Analysis of Recent New Zealand Employment Relations Events: Senior Doctor Strike and 90-Day Trial Period Reinstatement

The landscape of employment relations in Aotearoa New Zealand is perpetually dynamic, shaped by the interplay of legislative changes, economic conditions, industrial action, and shifting societal expectations. Recent years have witnessed significant developments, particularly concerning the balance between employer flexibility, employee rights, workforce sustainability, and the unique pressures within essential public services like healthcare. The ongoing dialogue around fair remuneration, secure work, and the appropriate regulatory framework continues to generate friction and necessitates careful analysis. This report examines two distinct but significant employment relations events reported between April 2023 and April 2025: the nationwide strike by senior doctors in May 2025 and the legislative reinstatement of universal 90-day trial periods in late 2023. It argues that these events, while differing in context and manifestation, both illuminate fundamental tensions within the New Zealand employment relations system. They reflect the complex challenges in reconciling operational efficiency and flexibility with the provision of fair remuneration and conditions, ensuring workforce sustainability, and safeguarding employee protections, particularly against the backdrop of public sector constraints and evolving ideological approaches to employment regulation. The analysis will first delve into the senior doctors' strike, exploring the involved parties, relevant legislation, broader significance, and connection to employment relations theory. Subsequently, it will undertake a similar examination of the re-universalised 90-day trial periods. Finally, a conclusion will synthesize the key findings and consider the wider implications for the trajectory of employment relations in New Zealand.

The planned industrial action by senior medical and dental officers in May 2025 represents a significant moment in New Zealand's public health sector employment relations.$$^{1}$$ Approximately 5,500 senior doctors and dentists, members of the Association of Salaried Medical Specialists (ASMS), voted overwhelmingly (86% in favour) to undertake a 24-hour national strike commencing on May 1, 2025.$$^{1}$$ This action was unprecedented in the union's history, marking its first full-day strike since its establishment in 1989, $$^{1}$$ and followed less disruptive strikes of two to four hours during the previous bargaining round in September 2023.$${^2}$$ The immediate catalyst for the strike was the breakdown of collective bargaining negotiations between ASMS and the national health agency, Te Whatu Ora – Health New Zealand (HNZ). These negotiations, aimed at renewing the collective agreement which expired in August 2024, had been ongoing since that month but reached an impasse.$$^{1}$$ At the heart of the dispute lay conflicting positions on remuneration. ASMS sought a 12% pay increase for its members, arguing this was necessary to address cost-of-living pressures and critical issues of staff retention, particularly in comparison to significantly higher salaries available in Australia.$$^{1}$$ Conversely, HNZ offered a package equating to an approximate 1-1.5% increase in total salary costs, deeming this fair within the prevailing economic climate.$$^{1}$$ Beyond pay, ASMS highlighted chronic understaffing and severe workforce shortages across the public health system as fundamental concerns underpinning the dispute, arguing these issues were already compromising patient safety daily.$$^{1}$$

The 2025 senior doctors' strike involved several key actors and institutions operating within the framework of New Zealand's employment and health legislation. The primary union involved was the Association of Salaried Medical Specialists (ASMS), representing the industrial and professional interests of approximately 5,500 to 6,100 senior medical and dental officers (SMOs/SDOs) employed by HNZ.$$^{1}$$ Led by Executive Director Sarah Dalton,$$^{1}$$ ASMS's role included negotiating the collective agreement and initiating industrial action to advocate for its members.$$^{11}$$ Its central demand was a 12% pay rise, justified by the need to address cost-of-living increases, stem the tide of doctors leaving for better pay in Australia (a significant retention issue)$$^{1}$$, and maintain appropriate pay relativity with junior doctors (Resident Medical Officers or RMOs), who had received a significant settlement previously.$$^{1}$$ ASMS countered concerns about patient safety during the strike by arguing that chronic understaffing meant safety was already being compromised daily.2 The employer was Te Whatu Ora – Health New Zealand (HNZ), the national health agency established under the Pae Ora (Healthy Futures) Act 2022,17 responsible for managing public health services and acting as the employer in collective bargaining.18 Represented publicly by Chief Clinical Officer Dr Richard Sullivan, $$^{1}$$ HNZ maintained its offer of 1-1.5% was fair given economic conditions,$$^{1}$$ and expressed disappointment over the strike's impact on patient care and waiting lists.1 HNZ committed to working with ASMS to ensure life-preserving services (LPS) were maintained during the strike,$$^{1}$$ a crucial aspect of industrial action in essential services. HNZ itself was operating under significant financial pressure, having reported substantial deficits and facing government directives to control spending.$$^{25}$$

