New Zealand: Employment Relations Bill introduced – changes to trial periods and more

Last Updated: 28 March 2018
Article by Amanda Douglas and Sophie Carter

With a new government comes new legislative changes. Following announcements by the Labour Government that changes would be made to employment laws1, the Employment Relations Amendment Bill (Bill) has now been introduced into Parliament.

The stated purpose of the Bill is to "restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace".

The most significant changes are summarised here. During the legislative process, the Bill may be amended, so the final product that comes into law may differ from the Bill.

Changes to employment standards

The Bill proposes several changes to the Employment Relations Act 2000 (Act) which are intended to reintroduce minimum standards of employment. Many of the changes will reverse changes made by the previous government.

Despite not previously being announced as an area for amendment, the Bill introduces changes to when certain employees must be given the option to transfer to a new employer. The current legislation provides that employees who work in specified industries and roles (commonly known as "vulnerable workers") must have the option to transfer to the new employer where the business is sold, transferred or contracted, except where the new employer has less than 19 employees. The Bill proposes to remove that exception, which will mean that all new employers will be required to offer employment to vulnerable workers, regardless of the number of employees that the employer already employs. Small to medium businesses will notice this change as they will not be able to rely on the exemption to avoid taking on vulnerable employees. The Bill also extends the time frame, for employees to elect to transfer to the new employer's employment, from five to ten working days.

The Bill also proposes to reinstate an employee's right to prescribed rest and meal breaks. There is the ability for the employer and employee to agree on the times that an employee will take rest and meal breaks but, in the absence of agreement, the Bill prescribes when rest and meal breaks are to be taken depending on the length of the employee's shift.

As announced by the Government, trial periods will be affected by the changes, but only for employers with more than 20 employees. The Bill removes the ability for an employer to use a 90 day trial period, unless it employs less than 20 employees. Those with less than 20 employees will still be able to use trial periods. Where a trial period cannot be used, an employer could introduce a probationary period to its employment agreements. However, there are more controls in place surrounding when an employee may be dismissed under a probationary period. Controls include the requirement to follow a fair process, and having a fair reason for dismissal that has been communicated to the employee. However, it is worthwhile for employers to consider these amendments to employment agreements if the Bill is passed into law.

Collective bargaining and unions

The Bill introduces further changes to the Act that are intended to enable unions to more effectively carry out union activities, support successful collective bargaining, improve an employee's ability to make informed choices about joining a union, and protect union members from unfair treatment. This is achieved by:

  • removing the requirement for a union representative to gain an employer's consent before entering the workplace;
  • requiring employers to allow union delegates "reasonable time" during work hours to perform their duties;
  • repealing current provisions allowing the Employment Relations Authority to determine that bargaining has concluded;
  • reinstating a union's ability to initiate collective bargaining 20 days before an employer;
  • requiring collective agreements to contain rates of pay, and that rates of pay must be agreed during collective bargaining;
  • requiring new employees on individual agreements to be afforded the same terms and conditions as the applicable collective agreement for the first 30 days of employment,
  • requiring employers to provide the applicable collective agreement and information about the union at the same time as the individual employment agreement; and
  • extending the grounds for discrimination to include union membership.

Timing

The majority of the provisions will come into force four months after the date that the Bill receives royal assent, and becomes law. For employers of more than 20 employees, this will mean that you can legally employ employees subject to a 90 day trial period up until a month after the Bill becomes law, but not following that.

If the changes come into law in the current form, we recommend that employers amend their employment agreements, particularly to address trial periods / probationary periods, and rest and meal breaks. Where employers are party to a collective agreement, significant changes in practices will also be required.

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Footnote

1 90 day trial periods – soon to change for some

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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Authors
Amanda Douglas
Sophie Carter
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