Workplace Relations and Safety Minister Brooke van Velden said the change allows more flexible dismissal processes for high-income employees.
The policy aims to enhance labour market flexibility and will be introduced through the Employment Relations Amendment Bill next year.
The proposed removal of unjustified dismissal protections for employees earning more than $180,000 tackles key challenges in managing senior roles in NZ.
These changes will promote accountability, flexibility and fairness in the workplace.
Here’s why Brooke van Velden’s bill makes a lot of sense:
1. Senior leaders and specialists earning over $180K are in roles that significantly shape a company’s success. With these high rewards come expectations of high performance, adaptability and resilience.
By removing unjustified dismissal protections, businesses can address underperformance or misalignment in these roles more effectively, ensuring leadership teams deliver the value they promise.
2. The current rigid employment law can stall necessary leadership changes, especially in fast-moving industries.
This policy empowers businesses to realign their workforce efficiently without fear of drawn-out legal disputes, enabling adaptability and sustained innovation.
Nick Mowbray argues that high rewards come with expectations of high performance, adaptability, and resilience. Photo / File
3. The current system is sometimes misused to prolong disputes or negotiate settlements without substantive claims.
The new policy reduces protracted legal disputes: Personal grievance claims at senior levels can drag on for years, consuming leadership time and focus.
The new policy should also curtail frivolous or strategic claims. High earners may exploit the system as a negotiation tool, diverting resources from legitimate cases.
This new bill would allow businesses to ensure the system serves its intended purpose – protecting fairness, not facilitating unnecessary disputes.
4. The current system is most valuable for lower-income or vulnerable workers who lack bargaining power.
This change ensures the system focuses its resources on those who need it most, while preserving protections for fundamental rights like discrimination and harassment for all workers.
5. Excluding high earners from personal grievance protections for unjustified dismissal will encourage alternative resolution methods.
Those methods can include pre-agreed severance terms in employment contracts, and mutual termination agreements without the current risks associated with these processes.
6. Countries like Australia and Germany already offer valuable examples of how similar policies work in practice.
Australia excludes employees earning over A$175,000 (NZ$192,600) from unfair dismissal claims, allowing businesses to manage senior roles more flexibly.
Germany’s mutual termination agreements, known as Aufhebungsvertrag, enable fair resolutions without lengthy disputes.
This new policy strikes the right balance between accountability and flexibility.
By creating a streamlined approach to managing senior roles, it protects workplace culture, empowers businesses to innovate, and focuses the system on workers who need it most.
It’s a bold and necessary step toward a modern employment environment for New Zealand.