The Minister of Health, Simeon Brown, played a key governmental oversight role.$$^{1}$$ He publicly expressed disappointment, framing the strike as detrimental to patients and urging the union to return to negotiations.$$^{1}$$ His claim that the average senior doctor remuneration package exceeded $343,000 was strongly disputed by ASMS, who cited an average closer to $240,000.$$^{2}$$ The SMOs/SDOs themselves, the employees taking action, were motivated by concerns over pay, conditions, workload, burnout, and the ability to provide safe care amidst staffing shortages.$$^{1}$$

Finally, patients were the group most immediately affected, facing the cancellation or postponement of an estimated 4,300 elective surgeries or specialist appointments and thousands of radiology procedures.$$^{1}$$

The institutional context was the broader public health system, grappling with workforce shortages 32, recruitment and retention difficulties,32 reliance on expensive locum staff,$$^{1}$$ and ongoing debates about adequate funding.25 Employment Mediation Services, provided by the Ministry of Business, Innovation and Employment (MBIE), would have been involved in earlier, unsuccessful attempts to resolve the bargaining impasse.23 The primary legislative framework governing the dispute was the Employment Relations Act 2000 (ERA). Key provisions included section 4 (duty of good faith binding both parties),42 Part 8 covering strikes and lockouts,43 including the definition of a strike (s 81),47 conditions for lawful strikes related to collective bargaining (s 83),43 definitions of unlawful strikes (s 86),46 and the specific notice requirements for essential services (s 90).43 As health services fall under Part A of Schedule 1, ASMS was required to provide at least 14 days' written notice of the strike to HNZ and the MBIE chief executive.$$^{44}$$

The significance of the May 2025 senior doctors' strike extends beyond the immediate disruption to services. As the first 24-hour national strike in ASMS history,1 it marked a considerable escalation compared to previous industrial actions, signalling profound dissatisfaction among a critical workforce and a significant breakdown in the bargaining relationship with HNZ. The event starkly highlighted the acute pressures confronting the New Zealand public health system, including severe workforce shortages, particularly in regional areas like Gisborne and Nelson,1 persistent difficulties in recruiting and retaining highly skilled medical professionals, exacerbated by strong competition from Australia where salaries are substantially higher, 1and the ongoing tension between service demands and governmental fiscal constraints.25 The direct impact on patient care, with thousands of procedures and appointments postponed, 1 inevitably generated significant public and political pressure, intensifying the ethical considerations surrounding industrial action in essential services.49

Several lessons emerge from this dispute. It underscores the inherent difficulties in conducting collective bargaining within essential public services, especially when government funding is perceived as inadequate to meet both operational demands and workforce expectations. The mobilisation of a highly skilled and difficult-to-replace workforce by ASMS demonstrates the considerable industrial power such unions can wield, even within a regulated strike framework. Furthermore, the dispute reinforces the critical importance of addressing both remuneration and non-pay factors, such as workload, working conditions, and professional respect, for ensuring the retention and sustainability of the health workforce.32 The stark disagreement over average salary figures also points to potential communication failures and divergent perceptions of the employment reality between HNZ/Government and frontline clinicians.2 In terms of immediate impacts, patients whose care was delayed were the primary losers, alongside HNZ which faced service disruption and potential reputational costs, and the Government which faced political fallout. Striking doctors also lost pay for the day. The potential winners were ASMS and its members, should the strike pressure ultimately lead to a more favourable settlement addressing their core concerns regarding pay and conditions. Looking longer term, the dispute could potentially catalyse necessary changes, such as a review of health funding mechanisms or more robust workforce planning strategies.26 However, an equally plausible outcome, if underlying issues remain unaddressed, is an acceleration of SMO migration, further exacerbating shortages 5, and potentially souring the industrial relations climate within the health sector for future bargaining rounds.

