SHIFTING UNEMPLOYMENT RATES: WHAT THIS MEANS FOR EMPLOYERS
Rising unemployment | Employer readiness | Workforce planning | Good faith
Recent Stats NZ figures show unemployment sitting at around 5.3% in March 2026. Although the unemployment rate has not shifted dramatically since last quarter, it remains well above the 3.5% recorded three years in the March 2023 quarter, and is still sitting at one of the highest rates since briefly around September 2020 and prior, back in 2015/2016.
What’s more troubling is that since March, New Zealand has seen tough times particularly with the Middle East conflict, and fuel crisis that began in late February, and it is unlikely that the current quarter accurately reflects the current economic times.
Although the unemployment rate has not shifted dramatically since last quarter, it remains well above the 3.5% recorded three years in the March 2023 quarter.
ARE EMPLOYMENT DISPUTES TAKING TOO LONG? MBIE CALLS FOR FEEDBACK
Employment disputes | MBIE Mediation | Early resolution | Mediation delays | Dispute strategy
Employment disputes are rarely resolved quickly. Before a matter can be heard Employment Relations Authority, parties will usually need to go through MBIE (the Ministry of Business, Innovation and Employment) mediation first. Right now, that means waiting around 3 to 4 months just to get a mediation date.
Even then, the process is not fast. Between 2025 and 2026, disputes took an average of 36.6 working days to complete mediation. However, current wait times for a mediation date are now around 3 to 4 months. If mediation does not resolve the issue, the next step is the Authority or the Court – adding further delay, with Authority determinations taking around 203 working days on average.
That delay and MBIE is currently seeking public input on the employment dispute resolution process. Consultation will be open on MBIE’s website from 5 May to 31 July this year.
REPEAL OF THE HOLIDAYS ACT 2003
Holidays Act 2003 | Employment Leave Bill | Payroll compliance | Legislative change | Leave accrual
A new Employment Leave Bill has been introduced to replace the Holidays Act 2003, with the new regime expected to take effect in 2028 after a year’s transition period. The proposed reforms are aimed at simplifying one of New Zealand’s most difficult employment law regimes, which has been notoriously hard for employers to apply in practice – particularly where employees work variable hours, shifts, overtime, or casual arrangements.
Some of the main proposed changes include:
- Hours based accrual: Annual leave and sick leave will accrue on an hours-based balance, from day one of employment, marking a shift away from the current weeks/days model. This change will allow employees more flexibility to take part-days leave.
- Cashing up leave: Employees will be able to request to cash up to 25% of their total annual leave balance every 12 months, giving greater flexibility than under the current regime.
- Leave compensation: The Bill introduces a Proposed Leave Compensation Payment of 12% for additional hours or casual hours worked. Any hours worked on top of contracted hours will not accrue annual or sick leave, instead workers will receive an upfront payment of 12.5% for each additional hour worked. Casual employees will receive a 12.5% leave payment for each hour worked, and will not accrue any annual leave or sick leave.
AMENDMENT TO HEALTH AND SAFETY AT WORK ACT 2015
Health and Safety at Work Act 2015 | HSWA reform | PCBU duties | WorkSafe NZ | Risk management
The Health and Safety at Work Amendment Bill is now before Parliament, and, if passed, this legislation would mark the most significant reform of New Zealand’s health and safety regime since 2016. The Government says the Bill is intended to reduce unnecessary compliance costs by sharpening the focus on critical risks, clarifying grey areas, and easing some obligations for smaller PCBUs (Persons Conducting a Business or Undertaking).
The proposed reforms may change how businesses identify, prioritise and manage risk, particularly where operations involve serious hazards, land access issues, or smaller workforces.
Some of the proposed changes include:
- A new definition of ‘critical risk’: The Bill would introduce a new definition of ‘critical risk’, aimed at focusing the health and safety system on the prevention of serious harm. Employers need to assess whether any of the new Schedule 1A activities or hazards apply to their operations.
- Different obligations for smaller businesses: PCBUs/Businesses with fewer than 20 workers would only be required to manage critical risks. All other businesses must manage all risks but will be required to prioritise critical risks.
- Recreational access to land: In some circumstances, businesses that manage or control land would generally not owe duties to people lawfully accessing it for recreational purposes, unless the activity is connected to the PCBU’s work, or occurs at the same time and place as that work.
HOW EMPLOYERS CAN RESPOND TO GLOBAL SUPLY CHAIN DISTRUPTIONS AND FUEL SUPPLY UNCERTAINTY
Supply disruption | Operational risks | Restructures and business continuity | Fuel Crisis | War
Global supply chain disruptions and fuel supply uncertainty can affect business operations, staffing, costs, and customer demand. Employers should respond proactively by reviewing employment agreements, updating flexible working policies, assessing restructuring risks, and planning for contractual issues such as force majeure. A clear response plan can reduce uncertainty, support employees, and help businesses remain resilient during periods of geopolitical instability.
In light of recent interruptions to global supply chains due to events in the Middle East, it is vital that employers consider how their business may be impacted by similar events and put a plan in place to mitigate any potential negative consequences.