What employers should do now

• Review your disciplinary and dismissal templates so they reflect the updated section 103A test while still following a genuinely fair process.
• Check any contractor arrangements against the new gateway test and document how each one meets it.
• Identify any roles at or above the $200,000 threshold and decide whether to address unjustified-dismissal protection in their agreements.
• Update onboarding so new employees are no longer defaulted onto collective-agreement terms for 30 days.
• Train your managers: the safest position is still a fair, well-documented process, every time.