Posted by De Novo Legal - last updated 8 April 2026

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Budgie smugglers and togs. Doonas and duvets. Eskies and chilly bins.

Things are a bit different across the ditch.

While Australian and NZ employment law share many common principles, three key features of NZ employment law are often overlooked by legal and HR practitioners in Australia when it comes to managing NZ-based employees.  More than simply technical differences, they have real implications that can trip up Australian businesses.  

Factoring in these key differences will help reduce unnecessary risk and cost.

1.         NZ law requires employers to consult more before making significant decisions

This is a wide-reaching point of difference between Australian and NZ employment law.  

Before making any decision that might result in a significant change or termination of employment, NZ law typically requires an employer to meaningfully consult with affected employees (although there is an exception with regard to high earners – see point 3 below).

The key source of this obligation is NZ’s statutory duty of good faith.  Among other things, the duty of good faith requires NZ employees and employers to be“active and constructive in establishing and maintaining a productive employment relationship in which the parties are, among other things, responsive and communicative”.  While consultation obligations can be found in many Australian Modern Awards and Enterprise Agreements, few go as far as the proactive requirements of NZ's statutory good faith duty.

One implication of being “active and constructive” is that NZ employers must meaningfully consult with employees any time they are proposing to make a decision that might result in the loss of employment.  In this situation, the duty of good faith requires an employer to provide impacted employees with access to information about the proposed decision, and an opportunity to comment on that information, before the decision is made.  

This obligation to consult can often be underestimated by Australian practitioners in the context of organisational restructuring and redundancy, performance management, and the management of medical incapacity.  It’s safe to assume that in most cases, additional time will be required when running these processes in NZ, when compared to how these matters are often addressed in Australia.

2.         There’s no minimum employment period in NZ for unjustified dismissal claims

Unlike in Australia, where a statutory minimum employment period must be served by an employee before they're eligible to bring an unfair dismissal claim, NZ employees can raise a personal grievance for unjustified dismissal regardless of their length of service.  An employee includes any individual “intending to work”, so an employee yet to commence in their role can even bring a claim (unusual, but not impossible).

There is an exception: where the employer has upfront written agreement with the employee that a trial period (of up to 90 days) will apply, although it's important to note that specific requirements apply as to how the trial period provision must be written and the timing as to when it's agreed. When drafted and signed properly, a valid trial period provision will permit the employer to give notice of termination during the trial period, in which case the employee is prevented from bringing an unjustified dismissal grievance in respect of the termination.   

NZ employers can also make use of contractual probation periods, although these don’t automatically preclude employee claims, and employers must still follow a fair process before terminating employment during the probation period.  

In the absence of a valid trial period provision, employers in NZ should therefore manage any termination, performance or misconduct issue in respect of newer employees with no less vigilance as they should with longstanding employees.  While length of service may impact the extent of remedies available to an aggrieved employee, it shouldn’t be assumed that the obligations to consult and follow a fair process are any less applicable in respect of newer staff.

3.         Like Australia, NZ now has a high income threshold for dismissal-related claims, but it’s calculated slightly differently

Australian law has, for a long time, prevented certain high earners from bringing claims for unfair dismissal. Until February 2026, no such threshold existed under NZ law.

However NZ law was amended on 21 February 2026 to introduce a new high income threshold, designed to prevent those earning more than NZ$200,000 from bringing claims for unjustified dismissal.

Importantly, there are some key distinctions between how the Australian and NZ thresholds apply, including that:

- a 12 month transition period applies to the new NZ threshold, which means NZ employers should take legal advice before terminating a NZ high earner’s employment before 21 February 2027 as it’s possible the threshold may not apply and the employee could still bring a claim in respect of the dismissal;

- NZ employers and employees are able to contract out of the threshold by agreeing (in writing) that it will not apply, in which case the employee will not be prevented from raising a dismissal claim in future; and

- critically, the way the threshold is calculated is different in NZ: it takes into account all amounts actually paid to the employee, whereas the Australian threshold is based (in general terms) on guaranteed earnings, so it excludes any amounts that may have been paid to the employee but were not able to be determined in advance (like discretionary incentives and bonuses, and non-guaranteed overtime).

As in Australia, high earners in NZ will still be able to bring other types of employment claims, including breach of contract claims (for example, where their employer has failed to follow a contractually-agreed termination process), or claims arising from discrimination, sexual harassment or other unlawful behaviour.

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For legal and HR practitioners in Australia managing staff across the ditch, it pays to know your jandals from your thongs - by understanding these key differences you can reduce the chances of getting inadvertently tripped up.

If you're wanting more, check out our NZ employment law dictionary for Australian practitioners for more key differences between Australian and NZ employment law.

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De Novo Legal works with Trans-Tasman businesses, providing NZ legal advice on a range of commercial and employment matters.  Contact us for a fuller understanding of your obligations in NZ and practical steps to de-risk your approach to employment relations across the ditch.

This post provides general information only, always seek specific legal advice for your particular situation.  

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