The Employment Relations (Breaks and Infants Feeding) Amendment
Act has received royal assent, not only introducing mandatory
breaks for all employees but also controversially altering the
KiwiSaver legislation under urgency without public consultation and
as a change to this Amendment Act - the title and content of which
is totally unrelated. The changes and process used will be
concerning for many.
The legislation states an employee's employment is adversely
affected where, because the employee is a member of a KiwiSaver
scheme or a complying superannuation fund, their salary or wages
(defined as not including the employer compulsory contribution) is
less than that of other employees in comparable roles. This change
will have a significant impact on many existing remuneration
structures. It means employers cannot now have a total remuneration
approach which factors in compulsory employer contributions as part
of an employee's remuneration package. The total remuneration
approach was seen by many employers as enabling parity of pay and
equity whilst giving employees some freedom to decide how their
remuneration package would be structured.
The Amendment Act has teeth. It allows employees to bring
personal grievances where they believe their employment has been
adversely affected because they are a member of a KiwiSaver scheme
or complying superannuation fund.
The amendments to the KiwiSaver legislation specifically
relating to salary/wages apply to employment agreements entered
into on or after 2 September 2008 and to variations made on or
after 2 September 2008 to any employment agreements.
There are also other general provisions which may affect
specific superannuation and KiwiSaver regimes put in place by
employers. Employers with unique arrangements should seek advice to
determine whether there are potential issues under this new
legislation with their superannuation arrangements.
We suggest that, in light of these changes, employers review the
remuneration structures of all current employees to ensure
compliance with this legislation. When an employee's employment
agreement is varied (by salary increase or other variation to a
term or condition) the agreement will need to comply. All employees
employed from 2 September 2008 will need to have employment
agreements which do not have a total remuneration approach which
factors in the employer's KiwiSaver contribution and pays a
lesser base salary/wage than comparable employees as a result.
The Amendment Act also sets out minimum break requirements for
all employees depending on the amount of time they spend in the
workplace. Further, it requires employers to provide appropriate
facilities for employees wishing to breastfeed in the workplace and
appropriate breaks in which they are able to do this. We recommend
alterations to employment agreements for new employees advising of
these entitlements and a letter advising all existing employees, so
as not to cause confusion, particularly in those workplaces which
already provide structured breaks.
Phillips Fox has changed its name to DLA Phillips Fox
because the firm entered into an exclusive alliance with DLA Piper,
one of the largest legal services organisations in the world. We
will retain our offices in every major commercial centre in
Australia and New Zealand, with no operational change to your
relationship with the firm. DLA Phillips Fox can now take your
business one step further − by connecting you to a global
network of legal experience, talent and knowledge.
This publication is intended as a first point of reference
and should not be relied on as a substitute for professional
advice. Specialist legal advice should always be sought in relation
to any particular circumstances and no liability will be accepted
for any losses incurred by those relying solely on this
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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.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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