The government has indicated they are to change its upcoming Employment Relations Amendment Bill (ERAB) legislation to make it clear that the right for contractors to challenge their employment status will not be applied retrospectively.
The amendment is a hot topic of discussion as it was introduced near the end of the Bill-passing stage, meaning it has not gone through the select committee stage. The select committee occurs earlier in the Bill passing process, and is when the public can send submissions into the government with their thoughts on the law to be passed. Essentially, the public have not been given the chance to have their thoughts on this amendment heard by the Government.
What’s changed?
The change would make a distinction as to which law - the old or the new - would apply when. This allows for split decisions in future cases.
The reason this change was implemented was to address a potential future scenario if someone took up a claim to be considered an employee in previous work, the Government did not want a situation where they may be found an employee under the old law into the future.
It all sounds a little confusing and back-to-the-futurey, but essentially if someone was to bring a claim with this change they would be found an employee under the old law up until the point where the new law applies, where they would be a contractor based on whether they met the proposed gateway test. They would not suddenly become a contractor after the law passed.
Any decisions made about employment status before the new law starts would not be affected by the new transitional rules, and any cases filed before the new law starts would use the existing test to consider whether someone was an employee or a contractor.
For cases that were filed after the new law came into force, the existing test would be applied to the time before the law was passed, and the new gateway test would be used after the law was passed. This could result in a split decision, where a worker may be found an employee before the law changed, and a "specified contractor" after the law changed.
What’s the issue?
It has been raised that this approach could be problematic as it locks people in who were potentially employees, into to a contractor status based on an arbitrary date.
Comments have been made that this last minute amendment erodes worker's rights by blocking potential claims by employees, as they will be barred from taking claims against their employer once the ERAB takes effect.
Further, this change comes just a few months after the Supreme Court threw out Uber's appeal against treating drivers as employees in November 2025 (the Uber case).
The Uber case followed four Uber drivers who took the ride-sharing company to the Employment Court in 2022 over their employment status. They argued that as drivers they should be considered employees of Uber rather than contractors, and therefore they should be entitled to the benefits like leave entitlements, holiday pay and minimum wage that come with being an employee under the Employment Relations Act 2000.
The Employment Court ruled in favour of the drivers, which Uber appealed unsuccessfully at the Court of Appeal in 2024. Uber then appealed that decision to the Supreme Court, where five justices unanimously voted to throw out the appeal yet again.
Deputy secretary for Workers First Union, Anita Rosentreter, who represented the drivers, has voiced her worries around the recent tweak disallowing retrospective application of the ERAB. She said the amendment confirmed that Uber drivers and other gig workers who filed with the Courts could still access wage arrears and backpay from the time they were misclassified as contractors prior to the law change, but if the ERAB is to pass into law in this newly changed form, it may lock Uber drivers out of the employment rights the Supreme Court confirmed last year they are entitled to.
What does this mean for me?
Whilst it is something for consideration, the ERAB is yet to be passed into law and therefore is not yet of any effect.
If you are an employer or employee with any questions or issues concerning employment status or anything else, Godfrey’s experienced employment law team are here to help. Get in touch with Brad and Sally today for all your employment relationship requirements. We’re on your side, and here to help.
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