Senior Associate Lynn Booker reflects on the trends seen by our team in workplace mediations, including the rise of team conflict, and the growing impact of individual mental health on the employment relationship.

 

As mediators we work with parties in a confidential process. We do not discuss matters with our mediation team but we often talk about themes. What I find interesting is that if one of us has a pattern of similar issues/types of mediations, it is not unusual for other mediators in our team to be experiencing the same.

Late 2024 and early 2025 we noticed a large volume of mediations about returning to the office post COVID. Many employers had continued to allow its employees to work remotely but, in many situations, they found that the workplace culture had been lost, younger members of the team were not receiving mentorship and guidance, there was little development opportunities and individuals did not see themselves as being part of a team, or even needing to be part of a team. There was little concern that employees were not doing the work, the concerns were all about the benefits that come from working in the same location.

By mid 2025 these mediations had all but disappeared, and we have begun to notice mediations with two particular type of issues:

Teams in crisis

This took different forms: two teams in conflict within the workplace, teams in conflict with their leader, or sometimes an event that has occurred between two employees that had caused people to take sides.

These mediations are usually large and require careful consideration to ensure all the parties are prepared for the day. It usually involves pre-mediation meetings for the mediator to understand what has occurred and what is important to the parties.

Mediation in this type of situation can be highly successful. It provides an opportunity to clear the air, reset and agree on a way of working in the future.

Individual’s mental health and wellbeing

We have noticed a volume of mediations where an individual’s mental health and emotional wellbeing has impacted on the parties ability to move forward.

Issues that had the potential to be resolved, at the lowest level and at the earliest possible time, often escalate and impact on the ongoing employment relationship. This often means that by the time parties attend mediation they struggle to see how an ongoing employment relationship is possible. Where an employee has been absent from the workplace for an extended period, the wider workplace can become involved and integration back into the team is difficult.

The mediator always takes these types of concerns seriously and must consider the best process for the parties to have the discussion while ensuring the process does no harm.

In conclusion

The reasons behind trends in mediation are varied, but the themes we are seeing may be shaped by the economic climate, or the length of time since a significant event has passed. These patterns can be hard to pin down, but they’re important to watch and understand.

As a mediation team, we will continue to observe what’s changing and share what we learn, to help support positive outcomes and healthier workplaces for everyone.

Senior Associate and former MBIE Senior Labour Inspector Lynn Booker summarises the changes proposed by the reform of the Holidays Act 2003, and what the new Employment Leave Act could mean for employers.

 

I imagine for a lot of employers it’s a “here we go again” moment.

We have been told several times over the past few years that changes are coming that will simplify the Holidays Act 2003 and make it easier for employer to implement and employees to understand. With the announcement of the Employment Leave Act, we can start to see the detail.

My view, for what it is worth, is that if the proposed changes go ahead they will indeed address the long waited and long needed accrual of annual leave and sick leave in hours, rather than days. Leave will also be take in hours, and this will align with practices many employer’s payroll systems currently operate.

There will be a 24-month implementation period between when the Bill has passed and when it comes into force. This will provide the time for payroll providers and employers to make changes to business and payroll systems.

Employers will be required to comply with the Holidays Act 2003 until it is repealed and should there be any historic underpayments, employers will still have an obligation to rectify this.

Understanding the changes

Annual Leave

Sick leave

Taking Annual leave

Cashing up

Working extra hours – waged workers

Working extra hours – salaried workers

Casual workers

 Fixed-term arrangements

Payment for leave

Parental leave

Bereavement and Family Violence Leave

Public holidays

Entitlements for working on public holidays

Pay Slip (Pay Statements)

The impacts for employers and employees

There is no doubt that this reform has been a long time coming and the simplicity of the calculations will be welcomed by many.

There could be some challenges for employers to change a days-based leave record to an hours based record. It is likely that this will have a process where the carried forward entitlement in hours is agreed.

It does provide a benefit for many workers with an uplift in access to entitlements where previously they had to wait six months to become eligible.

People returning from a period of parental leave will no doubt be pleased that their annual leave value is not diminished and they can take this leave, at its full value, within 12 months of returning.

There will likely be some push back from those workers who do not work a 40 hours week and have their sick leave entitlement reduced to reflect the hours worked.

