The Advocate | Issue 366| August, 2025

End of “Pay Secrecy”

The Employment Relations (Employee Remuneration Disclosure) Amendment Bill (“Bill”) has passed its third reading and is awaiting Royal Assent. The Bill, once given Royal Assent, will introduce grounds for a personal grievance where an employer has engaged in “adverse conduct” against an employee for a “remuneration disclosure reason”. The aim is “to increase transparency about pay and allow any pay discrimination to be more easily identified and remedied”. 

The Bill essentially introduces a two-stage test:

1. The employer (or a representative of an employer) must have engaged in “adverse conduct” and
2. The “adverse conduct” must have been for a “remuneration disclosure reason”.

Adverse conduct means:

1. Dismissing an employee or forcing them to resign/retire; or
2. Not providing an employee the same terms of employment, work conditions, benefits, opportunities for training, promotion etc. that are made available to other similarly qualified/experienced employees; or
3. Subjecting the employee to any detriment to which other employees engaged in the same work are not subjected; or
4. Threatening or arranging for another person to do any of the above.

A remuneration disclosure is where an employee:

1. discusses their remuneration with any other person (whether or not that includes disclosing their remuneration to that person); or
2. inquires into the remuneration of another employee, whether or not the other employee discusses or discloses their remuneration; or
3. participates in a discussion with the employee referred to in paragraph (a) about that employee’s remuneration; or
4. receives an inquiry about their remuneration from the employee referred to in paragraph (b).

The remuneration disclosure must be the substantial reason for the employer’s adverse conduct. This is presumed to be the case unless the employer can prove, on the balance of probabilities, that the remuneration disclosure was not the substantial reason for the adverse conduct.

Practical Considerations for Businesses

The law changes would apply to any adverse conduct that occurs on or after the date the legislation comes into force, even if the remuneration disclosure occurred prior to this date. An employee will have 90 days from the date of the action occurred or came to the notice of the employee to raise a personal grievance in relation to adverse conduct by their employer for a remuneration disclosure reason. 

The Bill does not expressly prevent employers from including remuneration confidentiality clauses in employment agreements. 

Therefore, employment agreements with existing employees will not need to be changed. However, the effect of the Bill is that as the legislation does not allow for exceptions by agreement, employers would no longer be able to rely on a confidentiality clause to discipline or dismiss an employee where an employee discusses their pay with another person. For employment agreements for new employees, please contact us for advice regarding your options. 

We will monitor the progress of the Bill through Parliament and provide further updates as required. If you have any questions about the Bill and the potential impacts on your business, please contact us for advice.

The Employment Relations Amendment Bill (“Bill”) had its First Reading in Parliament in July and has now been sent to the Education and Workforce Committee. Submissions to the Committee are now closed, with the Committee’s report back to Parliament by 17 November 2025. 

The next instalment in our Employment Relations Amendments Series focuses on the introduction of a “gateway test”  for independent contractors. This change is intended to provide greater certainty and support greater labour market flexibility.

The Current Framework

Currently, the Employment Relations Authority (“Authority”) and Courts look at the “real nature of the relationship” to determine whether a worker is an employee or an independent contractor. This involves the following legal tests:

1. The "control"  test – the degree of control/supervision exercised by the business over the worker’s work; and
2. The "integration" test – whether the work is an integral part of the business and whether the worker has essentially become part and parcel of the business; and
3. The "fundamental" or "economic reality" test – whether the worker is engaged in business on their own account.

The Gateway Test

The Bill proposes to amend the statutory definition of “employee”  to exclude "specified contractors”. If a worker meets the definition of a “specified contractor”  then they would not be entitled to any minimum employment entitlements and protections. 

A “specified contractor”  is defined as a person (“Person A”) who works for another person (“Person B”) and meets the following criteria:

• A written agreement specifies that Person A is an independent contractor; and
• Person A is not restricted from working for other people, except while performing work for Person B; and

• Either:  There are no minimum requirements regarding days/hours/period of work or availability; or Person A can subcontract the work to another person; and
• Person A may decline additional work offered by Person B and this does not have the effect of terminating the work arrangement; and
• Person A has had a reasonable opportunity to seek independent advice before entering into the agreement.
• There has been a lot of debate about the Bill and its potential effect on the recent Uber case (Rasier Operations BV v E Tū Inc). Both the Employment Court and the Court of Appeal decided that four Uber drivers were, in reality, employees. Uber has now appealed this decision to the Supreme Court.

It has been speculated that, even if the Supreme Court decides that the Uber drivers are employees, the Bill would essentially overturn that decision. 

Practical Considerations for Businesses

Given the new test could prevent workers who would otherwise be considered employees from accessing minimum employment entitlements and protections, the Authority and the Courts are likely to take a strict approach to the interpretation and application of the test. If a person does not meet the criteria to be a “specified contractor”, then the Authority and Courts may use the existing legal tests to determine the person’s status. 

Either way, while the test could make it clearer whether a worker is an employee or an independent contractor, it does not prevent a worker from bringing a claim in the Authority and forcing a business to spend time and money defending its position.

With the recent decision in the Uber case, and likely changes in the law, it may be time to review independent contractor agreements and please contact us for further advice.