It seems that small business owners are being promised another dose of employment law reform if the National Party are re-elected in November 2026, and the National Party does not trade away its policies in negotiating a coalition government.

National's recently announced 47-point Small Business Plan (yes count them, in a plan proposing to reduce complexity and compliance costs) is aimed at reducing compliance costs and promising to make it easier for small businesses to invest, grow and employ people. That is an attractive proposition, particularly for the thousands of small businesses where the owner is also the manager, accountant, IT person, HR department, and compliance manager.

After several years of substantial changes to New Zealand's employment laws, do small businesses really need more changes to deal with? And why create even more confusion over employment rights and processes for businesses?

Trial periods have been a political football for many years now, switching between all businesses and small businesses (less than 20 employees, which in effect meant that those small businesses needed to check their head count – how many full-timers, part-timers/casuals on the books).

The National Party says small businesses make up around 97 per cent of New Zealand enterprises and employ approximately 680,000 people. So what are some of those plans?

Point 7 - Develop a fast-track for suitable employment disputes, through a simplified Employment Relations Authority pathway, with clear eligibility, proportionate procedures, firm decision timeframes and fair-hearing standards.

Those working in this space know that both employers and employees would love to have a speedy, simplified system for most cases. When the current system was implemented 26 years ago it offered the promise of a “quick and dirty” resolution process. Unfortunately, it has never lived up to this promise - it is neither quick and it certainly is bogged down in procedure. Like all justice processes in New Zealand, it simply needs resourcing and funding to enable this to happen.

Point 8 – Make better use of mediation to resolve minor disputes early, including requiring mediator recommendations and available binding options to be clearly explained and offered in suitable cases.

Those working in this space know that both employers and employees would love for this to be promoted. Two key objectives are already set out in the Employment Relations Act and clearly provide that:

·        mediation is the primary problem-solving mechanism; and that

·        the objective is to reduce the need for judicial intervention.

Again, the mediation process simply requires more funding and resourcing. Every communication with the Employment Relations Authority or Mediation Services (which is run by the Ministry of Business, Innovation and Employment) comes with a warning of prolonged delays.

The big question is why limit it to “small business operators” and create a further complication in the system?

One of the strongest messages coming from the business community in recent years has been the need for stability and certainty in employment law. In July, the Employers and Manufacturers Association head of advocacy Alan McDonald made the point particularly clearly. In setting out the EMA's election priorities, he said reforms in areas including employment law needed time to “settle and stick”.

Retail NZ has previously made an even more explicit connection between frequent employment-law changes and the problems faced by employers. It has said retailers need “stable, predictable employment laws” that are easy for business owners to navigate and comply with. It has also warned that the complexity of, and frequent changes to, employment legislation create uncertainty and costs for recruitment.

BusinessNZ has made a similar argument. Its recent survey work found that 47.1 per cent of businesses surveyed said regulatory changes over the previous three years had increased their cost of doing business. BusinessNZ chief executive Katherine Rich has also repeatedly argued for greater policy certainty for businesses.

The Employment Relations Act was amended substantially in 2026 creating so many legal questions that will take years to work through the system to provide employers with some certainty. The Holidays Act has also been replaced by the new Employment Leave Act after years of debate and uncertainty. No doubt this new system will be litigated for years before questions are resolved.

Every change has a cost. Employment agreements have to be reviewed. Payroll systems need to be changed. Managers need to understand new obligations. Staff need to be informed. Policies and procedures have to be rewritten. Sometimes lawyers and consultants need to be engaged.

Is it not in New Zealand’s best interests to have settled, well understood employment laws that employers and employees can navigate swiftly and without unnecessary complication? Providing adequate resourcing funding to a well-established and understood dispute resolution system will provide the productivity gains that political parties love talking about, but unfortunately provide very few answers to. Read more.....