Employment Law Changes

The Labour Government has made legislative changes to employment law (The Employment Relations Amendment Act 2018), some of which have already taken effect, with the minimum wage changing on 1 April 2019, and other changes taking effect from 6 May 2019. If you employ staff, you may need to know about these changes and ensure you're ready for them.

CHANGES ALREADY IN FORCE (EFFECTIVE 12 DECEMBER 2018)

Changes affecting all employers:

• If requested by the employee, reinstatement will be the first course of action considered by the Employment Relations Authority, for employees that have found to be unfairly dismissed. Reinstatement means the employee gets their previous job back. The Relations Authority will still assess whether reinstatement is practicable and reasonable for both parties.

• New categories of employees may apply to receive the protections afforded to ‘vulnerable employees’ through an application process set out in the Act. 

Changes affecting employers which employ Union members:

• Union representatives can now enter workplaces without consent, provided the employees are covered under, or bargaining towards, a collective agreement. They can still only enter a workplace for certain purposes, must be respectful of normal operating hours, and follow health, safety and security procedures. 

Union representatives still need to seek consent before entering workplaces where no collective agreement or bargaining exists, and for workplaces that are also residences (such as farmhouses). Union representatives can also enter a workplace to assist a non-union employee with matters relating to health and safety if that employee has requested their assistance.

• Pay deductions can no longer be made for partial strikes, such as wearing t-shirts instead of uniforms as part of low-level industrial action. Employers can respond to a partial strike action the same way as any other strike, which could include suspending employees without pay or a lockout.

• Businesses must now enter into bargaining for multi-employer collective
agreements, if asked to join by a union. They will not have to settle a multi-employer collective agreement if their reason for not wanting to settle is based on reasonable grounds.

• Employees will have extended protections against discrimination on the basis of their union membership status, including either being a union member or intending to be a union member. 

• Earlier initiation timeframes have been restored for unions in collective bargaining, enabling a union to initiate bargaining 20 days ahead of an employer.

MINIMUM WAGE CHANGES AFFECTING ALL EMPLOYERS (FROM 1 APRIL 2019)

The adult minimum wage will rise on 1 April 2019 to $17.70 per hour - from the current rate of $16.50 per hour. This means that if you have adult employees earning less than $17.70 an hour, you are legally required to increase their wage rates.

The minimum rates apply to all employees whether they work full-time, part-time or casually and whether they are paid a wage for time worked, partly or wholly on a commission basis or for what they produce (piece rates).

The minimum adult rate applies to any employee aged 16 years and over unless they are eligible for the 'starting-out' wage or the 'training' wage.

There is no legal minimum rate for employees aged 15 years or younger.

If you have salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period, taking into account any overtime, meetings, or time spent opening and closing stores. If these bring total remuneration below the minimum wage rate, you are breaking the law. 

Minimum wage for Children: 

Aged 15 years or under 

• Current minimum rate per hour: No minimum applies
• New minimum rate per hour 1 April 2019: No minimum applies

Minimum wage for Starting out: 

16 and 17-year-olds, first six months with a new employer, not training or supervising others;

16 to 19-year-olds on an Employment Agreement specifying the requirement of an industry training programme involving at least 40 credits a year, not training or supervising others;

18 and 19-year-olds, previously on a benefit for six months or more, not yet completed six months' continuous employment with any employer, not training or supervising others.

• Current minimum rate per hour:  $13.20
• New minimum rate per hour 1 April 2019: $16.50

Minimum wage for Training: 

Aged 20 and older on an industry training programme involving at least 60 credits a year.

• Current minimum rate per hour: $13.20
• New minimum rate per hour 1 April 2019: $14.16

Minimum wage for All other employees: 

All other employees, including 16 and 17-year-olds after six months of employment with the same employer.

• Current minimum rate per hour: $16.50
• New minimum rate per hour 1 April 2019: $17.70

INTRODUCTION OF FAMILY VIOLENCE LEAVE (effective 1 April 2019)

From 1 April 2019, employers will need to provide their employees who are affected by family violence with up to ten days of paid leave. This is very similar to the way sick leave and bereavement leave is provided to staff.

