Changes ahead for Employment Law in 2018 09 Apr 2018

 

The new Government has proposed changes to employment law and this article discusses just some of the key ones which will likely come into force soon. The Employment Relations Amendment Bill 13-1 (2018) is the piece of legislation and sets out those changes here. The introduction to the Bill sets the scene well as it states:

The purpose of this Bill is to implement the Government’s post-election commitments to restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. The changes are intended to introduce greater fairness in the workplace between employees and employers, in order to promote productive employment relationships.

Let’s take a look at some of the most important changes proposed.

Trial periods for employees

 

This is the headline story and it is worth spending time on. Under the current system a trial period can be used for new employees in certain situations. A trial period cannot exceed 90 days. The employee must be given such an employment agreement that has this provision in advance, and the agreement must be signed before the employee starts work.

The proposed change is that the ability to have trial periods will only apply if the employer has less than 20 employees.

Why does this mean much change? Statistics show that 97% of employers have fewer than 20 employees – this makes it sound like the vast majority will not be affected. But the reality is that such enterprises only employ around 30% of New Zealand’s employees, which means the others are employed by larger entities that will no longer be able to use the trial periodss.

How might this be worked around? Well, what we may see is that entities begin to have multiple subsidiaries each of which employ less than 20 people. It will be interesting to watch this space and see how this change impacts on medium sized businesses which previously had been using the 90 day trial period.

Rest and meal breaks

 

Formerly if you worked a certain amount of time you were entitled to rest breaks. This was changed to allow for “reasonable opportunity” for “appropriate“ breaks. What is proposed now is to go back to a prescriptive mechanism that provides for rest and meal breaks that depend on the hours worked. For example, after 2-4 hours you would get one 10 minute break, or after 4-6 hours you would get a 10 minute break and 30 minute meal break. However, if there is an essential service being provided (think air traffic controllers) then the parties may agree on alternative break arrangements.

Unions

 

This is a big change as the new Government wants to strengthen Union rights and make membership more attractive for employees. The practical relationship between the Unions and Employers will be tested by the new rules.

As some examples:

Reinstatement

 

An employee who has been unjustifiably dismissed will need to reinstate the employee unless the employer can find a reason why they should not be reinstated (this switches the onus back to what it was formerly). Employers will need to consider why it is not practical or reasonable to have the employee reinstated.

Parental leave

 

Currently an employee who meets the right criteria is eligible for 18 weeks paid parental leave but from 1 July that will increase by a month to 22 weeks. By 1 July 2020 this will increase to 6 months (26 weeks). The idea behind the changes is that extended leave will be more possible. The amount paid to the employee is itself not increasing, but the length of time this is payable.

These are just some examples of the proposed changes – for more details on the key issues you may face under the new rules contact us and we would be happy to discuss these with you.

We act for many large employers and assist with their dealings with employees and also are able to offer advice to individual employees on their individual situations from one of our three offices (Riccarton, Hokitika and Rolleston).

 

Contacts
Lois Flanagan, Partner LoisFlanagan@parryfield.com
Steven Moe, Senior Associate StevenMoe@parryfield.com
Hannah Carey, Senior Associate hannahcarey@parryfield.com