Employment Agreements

Recent developments in employment law means now is a good time for employers to review employment agreements and ensure they are up to date and inclusive of the recent changes.

We have outlined these changes in further detail below.

Sick leave

From 24 July 2021, after 6 months’ continuous employment, employees will be entitled to 10 days sick leave, an increase of 5 days. Employees can carry over up to days’ sick leave to a subsequent 12-month period of employment up to a maximum of 20 days’ current entitlement.

Leave for miscarriages or stillbirth

From 31 March 2021, employees can now take up to three days’ paid bereavement leave if they, or their partner, experience a miscarriage or stillbirth. People planning to have a child through surrogacy or adoption are also eligible for this bereavement leave if the pregnancy ends by miscarriage or stillbirth.

This leave is available to employees per pregnancy and there is no limit on the number of times an employee can access the leave.

Matariki public holiday

This year, New Zealand celebrated its first official Matariki Public Holiday, on Friday 24 June 2022. This is New Zealand’s first public holiday to recognise Te Ao Māori (the Māori worldview). Matariki is a standard national public holiday. If an employee is to work on Matariki, they must be paid at least time and a half and, if it is a day that employee normally works, then the employee must be given a “day in leu” otherwise known as a paid day off at a later date agreed between the employer and employee.

Minimum wage increase

On 1 April 2022 the adult minimum wage increased from $20 per hour to $21.20 per hour. This will be particularly important for employers who have salaried staff that frequently work in excess of their usual hours each week. Employees must be paid at least the minimum wage for every hour they work.

As a result of minimum wage increasing, paid parental leave payments have also increased to a maximum of $621.25 gross per week.

Privacy Act 2020

The Privacy Act 2020 governs how organisations and businesses can collect, store, use, and share information. While many of the existing principles of the former Privacy Act 1993 have been carried over, there have been important updates which will have a direct impact on both employers and employees. The changes include updating existing principles, introducing a new privacy principle, new criminal convictions, fines, as well as new reporting obligations for organisations (including employers) for when a privacy breach has occurred.

These changes have increased the responsibility of employers when it comes to handling employee information. Conversely, employees have been granted more protection over the information their employer holds. Because of this, it is important that both parties to an employment relationship understand their rights and responsibilities. This is especially the case when dealing with the sensitive information, e.g. the details of a workplace investigation. Ensuring your employment agreements and policies reflect these changes is key to compliance as well as maintaining best workplace practice.

Restraints of trade

In the wake of COVID-19, the resulting tight labour market has placed a premium on skilled workers. This has led to a number of employers attempting to retain their staff through restraints of trade. It is crucial that employers understand the nature of a restraint of trade before they are included in any employment agreement or before an employer attempts to enforce.

There are two types of restraint of trade: non-competition and non-solicitation. A non-competition clause prevents an employee from working in a similar field to their former employer’s business. They are generally used to protect the former employee’s confidential information or customer relationships. However, as this limits an individual’s ability to make a living, there are difficulties associated with their enforcement.

The second type of restraint of trade is non-solicitation. Non-solicitation clauses prevent a former employee from soliciting clients, suppliers, or potentially other employees from their former employer. These focus on protecting relationships and client bases. To enforce this type of clause, the employer must show that the restriction on the former employee is reasonable.

We can help employers develop safeguards to protect their business, if there are concerns that a departing employee will adversely impact business.

90 day trial period clauses and probationary period clauses

As a reminder, 90 day trial periods are now only available for employers with fewer than 20 employees.

90 day trial period clauses must also strictly comply with the relevant employment laws. There are many fishhooks: for example, if there are material deficiencies in the wording of a clause, or the employee did not sign and return their employment agreement before commencing work, an employer will not be able to rely on the 90 day trial period provision.

If a business has 20 or more employees, it cannot use a 90-day trial period. However, employers can use a probationary period provision. Unlike a 90 day trial period, if an employer chooses to dismiss an employee at the end of the probationary period, the employee can bring a personal grievance for unjustified dismissal.

Health and Safety

To say that the recent health and safety landscape has been difficult for businesses to navigate, is an understatement. We recommend reviewing employment agreements, and associated policies, to ensure they adequately protect the business.

To ensure employment agreements remain compliant with current law and any further changes to health and safety legislation, we suggest that health and safety clauses refer, by way of an example, to employees “working in a safe manner in compliance with all applicable Health and Safety Acts, regulations and codes of practice…”.

Businesses may also want to consider reviewing any health and policy that they have, or implementing one, if they do not already have one in place.

Concluding comments

When reviewing employment agreements, it is also helpful to review any workplace policies which may be in effect and ensure that the policies are not only consistent with the employment agreement, but also fit for purpose and achieve the objectives of the business in introducing the policy.

If you have any questions about the above or how you may be affected in your particular circumstance, please contact a member of Holland Beckett Law’s employment team to discuss. We would be happy to review current employment agreements to ensure they are up to date and reflect best practice.

The information contained in this article is general information only, and does not constitute specific legal or other professional advice and should not be relied on as such. Readers should obtain specific advice before making any decisions or taking any action based upon information contained in this document.