Employers will also need to carefully consider the implication of paying 12.5% to those workers on PAYE for annual and sick leave.

It might also be wise to consider the pros and cons of the new “cashing up” of annual leave. Certainly the new system may provide the employer an opportunity to manage those high leave balances but does it provide the employer confidence that their workers are having paid time off to rest and recuperate.

It might be helpful for employers to consider its obligations under the Health and Safety at Work Act 2015 to ensure there is no potential risk for an employee to claim that it is not promoting a proactive safety culture by allowing the employee to cash up and not take the physical leave.

We will keep you up to date with changes as they happen. The Minister indicated that her intention is to have the new Act passed before the next elections. A draft is expected early 2026.

Navigating the intersection of criminal law and employment investigations can be challenging for employers and employees alike. In this article, Senior Associate Graham Emery explores the crucial distinctions between criminal and employment investigations in New Zealand, and outlines the considerations and rights involved in each process.

 

How to deal with employee misconduct that might also be a criminal matter is one of the trickiest challenges employers face. It’s a challenging place to be—you want to act fairly, protect your workplace, and at the same time make sure you’re not trampling someone’s legal rights.

The Basics: Two very different worlds

Let’s start with the obvious: criminal investigations and employment investigations are not the same thing.

The tricky part is when these worlds collide. Say an employee is suspected of stealing company data. The police get involved, but the employer still needs to know what happened internally. What do you do without stepping on legal toes?

Employee Rights in an Employment Investigation

One of the biggest differences is the employee’s rights:

For employers, that’s a tension point. You want answers, but you also have to respect the law. Ask the wrong question, and you could inadvertently affect a criminal trial.

Timing and Process

So how do you handle it practically?

Courts look at the bigger picture: the employee’s rights, your need to run a fair workplace, and the potential impact of delays.

Evidence and Confidentiality

Another key difference:

Practical Tips for Employers

If you’re facing a situation like this, here’s what to think about:

Lessons from the Courts

Conclusion: Walking the Tightrope

The truth is this is a balancing act. Employers have to keep the workplace safe and fair but also respect the employee’s legal rights. It’s like walking a tightrope: one wrong step, and either you or the employee could be exposed to unnecessary risk.

The best approach? Be thoughtful. Separate criminal issues from workplace issues where you can. Seek advice. Document everything. And above all, treat the employee fairly while keeping the workplace running.

If your or your organisation would like further advice or support around workplace investigations, please get in touch with our team.

As we pass the midpoint of 2025, the collective bargaining landscape in New Zealand is marked by economic strain, legislative upheaval, and rising industrial action. Employers, employees, and unions are navigating a tense and transitional environment shaped by inflation, wage pressures, and significant changes to employment law.

Pay Equity changes: An end to the current process

The Coalition Government rushed through significant changes in May 2025 to lift the bar for pay equity claims and cancel all current pay equity claims to ensure the new thresholds were met. The attention is now likely to move to collective bargaining as Unions seek to achieve the gains they were seeking from pay equity claims through the more traditional bargaining approach.

The Employer perspective: Fiscal constraint and strategic restraint

Employers are responding to the rebalanced labour market with caution. While skilled labour shortages persist in areas like healthcare and IT, overall supply has increased, easing recruitment pressures. The unemployment rate sits at 5.1%, and restructuring continues across industries due to recessionary concerns and low growth forecasts.

In this context, employers are offering subdued wage increases. Public sector offers are expected to range from 0% to 2.0%, with government directives requiring that these figures include pay step increases. In the private sector, entry-level roles may see increases of 1.0–3.0%, while skilled trades are likely to receive 1.0–2.5%. High-demand areas may command 3.0–4.0% increases, though these are lower than in previous years.

Recent collective agreement settlements reflect this restraint. Ferry services secured a 4% increase in 2025 by front-loading a three-year deal. Other sectors, such as security and media, saw modest increases, with some agreements offering 0% in subsequent years. These settlements are likely to be indicative of current pressures, as employers face growing demands from unions and employees.

