Important Changes to Employment Law

The Labour Government indicated early in their term that they would make a number of changes to legislation governing employment relationships, HRtoolkit wanted to bring to your attention a significant number of changes have recently been introduced.

A number of these changes have already come into effect and there are a number which will come into effect on 6 May 2019.

It is important that you understand these changes and put in place the required legally compliant policies and practices. Some of these changes require you to review your employment contracts to ensure you comply with the new legislation.

Here’s A Quick Overview of Labour Government Changes to Employment Law:

Law changes in effect from 1 April 2019:

  1. Minimum Wage goes up to $17.70 (an increase of $1.20).
  2. Domestic Violence – Victims Protection Act:

This is a significant piece of legislation reaching across the Employment Relations Act 2000, Holidays Act 2003 and the Human Rights Act 1993. All companies are required to have a comprehensive policy which provides the necessary support to the affected family member (employee) and responds to the payroll, privacy and employer obligations required by this bill.

 Law changes coming into effect from 6 May 2019:
  1. Trial periods (90-day trial) restricted to employers with less than 20 employees.
  2. Rest and meal breaks to be more prescriptive. These are to be agreed between the employer and the employee. Where these rest and      meal breaks cannot be agreed, then the breaks will be in the middle of the work period (so long as it is reasonable and practical to do      so).

As an Employer what do these changes mean to me?

Domestic Violence -Victims Protection Act

Effective 1 April 2019
This is a significant piece of legislation which all employers need to addressSimilar to sick leave, once an employee has been employed 6 months (continuous employment), the employee becomes entitled to up to 10 days per annum of paid domestic violence leave. This entitlement is not cumulative and does not roll over after each 12 months following entitlement.

  • This entitlement is not payable upon termination.
  • The purpose of this leave is to allow an employee to deal with the effects of domestic violence.

Employers require a “Victim Protection” policy. This should outline the mechanisms for the application of domestic violence leave and ensures that the employee is adequately supported through the process and maintains dignity and privacy. The policy will identify who has access to information regarding the employee’s status and payroll information specifically related to these matters.

Your payroll & leave codes may also need to be updated to ensure that entitlements are available and calculated appropriately for those employees accessing the leave. Also, the leave code for taking DV Leave needs to be considered carefully – we suggest you use the code HR approved leave.

HRtoolkit has a comprehensive Domestic Violence- Victims’ Protection Kit, $199 + GST, ready to personalize for your business.  Call us on 0800HRtoolkit (0800 4786655)  or click the buy now button below. This Kit is comprehensive and contains:

  1. Workplace Safety Plan Checklist
  2. Manager’s guide to managing the conversation and confidentiality, when approached by an employee requesting DV Leave.
  3. Summary of the Domestic Violence – Victims’ Protection Act (2018)
  4. A comprehensive Domestic Violence – Victim Protection & Support Policy out lining processes and responsibilities for employer and employee.

Some critical information about this piece of legislation

An employee may make a request (irrespective of when, or how long ago) the domestic violence event occurred and regardless of whether the employee was employed by you (as the employer) if it was a retrospective incident.

If an employee is impacted by domestic violence, they can request leave or make a request to temporarily variation to their working arrangements for a period of up to two months with the intent of dealing with the effects of domestic violence.

An employer may require proof of domestic violence prior to paying domestic violence leave or making changes to their working arrangements. There are grounds upon which leave and/or flexible working arrangements can be denied. (We will draft further communication around grounds for denial, as these details become available).

Where employment agreements specify the types of leave available to employees, a provision will need to be included identifying the entitlement to domestic violence leave. Employers should also consider updating their flexible working arrangements policies to reflect the changes to legislation.

It is our view that Employers should be proactive and communicative with their employees in agreeing to leave arrangements when a request is made. Ideally, employers will be discussing how much leave is requested, whether the employee anticipates taking more leave in the future and whether there is any other support or assistance that the employer can provide.

An employer may require proof of domestic violence prior to paying domestic violence leave or making changes to their working arrangements. There are grounds upon which leave and/or flexible working arrangements can be denied.  (We will draft further communication around this as these details become available).

Where employment agreements specify the types of leave available to employees, a provision will need to be included identifying the entitlement to domestic violence leave (this clause features in all HRtoolkit employment agreements ). Employers should also consider updating their ‘flexible working arrangements’ policies to reflect the changes to legislation.

It is our view that Employers should be proactive and communicative with their employees in agreeing to leave arrangements when a request is made. Ideally, employers will be discussing how much leave is requested, whether the employee anticipates taking more leave in the future and whether there is any other support or assistance that the employer can provide.

To purchase HRtoolkit’s Domestic Violence -Victim Protection Kit, for $199 + gst, just click on the buy now button below

Restrictions of the 90 day trial

Effective 6 May.

A Company with less than 20 employees – no change you are able to continue using the 90 day trial period with confidence, please ensure you check your 90-day trial clause is in line with current legislative requirements for the 90 day trial. With the significant law changes, we have been busy reviewing a number of employment contracts recently, and have been finding a number of contracts where the 90-day trial clause was not legally compliant and could be contested.

A Company with MORE than 20 employees – If a trial period starts on or before 5 May 2019 it will continue to apply.

