Brooke van Velden: Workplace Relations and Safety Minister on legislation preventing people earning over $180k a year from raising unjustified dismissal claims

• Workers earning over $180,000 will lose the right to raise unjustified dismissal claims under a new policy.
• 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.

Workers making over $180,000 a year will no longer be able to raise an unjustified dismissal claim if they lose their job once a new Government policy takes effect.

The upcoming change to the Employment Relations Act “will enable employers to ensure they have the right fit for their high-impact leadership and specialist roles”, Workplace Relations and Safety Minister Brooke van Velden said.

The policy, described as a “more flexible dismissal process for high-income employees”, delivers on the Act-National coalition agreement to set an income threshold above which personal grievances cannot be pursued.

“This policy is about offering workers and employers more choice when negotiating contracts.

“Employers and employees are free to opt back into unjustified dismissal protection if they choose to or negotiate their own dismissal procedures that work for them,” van Velden said.

She said the policy was “paving the way for the next generation of leadership” when she spoke to Mike Hosking on Newstalk ZB.

“One of the classic cases of grievance from businesses is you want to take a chance on someone, but you’re too afraid if something goes wrong, how on earth will it work out.”

“You’ve got someone in the workforce who is maybe quite skilled, got a good attitude, but if you push them up to that next leadership level into management, you know, if it doesn’t work out and they aren’t a good fit, this allows you to move them on.”

Van Velden said many people would have worked with a manager “who has led to poor productivity, low morale, and the boss and the workers are just sitting there and waiting for this person for years and years to want to move on”.

The change would provide greater labour market flexibility and would benefit employers and workers, she said.

“This policy allows employers to give workers a go in these high-impact positions without having to risk a costly and disruptive dismissal process if things don’t work out.”

The income threshold of $180,000 will cover about 3.4% of the workforce. The threshold will be adjusted annually to match increases in average weekly earnings.

“The change will be progressed through the Employment Relations Amendment Bill, which I aim to introduce in 2025,” van Velden said.

The income threshold refers to a regular base salary and excludes other income such as incentive payments and benefits like vehicle use.

Employees earning over $180,000 will still be able to raise other types of personal grievances.

Jaime Lyth is a multimedia journalist for the New Zealand Herald focusing on crime and breaking news. Lyth began working under the NZ Herald masthead in 2021 as a reporter for the Northern Advocate in Whangārei.

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Episode Transcript

Speaker 1 (00:00):
Change in the workplace. Cabinets agreed that if we earn
more than one hundred and eighty thousand dollars a year,
you won't be able to raise an unjustified dismissal claim.
It's interesting this, what's it about a workplace relations safety?
Minister Brook Vanvelden's with us. Brook morning, Good morning mate.
Just real quick on the COVID thing, given you're in
charge of face too. The story I read Minister to
sit on COVID Royal Commission report for months, as reported

(00:21):
by a newsroom, and everyone ran with that you weren't
supposed to release it yesterday and you did. How did
that all play out? Oh?

Speaker 2 (00:30):
Look, Mike, I think this really comes down to what
I hear a lot of, which is a trust in media.
This is just a classic example. Many many months ago,
newsroom approached an office that wasn't mine and asked what
I was going to do with the report. Someone in
that office who didn't know me, said I was going
to sit on it till twenty twenty six, and newsroom
ran with that. And you know, sometimes miss information can

(00:52):
go circle the globe a few times before it actually
comes back to you.

Speaker 1 (00:56):
Did you come back did any of you go wrong? Corrected?

Speaker 2 (01:00):
We did, and they did actually publish a correction. But
the up there, the concusion was laid. But I've been,
you know, for the last month or so, definitely going
to release it.

Speaker 1 (01:13):
As you should it because it's ours after all. Now, right,
did this business? What's the point of this? So if
you were one hundred ninety thousand dollars, you cannopt in?
I note so, But but what's the point?

Speaker 2 (01:26):
So what it is here is it's really paving the
way for the next generation of leadership. You know. One
of the classic cases of grievance are here from business
is you want to take a chance on someone, but
you're too afraid something goes wrong, how on earth it
will all work out? And so what this says is,
you know, you've got someone in the workforce who's maybe

(01:46):
quite skilled, got a good attitude, but if you push
them up to that next leadership level into management, you know,
if it doesn't work out and they aren't a good fit,
this allows you to move them on. I think that's
really positive for the next generation coming through. But the
other part of this is I'm sure there'll be many
people listening who have worked with a manager who has

(02:07):
led to poor productivity, low morale, and the boss and
the workers are just sitting there waiting for this person
for years and years to want to move on. And
this will boost productivity and culture within our workplaces.

Speaker 1 (02:20):
The one eighty is tied to the top tax rate.

Speaker 2 (02:23):
I take that's right, but it will only be for
the first year because then it will be indexed with
wage growth. What we're not aiming for here is that
in twenty years time, when wages have continued to grow,
everybody's been captured by this, but it is for the
top earners. It's around three point five percent of New
Zealand's workforce.

Speaker 1 (02:41):
Good stuff. You have a good weekend, Appreciate it, Brook
van Velden. For more from the Mic Asking Breakfast, listen
live to news talks that'd be from six am weekdays,
or follow the podcast on iHeartRadio.