The Employee perspective: Rising costs and growing expectation

Employees are feeling the pinch of persistent inflation and rising living costs. The Consumer Price Index (CPI) rose 2.6% to March 2025, while the Household Living-Costs Price Index (HLPI) increased 3.0% to December 2024. Although the HLPI’s March update was cancelled due to technical challenges, the trend remains upward. Food prices rose 4.4% annually, and average hourly earnings climbed 4.46% to $42.79. The adult minimum wage increased to $23.50 in April, and the Living Wage will rise to $28.95 in September 2025.

These economic indicators have led to heightened expectations in collective bargaining. Workers are seeking wage increases that reflect real-world costs, especially in sectors previously engaged in pay equity claims—claims that were cancelled by the government in May 2025. The cancellation has left many employees frustrated and determined to pursue redress through bargaining.

Industrial action is becoming more common. Workers at Oranga Tamariki, senior doctors, support workers, nurses, teachers, and retail staff have all initiated or planned strikes in response to pay offers perceived as inadequate or working conditions deemed unsafe. This surge in action reflects a growing willingness among employees to challenge employers and assert their demands.

The Union perspective: Rising activism and legislative challenges

Unions are under pressure from both internal and external forces. Many feel “under attack” due to recent Government legislative reforms and the cancellation of pay equity claims. Internally, unions are struggling to retain experienced staff, leading to a rise in less seasoned organisers. These newer organisers, often activists with limited bargaining experience, are more likely to initiate strike action when negotiations stall.

Despite these challenges, unions remain active and vocal. Industrial action is on the rise, with strikes planned or underway across multiple sectors. Unions are pushing back against government-imposed wage caps and advocating for better working conditions, especially in healthcare and education.

In summary

In summary, collective bargaining in New Zealand as of July 2025 is defined by economic tension, legislative reform, and rising industrial unrest. Employers are constrained by fiscal realities and cautious about future growth, employees are demanding wage increases that reflect the cost of living, and unions are navigating a challenging environment with renewed activism.

The cancellation of pay equity claims and the introduction of employer-favourable legislation have intensified the bargaining climate. While some sectors have secured reasonable settlements, the overall trend points to prolonged and potentially disruptive negotiations, especially in the public sector.

The reality is that there is significant change taking place in the legislative framework that surrounds collective bargaining and employment relations. There is potential for all this to change at the next election, so a lack of certainty, along with economic pressures on both employers and employees is going to require strategic thinking about how to ensure workplace relationships are maintained in the longer term.

 

Significant shifts are proposed for New Zealand’s workplace law landscape and the Employment Relations Act 2000. With the indication that the Employment Relations Amendment Bill will be passed into law before the end of the year, we summarise the changes and our view of the impacts for employers.

Contractors vs Employees – Greater Clarity

Under the new rules, genuinely independent contractors (“specified contractors”) will sit outside the Act’s employment-law umbrella. To qualify, a contractor must have:

What this means for employers

Our view

Many of our clients who engage independent contractors may still not meet the requirements for this new classification of “specified contractors”, due to the restrictions placed on contractors during engagement. It will be vital to ensure that contracts are reviewed to meet the new specifications, with particular focus on making the agreements task orientated, with relaxing requirements regarding hours /days of work and sub-contracting arrangements.

Personal Grievances & Employee Behaviour – Shifting the Balance

The Bill aims to shift the personal-grievance system so that employees who contribute to their own dispute, particularly through behaviour that amounts to serious misconduct, can lose access to remedies like reinstatement or hurt-and-humiliation awards.  New powers allow the Authority or Court to:

What this means for employers

Our view

These amendments will likely discourage “technical” personal grievances and encourage employers to take swift action and bypass due process when they consider and employee has engaged in serious misconduct. However, we believe there will still be the requirement for organisations to have solid investigation and disciplinary frameworks. Organisations without clear disciplinary policies may find it harder to rely on these new defences until their procedures are tightened.

High-Earner Dismissal Threshold – Certainty for Senior Roles

From day one, under new employment agreements, roles paying $180,000 pa base pay (indexed annually) would not be able to  pursue unjustified-dismissal or disadvantage grievances tied to dismissal, unless the Employer and Employee agree to “contract back in”. There will be a transitional 12-month period for existing agreements.

