Highlights from RemNet’s Employment Law Update with Nicola Cuervo, Partner at Lane Neave (23 September 2026)
Nicola Cuervo described the past year as bringing the biggest changes to New Zealand employment law since the Employment Relations Act replaced the Employment Contracts Act. These are the points that matter most for remuneration and reward specialists.
The $200k high-income threshold
Since 21 February 2026, employees earning over $200,000 can’t bring a personal grievance about their dismissal. The threshold is based on total gross remuneration over the previous 364 days. That includes base salary, commission, bonuses, employer KiwiSaver contributions, allowances and employee share scheme benefits.
This means an employee whose base salary is below $200k could move over the threshold partway through the year once incentives are paid.
- The government can adjust the threshold annually from 1 July 2027.
- Employers and employees can agree to “opt back in” to grievance rights.
- For existing employees, the new rules apply from 21 February 2027 unless the employer and employee agree otherwise. For new hires earning over the threshold, they apply from day one.
Employers are now deciding their position. Some larger employers are simply agreeing to opt back in. Others are considering enhanced notice periods or pre-agreed ex gratia payments as a trade-off. Expect this to come up more often in senior offer negotiations.
Pay secrecy is out
Since August 2025, employers can’t stop employees from discussing their pay or treat them adversely for doing so. Employees now have a new personal grievance ground if this happens. Remove pay confidentiality clauses from your agreement templates. Existing agreements don’t need to be updated, but those clauses can’t be enforced.
Other changes
- Partial strikes: Employers can now deduct pay from employees taking part in a partial strike, using either a flat 10% or a proportional formula, provided the notice requirements are met.
- Equal Pay Amendment Act 2025: The threshold for a pay equity claim has risen (the female representation test went from 60% to 70%). Comparators are stricter, existing claims were discontinued, and there is a 10-year bar on re-raising settled claims.
- KiwiSaver: The default contribution rate rose to 3.5% on 1 April 2026 and will rise to 4% on 1 April 2028. Factor this into total remuneration.
The Employment Leave Act 2026
The Employment Leave Act replaces the Holidays Act on 6 August 2028. Under the new Act:
- all leave accrues in hours from day one
- leave is taken hour for hour, including part days
- one hourly rate applies to all leave types
- a 12.5% leave compensation payment (up from 8%, and now covering sick leave as well) applies to additional and casual hours.
Nicola expects payroll systems and the law to line up far better than they did under the Holidays Act. Her advice is to wait for the outcome of November’s election, since some tweaks are possible, and then plan the transition during 2027. Workplaces with long-term collective agreements should start that planning early.
Case law: get your documents and processes right
- Petrie v Alphere: An informal, long-standing work-from-home arrangement wasn’t a contractual entitlement, and the employee’s constructive dismissal claim failed.
- TEU v Te Pūkenga: The Employment Court held that the employer could remove a discretionary life and income protection insurance benefit. However, it breached good faith because its consultation wasn’t genuine: the decision had already been made.
- O’Rourke v McKay: The employee never signed up to the incentive scheme, and the scheme rules required him to still be employed when payment was made. He wasn’t entitled to a payment.
- Grinsted v Bunnings: The employer failed to complete the performance rating that the incentive scheme required. The Authority awarded the bonus ($11,820) plus $5,000 compensation.
- Top Energy v Dell: The employer recovered relocation and study costs under clear contractual terms. Completing a salary review and deciding not to give an increase was lawful, and no discretionary bonus was owed after the employee resigned.
The common thread: clear documentation and doing what your scheme rules say you’ll do are your best protection.
Thank you to Nicola Cuervo and Lane Neave. To receive Lane Neave’s employment law updates, email communications@laneneave.co.nz. This article is a general summary and not legal advice.
Lane Neave is committed to solving problems and realising opportunities for our clients.
We tap into more than 150 years of experience and provide our hugely talented pool of emerging and current legal experts with the opportunity to make the complex simple.
Nicola is a Partner based in our Christchurch office, specialising in employment, health law, privacy law, and dispute resolution.
She has extensive private practice experience as an employment law expert, as well as significant in-house experience having been Principal Legal Advisor Employee Relations at New Zealand Police and General Counsel at District Health Boards New Zealand.
Nicola is an expert in disciplinary processes and investigations, as well as restructuring, personal grievances and alternative dispute resolution. She has broad experience in health & safety advisory work, managing complaints and adverse events, and has extensive experience in high-profile government and coronial inquiry work.
Nicola is known for her pragmatic approach, and ability to navigate clients through difficult situations without damaging ongoing relationships. Prior to joining Lane Neave, Nicola was Special Counsel at another national law firm.
In addition to her New Zealand experience, Nicola has worked in London as in-house counsel to investment banks. She has graduate qualifications in viticulture, wine science, and Spanish.