Staff who are entitled to family violence leave include those on fixed-term agreements or casual contracts as well as permanent employees.

Staff affected by family violence may feel shame and stigma and be hesitant to confide in others. It’s important to reassure staff that all discussions and information around leave will be kept confidential, unless there is an immediate risk to someone’s safety.

Workers who are affected by family violence may be distressed, depressed, anxious, distracted and fearful at work. 

They may need to take time off work to:

• attend court
• seek medical attention
• go to counselling
• relocate or seek alternative accommodation
• go to an appointment with the bank
• meet with their children’s school
• seek any other support needed during a time of crisis.

Employees who have perpetrated family violence may need time off to attend court or stop violence programmes. Providing them with the opportunity to have time off or flexible hours allows them to seek help to stop using violence.

The legislation for these changes can be found on the NZ Legislation website Domestic Violence - Victims' Protection Act 2018.

ACTION REQUIRED before 1 April:

1. Identify employees who are paid minimum wage rates and amend to the new rates from 1 April 2019. 
2. Update Individual Employment Contracts to reflect Family Violence Leave entitlements and allow leave to those employees affected by family violence.  

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CHANGES COMING INTO EFFECT 6 May 2019:

Affecting all employers

• 90-day trial periods: the use of trial periods will be limited to employers who employ fewer than 20 employees but any existing 90-day trial periods will continue to be valid. Businesses with 20 or more employees can continue to use probationary periods to assess an employee’s skills against the role’s responsibilities. A probationary period lays out a fair process for managing performance issues and ending employment if the issues aren’t resolved.

• Set rest and meal breaks will be mandatory, the number and duration of which depends on the hours worked. For example, an eight-hour work day must include two 10-minute rest breaks and one 30-minute meal break, while a four-hour work day must include one 10-minute rest break.

• Employers must pay for minimum rest breaks but don’t have to pay for minimum meal breaks. Employers and employees will agree when to take their breaks. If they cannot agree, the law will require the breaks to be in the middle of the work period, so long as it’s reasonable and practicable to do so. Some limited exemptions may apply for employers in specified essential services or national security services.

• Employees in specified ‘vulnerable industries’ will be able to transfer on their current terms and conditions in their employment agreement if their work is restructured, regardless of the size of their employer. A minimum of 10 working days is now required for employees to elect to transfer to the new employer.   

Affecting employers which employ Union members

• Duty to conclude collective bargaining: The duty of good faith requires that employers and unions must conclude collective bargaining, unless there are genuine reasons based on reasonable grounds not to. This ensures that parties genuinely attempt to reach an agreement.

• Pay rates will need to be included in collective agreements, along with an indication of how the rate of wages or salary payable may increase over the agreement’s term.

• 30-day rule restored: New employees who are not a member of the union that is a party to a collective that covers the work to be done by the employee, will be automatically covered by the terms of the collective that would bind the employee as if they were a union member, for the first 30 days of employment.

• Employers will need to provide new employees with an approved active choice form’ within the first ten days of employment and return forms to the applicable union, unless the employee objects. The form gives employees time to talk to their union representatives before considering and making a choice about whether to join a union or remain on the individual employment agreement.

• Employers will need to allow for reasonable paid time for union delegates to undertake their union activities, such as representing employees in collective bargaining. Employees will need to agree with their employer to do so or, at a minimum, notify them in advance. An employer will be able to deny the request if it will unreasonably disrupt the business or the performance of the employee’s duties.

• Employers will need to pass on information about the role and function of unions to prospective employees. Unions must bear the costs if they want printed materials to be passed on.

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ACTION REQUIRED before 6 May:

1. Agree specific times for rest and meal breaks with each of your employees and document this in writing.
2. Update your Employment Agreement templates. 
3. No longer use 90-day trial periods, from 6 May, if you employ 20 or more staff.