The strike itself is not merely an isolated pay dispute but rather a manifestation of deeper, systemic strains within the New Zealand public health system, particularly concerning the long-term sustainability of its workforce. ASMS explicitly framed the action as a response not only to inadequate pay offers but also to chronic understaffing and the consequent risks to patient safety, citing high vacancy rates and the 'bleeding' of doctors to Australia.1 This narrative finds support in academic research consistently highlighting significant doctor shortages and retention challenges in New Zealand, driven partly by international pay disparities and demanding working conditions.32 While HNZ acknowledged workforce pressures, its bargaining position remained anchored to the "current economic situation",1 reflecting documented financial constraints and government directives.25 This situation exemplifies a fundamental conflict where immediate fiscal pressures and budget limitations clash with the need for sustained investment in workforce recruitment, retention, and development to ensure service quality and capacity. The strike thus served as a flashpoint for these unresolved tensions between short-term financial management and long-term health system viability.

Furthermore, the unprecedented 24-hour duration of the strike significantly amplified the ethical dilemma inherent in industrial action by essential service workers.1 Compared to the shorter strikes of 2023,2 a full-day stoppage posed a greater potential for disruption to patient care, a point emphasized by both HNZ and the Minister of Health.1 ASMS countered this by asserting that understaffing already compromises patient safety daily, positioning the strike not as the cause of harm, but as a necessary measure to compel improvements that would enhance long-term patient safety and care quality.2 This starkly illustrates the ethical tightrope walked by health professionals contemplating industrial action, balancing their immediate duty of care to current patients against a perceived professional obligation to advocate, sometimes through disruptive means, for systemic changes deemed necessary for the future health of the system and its patients. This tension is a recurring theme in medical ethics literature concerning strikes.49 The 24-hour duration raised the stakes of this ethical debate for the union, the employer, the government, and the public.

From an employment relations perspective, the senior doctors' strike illustrates several key concepts and trends. It showcases the power dynamics inherent in collective bargaining, particularly when a union representing a highly skilled, essential workforce (ASMS 11) confronts a large public sector employer (HNZ) operating under significant governmental fiscal direction and constraints.25 The resort to strike action exemplifies the outcome when good faith bargaining reaches an impasse, a scenario contemplated and regulated by the ERA 2000.1 The dispute reflects broader trends often observed in public sector bargaining, where wage settlements can be heavily influenced by prevailing government economic policy, public sector pay guidance, or specific funding allocations, potentially limiting the scope for negotiation compared to the private sector.56 The event confirms that strike action, despite its complexities and potential consequences, remains a relevant instrument in contemporary New Zealand employment relations, even within essential services.43 The legal framework under Part 8 of the ERA 200043 provides the structure for such actions, mandating specific notice periods for essential services like healthcare44 and requiring agreements for the provision of Life Preserving Services (LPS) to mitigate immediate risks to life and limb during the strike.22 The strike also connects directly to pressing workforce issues central to employment relations thinking: the challenges of managing workforce shortages, the critical role of recruitment and retention strategies 32, the tangible impact of international labour market competition (particularly from Australia) 16, and the economic consequences of high staff attrition and reliance on expensive contingent labour, such as locums.1 Finally, the dispute highlights the intricacies of pay determination, involving considerations of internal relativities (SMOs versus RMOs 1), external benchmarking against comparable jurisdictions,16 adjustments for cost of living, and the significant influence of government fiscal policy on public sector remuneration outcomes.1

The dispute involving senior doctors vividly illustrates the unique complexities that arise when the state functions as the employer. HNZ, while the direct employer, operates within a framework heavily dictated by government funding decisions and policy directives emanating from the Minister of Health.20 This was evident in the Minister's active public commentary on the dispute and the framing of HNZ's bargaining position within the context of the "current economic situation" and broader fiscal constraints.1 Unlike private sector negotiations, where factors like company profitability and market competition might more directly shape outcomes, public sector bargaining is inherently politicised. The government must balance its roles as service provider, employer, funder, and regulator, often leading to tensions where political considerations and budgetary priorities intersect with, and sometimes override, purely industrial relations concerns.56 This dynamic can make reaching mutually agreeable settlements more challenging and increases the likelihood of disputes escalating into public and political arenas. Academic literature focusing on public sector employment relations in New Zealand provides context for these dynamics.56 Research specifically addressing health workforce retention and migration patterns offers evidence supporting the union's concerns about staffing sustainability.32 Furthermore, scholarly work examining the ethics and impacts of industrial action in essential services provides frameworks for analysing the difficult balance between the right to strike and the duty of care.49

