March 2018 Newsletter


Changes to the Employment Relations Act 2000

Upcoming changes to employment legislation are currently going through the parliamentary process. The Employment Relations Amendment Bill 2018 is currently at the Select Committee for review with the public submission process closing on 30 March 2018.

The way in which it was presented by the Government lead Employers to believe that the changes were already in place however, this is not the case. Therefore some Employers have already changed their business practices to accommodate for the change – i.e stopped utilising the 90 Day Trial Period as they believed it was no longer enforceable.

This is not however the case.

Once it has gone through the Select Committee it will then move to a second reading. From there it will then be presented to the Parliament including the completion of the public submission process, for a third reading after which, if passed, it will be handed over to the Governor General for Royal Assent.

We believe the changes will come into force around June or July 2018 at which time it will then be enacted into law.

If you would like further information as to what the upcoming changes are, and how they affect you, please feel free to give us a call.


Union Access Provisions

Based on the most recent figures released by the Ministry of Business Innovation and Employment (MBIE) total Union Membership sat at 357,120 individuals. This represents 17.7% of the total work force with membership being spread across 122 separate Union Organisations. The 10 largest Unions cover 291,226 of the total unionised workforce with a high percentage of these staff being within the wider Government sector (Public Servants, Police, Nurses and Teachers).

Currently s20A of the ERA 2000 requires a Union Official who wishes to visit a worksite (even where membership does not currently exist) to provide not less than 24 hours’ notice of the intention to visit. The Employer, on receiving such notice has 24 hours to respond to the request, otherwise the request is deemed to have been accepted.

Under the currently proposed amendments to the Act, if passed, the need to provide notice will be removed with new wording added stating “nothing allows an Employer to unreasonably deny a representative of a Union access to a workplace”.

Therefore, subject to usual visitor entry provisions and specific Health and Safety considerations, the Union Official will then be able to freely walk around the worksite speaking to Employees while they work. Such conversations will no doubt focus on the (perceived) benefits of Union Membership.

While it would seem practical to make a meeting room available and to alert all staff to the presence of the Union Representative, allowing staff to visit the room without ‘loss of pay’ if they are interested, the Unions have already signalled that they would see this as ‘restrictive action’ with them reinforcing their right to ‘walk the floor’ and speak to individuals on a one-on-one basis.

The only apparent deterrent to such disruption appears to be the individual Employee advising the Union that they are not interested.

With such new legislations pending we are expecting a significant increase in the number of Collective Agreements being negotiated within small to medium sized businesses over the next two to three years.

If you have never had experience in dealing with Unions within the workplace we strongly recommend that you contact us if you receive an approach from a Union. We can assist in all matters associated the Union Access, Union Rights and Collective Bargaining and Collective Agreements.


Employers want 90-Day Trial Periods to stay

Employers have repeatedly told the EMA that 90-Day Trial Periods are a valuable and useful asset to have when employing staff and they want them to remain.

Surveys of EMA members clearly indicate that many companies have employed staff that they would not normally consider because of the 90-Day Trial Period.

The Employment Relations Amendment Bill looks to restrict the 90-Day Trial Period to Employers with fewer than 20 staff. For Employers with 20 Employees or more, they will have the choice of using probationary periods if they wish to use some type of trial period. However, under a probationary period an Employee can choose to initiate a personal grievance claim if they feel they are unfairly dismissed.

"Our members have repeatedly said they have given someone a chance because of this law and it has worked for them and the Employee. They say the 90-Day Trial Period gives them the ability to work with the Employee to ensure they are right for the role and this has usually been successful," says Kim Campbell, CEO, EMA.

"They have gone on to say, that without this flexibility, they would not have given the person in question a chance. This is because the person may have no employment history; may not have presented well at the interview or may not have been an obvious choice," says Mr Campbell.

Employers have often referred to using a six week time frame for on-boarding new Employees to ensure they demonstrate their ability to get to work on time, arrange secure transport, able to organise family care if needed, along with the ability to perform the role required. They say that having new staff locked in as Employees with no 90 day provisions is simply too higher risk in some cases.

"The premise of the Bill is that Employers with fewer staff need the flexibility offered under the 90-Day Trial Period, yet our member feedback shows that Employers with more than 20 staff are keen users of this as well. In fact, Employers who are large enough to have their own in-house Human Resources team are using the trial period. This strongly indicates to us that this is not something that only small businesses value.

"If we are wanting to enable a productive and vibrant economy, then businesses need flexibility to manage their staff requirements. It must be noted that employing staff is an expensive exercise and uses a lot of resources. Therefore companies do not actively seek to throw money away by firing staff at will," says Mr Campbell.


Rest and Meal Break changes imposing further obligations on Employers

The Employment Relations Amendment Bill 2018 is proposing a number of changes to employment law, one of these changes is in relation to the timing of meal and rest breaks taken by Employees.

If you think back to a time before the 2016 Amendment Act where meal and rest breaks were prescribed by the Act – you may remember that these were not practical for many employment environments – the Amendment Bill is proposing to add these back into the current legislation.

This means that a default break schedule, as defined by legislation, will apply and operate in all employment relationships unless the parties agree otherwise. The proposed provisions are:

  • between 2-4 hours, a 10 minute rest break must be taken in the middle of that period;
  • between 4-6 hours, a 10 minute rest breaks one third of the way through the work period and a 30 minute rest break two (2) thirds of the way through the work period; and
  • between 6-8 hours, a 10 minute rest break between the start of work and the meal break, a 30 minute meal break in the middle of the work period, and a 10 minute rest break between the meal break and the finish of work.

