A worthwhile trade off

Susan Hornsby-Geluk writes:

Among the most controversial aspects of the recently enacted Employment Relations Amendment Act 2026 is the introduction of a high-income threshold for personal grievance claims.

Under the new provisions, employees earning $200,000 or more in annual remuneration will lose the right to bring a personal grievance for unjustified dismissal, or an unjustified disadvantage claim where the disadvantage relates to their dismissal. …

Additionally, the change is promoted as making it easier for employers to address underperformance in key roles.

This is correct. A dud receptionist doesn’t threaten the viability of a business. But a dud CEO, CFO etc can.

Another unintended consequence, but with immediate practical implications, is that highly paid employees are unlikely to accept a loss of statutory protection lying down.

Therefore, pre-employment negotiations for affected employees may become more intense, as they seek contractual certainty in exchange for giving up certain rights.

Consequently, there is likely to be a rise in high-income employees demanding extended notice periods and severance entitlements.

This is a good trade off. As someone who has been an employer of executives who haven’t been right for the role, I would happily happily take a (say) six month notice and severance entitlement for the certainty that we could part ways, compared to the status quo of months of meetings, letters, performance management, lawyers, threatened court action and then eventually a pay out.

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