Major change on the horizon: personal grievance reform

The Government is set to introduce significant reforms to the personal grievance process, reshaping how employment disputes are handled.  These changes will affect both employers and employees, altering how disputes are raised, defended, and resolved. 

Overview of the reform 

The reform is expected to make certain personal grievance claims harder for employees to pursue. It will also provide clearer rules for employers regarding behaviour expectations and remedies.  

The legislative amendments aim to streamline resolution procedures, while raising the bar for employee claims. Accurate record-keeping and thorough documentation will remain essential safeguards for employers throughout the employment relationship. 

Salary threshold and grievance eligibility 

One of the most notable reforms is the introduction of a $180,000 annual base salary threshold. Employees earning above this level will generally be excluded from raising personal grievances for unjustified dismissal or related disadvantages, unless their employment agreement explicitly preserves these protections. 

In addition: 

• Employees found to have committed serious misconduct may be ineligible for remedies. 

• Employees whose actions contribute to a grievance without constituting serious misconduct may face restrictions on reinstatement and compensation for emotional harm or lost benefits. 

Reduced remedies and greater discretion 

Courts and the Employment Relations Authority will gain discretion to reduce remedies by up to 100% based on employee behaviour. The bill also eliminates the ‘30-day rule’ for new employees under collective agreements, simplifying entry into workplace terms. 

These changes require employers to carefully consider termination provisions in employment agreements for staff near or above the salary threshold. Adjustments to notice periods, severance, or remuneration components may be considered to align with the new rules. 

Defining serious misconduct and maintaining records 

Employers will need to clearly define what constitutes serious misconduct and maintain thorough documentation of employee behaviour and disciplinary processes. Reliance on employee behaviour to reduce or deny remedies depends on establishing facts, which may increase the complexity of managing conduct and documenting processes. 

Employees should also be aware of the greater risks associated with certain conduct, as actions contributing to disputes may limit potential remedies. 

Implications for workplace culture 

While the changes may complicate matters for employees, they could also encourage greater accountability and professionalism. Reduced personal grievance claims may decrease the need for disciplinary interventions. 

However, a decrease in formal claims does not automatically indicate improvements in employee engagement or workplace culture. Issues may not be communicated, leaving them unresolved. This can lead to disengagement, resentment, and increased workplace conflict over time. 

Timeline for implementation 

The second and third reading of the Bill is anticipated before the end of the year. If passed, some changes will not apply immediately, with transitional periods expected for existing employment agreements. 

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