New law targets high-income employees in key roles.
The New Zealand government has announced plans to introduce an income threshold for unjustified dismissal personal grievances under the Employment Relations Act. Workplace Relations and Safety Minister Brooke van Velden says this change will provide greater labour market flexibility, allowing employers to choose the best fit for their organisation.
According to the new policy, employees earning above $180,000 per annum will be unable to raise an unjustified dismissal claim. However, those affected can still opt back into unjustified dismissal protection or negotiate their own dismissal procedures with their employer. The income threshold is set to cover approximately 3.4% of the workforce and aligns with current top income tax rates.
The policy aims to benefit workers who want to move up the career ladder and be considered for high-impact positions, allowing employers to give them a chance without risking a costly dismissal process if things don't work out. The change will be progressed through the Employment Relations Amendment Bill in 2025, with the income threshold adjusted annually to match increases in average weekly earnings.