If you work in the construction industry or carrier services, you will know that having prescribed break times such as these will not work well for your business and may even cause significant disruption to the operation of your business.

However, there is a way to get around Employees taking breaks at these prescribed times. The Employer and Employee can agree at the times breaks are to be taken. This means that there could be a completely different regime of rest and meal breaks operating within your business, as long as there is mutual agreement. If no agreement is reached, the default legislative timing of breaks will apply.

What will you need to do to ensure you are not breaching the Act if this provision is passed into law? If, by mutual agreement, the Employee and Employer come to a different break arrangement – i.e a one (1) hour break to be taken in the middle of the Employee’s working day – record it in writing and retain these records. This could be recorded within your Employment Agreements, a Policy, or even a weekly breaking schedule which sits alongside the roster.

It is imperative that Employers do this in case a complaint is made to the Labour Inspector. If you cannot prove that you and the Employee agreed to a different breaking schedule, you may be penalised by the Labour Inspector.

There are likely to be further exemptions that will apply to taking meal breaks including if you: work in an essential service; and the continuity of service or product is crucial to public interest or public safety; and the Employer will would incur unreasonable cost in replacing an Employee with similar skills or experience. If you can satisfy all three (3) of these requirements, an Employer will be considered exempt from taking breaks as defined within the Act. However, if this is the case, the Employer and Employee will need to mutually agree when rest and meal breaks will be taken.

The Employer may also be able to compensate the Employee if they cannot reach an agreement as to when rest and meal breaks are to be taken. Compensation could be in the form of time off work, or monetary compensation, which is equal to the rest and meal break times.

If you require further advice about what the changes to rest and meal breaks could mean for you, or would like us to draft a Policy for rest and meal breaks, please do not hesitate to contact us – we would be happy to help.


Three’s company in an employment relationship

Currently, a number of Employers use Temp Agencies to source their Fixed Term, Casual or Part time Employees, with some Employers only offering permanent employment to the Employee if they ‘prove’ they are a good worker. However, some Employers use a Temp Agency to limit their obligations to the temp worker.

Proposed changes to the Employment Relations Act 2000 would enable a temp worker to raise a personal grievance against the Temp Agency and the Employer. Furthermore, if there is a collective agreement operating in your business, the coverage clause could extend to temp workers.

Therefore, if the temp worker believes that they have a personal grievance they have the ability to raise it against the Primary Employer (Temp Agency) and add the Secondary Employer (the Company where they are actually working) by lodging an application with the Employment Relations Authority.

If the personal grievance is successful, this would mean that the Employer may have to pay compensatory damages to the temp worker and take the Employee on as a permanent worker.

For Employers who utilise Temp Agencies to source their Employees because they want to limit their liability or obligations to temp workers, this may no longer be the case as the temp worker will now be able to raise a personal grievance against that Employer.

What could this mean for the future? We may see the reduction in use of Temp Agencies, or it may become pointless for a Company to utilise Temp Agencies as it provides no additional benefits for the Employer.

If you require further information about how this affects you, please feel free to get in touch – we would be happy to help.


Increase the Minimal Wage

Remember - as at 1 April 2018 the minimal wage will increase to $16.50. This means that any existing Employee, regardless of their work status (Casual, Part-Time, Fixed Term etc.) currently paid less than $16.50 per hour, will need to have their hourly rate of pay increased to at least $16.50 per hour. Obviously other Employees who are currently paid marginally above this rate will also expect a pay rise to restore any previous relatively gaps that are eroded as a reset of this change.

Please contact us if you need advice on how to address this ‘relativity’ situation.


Easter Weekend – Do you need to pay your Employees?

Under the Holidays Act 2003, it recognises Good Friday and Easter Monday as Public Holidays. The Shop Trading Hours Act 1990 imposes further obligations on Employers in relation to Good Friday and Easter Sunday. What do you as an Employer need to know?

Good Friday and Easter Sunday

Under the Shop Trading Hours Act you are required to close your business on Good Friday and Easter Sunday. As such if Friday and/or Sunday is a normal working day for your Employee you will be required to pay them for the hours they would have worked, had your business been open. However you will not be required to pay them at time and a half, nor will they be entitled to a day in lieu.

Some Employers may have an automatic exemption which allows them to open on Good Friday and Easter Sunday, such as Petrol Stations and Convenience Stores. As Good Friday is a Public Holiday, your Employees will need to be paid at a rate of time and a half and be entitled to a day in lieu.

If Employers have an exemption either automatic or by local Council Bylaw exemption to open on Easter Sunday, Employees will be remunerated at their ordinary rate of pay, and will not be entitled to a day in lieu, as Easter Sunday is not a recognised Public Holiday.

Easter Monday

All business are able to open on Easter Monday and are not prevented from doing so under the Shop Trading Hours Act. As Easter Monday is a recognised Public Holiday, Employees who work that day will be entitled to be paid at a rate of time and a half and be entitled to a day in lieu.

If you have any questions about how the Easter Weekend affects you, or how Employees should be remunerated for working on these days, please feel free to give us a call.

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