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.

You may also like ...
Restructuring in the workplace – What employers need to know
With the economy continuing on its downward slide, you will not be alone in giving thought to potential cost cutting measures, including reducing your labour costs. Restructuring is usually a last resort for employers and is only a step that tends to be taken when there seem to be no other viable options for reducing costs quickly.  While the impact on employees is immense, it is clear that a restructure process can be just as stressful and fraught for an employer.  That is why, sometimes, employers can get things wrong and may find themselves at the centre of a personal grievance, which can result in greater stress, cost and uncertainty. A restructuring needs to be substantively justified, and procedurally correct.  If you do not meet both of these requirements, there is a risk that if an employee were to make a claim against you, it could be upheld. What is Substantive Justification? It is likely that during recessionary times, such as we are in now, the substantive reasons for a restructure will be fairly obvious to your employees.  However, you will still need to justify this by providing evidence in support.  This may include pointing to reduced sales figures or forecasts, showing increased costs (i.e. materials, rent, insurance), or any other information that you are willing to share that goes toward justifying the proposal to restructure. What is the Correct Procedure? The procedure for restructuring is usually where an employer can get tripped up.  To start, you need to remember that you should not pre-determine that a restructure is inevitable.  You have a good faith obligation to your employees to consult with them before any decisions that may affect their employment are made.  It may be that during consultation, you are able to see a way forward that means a restructure is not required, or at least not to the extent that you had originally envisaged. Once you have substantive justification, you need to advise your employees that you are proposing a restructure and give them adequate information including what the restructure would entail, how it would impact them, and how you wish to consult with them about it. You will then move to the consultation stage and be ready to provide further information or answer any questions the employees may have.  Once you have finished consultation, you will need to advise the employees of your proposed decision.  Your employees should then be given an opportunity to comment on or ask further questions about the proposed decision.  It is not until they have been given this opportunity that you should procced to confirm your decision. The exact process you follow will depend on factors such as the size of your workforce, the number of roles that may be impacted, the typical method of communication with employees, the specific terms of your employment agreements, and the location of your employees. Having guided employers through numerous restructures, the one point we want you to keep in mind is that getting your restructure right is by far more preferable than having to deal with the consequences (and potential costs) of getting it wrong.  We can provide specific advice and guidance on restructuring and all other employment related issues, so please contact our employment law team at any time for further information.
Read more
Holidays Act – could change finally be on the horizon?
Earlier this week the Workplace Relations and Safety Minister Brooke Van Velden gave a speech to the Auckland Business Chamber, reiterating her priorities following the conclusion of the Government’s 100-day plan in which Fair Pay Agreements were abolished, and the availability of 90 day trial periods extended to all new employees. The Minister has confirmed that delivering changes to the Holidays Act (“Act”) is one of her top priorities, which is likely to be welcome news to both employers and employees. Compliance with the Act has been difficult and costly for employers and payroll providers. The Labour Government put together a taskforce in 2018 to address the many issues being experienced by employers when calculating leave and holiday entitlements. The taskforce made a number of recommendations, all of which were accepted (for further details on these changes see our previous article here). A draft Leave Entitlements Bill was prepared, however was not introduced prior to last year’s election. The overarching issue with the Act is that there are multiple ways to calculate an employee’s holiday pay, and the Act has struggled to keep up with working arrangements outside of a normal five day a week salaried employee. Payments such as bonuses, commission, or if an employee works variable hours mean that the calculations are not straight forward and are often done incorrectly. The changes proposed were an attempt to simplify these calculations. The Minister has now confirmed that the changes recommended by the taskforce and the draft Bill will not be “simply rubberstamped” and will be subject to scrutiny as well as consultation with key stakeholders. She went on to say “if the policy is difficult to draft, chances are businesses would have a tough time implementing it too”. This indicates a major reset of the Act, and the changes which we had expected, could be on the way. Other indicated changes to employment law include a change to the rules surrounding contractors (with the Court of Appeal due to hear the Uber case this month (see here for our previous advice regarding this), we are likely to also have further developments in this area from the Courts later in the year) and changes to personal grievances. The Minister has asked for advice on whether an income threshold for raising a personal grievance can be set and removing eligibility for any remedies when an employee is at fault. The Minister has been very clear that she would like to receive feedback from the stakeholders who will eventually have to work with the Act and it is important that businesses use this opportunity to have a say on the Act. The majority of employers have struggled to achieve strict compliance with the Act due to its many complexities. Putting forward issues which regularly impact your business will ensure these can be given consideration. Our team will be closely monitoring this and will provide specific information on how feedback can be given when this information is available. If you require assistance with your current obligations under the Act, or would like to discuss providing feedback then please feel free to get in touch with a member of our specialist employment law team.
Read more
Using Chat GPT in the workplace – what you need to know
The use of Artificial Intelligence (“AI”) in the workplace is likely to become increasingly common as technologies advance and benefits become proven and trusted. One AI development that looks set to be eagerly embraced by business is the generative pre-trained transformer model designed by developer OpenAI and used in its Chat GPT product (as well as in competing products, such as Google’s Bard and Microsoft’s Bing Chat). In a nutshell, Chat GPT is a large language model chatbot that is able to generate content based on requirements set by the user.  It essentially searches the internet to find information that matches your query and can then produce written content including articles, emails and even social media posts, as well as images and graphics. While the use of this technology may create huge benefits for your workplace, there are a few key points that you should be aware of before you start: If you plan to use Chat GPT in the workplace, you should open a Chat GPT Enterprise account (or its equivalent). The Enterprise account will provide greater speed, data security and privacy than a standard individual account.  Yes, it will cost more, but if your employees use Chat GPT from their own account there is a risk that sensitive/confidential information may be leaked and could become available to anyone.  If you use the Enterprise level service, any information you input or work product received will remain private to you and will not be used by the model to provide work output for third parties. Furthermore, if an employee uses their own Chat GPT account to generate work product, it is the employee who will be the copyright owner of the work product – not the employer. This may create the issue of having to assign or license the right to use the content, or the employee having the ability to share the work product with third parties without requiring your consent to do so.  It may be simpler to have copyright clearly belonging to you from the start. Another important point is that the content that you receive may not always be correct or suitable! Chat GPT looks for any available information to help it formulate its work product.  That means it will not always retrieve accurate information, and in some cases could be basing its work product on false information.  Furthermore, the style of the response may not be suited to you or your customers.  Chat GPT is not yet able to distinguish between what might be a great communication to an American consumer from one that would work better in a New Zealand context. If you are thinking about using AI in the workplace, it really is a good idea to put policies in place so that you and your employees understand the parameters and effects.  It is an ever-evolving world of technology so you will need to ensure that policies (and employment agreements) are regularly reviewed and updated to meet your needs. If you require any assistance with your policy drafting and implementation, our employment law team is here to help (and will provide you with a much better-tailored service than Chat GPT!)
Read more

Start typing and press enter to search

Scroll to Top