Brooke van Velden spoke first during the debate. Photo / RNZ, Samuel Rillstone
By Lillian Hanly of RNZ
Employment Relations Minister Brooke van Velden had declared today a “great day for New Zealand’s labour market”, but Labour says it’s “very sad” and the Greens have opted for the “dark day” descriptor.
The Employment Relations Amendment Bill was debated for the third and final time in Parliament on Tuesday.
The law change comes just a few months after the Supreme Court threw out Uber’s appeal against treating drivers as employees in November 2025.
Van Velden, who spoke first, said the legislation was about solutions, and modernising the employment relations framework “for a new era”
She said the bill provided greater certainty for contracting parties.
“Businesses and workers have faced uncertainty about who is an employee and who is a contractor, which has prevented workers from accessing flexible contracting opportunities that stifles innovation and growth,” she said.
The bill introduces a gateway test that “creates an exclusion from the definition of employee consisting of criteria that represent characteristics of clear-cut contracting arrangements”.
Van Velden called it a “clearer and more efficient test” to determine whether a worker is a contractor or an employee. She said the four-part gateway test clarified contractor versus employee status from the start of their contracting arrangement.
“This test gives legal weight to the intention of contracting parties, protects genuine contracting arrangements, including modern platform-based arrangements, and allows businesses and workers to move forward with confidence, knowing where they stand.
“If the worker does not meet the criteria, they can be assessed under the existing common law test,” she said.
But unions have raised concerns that under the new law, criteria will rely heavily on the formal wording of a contract rather than the reality of the working relationship, excluding specified contractors from being able to test their employment status as four Uber drivers did.
The bill also changes personal grievance settings by strengthening the consideration of and accountability for the employee’s behaviour in the process. It introduces a remuneration threshold, set at $200,000, for eligibility to raise an unjustified dismissal.
It also revokes what is known as the 30-day-rule, which currently allows for an employee’s individual agreement to reflect the terms of the collective agreement (if it is in place) for 30 days, regardless of whether an employee chooses to join a union or not.
Van Velden said revoking that rule would allow employers party to collective agreements to hire new employees on “bespoke, flexible terms” for the first 30 days, which would reduce compliance costs.
Leader Chris Hipkins spoke following van Velden, saying the law change would drive New Zealanders to Australia where the Government had provided more protection to workers being “forced to become contractors by their employers”.
“It extended minimum wage protection to more of those workers. It extended leave entitlements to more of those workers. It extended unfair dismissal protections to those workers. It extended superannuation obligations to those workers.
“And this Government here in New Zealand is doing the opposite of that,” Hipkins said.
He said it wasn’t just Uber drivers that would be affected, but also transport, construction, cleaning, security and labour hire workers.
“These people deserve to be treated well. They deserve to be paid properly. They deserve to have security in their employment, security that this Government is stripping away.”
Hipkins said listening to van Velden’s speech it was hard not to reach the conclusion she “doesn’t understand the dynamic that exists between an employer and an employee”.
“That actually the employer goes into that discussion with the power balance tilted in their favour.”
Labour MP Camilla Belich said the bill would change the fundamental fabric of employment relationships in New Zealand.
She said it eroded the rights of the employees the Government was “alleging to support”.
“This will make employment harder, if not unattainable for many workers in New Zealand, alongside all the rights that go with it.”
Green MP Teanau Tuiono called it a “terrible bill” and a “dark day” for Aotearoa and for the workers who have a “reasonable expectation that if you put in a hard day’s work, you should get a fair day’s pay”.
Tuiono referenced the Uber drivers who, he said Parliament should be backing, rather than multinational corporations.
“We actually should be backing the workers, the people who need our help and support.”
Green MP Ricardo Menendez March added the bill created a “new class of contractors” that effectively won’t have access to basic entitlements like sick leave and minimum wage.
He said government MPs called it the “gig economy” but accused it of leading to poor working conditions for many people across the country.
Government MPs spoke briefly in support of the bill citing more certainty for businesses and workers, opportunities for businesses to provide good employment opportunities, and labour laws that provide flexibility.
Most Opposition MPs used their allocated time in full.
- RNZ