A recent Member’s Bill, the Employment Relations (Termination Of Employment By Agreement) Amendment Bill (Bill), passed its first reading in April this year. From its introduction in November last year, ACT MP Laura McClure’s Bill has drawn a lot of flak from the Opposition and trade unions regarding workers’ rights. One of the main purposes of the Bill is to provide employers with the means to negotiate with an employee, with view to ending their employment, without risking triggering a personal grievance. Situations given where this might apply include where an employee is not meeting the demands of their job, or changes in the business occur such that their position is no longer sustainable, or due to a relationship breakdown. Laura McClure in her ACT press release stated, “I know from experience that a common fear for employers is a long and costly personal grievance or unfair dismissal claim, even when the employer has adhered to due process.” The provisions in the Bill, which draw upon similar legislation in the United Kingdom, are presented as enabling an employer and employee to have an amicable conversation and come to a mutual agreement. The Bill would enable this by amending the Employment Relations Act 2000, to allow an employer who wishes to discuss or negotiate with an employee the termination of their employment, to do so without the risk of the discussion or negotiations being used as a part of any future unfair dismissal or personal grievance case (unless certain exemptions apply). This provision would apply regardless of whether there is an existing employment relationship problem. As part of the negotiations, an employer may make an offer to an employee, including payment of a specified sum, for the purpose of terminating the employment relationship by mutual consent. The offer in itself would not constitute grounds for a personal grievance. For an agreement to be enforceable, the employer must have advised an employee to seek independent advice, and given them reasonable time to do so, before signing a settlement agreement. Some of the issues raised from the first reading included concerns around ensuring the employee is adequately protected from being coerced, what are the boundaries for an off the record conversation, and timeframes given for an offer to be considered. National and NZ First indicated these concerns would need to be addressed at select committee for their continued support. Those supporting the Bill in its first reading underlined the importance of hearing from the public, both businesses and employees, on their experiences and views. How this pans out remains to be seen, with the Education and Workforce Committee’s report due 9 October 2025.