Effective from 6 May 2019 you are no longer able to use the 90-day trial clause. You will have to alter your employment agreements:

You will need to remove the 90-day trial clause from your employment contracts by 5 May 2019.
From the 6 May 2019 employers (with 20 or more staff) can use the probationary period clauses in their employment agreements to assess new employee’s skills, fit and their skills and performance.
Under a probationary period, you will need to follow a fair process before potentially dismissing an employee. Unlike a trial period, an employee who is dismissed in accordance with a probationary period clause can raise a personal grievance or other legal proceedings in relation to the dismissal.

Therefore, employers need to actively manage the performance of their new employees and ensure that any references to procedural elements contained within the employment agreement are adhered to. You should to meet regularly with your new employee and give them honest feedback on how they are going, where they can improve and how you can assist them to improve. It is important you keep notes arising from these meetings; challenges, action points and outcomes. If you are challenged on a dismissal, as an employer you will need to provide proof that you followed a fair process in relation to the dismissal.

In addition, it is important that you adhere to what you have stipulated in your employment contracts. If your contract says “reviewed monthly” then you are required to uphold the contracted terms.

To learn more about probationary periods check out our blogs on the HRtoolkit website.

Greater access for Unions

While greater union access rights were granted in December (entering workplaces without the consent of employers where there is a current collective (or bargaining for a collective is taking place) in force, the changes in early May will see the restoration of the requirement for single-employer collective bargaining to be concluded. The caveat being that this is the requirement unless there are genuine reasons based on reasonable grounds not to.

In short, parties must genuinely attempt to reach an agreement.

The 30-day rule will also be restored. This means that for workplaces where a collective agreement is in existence, a new employee must be employed under terms consistent with the collective agreement. This sets the minimum terms and conditions offered to a new employee. However, this does not prevent the employer and the employee agreeing on more favourable terms than the collective.

Where collective agreements are negotiated and concluded, pay rates will need to be included in the collective agreement along with an indication of how the wage/salary rates may increase over the agreement’s term.

Employers are required to provide new employees with an approved ‘active choice’ form within the first 10 days of employment and return it to the applicable union (unless the employee objects). The form will be available from the Ministry of Business, Innovation and Employment for download ahead of the 6th May.

Employers will also need to allow for reasonable paid time for union delegates to undertake their union activities. Ideally, this will be done via an agreement between the employee and the employer. The minimum is a notification to the employer by the employee ahead of the employee undertaking these activities. Employers will be able to deny a request if it will unreasonably disrupt the business or the performance of the employee’s duties.

Rest and meal breaks – more prescriptive

Effective from 6 May 2019.

We are about to see a return to a more prescriptive model of rest and meal breaks. This restores minimum entitlements that applied before 2015.

An employer and employee can agree when the breaks are taken; where they cannot agree the legislation will require the break to be taken in the middle of the work period to which they relate, if reasonable and practicable to do so.

The number and duration of rest and meal breaks depend on the length of the work period. Here is a helpful guide:

  • Between 2 hours and 4 hours – One 10-minute paid rest break
  • Between 4 hours and 6 hours – One 10-minute paid rest break and one 30- minute unpaid meal break
  • Between 6 hours and 8 hours – Two 10-minute paid rest breaks and one 30-minute unpaid meal break
  • Over 8 hours – Entitled to breaks as if the work period has started again; e.g. if they work more than 2 hours but not more than 4 hours on top of the 8 hours already worked (a twelve-hour shift) they get another 10- minute paid rest break

A work period is defined as the period beginning with the time the employee starts work (in accordance with their employment agreement) and ending with the time at which they finish work (in accordance with their employment agreement). It also includes the time where they are on an authorised break.

There are some exemptions: Some employers will be exempt from the requirement to provide rest and meal breaks as above if:

  • Those engaged in the protection of NZ’s national security
  • The employer is engaged in providing an essential service where continuity of service is critical to the public interest, including those services which affect public safety,
  • Where the continuity of service is critical to NZ’s national security
  • Where the employer would incur unreasonable costs in replacing the employee during the rest and meal breaks.
  • If an employer is exempt, they may agree with the employee that breaks are to be taken in a different manner. If they are unable to reach an agreement an employee is entitled to compensatory measures; for example, time off work at an alternative time during the work period and/or financial compensation.

 

What this means for employers:

The impact of this legislation will impact smaller business with just a few employees, such as a café or sole operators in retail, careful planning will be required as the burden is on the employer to ensure that the employee is able to take their rest and meal breaks.

Employment agreement rest and meal break clauses should be checked and may need to be amended to be compliant. This may require a variation to agreement to be issued to any current employees. If you need help with updating your agreements or drafting variations we can help with this.

Some manufacturing sectors where 12-hour rotating employees have traditionally combined their two 10-minute breaks and skipped a lunch break – and got paid for it…will have to reconsider their production output and how they will manage the fact their employees will now have both 10-minute coffee breaks (paid) and the unpaid meal break. Some companies are implementing formal 15min shift handover at the start and end of a 12-hour shift, and using this time for toolbox talks/training updates or increase the output at either end.

Employers may need to adjust the way they currently work to allow for rest and meal breaks to be taken at specific times. There will likely be a settling in period in relation to getting things right, but long-term non-compliance may leave you open to the risks of personal grievance or disadvantage claims.

We anticipate that greater guidance will likely start to come through the Employment Relations Authority and the Employment Court, toward the end of the year.