- Hon Brooke van Velden
Workplace Relations and Safety Minister Brooke van Velden says an 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.
This policy delivers on the ACT-³Ô¹ÏÍøÕ¾ coalition to set an income threshold above which personal grievances cannot be pursued.
Cabinet has agreed to introduce an income threshold of $180,000 per annum for unjustified dismissal personal grievances, meaning employees earning above that will be unable to raise an unjustified dismissal claim.
“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,” says Ms van Velden.
“Highly paid workers such as senior executives or technical specialists can have a significant impact on organisational performance and culture. Having a poor performing manager or executive can have big flow-on effects for the entire business and increase the risk of poor culture and low morale.
“I know there will be many hardworking Kiwis who have had to work under a manager who might not have been up to the task, and whose leadership might have harmed the morale or productivity of their team.
“This change will provide greater labour market flexibility, enabling businesses to ensure they have the best fit of skills and abilities for their organisation.
“Workers who are wanting to move up the career ladder and be considered for more challenging positions will benefit from this policy. 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 approximately 3.4 percent of the workforce and aligns with the current top income tax rates. The income 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,” says Ms van Velden.
Editor notes:
- The income threshold of $180,000 per annum refers to a regular base salary and excludes other income such as incentive payments and benefits like vehicle use. It will not be adjusted for part-time employment.
- Employees earning over $180,000 per annum will still be able to raise other types of personal grievances.
