Supermarkets, FMCG suppliers, manufacturers and distributors often need workforce flexibility to respond to seasonal demand and fluctuating workloads.
That can mean using a mix of permanent and part-time employees, casual employees and contractors across stores, warehouses, manufacturing sites and distribution operations.
Having a mixture of employment arrangements can be challenging to manage. A key employment law risk can arise when there is a mismatch between the contractual arrangement and how the relationship actually operates. That mismatch may exist from the outset or develop as working patterns change.
The key for employers is therefore not only choosing the right arrangement at the beginning, but ensuring it continues to reflect reality.
Contractors: greater certainty under the new gateway test
The distinction between an employee and an independent contractor has long been a challenging issue to navigate. In this sector, contractors may be used for specialist, project-based or support work across areas such as logistics, merchandising or distribution.
Calling someone a contractor does not, by itself, determine their legal status. If a contractor is later found to be an employee, the business may face employment-related obligations that were not accounted for.
The Employment Relations Amendment Act 2026 introduced a new contractor gateway test from 21 February 2026, providing a clearer route to contractor status.
The gateway has five statutory criteria: a written agreement which makes it clear that the provider is a contractor, freedom to work for others, sufficient control over when work is performed or an ability to subcontract within the parameters of the test, the ability to decline additional work without the arrangement being terminated, and a reasonable opportunity to obtain independent advice.
If all criteria are met, the worker will be treated as a specified contractor. If any are not met, the existing common-law analysis applies to the true nature of the relationship.
The gateway is not retrospective. Contractor status for periods before 21 February 2026 continues to be assessed under the common-law approach. Businesses should therefore distinguish between historic status and whether current and future arrangements satisfy the new gateway.
The introduction of the new gateway test provides a timely opportunity for businesses to review their existing contractor arrangements and, where practicable, ensure they meet the statutory criteria to provide greater certainty around contractor status and reduce the risk of future disputes.
- Chris Baldock, Partner, PwC Legal, PwC New Zealand
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