A second significant development in New Zealand employment relations during the period under review was the legislative reinstatement of 90-day trial periods for all employers, effective from 23 December 2023.66 This change, enacted via the Employment Relations (Trial Periods) Amendment Act 2023 67, removed the restriction introduced in 2018/2019 that limited the use of such trial periods to employers with fewer than 20 employees.69 As defined in sections 67A and 67B of the Employment Relations Act 2000 (ERA), a 90-day trial period is a provision within an employment agreement that allows an employer to dismiss a new employee within the first 90 calendar days of their employment without the employee being able to pursue a personal grievance for unjustified dismissal.69 Critically, for a trial period to be legally valid and enforceable, it must be agreed to by both parties in writing before the employee commences work, and it can only apply to employees who have not previously been employed by that specific employer.66 It is also important to note that this universal reinstatement did not override the specific prohibition on using trial periods for migrants employed under the Accredited Employer Work Visa (AEWV), a restriction implemented separately through immigration instructions in late 2023.69

The reinstatement of universal 90-day trial periods involved a distinct set of actors and institutions compared to the doctors' strike. The key driver was the Coalition Government (National, ACT, NZ First), which included the policy in its 100-Day Plan and coalition agreements.69 Workplace Relations Minister Brooke van Velden championed the change, arguing it would bolster employer confidence, enhance workplace flexibility, and create job opportunities for candidates perceived as 'riskier' hires.68 This position was strongly supported by major employer lobby groups, including the Employers and Manufacturers Association (EMA), BusinessNZ, and Retail NZ.68 These groups contended that trial periods mitigate the risks and costs associated with hiring, enable better assessment of employee 'fit', promote business agility, and encourage employers to offer chances to individuals returning to the workforce or those with unconventional backgrounds.$$^{68}$$ Conversely, trade unions, led by the New Zealand Council of Trade Unions (NZCTU) and including affiliates like FIRST Union and Unite, vehemently opposed the reinstatement.75 Their arguments centred on the erosion of job security, the potential for increased worker precarity, the disproportionate negative impact on vulnerable groups (such as young workers, Māori, Pasifika, disabled individuals, and migrants not covered by the AEWV exception), and the lack of evidence supporting claims of increased hiring.75 Unions also highlighted that collective agreements can offer protection against trial periods.75 Migrant worker advocacy groups, such as Migrante Aotearoa, echoed concerns about vulnerability, particularly the potential for employers to leverage the threat of dismissal during a trial period in relation to visa sponsorship.$$^{83}$$ Employees and jobseekers are the cohort most directly impacted, facing either potential new opportunities or heightened insecurity during their initial employment phase.

Institutionally, Parliament played the central role by passing the Employment Relations (Trial Periods) Amendment Act 2023.$$^{67}$$The Employment Relations Authority (ERA) and the Employment Court remain crucial as the bodies responsible for interpreting and enforcing the trial period provisions (sections 67A and 67B of the ERA).67 These bodies have established a reputation for applying these sections strictly, frequently finding trial periods invalid due to employers' failure to meet precise procedural requirements, such as ensuring the agreement is signed before work commences.$$^{69}$$ MBIE continues its role in providing guidance on employment law 66 and housing the mediation service.41 Notably, MBIE's own regulatory impact statement suggested departmental reservations about the benefits of extending trial periods universally, particularly to larger employers better equipped to manage dismissal processes.69 Key research institutions, Treasury and Motu Economic and Public Policy Research, provided the foundational empirical analysis on the impacts of trial periods during their earlier iterations.73 Other relevant legislation includes the ongoing requirement for good faith (ERA s4),$$^{72}$$ the need to advise employees of their right to seek independent advice (ERA s63A) 89, and the fact that personal grievances on grounds other than unjustified dismissal (like discrimination or harassment under ERA s103(1)(b)-(k) or the Human Rights Act 1993 130) remain available to employees even during a trial period.$$^{75}$$

