Most Read Contributor in New Zealand, September 2016
The Government's employment law changes came into effect on
1 April 2011. This Brief Counsel focuses on the key practical
issues that flow from the new amendments.
This advice is necessarily generic and is not a substitute for
specific advice in relation to your particular circumstances.
All employers can now use 90 day trial periods for new
employees. Trial clauses should be simple, and will be interpreted
by the Courts very strictly.
For the trial clause to be effective, the employment agreement
containing the trial clause must be (a) signed by both parties (b)
before employment starts. A recent Employment Relations Authority
case held that a trial period clause was not valid because (amongst
other things) the employee had signed the agreement after lunch on
her first day (Parkes v Squires Manufacturing Limited,
Employment Relations Authority, Wellington, 11 February 2011).
In addition, before a job is verbally offered and accepted,
employers should advise the prospective employee that they will be
including a trial provision (ideally employers would have something
in writing to show that this has occurred.)
Employers should also remember the distinction that exists
between trial periods and probationary periods (which, in older
template agreements, will sometimes be labelled as a 'trial
period'). Employees who are dismissed during a probationary
period can still bring a grievance challenging their dismissal.
Undoubtedly, teething issues around the new trial period law
will continue for some time. Given the potential early pitfalls, we
strongly suggest employers act cautiously and take advice before
relying on a trial clause.
Cashing up leave
Under the new law, employees can ask to have up to one week of
their minimum statutory leave paid out in cash. All employers
should have a policy covering cash up requests.
Employers who do not want to cash up leave can adopt a policy
that states they will not consider these requests. In the absence
of such a policy, employers must consider requests and advise the
result in writing within a reasonable time. However they do not
have to give a reason for declining a request.
Employers may adopt different policies for different parts of
Employees cannot request a cash-up until their next entitlement
date on or after 1 April 2011 (usually this will be their next
anniversary date). Importantly, leave can only be cashed up at the
employee's request. An employer cannot require cash up
requests, or even raise the matter in negotiations.
From 1 July 2011 employers must retain a signed
copy of each employee's individual employment agreement, to be
available to the employee on request, or (where the employee has
yet to sign) a copy of the intended agreement.
It is now more important than ever to have signed agreements for
all staff. The new law makes it harder to argue that an unsigned
agreement is binding, meaning there will be real uncertainty if
something goes wrong.
Employers now have more flexibility to request medical
certificates when an employee takes statutory sick leave for an
illness that lasts less than three days. However, in these
circumstances the employer has to:
inform the employee as early as possible that the certificate
is required, and
meet the cost.
Employers should check that their template clauses allow them to
take advantage of this change (many won't, and will need to be
Other changes include:
the ability to transfer public holidays to another significant
relaxing (slightly) the test an employer must meet when
justifying warnings and dismissals, and removing reinstatement as
the primary remedy
requiring unions to seek an employer's permission before
they enter a workplace (employers should ensure that managers are
aware of how to respond to these requests as consent cannot be
unreasonably withheld and there is a strict process that must be
employers can now communicate directly with employees during
collective bargaining about matters relevant to the bargaining
(bargaining process agreements may need to be tweaked to allow for
increased penalties for non compliance (from $5,000 to $10,000
for individuals, and from $10,000 to $20,000 for companies and
other bodies corporate), and
wider powers for labour inspectors to enforce undertakings and
issue statutory improvement notices.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
This WHS decision clarified the interpretation of s 19 of the Work Health and Safety Act 2011 (NSW).
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