New Zealand: Employment law changes – a snapshot for employers

Last Updated: 6 November 2014
Article by Naoimh McSparron

Parliament have just voted to pass the Employment Relations Amendment Bill ("the Bill"). It has yet to receive Royal assent and the Bill will become law 4 months after that. The changes do not therefore have immediate effect but they are imminent.

This is a short summary of the main changes which we think will affect our clients.

Collective Bargaining and Agreements
The Bill allows a party to a collective bargaining situation to obtain a declaration from the Employment Relations Authority that bargaining has concluded. This is intended to apply to situations where clearly agreement between parties is not going to be reached and seeks to avoid the need for protracted and unfruitful negotiations.

Under the Bill, where an employee's work is covered by a collective agreement and the employee is not a member of a union, employers can offer the terms and conditions they want to new employees who are not union members, instead of being bound to offer the terms and conditions in the collective agreement for the first 30 days as previously.

The Bill gives power to employers in some situations to reduce pay to employees who are party to a partial strike. Failure to provide written notice of a strike or lockout will make it unlawful.

Flexible Working Arrangements
The ability to request flexible working arrangements is extended to all employees (not just those with dependents) from the beginning of their employment. There will be no limit to how many requests for flexible working arrangements can be made over a 12 month period and employers will have one month (instead of the previous 3 month timeframe) to consider such requests.

Continuity of Employment
Currently, the Employment Relations Act separates employees into vulnerable employees (cleaners, food catering sectors, orderly services in the aged-care sector etc.) and other employees. As the current law stands, an incoming employer or contractor is required to take on any vulnerable employees if those employees elect to transfer to that new employer.

The Bill introduces an exemption to this right of transfer based on the size of the employer. In particular, incoming employers with 19 or less employees will be exempt from these requirements. However, this exemption only applies to vulnerable employees. The position will remain the same in relation to other employees. Employee protection provisions are contained in employment agreements regarding negotiation of an employee's transfer to a new employer on a sale of business or change in contracting arrangements.

The Bill makes changes to the requirement for an outgoing employer to forward individual employee information, timeframes being placed upon employees as to whether they may elect to transfer, and the addition of penalties and compliance orders for non-compliance with the provisions.

Rest and Meal Breaks
The main publicity surrounding this new legislation has been about rest and meal break provisions. The Bill simply codifies what generally happens practically and informally in most work places and gives flexibility. The statutory obligation for minimum paid 'smoko' and rest breaks is removed, when reasonable and necessary, allowing employers and employees to agree on compensation or alternative arrangements which suit the workplace. The compensation could be reasonable remuneration or the time off at another time during the work period. For instance, the employee and employer can agree that, if the employee has missed a paid 15 minute break, they could leave 15 minutes before the end of their shift.

Disclosure of Information and Duty of Good Faith
The Bill responds to a previous Employment Court decision allowing unsuccessful job candidates access to evaluative information about themselves and other candidates as part of the good faith obligations under the ER Act. The Bill signals a change to the duty of good faith such that an employer is not obliged to provide an affected employee with access to confidential information if the confidential information is about another identifiable individual; or evaluative or opinion material compiled for the purpose of making a decision about the continuity of the employee's employment; or about the identity of the person who has applied the evaluative or opinion material.

This proposed change is intended to align the good faith requirements in the Employment Relations Act more closely with the privacy principles and withholding reasons in the Privacy Act 1993 and the Official Information Act 1982. The proposed change seeks to provide a balance between employees having access to relevant information to allow an informed comment on a situation affecting their employment and also an individual's right to have his or her personal information kept private.

It is also worth noting that proposed changes to health and safety, expected to become law in the later part of 2015, will have implications for all employers. We want to help to keep you and your employment agreements and policies up to date with developments in the law. Give us a call to see how we can work with you to ensure that you are up to date.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Naoimh McSparron
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