Of concern are the recent amendments to employment legislation which emasculate worker protections under personal grievance procedures. In this opinion piece, I will discuss the elimination both of compensation (other than reimbursement of lost wages in some circumstances) as a remedy, and of reinstatement – that is, giving the person their job back – in cases of unjustified dismissal. My own perspective is based on many years of practice as an employment lawyer prior to retirement, and having acted for parties on both sides of dismissal disputes.
The background is that the coalition agreement between ACT and National of November 2023 recorded, among ACT’s program objectives, that the government would “consider” removing eligibility for personal grievance remedies where an employee is at fault. That “consideration” was transformed into harsh reality for employees from 21 February 2026.
In 1970, the introduction of the personal grievance procedure into legislation by the Holyoake government was a major step forward in New Zealand’s employment law, although only available to union members. The new law replaced the previous legal position which had enabled workers to be sacked on notice but without cause. In effect, the government recognised that workers were not a commodity of an employer, but persons who were entitled to reasonable treatment, and not to be deprived of their livelihood without just reasons and in a fair way. The 1970 Act enabled workers to seek reinstatement for wrongful dismissal and compensation (usually for distress related reasons) and reimbursement of lost wages.
In 1991 the new National government under Jim Bolger, elected on a platform of promoting a “decent society”, passed legislation which extended personal grievance protections to all workers. Bolger himself had been a Minister of Labour, so that portfolio would have equipped him with good understanding of the need for sensible, balanced and fair employment relations.
Although modified over the years, the personal grievance protections remained basically the same as they had been in 1991 up until last month. The remedies of compensation and reinstatement went back to 1970.
A dismissed employee’s right to ask for reinstatement was not unqualified. This could only be awarded if the tribunal decided that the dismissal was unjustified and reinstatement would be practicable and reasonable in the circumstances. Those factors effectively eliminated reinstatement where a person had been sacked for sheer incompetence or for behaviour which destroyed trust, for instance, theft from their employer. Most instances of employee fault are much less destructive of trust than that example and can be managed by any competent employer (usually by giving warnings), e.g. things like accounting errors, irregular punctuality, carelessness, bad language.
Problems afoot
One of the problems with the new law is that it treats all kinds of misconduct resulting in dismissal as being the same level of seriousness when they are not – an inflexible “one size fits all” approach. It’s obvious that a worker who is caught red-handed stealing a large sum of money from their employer shouldn’t, and won’t, be reinstated or get compensation. That same conclusion shouldn’t necessarily apply if the person makes an accounting error which causes minor financial loss to their employer. But under the new law it will apply in that latter situation if the person is dismissed. (There are other problems with the new law which space doesn’t permit me to outline, but which are referred to at length in the Opposition Parties’ statements of position in the select committee report of 8 December 2025 that can easily be googled on the Parliament website).
The employment tribunals could reduce remedies proportionately in cases of employee fault, typically around 30 or 40% although sometimes a lot more or a lot less than that range depending on the degree of fault. This part of the law reflects that “to err is human…”: at times we all make blameworthy mistakes, but there should be a reasonable degree of tolerance. Remedies should be reduced, not eliminated.
In unjustified dismissal cases, the remedies of compensation and, more rarely, reinstatements (usually only a handful of orders were made each year) have worked satisfactorily for many years. New Zealand had eight distinct governments from 1970 before the present one, including a total of 30 years of National Party governments, but none saw a need to make substantial changes to those remedies. Such a change occurred only last month and, even then, only because the changes have been driven through Parliament by a pro-business party that won just 8.64% of the popular vote at the last election – not exactly a resounding mandate from electors to remove protective employee remedies that had worked well for more than 55 years.
So the outcome is that the important right to job and financial security has been greatly eroded in employment dismissal cases. It now seems that an employer who sacks someone for misconduct can be confident that the person won’t be able to get either compensation or their job back even if the misconduct was minor, such as being late for work on a few occasions, and even if the employer’s process is a botched one.
Why has this happened?
A puzzling aspect is why the National Party, the architect of the law reforms both in 1970 and again in 1991, went along with the harshly unbalanced, anti-employee ACT Bill. In the 30 years of National governments since 1970, there has been no obvious dissatisfaction with the law. And surely, National MPs won’t have read “consider” in the coalition agreement as if it meant “must enact”. My cynical guess is that National MPs are gambling that, because the public may not have much sympathy for workers who have lost their jobs due partly to their own fault, or for their dependants, few votes will be lost in November.
Lastly, the double standards of the Coalition politicians won’t be lost on your readers. There are numerous examples of unacceptable behaviour by MPs in their own workplace, Parliament, which haven’t resulted in sanctions, much less loss of their jobs. Just last year Mr Seymour drove a Landrover up several steps at Parliament before being stopped by a security guard, and despite the Speaker having refused permission to the car’s owner for it to be driven on the steps. If a worker in any normal workplace pulled such a stunt they could have lost their job for reasons related to defiance of authority, disregard for safety, security, or potential damage to property. Under his new legislation they wouldn’t get their job back. No sanctions were applied against him.
