Robotics Plus acquisition by Japan’s Yamaha Motor Company

The term ‘Performance Improvement Plan’ — or PIP — is now widely recognised by both employers and employees. In today’s fast paced and constantly evolving workplaces, employers increasingly expect staff to perform consistently and add value. But while the concept of a PIP may be familiar to some, the practical realities are often far more complex. In practice, a PIP is a highly contentious area of employment law. When poorly designed or implemented, a PIP can quickly become the catalyst for expensive, time consuming and reputationally damaging litigation. In short, a PIP is not simply a tool for exiting an employee. Careful planning, transparent communication and clear documentation are essential to mitigate legal risk. For employees, being placed on a PIP is rarely welcome. Equally, for managers, preparing and overseeing one can be stressful, administratively heavy and fraught with potential pitfalls. Regardless of which side of the table you sit on, PIPs create pressure — and both parties must navigate the process carefully while upholding their respective obligations. What the law requires To be compliant, fair and justifiable, a robust PIP must meet several legal requirements. A fair and reasonable process generally includes: Adequate notice; Clear communication of expectations; Genuine and structured support; Opportunities for feedback and response. These components become especially critical if the process ultimately results in dismissal. From an employee’s perspective Employees undergoing a PIP are entitled to a process that is fair and reasonable. This generally means: You should not be placed under undue scrutiny or required to meet unrealistic standards within unreasonable timeframes. You are not expected to demonstrate sudden improvement without clear guidance, structured support and adequate time. Performance concerns must not be confused with misconduct, which requires a different process with distinct legal tests and procedural steps. While these principles set the framework for what a fair PIP should look like, the Employment Relations Authority and Employment Court regularly assess whether employers have actually met these standards in practice. What the case law shows One recent example is Lowings v Vice-Chancellor of the University of Canterbury[1] where the Employment Relations Authority considered whether a dismissal following a PIP was justified in circumstances involving allegations of bullying and unfair procedure. The Authority ultimately found that the University had run a robust and fair PIP. Importantly, it highlighted that the employer had: Appointed a different manager — not the person accused of bullying — to oversee the PIP and provide daily support. Given the employee meaningful opportunities to comment on, and contribute to, the PIP process. Set out the performance issues and required standards in a clear, structured PIP document, including timelines, targets, training and support. Held weekly review meetings and provided written reports after each meeting. Conducted monthly review meetings and notified the employee of ongoing concerns. Extended the PIP to accommodate periods of leave and provide further opportunity for improvement. The Lowings decision illustrates the importance of transparent documentation, consistent communication and demonstrably genuine support. When employers meet these standards, they are far better placed to defend the fairness of their actions. Conversely, many cases show how quickly a poorly drafted or inconsistently applied PIP can unravel and how easily gaps in process, communication or support can undermine an employer’s position. The legal principles that apply to dismissal for poor performance are well summarised by the Employment Court in Trotter v Telecom Corporation of NZ Ltd[2], which confirms that an employer may dismiss for performance-based reasons provided it has acted in a manner that is fair and reasonable in all the circumstances. How we can help We regularly assist both employers and employees with all aspects of Performance Improvement Plans, from drafting and implementing compliant processes to advising employees on their rights, risks, and options. Whether you are overseeing a PIP or undergoing one yourself, we can guide you through the legal, procedural and practical steps to ensure the process is handled fairly, transparently and lawfully. [1] Lowings v Vice-Chancellor of the University of Canterbury [2025] NZERA 189. [2] Trotter v Telecom Corporation NZ ltd [1993] 2 ERNZ 659.

On 17 November 2025, in a majority decision, the Supreme Court unanimously dismissed Uber’s appeal, confirming that the four Uber drivers who brought the proceedings were employees, not independent contractors. This brings an end to this dispute which has been ongoing since 2021, and in which Uber has now been unsuccessful in each of the relevant Courts. Importantly, in reaching its decision the Supreme Court has reaffirmed the existing legal tests for determining whether someone is an employee or a contractor. There has been no change in this respect. The Court is imposed with the duty of establishing the real nature of the parties\' relationship which will override any contract which was entered into by the parties. This includes looking at intention, control, integration and “economic reality”. Despite Uber’s terms and conditions describing their relationship as one of company and contractor, the Court meticulously dissected the language of the document. It was evident that the agreement was drafted in the manner of a “take it or leave it document”, essentially prohibiting negotiation of its terms and disguising the reality of the parties\' relationship. The Supreme Court, therefore, concurred with the Court of Appeal that the contractual terms were “fictional” as they failed to reflect how the actual relationship between Uber and its drivers operated in practice. The Supreme Court noted that a passenger could not reasonably be expected to think they were contracting with the driver when they get into the car. They ordered the service from Uber and agreed to pay Uber for it. The Supreme Court agreed with the Court of Appeal that Uber’s contracts were “window-dressing.” This means that the contracts were designed to give the appearance of a different relationship than the one that actually exists, to the extent that it asserts that Uber is a mere facilitator of transport services between drivers and users. The Supreme Court held this is not the true relationship nor what unfolds in practice. The Supreme Court also agreed with the Court of Appeal that Uber exercised very close control over the Uber Drivers delivery of their services, particularly through controlling how the drivers performed, their route selection, their performance, their policies, their behaviour, the fare prices, the terms and services, complaints and refunds, as well as the rating system. Drivers lack control over the quantity and quality of work, the price they are paid for their services and their inability to build goodwill, despite being the face of Uber’s business and having a relationship of co-dependency with Uber and its Drivers. The decision highlights that when determining employment status, the assessment is very much fact-specific. We also note that the Supreme Court decision comes as the Government is separately proposing its Employment Relations Amendment Bill. This would specifically exclude workers from claiming that they were an employee if they have signed a written agreement confirming they are an independent contractor. The Select Committee is due to report back to Parliament on this next month. If you have any questions regarding this decision and what it may mean for your business, please reach out to one of our employment team members.

Free Employment Law Workshop for Kiwifruit Growers Join our expert employment lawyers Jeremy Sparrow and Sophie Law for a free, informative session designed specifically to assist kiwifruit growers to best manage workforces and navigate the complexities of employment law. Drinks and nibbles included. Tuesday 18 November 2025 From 5:00pm for a 5:30pm start Holland Beckett Level 2, Northern Quarter, 45 The Strand, Tauranga We will share insights on topics including: Different types of employment for seasonal workers Using piece rates correctly Holidays Act compliance & managing public holidays 90-day trial periods Restructuring permanent roles Addressing performance and disciplinary issues Q&A Please RSVP by Friday 14 November to Karla Sweeney karla.sweeney@hobec.co.nz