The Employment Relations (Termination of Employment by Agreement) Amendment Bill
- Business Central
- Oct 23, 2024
- 2 min read
Updated: Nov 5, 2024
ACT small business spokesperson Laura Trask has introduced a new Member’s bill aimed at helping employers avoid costly unjustified dismissal or personal grievance claims.
The Employment Relations (Termination of Employment by Agreement) Amendment Bill (“Bill”) would allow employers to engage in protected negotiations with employees regarding the termination of their employment.
Trask highlighted that sometimes when one New Zealander employs another it just doesn’t work out.
“Relationship breakdowns, poor performance, or personal circumstances can make an employment relationship unsustainable.
“Some employers would happily offer an employee money to leave, and in many cases the employee would happily accept. But this is not an option under current law.”
Trask added that employers frequently fear the financial and stressful toll of personal grievance or unjustified dismissal claims, even when they have followed proper process. She said high legal fees for personal grievance and unjustified dismissal claims should not simply be seen as ‘the cost of doing business’.
The Bill aims to streamline the process, allowing both parties to amicably agree to terminate the employment relationship before disputes escalate to the Employment Relations Authority.
The Bill proposes to introduce protected negotiations that would enable employers to seek mutual consent for termination by asking employees to sign a settlement agreement in exchange for specified compensation, regardless of whether there is an employment relationship problem. These discussions would be confidential and without prejudice, meaning they could not be used in any future claims of unjustified dismissal or personal grievances, except in certain cases.
While there are currently “without prejudice” off-the- record discussions that employers can engage in with employees to seek a negotiated exit, these are in limited circumstances, and there are stringent requirements that need to be met to protect against legal risk.
The Bill has only been introduced and it is unclear at this stage whether it will progress. As usual, we will keep you informed on any updates and seek your feedback should it proceed through the parliamentary process.