FIRED UNFAIRLY? A 2026 LAW CHANGE MEANS YOUR OWN ACTIONS COULD COST YOU EVERYTHING
Wed Apr 08 2026
Unfairly dismissed but not entirely blameless?
For years, the law ensured you still got a fair go. The Employment Relations Authority would balance the scales, docking your compensation for your share of the fault. You wouldn't walk away empty-handed.
That all changed on 21 February 2026.
A new law has created what you could call a "contribution cliff-edge". Now, if you're found to have contributed to your own dismissal, you don't just get a smaller payout—you could get nothing at all. This is a massive shift that changes the game for anyone making a complaint against their employer.
The Old Way: A "Haircut" on Your Payout
Let's say you were fired, and you believed it was unfair. You could raise a "personal grievance"—which is the official term for a formal employment complaint. If you won, you could get remedies, which might include:
- Getting your job back.
- Payment for the wages you lost.
- Compensation for the stress, humiliation, and hurt feelings the situation caused you.
Under the old rules, after figuring out what you should get, the Authority would then look at your role in the problem. The law required them to ask: "Did the employee's own actions help cause this situation?". If the answer was yes, they would then decide if your payout should be reduced.
This allowed for a lot of flexibility. The Authority would weigh up the fault on both sides, and any reduction had to be fair. A 100% reduction was possible, but it was rare. Usually, it was just a "haircut"—a percentage trimmed off the top.
The New Law: The "All or Nothing" Cliff-Edge
The new law, which started in February 2026, is much stricter. It introduces new rules that act like knockout punches for an employee's claim.
1. The "Serious Misconduct" Knockout Punch
The biggest change is a new rule that creates a total ban on any payout if your actions were serious enough. The law now says that if you have a valid complaint, you get zero payout if:
- Your actions helped cause the situation; and
- Your actions are considered "serious misconduct".
This is the cliff-edge. Imagine your boss didn't follow the correct process when firing you, but the reason they started the process was because you were caught stealing. Under this new rule, even though your boss messed up, the fact that you committed serious misconduct means you get nothing. Your right to any compensation is completely wiped out.
2. The "Partial Knockout" for Any Minor Fault
There's another, lower-level rule now in place. It says that if you contributed to the situation in any way—even if it was minor and not serious misconduct—you automatically lose two of the most important remedies.
If you are found to be even slightly at fault, you cannot get:
- Your job back.
- Compensation for stress, humiliation, or hurt feelings.
This means that even a bad attitude or a small mistake on your part now instantly removes those options. The only thing left you can claim is lost wages.
3. The Final Cut
To make things even tougher, the old "haircut" rule has been updated. For any payout you might still be able to get (like lost wages after the "partial knockout" rule has been applied), the Authority can still reduce it because of your contribution—and the law now makes it crystal clear that this reduction can be up to 100%.
So, you could win your case, have your main remedies knocked out because of a minor fault, and then have your final claim for lost wages cut to zero.
What Counts as "Serious Misconduct"?
The "knockout punch" rule depends on the term "serious misconduct". This isn't a new idea; it generally means behaviour so bad that it destroys the trust between you and your employer.
Think of things like:
- Theft or dishonesty.
- Violence or assault.
- Seriously breaking important safety rules.
- Harassment or bullying.
- Refusing to follow a reasonable and safe instruction from your boss.
- Being drunk or on drugs at work.
An employer must prove your actions were this serious to completely block your payout.
A Simple "Before vs. After" Comparison
Here's how the same situation could play out differently under the old and new laws.
Your boss fires you unfairly, but your bad attitude partly caused the problem.
In 2025:
Your complaint is successful. You might get $20,000, but it's cut by 25% because of your attitude. You still walk away with $15,000.
In 2026:
Your complaint is successful, but because you were partly at fault, you automatically lose the right to get your job back or get money for stress. You can only claim lost wages, and that amount can also be cut—even to zero.
What This All Means
This new law has made an employee's own behaviour a critical factor in any unfair dismissal case. What used to be a secondary issue that might reduce a payout can now be a silver bullet for employers to defeat a claim entirely.
For employees, the message is clear: your own conduct is under the microscope. Even if your employer is in the wrong, your own mistakes can now cost you everything.
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