Improved working conditions for employees

February 13 2018

The Labour led coalition government has make swift amendments to the Employment Relations Act 2000. These changes took effect on 1 February this year and will impact all businesses, so if you’re an employer, you need to take note.

The government has said the objective of these law changes is to improve conditions for employees and to focus on the advancement of small businesses. One point is certain: small business owners will have more responsibilities. Here’s a summary of the changes and a look at the proposed compulsory redundancy provisions.


How the 90 day trial period now applies

There were indications the government was going to abolish the 90 day trial period altogether, but this has been tempered slightly and now only applies to businesses with 20 or more employees. The trial period will remain in place, in the meantime, for businesses with 19 or fewer employees.

Obviously, if your business has over 20 employees, or you’re on the cusp of the division and you plan to hire more staff, you’ll need to amend your employment agreements to remove the reference to a trial period.

In addition, for businesses with 20 or more employees, any new people you hire will have recourse against any perceived unfair treatment and unjustified dismissal. If this situation arises, they will be able to bring personal grievance proceedings against their employer during the first 90 days. This is a good reminder for all businesses that thorough and due consideration should be given to hiring new staff.


Breaks are back

Employees have always been entitled to take breaks, but many choose to continue working. Statutory rest and meal breaks have been restored, meaning employees will have to take their breaks. There are a few exceptions where it isn’t practical to have employees taking breaks at the same time, such as air traffic controllers. If you’re an employer, you’ll need to plan how you’re going to give employees their breaks within the daily operation of your business to ensure you’re compliant.


Free access for unions to your workplace

Union representatives will now have free access to workplaces without needing your consent to be there. However, union reps will need to visit and a reasonable time without disrupting your normal daily business operations.


Collective bargaining and union membership

Further to union access to the workplace, the government has introduced the first of a series of law changes designed to extend the scope of collective bargaining to make union membership more attractive.

When collective bargaining is initiated, a duty is imposed to reach an agreement unless there is a genuine reason to stop the negotiation. There will be requirements to include pay rates in collective agreements and to provide equal conditions for new workers. The change also includes protection against discrimination for union members and for union members to participate in low-level industrial action without the threat of pay deductions.

The government has proposed more changes to collective bargaining, one of which is the development of ‘fair pay agreements.’ These will set industry wide minimum employment conditions based on a set of standards appropriate to each industry. Employers won’t be able to opt out of these agreements. Other proposals include restoring the collective bargaining rights of film and television workers, and rules to prevent non-union workers from receiving the same terms and conditions as union workers. These have longer time frames to allow further discussion and consideration.


More changes in consideration: compulsory redundancy provisions

The government has said it will consult with all relevant stakeholders about increasing minimum redundancy protection for employees affected by restructuring. They plan to do this within their first year in office.

As New Zealand has a large number of SMEs, the process will have to address the problem that there may be an increase in business insolvency. Businesses often need to restructure to adapt to the change, which is a constant in many industries as a result of rapidly evolving technology. Insolvency may become more desirable than business restructuring to avoid the cost of compulsory redundancy entitlements. This means employees could be faced with job losses without redundancy compensation.


Finally, changes to the minimum wage and paid parental leave

Remember to mark 1 April into your diary for minimum wage increases to $16.50 per hour. Another date to note is 1 July, when paid parental leave entitlement increases from 18 to 22 weeks.

Our employment lawyers will keep you up-to-date on any further developments.

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