The Employment Relations Amendment Act 2026 received Royal Assent on 20 February 2026 and came into force the following day. It is the most significant reshaping of the Employment Relations Act 2000 in many years, and it directly affects how 90 day trial periods, personal grievances and dismissals work. Whether you run a business in Hawke’s Bay or you have just started a new job under a trial period, this guide explains the current rules and what changed.
A trial period is a written clause in an employment agreement that allows an employer to dismiss a new employee within the first 90 days of employment without the employee being able to raise a personal grievance for unjustified dismissal. Trial periods are governed by sections 67A and 67B of the Employment Relations Act 2000.
Since 23 December 2023, when the Employment Relations (Trial Periods) Amendment Act 2023 came into force, trial periods have been available to all employers regardless of size. Before that date they were limited to employers with fewer than 20 employees.
The protection a trial period offers an employer depends entirely on the clause being valid. The courts interpret these requirements strictly, and a defective clause gives the employer no protection at all. To be valid, the trial period must meet all of the following conditions:
Employers should also remember that ordinary obligations continue during a trial: minimum employment standards, health and safety duties and protections against discrimination and harassment all still apply.
Trial period dismissals are now harder to challenge
Under the previous law, an employee dismissed under a valid trial period could not claim unjustified dismissal but could still raise a personal grievance for unjustified disadvantage connected to the dismissal, for example about the way the process was handled. The 2026 Act closes that gap. An employee dismissed under a valid trial period can no longer raise a personal grievance for unjustified dismissal or for unjustified disadvantage where the claim relates to the dismissal. Grievances on other grounds, such as discrimination or sexual harassment, remain fully available.
A new income threshold for unjustified dismissal claims
Employees whose annual remuneration is at or above a specified threshold, initially set at $200,000, can no longer bring an unjustified dismissal personal grievance. The parties can expressly contract back in to those protections or negotiate their own dismissal terms, such as longer notice or severance. For employees on existing agreements there is a 12 month transitional period, running until 21 February 2027, during which the old rules continue to apply unless both parties agree otherwise. High income employees keep all other grievance rights, including for discrimination and harassment.
Process defects alone no longer sink a fair dismissal
The test of justification in section 103A has been amended. The Employment Relations Authority and the Employment Court must not find a dismissal unjustified solely because of defects in the employer’s process if those defects did not result in the employee being treated unfairly. The focus has shifted towards whether the outcome and the treatment of the employee were substantively fair, rather than whether every procedural step was perfect.
Employee conduct now directly affects remedies
Where an employee’s own behaviour contributed to the situation giving rise to the grievance, the Authority and the court must reduce remedies accordingly, and in serious cases can reduce them to nothing. Reinstatement and compensation for hurt and humiliation are not available where the employee’s contributing conduct amounts to serious misconduct, although lost wages can still be awarded.
Other key changes
A personal grievance is the formal legal claim an employee can raise against an employer, most commonly for unjustified dismissal or unjustified disadvantage. An employee generally has 90 days from the date of the action complained of, or the date they became aware of it, to raise a grievance with the employer. For grievances involving allegations of sexual harassment the period is 12 months. An employer can agree to accept a late grievance, or the Authority can grant an extension in limited circumstances.
Most grievances are resolved well before a hearing. Mediation through Employment New Zealand’s free mediation service is usually the first step, and early legal advice on both sides tends to produce faster and cheaper outcomes. Our team regularly advises on disciplinary processes, redundancies, grievance responses and settlement negotiations, and can represent you in mediation or before the Employment Relations Authority.
If you are offered an agreement containing a trial period, you are entitled to a reasonable opportunity to seek advice before signing, and it is worth taking. Check the length of the trial, the notice period that applies during it and whether the clause was presented before your start date. If you are dismissed during a trial period, ask for the reasons in writing and get advice quickly, because claims outside the trial period bar, such as discrimination, unpaid wages or an invalid clause, are still available and time limits apply. Employees earning near the new $200,000 threshold should review their agreements now and consider negotiating contractual protections such as extended notice before the transitional period ends.
Can any employer use a 90 day trial period?
Yes. Since 23 December 2023 trial periods have been available to employers of any size, provided the clause is valid and the employee is genuinely new to that employer.
Does a 90 day trial period need to be in writing?
Yes. The trial period must be recorded in the written employment agreement and signed before the employee’s first day of work. A verbal arrangement or a late signature makes the clause unenforceable.
Can an employee on a trial period raise any claim at all?
Yes. A valid trial period only blocks grievances for unjustified dismissal and for unjustified disadvantage relating to the dismissal. Claims for discrimination, harassment, unpaid wages or breaches of minimum standards are unaffected.
How long do I have to raise a personal grievance?
Generally 90 days from the event or from when you became aware of it, extended to 12 months where the grievance involves sexual harassment. Acting quickly protects your position, so seek advice as early as possible.
Employment law has moved quickly, and the cost of getting a trial period or dismissal process wrong can be significant for a business, just as the cost of missing a deadline can be for an employee. Bramwell Bate advises employers and employees across Hastings, Napier and the wider Hawke’s Bay region on trial periods, disciplinary processes, redundancies and personal grievances. Call us on 06 872 8210 or contact one of our team to discuss your situation.
