Changes to Employment Law 2018

Employment Law
Jun 21 2018

Changes Employment Law 2018

The new Labour-led coalition Government has introduced a new bill to amend the Employment Relations Act 2000 and implement the employment law reforms that were promised prior to last year’s general election.

The Employment Relations Amendment Bill 2018 (“Bill”) states that the changes are “intended to introduce greater fairness in the workplace between employees and employers, in order to promote productive employment relationships”. While these changes do include some new initiatives, a significant number are simply a roll-back of changes enacted by the previous government. The proposed key changes are:

Restriction of the 90 day trial period

90 day trial periods will be limited to employers with fewer than 20 employees.

Probationary periods will remain available to employers. However, unlike trial periods, dismissals in reliance on probationary periods allow employees to raise claims for unjustified dismissal. Care must be taken as the rules in relation to procedural fairness apply.

Restoration of rest and meal breaks

Currently, employers and employees are encouraged to bargain in good faith for the timing and length of rest and meal breaks. The proposed restoration of prescribed rest and meal breaks is intended to provide certainty to employees. This may result in unintended inflexibility including for part time workers.

A very limited number of employers in essential services will be exempt from the requirements (such as air traffic controllers) where it is not practical for workers to take breaks at certain times.

Reinstatement restored as the primary remedy to unfair dismissal

Reinstatement is intended to be restored as the primary remedy for employees who have been found by the Employment Relations Authority to have been unjustifiably dismissed. To avoid reinstatement, an employer will need to be able to show why reinstatement is unreasonable and impractical on the facts of the case.

In practice, this remedy is reasonably infrequently used, due to the breakdown in an employment relationship leading to an unjustified dismissal claim. In our view, many employees will continue to prefer to seek compensation rather than reinstatement.

Greater protection for “Vulnerable Employees” when a business is transferred or restructured

Under existing legislation, employers with 19 or fewer employees (“Small Employers”) are exempt from providing the protections afforded to specific groups of vulnerable employees (those deemed to be at greater risk of losing their job due to restructuring including cleaners and caterers). Under the proposed changes, Small Employers will no longer be exempt, and all vulnerable employees will have more time to consider whether to transfer to a new employer.

Collective bargaining and union rights

The Bill strengthens collective bargaining and proposes to restore various union rights in the workplace, including:

(a) Restoration of the duty to conclude bargaining, which would be required unless there is a “good reason” not to;
(b) Restoration of earlier initiation timeframes for unions in collective bargaining, so that a union can initiate bargaining first;
(c) Removal of the ability for employers simply to opt out of bargaining for a Multi-Employer Collective Agreement (MECA);
(d) Restoration of the 30 day rule, where for the first 30 days new employees (who were not union members) must be employed under terms consistent with the applicable collective agreement. After 30 days, the employer and employee can negotiate changes to the individual employment agreement;
(e) Repeal of partial strike pay deductions which will prevent employers from making deductions from wages for low level industrial action; and
(f) Restoration of union access without prior employer consent. Union access to workplaces will still be subject to requirements to access at reasonable times and places, having regarding to business continuity, health and safety.

The Bill also proposes a number of new provisions to support union rights, including:

(a) A requirement to include pay rates in collective agreements. This change is based on recent case law and may include pay ranges or methods of calculation;
(b) Employers must provide reasonable paid time for union delegates to represent other workers (for example, in collective bargaining);
(c) A requirement for employers to provide additional information about unions in the workplace along with a form for new employees to indicate whether they want to be a union member; and
(d) Greater protections against discrimination for union members including an extension of the 12 month threshold to 18 months relating to discrimination based on union activities and new protections against discrimination on the basis of being a union member.

Concluding comments

The Bill had its first reading in February and is currently being considered by the Education and Workforce Select Committee. Submissions are now closed and the Committee is due to report back to Parliament by 1 August 2018. It is predicted that the legislation could be in place by the end of this year.

The proposed changes are not the first under the new government. Other recent changes include the extension of paid parental leave, and an increase in minimum wage which was lifted to $16.50 in April this year.

Workplace Relations Minister Iain Lees-Galloway has recently made two announcements. The first is regarding the setting up of a task force to review the Holidays Act. The task force will focus on how to simplify that Act, and in particular will look at the two ways in which holiday pay is calculated. This has come about as a result of recent reviews that have concluded that many employers are calculating holiday pay incorrectly. The task force is due to report back mid-2019.

The second announcement is in relation to the Government’s proposed Fair Pay Agreements that can be entered into to set minimum employment terms and conditions for all workers in the industry or occupation covered by the Agreement. The Government has announced a team led by former Prime Minister Jim Bolger to develop recommendations on the design of a Fair Pay Agreement system, which is due to report back by the end of 2018.

There is also a Members Bill attempting to deal with “triangular employment”. This is intended to allow labour hire workers working in a business, to be covered by collective agreements that business has with its employees, and to allow such workers to bring personal grievances against the business.

While there are undoubtedly more changes to come, it is certainly clear that the changes in the employment law landscape will have an increased focus on employee rights.

If you have any questions about the above, or how these changes may affect you in your business, then please contact a member of Holland Beckett Law’s employment team to discuss.

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