What it means for employers

Our view

Setting a clear cut-off for high earners aligns New Zealand with some other jurisdictions.  However, at $180,000 per annum of base pay, many mid-level employees may fall into this category, prompting negotiation over “contract-back” clauses, or negotiations over enhanced notice periods. We foresee more use of bespoke agreements for these “high-earners”, as both Employers and Employees hedge their bets.

Repeal of 30-Day Rule & the “MBIE Active Intent Form” Requirements

The “30-day rule” whereby new employees have to be employed on no-less-favourable terms and conditions than the terms of an existing collective agreement for the first 30-days will be removed.

The requirement to provide the “MBIE Active Intent Form” to new employees – ensuring the new employees contact information was captured and unless the employee opted out, then provide the employees contact information to the Union – is gone. Instead, employers will now need to:

What this means for employers

Our view

By removing the 30-day period, the Bill provides more options for employers in terms of engaging employees on agreed terms and reduces administration. It’s also likely that many employers who have collective agreements in place covering the work of a new employee will not want to have substantial discrepancies in terms and conditions within their workforce as this will not help develop an engaged workforce.

Next Steps

Change brings both opportunity and compliance risk. Our team can provide support to:

If you would like advice around any of these changes, please contact our team.

The Coalition Government has today announced changes to employment regulations relating to collective agreements, to be included in the Employment Relations Amendment Bill due to be introduced this year. Here, we summarise the changes and assesses what the impacts may be for employers and employees.

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The rules relating to employers’ obligations to new employees around collective agreements are due to change, following the Coalition Government’s announcement regarding the proposed repeal of the 30-day rule, which applied the terms of any existing collective agreement to new employees.

Intended to simplify processes, align to contemporary privacy expectations, and reduce administration, this, along with other proposed changes, may impact on may impact on union membership and the uptake of collective agreements by new employees.

Repeal of the 30-day rule

Repeal of the 30-day rule, introduced by the previous government, is a key element of the proposed changes. The repeal would allow employees and employers to negotiate personalised terms from day 1 of employment, rather than adhering to collective agreement terms for the first 30 days. The Coalition Government’s view is that this change will allow for greater flexibility and individual choice.

Some employers may continue to offer the terms of the Collective Agreement to all new employees to create standardisation of terms and conditions across their workforce while enabling the opportunity for direct negotiation with non-union individual employees. For example, bargaining flat hourly rates inclusive of allowances and in lieu of overtime and penal rates.

Removal of the Active Choice Form  

The mandatory use of the Active Choice Form, which has caused confusion for both employees and employers, is proposed to be removed. Many employees misunderstood the form, believing it equated to union membership simply by indicating intent to join. For some employers, it added administrative complexity without clear benefits. The automatic sharing of employees’ personal information with unions unless opted out was also seen by some as problematic under modern privacy expectations. The Coalition Government’s intention of removing the form is to streamline the onboarding process while respecting employee privacy.

Reduced union information requirements

Employers will still be required to inform new employees about their ability to join a union, provide union contact details, and clarify that union membership binds employees to the collective agreement. This is intended to ensures employees can make informed decisions while removing a mandatory process.

Additional changes

With the removal of the 30-day rule, there is the ability for the 90 day trial period to be expanded to employees employed on individual terms, even if their role falls within coverage of a collective agreement. Some employers will welcome the opportunity for some of their recruitment needs. Employers who have collective agreements can expect some negotiating push back from Unions on this change.

The Employment Relations Amendment Bill introduces these reforms with the Coalition Government’s view of creating a balanced approach to personal freedom, workplace efficiency, and privacy protections. Expected to take effect by late 2025, these changes represent the Government’s view of a move toward clearer and more effective employment practices.

If you would like specific advice around how these proposed changes may impact your business, please get in touch with our team.

As 2025 unfolds, collective bargaining in New Zealand is being shaped by economic conditions, legislative changes, and shifting labour market dynamics. The repeal of the Fair Pay Agreements Act, alongside a government keen on tightening fiscal constraints, has created a challenging environment for negotiations. Perspectives from employees, employers and unions illustrate the complexity of these negotiations, with each party facing distinct pressures and priorities.

