Lately we have been reminded of the long-standing connection between New Zealand and Australia- built on shared history, values, and increasingly, shared approaches to work.
Our employment law in New Zealand is often developed with consideration of what is working in Australia. We’ve seen this in areas such as health and safety, for example. Another recent example sits within New Zealand’s adoption of a high-income threshold (currently $200,000), limiting unjustified dismissal claims for higher earners. Australia has had a similar concept for years.
At a glance, the idea feels familiar, with a similar intention, however, the detail has some important differences.
In Australia, the threshold is based on guaranteed earnings at a point in time. It is clear, predictable, and largely excludes bonuses and commission. In New Zealand, the approach is broader, based on actual remuneration over time (calculated over the last 364 days). This creates more uncertainty, particularly for roles with variable pay or recent promotions.
So, while we’re aligning in direction with Australia, we’re not identical in design.
For employers, that means:
- more judgement required
- less certainty (for now), until case precedent provides further clarity
It also means taking a considered approach:
- being clear on where and how the threshold applies, and how you intend to use it
- ensuring appropriate transparency in employment agreements
- being aware of how the changes will impact existing employees from February 2027, or earlier where employment terms are varied.
As always, the nuance matters.
Today is a good reminder that while we often walk similar paths across the Tasman, we still need to understand the terrain under our own feet.