The reinstatement of universal 90-day trial periods holds considerable significance for New Zealand's employment relations framework. It represents a decisive policy shift favouring employer flexibility during the critical initial phase of employment, potentially affecting the roughly 72% of the workforce employed by firms with 20 or more employees who were previously excluded.69 This move immediately reignited the long-standing debate concerning the appropriate balance between labour market flexibility, often argued as necessary for economic dynamism and hiring confidence 68, and employee security, which provides stability for workers and families but can be perceived by some employers as increasing the costs and risks of hiring.75 The policy change carries symbolic weight, clearly signalling the pro-business orientation of the new Coalition Government.68 Furthermore, the decision to expand trial periods despite significant research from Motu/Treasury questioning their effectiveness in boosting overall hiring or aiding disadvantaged jobseekers 73 raises pertinent questions about the role of empirical evidence versus political ideology and stakeholder lobbying in the formulation of employment legislation.110

The practical application of trial periods offers several lessons. The consistently high rate at which trial period dismissals are found invalid by the ERA and Employment Court underscores the critical importance of meticulous procedural compliance by employers.69 Errors in drafting the clause, timing the agreement signing, or providing notice can negate the intended protection from unjustified dismissal claims. This highlights an ongoing tension between the policy's aim to simplify dismissal for potentially unsuitable new hires and the legal system's insistence on upholding minimum procedural safeguards. It also emphasizes the need for employers to understand that trial periods do not eliminate all employee rights; obligations of good faith persist (albeit modified regarding justification for dismissal) 72, and employees retain the right to bring personal grievances for reasons other than the dismissal itself, such as discrimination or harassment.75 The primary beneficiaries of the change are employers, particularly larger organisations previously unable to use trial periods, who gain enhanced flexibility and reduced potential costs in managing new hires.69 The Coalition Government also achieves a key policy objective. Conversely, new employees entering the workforce face a period of heightened job insecurity and lose the right to challenge a dismissal they perceive as unjustified during the trial period.69 Unions view this as a weakening of hard-won worker protections. Potential consequences include wider adoption of trial periods by large employers 72, though whether this translates into increased hiring or merely increased churn remains debatable, given past research found no significant impact on job stability.73 Litigation over procedural validity is likely to continue 89, and there may be subtle shifts in recruitment practices, potentially favouring candidates based on perceived 'attitude' or 'fit' over demonstrable skills, as employers feel more protected in taking such risks.71

The legislative history surrounding 90-day trial periods in New Zealand reveals a pattern of policy oscillation closely tied to the political cycle, creating a degree of regulatory instability. Introduced initially for small-to-medium enterprises (SMEs) (<20 employees) in 2009 69, their availability was extended to all employers in 2011 under a National-led government.69 This universality was then reversed in 2018/2019 by the subsequent Labour-led government, restricting them back to SMEs 69, only for the current National-led coalition to reinstate universal availability in late 2023.69 This repeated back-and-forth, occurring three times in less than fifteen years, directly alters the balance of risk and power in the formative stage of the employment relationship. Such fluctuations make it challenging for businesses, particularly larger ones affected by the changes in 2011, 2019, and 2023, to implement consistent long-term human resource strategies regarding new hires. Simultaneously, it creates varying levels of job security for new employees depending on the government of the day. This instability in a fundamental aspect of employment regulation can potentially undermine confidence in the predictability of the legal framework for both employers and workers.

Despite the stated aim of simplifying dismissal processes for employers during the initial employment phase, the practical application of 90-day trials appears hampered by stringent procedural requirements enforced by the ERA and Employment Court. The high failure rate of trial period defences in legal challenges – with MBIE data indicating 75% of challenged trial provisions between 2015 and 2023 were found invalid 69 – suggests that achieving legal compliance is not straightforward. Common pitfalls include failing to secure a signed agreement before work commences, errors in the wording of the trial clause itself, neglecting to inform the employee of their right to seek independent advice, and mistakes in issuing notice of termination.89 Legal practitioners consistently advise strict adherence to these procedures.89 This reality creates a paradox: while the policy removes the need for substantive justification for dismissal during the trial, the procedural hurdles remain significant. Employers who stumble on these procedural requirements risk facing the very unjustified dismissal claims the trial period was designed to prevent, thereby potentially negating the policy's intended benefit of reducing employer risk and compliance costs, particularly for those lacking sophisticated HR support.

