Rights Without Reach: How Much do New Zealand Employees Actually Know About Their Rights in the Workplace?
By Tina Jing & Zhen ling guan
Introduction
When your livelihood depends on your job and employer, sometimes speaking up can come at a cost. New Zealand’s employment law framework was often considered to be relatively strong and 'employee-friendly' compared to other jurisdictions. However, the current Government’s recent passing of the Employment Relations Amendment Act 2025 may change how well this holds up. Although the Employment Relations Act 2000 is designed to recognise and address an inherent power imbalance during the course of employment, the ability of workers to actually enforce these rights is far less straightforward.
For many employees, pursuing an action against their employers can be both financially and emotionally overwhelming. It can be difficult to find good evidence, legal representation, and can be extremely time-consuming. These are burdens that many workers, particularly those already experiencing financial insecurity, cannot realistically be expected to manage simultaneously. In many cases, the amount rewarded for a successful personal grievance claim is not worth pursuing. For instance, average national compensation could be around $5,000 while typical costs of the process can be up to $10,000 to $15,000 while taking 12-24 months to receive a decision.
Moreover, employees may doubt that their concerns would be taken seriously, fear repercussions or lack clarity and awareness about the reporting process. This essentially discourages employees from seeking justice in the first place. Even if the claim was successful, many workers feel they can no longer stay in the industry anyway as negative feelings and ‘office talk’ from others inevitably remain. At the same time, many workers are unaware of the full extent of their legal rights, leaving them vulnerable to unfair treatment and skeptical to challenge unlawful workplace practices.
While legal rights do formally exist, access to those rights may not be equally attainable for all workers, thereby making power imbalances seem more prominent than it should be in practice. This article examines some of New Zealand's employment protections, the limitations on the courses of action employees may take, and the significant mental health impacts that workplace disputes can impose on workers.
"You’re fired.” — But Was It Actually Legal?
One of the largest areas where rights of employees are misunderstood is dismissal. Many workers retain a fear of employers being able to fire them whenever they want, especially in workplaces where staff may feel easily replaceable.
In reality, New Zealand law requires employers to act in good faith, have a valid reason for dismissal, provide notice where appropriate, and follow a fair process before even considering terminating employment. Despite these rules in place, many employees still do not realise they may have been unjustifiably dismissed until long after it has occurred. Some resign due to pressure from management and HR, while others tolerate unfair treatment because they believe they have no alternative.
This fear is often strongest in industries where employees are heavily reliant on stable shifts and regular income. Workers in retail, hospitality, fast-food, and other low-pay sectors subsequently tolerate unfair treatment because insecure work and rising living costs make unemployment financially dangerous. A 2025 Auckland study found that many workers in low-pay industries felt trapped in unstable employment and described their living conditions as akin to “crisis management” due to financial insecurity.
The New Zealand government provides clear guidance explaining what needs to be fulfilled before an employer decides to dismiss an employee, such as performance issues, misconduct, and ongoing health issues, and that workers who are unfairly dismissed may be able to raise a personal grievance. However, many employees are either unaware that these options exist or assume legal action would be too stressful, expensive, or time-consuming to pursue.
Are Employee Rights Realistically Accessible?
A number of support services and dispute resolution processes are available to employees who experience workplace issues. These include:
Asking for legal advice at the Citizens Advice Bureau;
Raising a personal grievance; and
Asking for mediation to help resolve the issue.
One of the first immediate options available to employees is seeking legal advice or guidance through the Citizens Advice Bureau (CAB). CAB provides free and confidential advice to workers who are unsure about their employment rights, dismissal processes, or workplace disputes, which can be especially important for employees who may not have the financial resources to immediately seek private legal assistance.
Employees may also seek assistance through Aotearoa Community Law Centres. While CAB primarily provides information and guidance, Community Law offers free legal advice and support to individuals who may be unable to afford private legal representation. Workers experiencing issues such as unfair dismissal, workplace discrimination, bullying, or unpaid wages can receive more specialized assistance in understanding their legal rights and the options available to them. These services can also be particularly valuable for vulnerable employees who face financial barriers to accessing legal support and may otherwise struggle to navigate employment disputes on their own.
