The Education and Workforce Committee has reported back to Parliament following its examination of the Employment Relations Amendment Bill after it was introduced in June. The Committee has recommended several changes, as set out below. Workplace Relations and Safety Minister, Brooke van Velden, has publicly supported the Committee's recommendations.
The key changes proposed by the Select Committee relate to the proposed test for when a worker will be considered a "specified contractor", and the threshold for personal grievance claims for unjustified dismissal. Further detail about the other proposed amendments can be found here.
Defining specified contractors
The Committee has recommended several updates to the proposed wording of the "gateway test", the criteria for a person to be a "specified contractor" under the Act (and to therefore be excluded from the definition of "employee" in section 6).
These recommendations include:
- "Perform work for" is amended to capture third party arrangements, for example businesses performing facilitative or agency roles through a platform model
- "Natural person" is replaced with "person", ensuring the test applies to arrangements managed through a legal entity
- The test only requires a written statement that a worker is "not an employee", rather than specifying that they are an "independent contractor". This is to avoid the need for businesses to revise existing written agreements
- A subsection is inserted to clarify that specified contractors are not restricted from performing work for any other person, even if their hours of work practically restrict their ability to do so. This is to ensure that full time hours are not interpreted by the courts as a de facto restriction
- Businesses are empowered to require vetting of subcontractors to check for a relevant qualification or a criminal record (or both), where it is justified by the nature of the work. This allows safety, reputational or quality-assurance beyond statutory compliance.
Threshold for personal grievance claims for unjustified dismissal
Additionally, the Committee has suggested changes to the proposed wages and salary threshold for pursuit of a personal grievance for unjustified dismissal.
The Committee has recommended that:
- Agreement to opt out of the threshold provision is required in writing
- References to "wages and salary" are replaced with "remuneration", in order to include all PAYE income payments (other than ACC earnings-related payments) and any other benefit arising from a relevant employment share scheme
- Annual remuneration be calculated by a formula that accounts for all applicable income sources, as well as for persons who have been in their role for less than 52 weeks
- The initial remuneration threshold is raised to $200,000
- The threshold may not increase until July 2027 at the earliest.
While the Bill is still progressing through Parliament and may be revised, it is likely to be passed in early 2026. It will be important for employers and employees to stay informed on the Bill's progress given the significant changes proposed.
For more information and advice about managing the potential changes ahead, please contact a member of our employment team.
Co-authored by Gianna Menzies (solicitor) and Morgyn Jakob (summer clerk).