The reinstatement of universal 90-day trial periods connects to several evolving streams of thought within employment relations. It most overtly represents a move along the spectrum from employee security towards greater labour market flexibility, reigniting the enduring ideological contest between these two priorities.120 Proponents frame it as a necessary deregulation to encourage hiring and efficiency 68, while opponents view it as contributing to job insecurity and potentially facilitating unfair treatment.75 This policy directly intersects with the academic and public discourse on precarious work.69 By its nature, a trial period introduces uncertainty at the start of employment. The debate revolves around whether this constitutes a justifiable, temporary assessment phase leading to stable employment, or if it normalises insecurity and potentially disadvantages vulnerable workers who may cycle through multiple trial periods without securing ongoing work. Research by scholars like Blumenfeld has explicitly linked trial periods to characteristics of precarious employment, such as reduced access to training during the trial.110 In terms of dismissal law, the policy represents a significant statutory departure from the established principle of requiring substantive justification for dismissal, a cornerstone of New Zealand employment law developed since the 1970s to enhance job security.145 While the ERA 2000 generally requires dismissals to be both substantively justified and procedurally fair, sections 67A/B create a specific exemption regarding substantive justification during a valid trial.70 Extending this exemption to all employers marks a notable deviation from the historical trajectory of strengthening dismissal protections in New Zealand. However, the survival of good faith obligations 72 and the availability of personal grievances for reasons other than unjustified dismissal 75 demonstrate the enduring influence of fairness principles within the NZ system. Finally, the policy's implementation despite research questioning its efficacy highlights the complex relationship between empirical evidence, political ideology, and stakeholder influence in shaping employment legislation.110

The analysis of universal 90-day trial periods benefits from reference to key academic and research sources. The Motu/Treasury research (Chappell & Sin, 2016) provides the most comprehensive quantitative assessment of the policy's impact during its previous iterations, particularly regarding hiring levels and effects on disadvantaged jobseekers.73 Academic literature on precarious work in New Zealand, including contributions from Blumenfeld and NZCTU reports, helps situate the trial period debate within the broader context of employment insecurity and its impact on different worker groups.75 Legal scholarship, such as Worthy's (2012) analysis of the Smith v Stokes Valley Pharmacy case 116, provides crucial insights into the judicial interpretation of trial period legislation, the emphasis on procedural correctness, and the application of good faith principles.145 These sources collectively allow for a nuanced understanding of the policy's rationale, implementation challenges, empirical effects, and positioning within evolving employment relations theory and practice.

The analysis of the May 2025 senior doctors' strike and the universal reinstatement of 90-day trial periods reveals significant, albeit different, tensions within contemporary New Zealand employment relations. Both events underscore the ongoing negotiation between the pursuit of operational efficiency or flexibility and the imperative to ensure fair treatment, adequate remuneration, and security for the workforce. The doctors' strike highlighted the acute pressures within essential public services, where fiscal constraints and chronic workforce shortages collide, leading to industrial conflict as a means of demanding sustainable solutions and fair compensation. It demonstrated the significant leverage held by highly skilled workers in critical sectors and the complex ethical considerations involved in strike action affecting public welfare. The reinstatement of universal 90-day trials, conversely, reflects a policy shift favouring employer prerogative in the initial hiring phase, driven by arguments for increased confidence and flexibility, despite empirical evidence questioning its effectiveness in boosting overall employment or aiding disadvantaged jobseekers. This policy change accentuates the ideological divide regarding the optimal balance between labour market deregulation and worker protection, raising concerns about potential impacts on job security and precarity, particularly for vulnerable groups. Both cases illustrate the critical role of the legislative framework, the influence of political cycles on employment relations policy, and the importance of robust engagement and evidence in navigating the complex challenges of the modern workplace. These events suggest a potential move towards a more contested employment relations environment, possibly favouring employer flexibility in some areas while facing strong resistance in others, particularly within unionised essential services grappling with systemic pressures. Addressing the underlying issues of workforce sustainability, fair pay, and the balance between flexibility and security will require ongoing dialogue, evidence-informed policy, and a commitment to good faith engagement from all parties involved in shaping the future of work in Aotearoa New Zealand.

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