After the February 2026 reforms — when does an employee have a personal grievance against me?

What to watch for

Six things that change how dismissal risk works for an SMB.

1. Contributory conduct can now reduce remedies to zero, even without serious misconduct. This is the change that matters most for typical SMBs. If the employee's behaviour contributed to the situation — failing to engage with performance management, refusing to follow reasonable instructions, dishonesty about their work — the Employment Relations Authority is now required to reduce remedies, and cannot award reinstatement or hurt-and-humiliation compensation, even if the conduct doesn't amount to serious misconduct. Lost wages can still be awarded but reduced by up to 100%.² The bar for triggering this is lower than people think — any contribution to the situation, not just a serious one.

2. Serious misconduct now strips remedies entirely. If the contributing conduct amounts to serious misconduct, the ERA can decline to award any remedies at all. Worth flagging that the Act doesn't define "serious misconduct" — the definition will emerge from ERA case law over the next year or two. Until that case law lands, expect disputes about whether specific conduct crosses the threshold.

3. Procedural slip-ups no longer sink a defensible dismissal automatically. Under the old rules, the ERA could only overlook minor procedural defects when assessing whether a dismissal was justified. The new section 103A(5) removes the word "minor" — meaning any procedural defect can be excused if it didn't actually result in unfair treatment of the employee. This is significant. The practical reading: the reason for the dismissal matters more relative to the process, where it used to be the other way round. But — if a procedural mistake genuinely treated the employee unfairly, you're still exposed. Don't read this as "process doesn't matter."

4. Process still matters. A predetermined dismissal will still bury you. The procedural-defects change tightens what counts as a defect that invalidates; it doesn't loosen the underlying obligation to act in good faith. If you've decided to dismiss before the meeting and the meeting is theatre, the ERA will still find that unjustified. Document the genuine investigation, give real opportunity to respond, take advice you actually consider. The reforms reward employers who are running the process honestly; they don't help employers running it as performance.

5. The $200,000 threshold matters only if you employ at that level — and the transitional window closes February 2027. Employees earning $200,000 or more in total remuneration (salary, bonuses, commissions, share scheme benefits) cannot bring an unjustified-dismissal personal grievance. Existing employees on agreements as of 21 February 2026 have a 12-month transitional window before the carve-out applies to them.³ Other grievance grounds (unjustified disadvantage, discrimination, harassment, duress) still apply. If you do employ at this level, it's worth a conversation with a lawyer about renegotiating terms before February 2027 — both because the carve-out becomes available and because high earners often expect contractual protections to backstop the lost statutory route.

6. Trial-period dismissals are now even better protected. The Amendment Act explicitly bars unjustified-dismissal and unjustified-disadvantage personal grievances arising from a valid trial-period dismissal. Other grounds (discrimination, harassment, etc.) still apply. Cross-link: see the entry on 90-day trial periods for what makes a trial period valid in the first place — the procedural traps there haven't changed.

A separate point on what this means operationally. The old picture: dismissal was risky, process was critical, and even a substantively-justified dismissal could be overturned on procedural grounds. The new picture: process still matters, but your reason has more weight relative to your process, and the cost of a procedurally-imperfect-but-substantively-justified dismissal is lower than it was. This isn't a licence to dismiss faster — it's a reduction in the tax on getting it almost-right. The honest reading: if you're managing an underperformer with genuine concerns, document the concerns, give real opportunity to improve, take advice when you're considering dismissal, and your risk has come down. If you're trying to manufacture grounds, your risk hasn't changed at all. The reforms reward employers who are doing it properly; they don't help employers cutting corners.

Where this entry stops

This entry covers the operational shape of the February 2026 reforms for typical SMBs. It doesn't cover:

• The personal grievance process itself. Mediation, ERA hearings, Employment Court appeals — different rules, different stakes, different timelines. If you're already in a PG, stop reading and call an employment lawyer. The decisions inside an active PG can compound costs fast, and lawyer time is meaningfully cheaper than getting it wrong.
• Specific PG grounds in depth. Discrimination (Human Rights Act 1993), harassment (ERA harassment provisions), duress, breach of statutory entitlements — each has its own framework. This entry covers unjustified-dismissal-shape changes; the other grounds need their own treatment.
• Restraint of trade and high-income agreement design. If you employ at the $200,000 level, the 12-month transitional window is an opportunity to negotiate enhanced contractual protections — notice periods, severance terms, opt-back-in to PG rights. Specialist territory; talk to an employment lawyer.
• The detailed remedies framework. Compensation, reinstatement, lost wages, hurt-and-humiliation — the Act changes how these get reduced, but the categories themselves are old territory and live on Employment NZ.
• Constructive dismissal. Named as a category of unjustified dismissal but its operational shape under the new rules is still developing.

If you've received a personal grievance, or you're considering a dismissal that might trigger one — stop. The cost of a 30-minute call with an employment lawyer is much lower than the cost of getting the procedure wrong. This entry helps you understand the framework before you're in one; it's not a defence playbook.

Last verified 9 May 2026 against the Employment Relations Amendment Act 2026 at legislation.govt.nz, Employment New Zealand operational guidance, and contemporary commentary as cited. Full source list: references. Note: the reforms are roughly 10 weeks old at time of writing. No ERA case law has been issued under the new provisions yet; expect drift on the contributory-conduct, serious-misconduct, and procedural-defects standards as cases land.