The Employee perspective

For employees, the economic outlook is mixed. While unemployment has risen to 5.1% and is forecast to climb to 5.4% in 2025, some skilled sectors still face labour shortages. Employees in high-demand industries such as healthcare, IT, and engineering continue to see wage increases of 3% to 4%, although this is lower than previous years.

Those in lower-skilled roles, particularly in retail, hospitality, and logistics, are experiencing smaller wage increases of 1% to 3%. Many employees are finding that wage growth is not keeping up with their expectations, particularly as employers cite economic uncertainty as a reason for conservative pay rises.

Industrial action is increasingly seen as a viable option for employees frustrated by stagnant wage growth. The use of military personnel to replace striking civilian defence staff in late 2024 was a stark reminder of the government’s willingness to intervene. Many employees feel that collective action is necessary to secure meaningful wage increases, though they also recognise the risks to workplace relationships and long-term job security.

The Employer perspective

Employers are facing a paradox: while workers expect wage increases of 3% or more, economic indicators point to a slow recovery and ongoing cost pressures. Many businesses are restructuring, particularly in the public sector, where the government is seeking to reduce expenditure.

In the private sector, employers in construction, manufacturing, and logistics are offering restrained increases (1%–2.5%) due to lower demand and concerns about profitability. Meanwhile, those in high-demand areas such as healthcare and IT acknowledge the need for competitive pay but remain cautious about long-term commitments given economic uncertainty.

A significant concern for employers is the shift in union bargaining strategies. The increasing number of less experienced organisers has led to earlier industrial action, sometimes before meaningful discussions have taken place. Employers argue that this makes negotiations more adversarial and less productive.

Additionally, the removal of the median wage requirement for Accredited Employer Work Visas has led to a more flexible hiring environment, but some employers remain cautious about over-reliance on migrant workers due to potential future policy shifts.

The Union perspective

Unions continue to push for wage increases that outpace inflation, arguing that real wages have eroded over the past few years. Despite CPI falling by 2.2% to December 2024, unions contend that workers still face rising costs in specific areas, such as housing and essential goods. The current Living Wage of $27.80 remains a key bargaining point for unions, especially in sectors where employers have resisted aligning pay rates accordingly.

However, unions are facing internal challenges. A high turnover of organisers has led to a less experienced negotiating workforce, with newer organisers more inclined to take industrial action when talks reach an impasse. As a result, strike activity is increasing, particularly in the public sector, where wage offers remain subdued (typically between 0% and 2%).

Union leaders have also raised concerns over proposed legislative changes, such as the reintroduction of partial wage deductions for partial strikes and restrictions on personal grievance claims for employees earning over $180,000. They argue that these measures disproportionately favour employers and reduce workers’ ability to advocate for fair pay and conditions.

In summary

Collective agreement bargaining in New Zealand at the start of 2025 is a high-stakes process, with unions, employees, and employers each navigating a complex set of economic and legislative conditions. The balance between wage growth, job security, and business sustainability remains delicate.

With continued industrial unrest expected, particularly in the public sector, all parties will need to engage in pragmatic, solutions-focused bargaining to avoid prolonged disputes and ensure fair outcomes for both workers and businesses in the evolving employment landscape.

 

2025 is shaping up to bring significant changes to employment law to in New Zealand. In this update, we summarise the key changes that employers and employees need to be aware of.

Increase to the minimum wage

From April 1st, the minimum wage will increase to $23.50 per hour. Employers must ensure that they are paying at least this amount by the specified date to avoid any compliance issues. Employers should check their payroll now to avoid any surprises.

Gateway test for contractors

The government is also planning to introduce a new ‘gateway test’ to determine whether an individual is an employee or an independent contractor. Although still in development, this test aims to provide greater clarity in employment classifications.

Income threshold for unjustified dismissal claims

Another notable potential change is that high-earning employees, defined as those earning more than $180,000 base pay per year, will no longer be able to make unjustified dismissal claims. This change is intended to simplify the hiring and termination processes for companies, reducing the risk of legal disputes.

However, given that there are already mechanisms available to employers to address employment matters involving high-earning individuals, it is unclear that this change would solve significant employment relations problems for Employers, as it is likely that employees who earn more than the threshold will negotiate alternative contractual arrangements to protect themselves, e.g. non-fault termination clauses, opting back into the current unjustified dismissal legislation.

