Should employers and employees be allowed to hold legally protected negotiations to end employment by mutual agreement, with those discussions inadmissible in personal grievance claims?
This member's bill amends the Employment Relations Act to allow "protected negotiations" between an employer and employee to terminate employment by mutual agreement, shielding those discussions from being used in a personal grievance claim.
MPs’ arguments for and against the bill
Why support it
Supporters argued the bill would help employers and employees avoid costly and lengthy personal grievance or unfair dismissal processes by reaching a mutually agreed outcome more quickly.
Supporters said most New Zealand businesses are small and lack HR departments or legal resources, and that the protected conversations would give them a simpler way to manage employment matters.
Supporters pointed to international examples such as the United Kingdom's protected conversations model as evidence the approach can support balanced, consensual terminations.
Why oppose it
Opponents argued there is an inherent power imbalance between employers and employees, and that allowing employers to initiate exit negotiations would strengthen rather than balance that imbalance.
Opponents said the bill contains no parameters limiting its use to small businesses, no minimum exit payments, no requirement for representation, and no guaranteed access to mediation, leaving employees at risk.
Opponents cited the Council of Trade Unions and employment lawyers arguing that without-prejudice conversations already occur under existing law, so the bill is unnecessary and could shield unjustified conduct.
These are claims MPs made in Parliament’s debate — not verified facts.
Full bill summary & link to official bill page
A member's bill that lets an employer and employee hold 'protected negotiations' about ending the job by mutual agreement — meaning what is said in those talks generally can't later be used as evidence in a personal grievance (an unfair-treatment claim). At present this 'without prejudice' protection only applies once a dispute already exists. The bill would extend it to conversations held before any dispute has arisen, giving both sides a safer way to discuss parting ways.
It was introduced by ACT MP Laura McClure and is not government policy. The bill includes safeguards: the employee must agree before talks begin, a cooling-off period between approaches, and written terms setting out any payment. Supporters say it offers a clearer, less costly alternative to drawn-out grievance disputes; critics, including Labour and the Greens, say employers and staff can already agree to part and worry vulnerable workers could feel pressured.