The biggest piece of advice someone from CAB may give you is to raise personal grievance. Employees who believe they have been unfairly dismissed, discriminated against, bullied, sexually harassed, or unfairly disadvantaged at work may be entitled to formally raise a personal grievance against their employer. However, many workers are unaware that there is generally a strict 90-day timeframe for raising grievances after the issue occurred or came to their attention. Employees who delay seeking advice due to fear, confusion, or financial pressure may unintentionally lose access to legal remedies altogether.
Tying back to recent changes introduced through the Employment Relations Amendment Act 2025, it restricts remedies available to employees who pursue personal grievance claims where the employee’s conduct is found to have contributed to the dismissal. Furthermore, the Act also introduces a high-income threshold, meaning employees earning $200,000 or more can no longer raise a personal grievance for unjustified dismissal. While this change has been justified on the basis that higher-income employees generally possess greater bargaining power and resources to protect their own interests, this assumption may not always reflect reality as income does not necessarily equate to bargaining power, particularly where earnings fluctuate due to commissions, bonuses, and other forms of remuneration. In addition, many higher-paying positions exist within specialised industries or relatively small professional networks where equivalent employment opportunities may be limited, meaning the loss of a job can still have significant professional and financial consequences. Consequently, some employees may find themselves excluded from important legal protections while remaining vulnerable to unfair dismissal.
Employees may also request mediation to help resolve workplace disputes before letting any issues escalate further. Mediation services can be requested online or by phone through Employment Mediation Services and can be attended in person, online or by telephone, aiming to help both employers and employees reach agreements in a less formal and less confrontational environment, though it is important to note that a lot of employment agreements have a predetermined mediator. Mediation serves as a less stressful and less expensive alternative to formal legal proceedings, subsequently making it a more accessible option for many workers. Nevertheless, mediation may still be limited in practice, as many ordinary employees are unaware that these services exist or do not fully understand how to access them until workplace issues have escalated significantly.
IV The Toll on Mental Wellbeing
Losing a job is, in itself, an extremely stressful and emotionally damaging experience. Perceived unfair dismissal can make this even more difficult. An Australian study published in 2025 looked at some of the psychological effects of involuntary dismissal. It can undermine a person’s dignity, autonomy, identity, self-worth, connection to others, and damage confidence in their own abilities and value to society. The effects of dismissal and unemployment may persist chronically, creating mental health challenges like anxiety about their competence in future roles, fear of future job losses, distress, depression and diminished self-esteem.
Dismissal also carries a degree of social stigma that may affect future employment opportunities, particularly where employees experience feelings of betrayal, humiliation or embarrassment. Financial insecurity and the loss of a steady source of income may intensify these pressures. It may be difficult to meet everyday expenses and support dependents, exacerbating emotions of stress, anxiety and uncertainty about the future.
Recommendations
If New Zealand employment law is intended to genuinely protect workers, then accessibility and awareness must become a greater priority moving forward. Legal protections are far less effective when employees do not fully understand their rights or feel too intimidated to exercise them.
One recommendation is for employers to implement clearer and more transparent workplace complaint procedures from the beginning of employment. This could be mandated by amendments to the Employment Relations Act 2000 to clearly set out what procedures employees can take during dismissal processes. Employers should be obligated to clearly explain workplace rights, dismissal processes, complaint procedures, and mediation options during employee onboarding, and employees should know exactly who they can approach, what steps can be taken if issues arise, and what legal protections are available to them before workplace conflicts occur.
Another improvement could involve increasing general public awareness surrounding employment rights and dispute resolution services. Many employees remain unaware that organisations such as CAB, Employment Mediation Services, and Community Law exist to provide free or affordable assistance. Greater public education through schools, workplaces, and government campaigns may help employees feel more confident recognising unfair treatment and seeking help earlier.
Conclusion
Ultimately, while employment law in New Zealand protects workers from power imbalances on paper, these protections are far less meaningful if employees are unable or unwilling to enforce them in practice. Financial pressure, limited awareness of legal rights, fear of repercussions, and emotional tolls continue to discourage workers from seeking justice. For workplace rights to be truly effective, employees need real and accessible legal protections and pathways to exercise them.