Asia-Pacific employment law bulletin 2025

New Zealand

2024 was another significant year for employment law in New Zealand, with landmark decisions and a number of proposed legislative reforms a year into a new coalition Government (led by the centre-right National party). This follows Workplace Relations Minister, Brooke van Velden signalling early in 2024 that the Government wants to ‘restore business confidence and certainty’.

Personal liability of officer for health and safety breaches

In a recent case, Maritime v Gibson [2024] NZDC 27975, the Court found guilty the former Ports of Auckland Limited (POAL)CEO, for breaching his due diligence obligations as an officer under the Health and Safety at Work Act 2015 (HSWA), after a worker died while working as a stevedore. The prosecution came after three previous deaths at POAL. Officers, those who have the ability to exercise significant influence over a business or undertaking, are required to exercise due diligence to ensure that the business or entity complies with its health and safety obligations. The abovementioned case marks the first time that a court provides guidance on what is required from an executive officer of a large company to comply with their due diligence obligations, since the HSWA was introduced eight years ago.

As an officer, the CEO was ultimately found to be responsible for health and safety at the Port. The fact that other senior employees played a role in managing health and safety did not detract from the CEO’s due diligence obligations. Given previous critical health and safety failures (including three previous health and safety convictions against POAL), he should have been aware of inadequate health and safety practices. There was a consistent failure by POAL and, by extension, by the CEO to properly understand work as done, as opposed to work as designed or imagined. The CEO therefore breached his due diligence obligations, exposing workers to the risk of death or serious injury.

The judgment clarifies that an officer can rely, to an extent, on delegation to health and safety personnel to ensure the business has appropriate resources and processes to manage risks. However, the officer is ultimately responsible, and cannot blindly rely on such delegation. This remains the case even for businesses with complex structures and many layers of hierarchy. The CEO is yet to be sentenced. He will not face a term of imprisonment, but is liable to a fine of up to NZD 300,000 (approximately USD 169,510).

Employment status case

In August 2024, in case Rasier Operations BV v E tū Inc [2024] NZCA 403 the Court of Appeal upheld a previous ruling from the Employment Court that had decided that four platform drivers were employees rather than contractors. Employment status is important because it acts as a gateway to several minimum legislative entitlements, including minimum wage, holidays and leave, minimum hours of work, rest and meal breaks, KiwiSaver (a voluntary retirement savings scheme) and the ability to pursue a personal grievance.

The Court of Appeal held that the Employment Court’s approach to determining the drivers’ employment status was novel and diverged from the approach set out by the Supreme Court in Bryson v Three Foot Six Ltd [2005] NZSC 34, a case involving the status of model makers engaged on the Lord of the Rings film trilogy. The Employment Court wrongly focused on the drivers' alleged vulnerability and the need for protection. In applying the correct legal test, the Court of Appeal noted that provisions in the written agreement suggesting driver independence were not reflective of reality. The Court considered that drivers were precluded from making any meaningful decisions about the terms on which they provided services, and that the platform retained significant unilateral control. The Court also found that drivers did not have freedom to make decisions expected of an independent business operator, such as determining their quantity and quality of work while using the driver app.

In December 2024, the Supreme Court granted the platform leave to appeal, which will mark the first time the Supreme Court has considered the test for employment status since 2005 and will be the final word on the status of these drivers in New Zealand.

Significant market trends

Given difficult economic conditions on a local and global level, and the New Zealand Government’s cost-savings directive, there has been a marked increase in restructures, both in the public and private sectors. New Zealand has a high bar for justifying a restructure – employers must have a genuine business reason, comply with any contractual provisions relating to change management, act in good faith, and follow a fair and reasonable process. This includes consulting on both the proposal to restructure and the implications for an employee before a decision is made. The courts have increasingly recognised the need for an employer to not only justify a decision to disestablish a role but also any decision not to redeploy an employee to a suitable alternative position.

With an increase in restructures, there has been a corresponding increase in litigation. Relevantly, in Television New Zealand v E Tu Incorporated [2024] NZEmpC 106, the Employment Court (Court) upheld an Employment Relations Authority (Authority) determination that TVNZ breached its consultation obligations under its collective agreement with E Tuū Union. The Court found that the agreement preserved managerial prerogative but required active participation with the union around change management before a change management proposal was presented. TVNZ was ordered to go back to the development stage of its restructure proposal with the Court noting that ‘if having to do things again comes at a significant cost, that is a natural consequence of its breach’.

The case illustrates the importance of carefully considering contractual provisions relating to restructurings before commencing the process.

Material changes on the horizon

The transition to a National-Act coalition Government has come with a spate of proposed legislation to make employment laws more employer friendly. In a speech to the Auckland Business Chamber, the Minister commented that the ‘Government is committed to cutting the red tape and regulations that are stopping both businesses and employees from realising their full potential’.

Gateway test for contractors

The Government plans to make changes to the Employment Relations Act 2000 (Act) to provide greater certainty for independent contractors and businesses. The proposed changes will include the introduction of a ‘gateway test’ for determining whether someone is an independent contractor or not. If the person satisfies the factors set out in the test, the worker will be considered to be a contractor and will have no ability to challenge their employment status in the Authority or Court.

Income threshold for raising a personal grievance for unjustified dismissal

Currently New Zealand law allows all employees to bring unfair dismissal claims and to access the full range of remedies, irrespective of their earnings. Going forward, the Government plans to introduce an income threshold that prevents employees earning over NZD 180,000 (approximately USD 101,827) per year from raising a personal grievance for unjustified dismissal. However, employees will still be able to raise other types of personal grievances. This reflects the approach in other jurisdictions, which, anecdotally, appears to see more discrimination claims or other legal action brought by high income earners. Drawing upon overseas experience, it is possible that senior executives simply reframe their claims, bringing forward alternative grievances or disputes to challenge their dismissals. This highlights the need for employers to ensure robust contractual provisions for such employees to best negotiate dispute resolution mechanisms and exit frameworks in advance.

Remedy reductions for employee contribution

The Government is planning to make amendments in the Act to the way that the Authority and Court will award remedies for personal grievances. Employees will no longer be entitled to remedies where their behaviour amounts to serious misconduct. Additionally, employees will be ineligible to reinstatement to a role, or for compensation for hurt, loss and humiliation, when the employee’s behaviour has contributed to the issue giving rise to the personal grievance. These changes are likely to result in a significant shake up to how disciplinary processes are conducted and assessed.

Health and Safety reform

In June 2024, the Government began a comprehensive consultation process to seek feedback on the work health and safety regulatory system, which is primarily governed by the Health and Safety at Work Act 2015. The Government considers that the current regulatory settings do not strike the appropriate balance. It is unclear what the eventual reform will look like, and in what timeframe it will be implemented, but this has previously been flagged as a priority area for the National-Act coalition Government.

Holidays Act reform

The New Zealand Holidays Act is widely known as being overly complex and difficult to apply, other than for those working Monday to Friday from 9-5. Global payroll systems typically require significant manual override and checking to ensure compliance. There have been widespread issues with employers collectively having to address over USD2.5 billion of holiday pay arrears due to inadvertent non-compliance. Minister of internal affairs announced in March 2024 that Holidays Act reform was her key priority. A draft exposure bill was released in September 2024, however feedback predominantly indicated that the general framework for the draft bill was not a significant improvement, and in some situations, would add even more complexity and higher compliance costs. The Government has therefore returned to the drawing board. Officials are now working on an hours-based accrual model for calculating annual leave. It remains to be seen whether this Government will deliver on meaningful reform.

Contributors: Rebecca Rendle - Simpson Grierson