The proposed Employment Relations (Termination of Employment by Agreement) Bill may offer an alternative legislative approach, as it would allow employers to approach employees with an offer of an agreed exit without the risk of constructive dismissal claims.

Other changes this year may include:

With these changes on the horizon, employers should review their policies and employment agreements to ensure compliance.

If you would like specific advice about any of these changes, please get in touch with our team.

For employers who are navigating organisational change, a careful consultation process is often the focus. However, there are several employment issues that may come out of a restructuring process which need to be handled with care.


Employers looking to hire after restructuring process may have the following questions:

  1. Do we have to offer vacant roles to affected employees first?
  2. Can we hire externally if affected employees don’t have the skills and attributes for the new role?
  3. We want to advertise vacant roles immediately after a restructure – is this ok?
  4. Can we change the duties or requirements of a role after the restructure?
  5. Can disestablished roles be re-created later?
  6. Can we hire a contractor or fixed-term employee instead of filling a new role permanently?
  7. Do we need to consult with employees if we create brand new roles after the restructure?


For questions 1-3, the answer is generally ‘yes’. Employers in New Zealand must ensure all affected employees have been given a genuine opportunity to apply for roles they are qualified for as a part of their good faith obligations. This includes assessing whether employees can reasonably perform the role with training or support. If there are no redeployment obligations remaining, employers may decide to proceed to external recruitment.

Actions covered in questions 4-7 may be possible but will require a nuanced approach based on preceding restructuring exercise and the individual circumstances of each workplace. For example, more consultation may be required with affected employees. Engaging a contractor or creating new roles immediately after going through a restructuring process should be consistent with the overarching premise of the change management process which led to the company’s reorganisation.

For specific advice around hiring after a restructure, please get in touch with our team.

This morning, Brooke Van Velden, Minister for Workplace Relations, announced that the proposed amendment to introduce a $180,000 per annum income threshold, above which employees cannot file personal grievances for unjustified dismissal, would be phased in over 12 months. Framed as a way to give employers more flexibility, this change could significantly impact workplace culture and leadership dynamics.

Workplace impact

One of the most obvious impacts of this change will be on trust and job security for senior employees. People in high paid roles may feel less stable, potentially leading to risk-averse decision-making and a reluctance to step out of the box, reducing innovation and evolution. While employers can more easily remove underperforming leaders, this may lower morale and create uncertainty across teams who may be unsettled by sudden changes or  wondering if they’re next. Insecurity at the leadership level has a way of trickling down, affecting not just high earners but also those who report to or work closely with them.

How will high earners address workplace issues?

The government suggests employees can negotiate contractual protections, but how likely is that in reality? Some companies may offer job security measures to attract and retain talent, while others could leverage the lack of protection to drive performance or maintain greater control over leadership decisions.

With unjustified dismissal protections removed, alternative dispute resolution processes—such as mediation and arbitration—are likely to become more common. Employees who feel unfairly treated may also turn to reputational damage, or even abrupt resignations, all of which can disrupt organisational stability.

Potential cultural & long-term effects

Workplaces that fail to navigate these changes carefully could see a decline in workplace culture. High-performing employees may seek roles in organisations that voluntarily provide greater job security. Companies that wish to retain top talent may need to offer additional contractual protections or higher compensation through remuneration or incentives, fostering an environment of fairness and stability even without legal obligations.

Despite the Minister’s assertion that this change will encourage internal promotions, there’s also a risk it could have the opposite effect. Employees who fear job insecurity may be less inclined to pursue leadership roles, knowing that stepping up comes with greater vulnerability to dismissal. This could ultimately hinder leadership development and succession planning within businesses.

Conclusion

The proposed law change will fundamentally reshape workplace relationships and how employment issues are handled for high-paid employees. While businesses will gain more flexibility in making leadership changes, they will also need to adapt their management strategies to maintain trust, motivation, and engagement at the senior level. The success of this shift will depend largely on how well companies foster an environment of fairness and transparency in the absence of statutory dismissal protections. Now is a good time to consider what your approach will be and how you will successfully balance changes with culture.