Legal Update – September 2016 – Employment Relations Amendment Act 2016 and Health and Safety at Work Act 2015 reminder

SEPTEMBER 2016 UPDATE – EMPLOYMENT RELATIONS AMENDMENT ACT 2016 AND HEALTH AND SAFETY AT WORK ACT 2015 REMINDER

Employment Relations Amendment Act 2016

This amendment to the Employment Relations Act, often referred to as concerning “minimum standards”, will require all employers to review their employment agreements and practices to ensure they comply with the changes.

Whilst some of the changes have a year transition period for agreements in existence before 1 April 2016, the reality is employers will need to be ready now, especially if employing staff or making changes to existing employment agreements post 1 April 2016.

In brief, the Employment Relations Amendment Act 2016 refers to a number of minimum entitlements, and prohibits unfair employment practices that impact on an employee’s ability to earn income. That includes cancelling shifts at short notice, expecting employees to be available just in case the employer wants them to work, without compensation for that, and prohibiting or restricting their ability to work for others.

There are a number of changes, but only some will apply depending on the nature of the business.

Whilst the changes were largely introduced to address “zero hours” contracts (which have had a lot of media attention), they include some more widely applicable changes including to record keeping, and secondary employment provisions.

Availability clauses

This is about expecting an employee to be available for work, but not guaranteeing any work – “zero hours” contracts. If this is something an employer wishes to pursue, that can now only be via a properly drafted “availability provision”, which will include some guaranteed hours. In other words, strict “zero hours” contracts are now unlawful. Ordinary casual contracts, which allow the employee to turn down the work offered, are not caught however.

Secondary employment clauses

This change is about ensuring that any restriction on an employee’s ability to work somewhere else is genuine and based on reasonable grounds, which also need to be spelt out in the employment agreement (or else the employee can work regardless). Reasons can include real conflict of interest which cannot otherwise reasonably be managed, protecting commercial reputation or commercially sensitive information or intellectual property rights, or for reasons of health and safety. Ordinary restraints of trade, which apply after the employment has ended, are not affected by this change.

Record keeping

Employers are also now required to keep a record of hours worked, including for salaried workers. Having said that, if the employee’s number of hours worked each day in a pay period and the pay for those hours is agreed, and the employee works those hours (“the usual hours”), then it is enough to have those usual hours and pay stated in the employment agreement, or the wages and time records, or in say a roster.

Deductions from wages

New requirements under the Wages Protection Act include that an employer must not make a specific deduction in accordance with a general deductions clause in a worker’s employment agreement without first consulting the worker. It must also be remembered that such general consent to deduct can be withdrawn at any time (which it could previously be also). The consultation requirement does not however extend to lawful deductions, such as for KiwiSaver.

Health and Safety at Work Act 2015

As set out in an earlier update, significant changes to Health and Safety Law in New Zealand were also passed last year. This resulted in a new “Health and Safety at Work Act 2015”, which came into force on 4 April 2016. The changes are wide-ranging (including new duties and duty holders, and significantly increased penalties), and so are beyond the scope of this update. However, if you require specific advice and/or training on the new Act, or on anything else referred to above, one of our team would be happy to help.

For advice from our employment law specialists either call us on 04 801 5427, or contact us via email:

Paul McBride (Partner) – paul@mdjlaw.co.nz
Geoff Davenport (Partner) – geoff@mdjlaw.co.nz
Tanya Kennedy (Senior Associate) – tanya@mdjlaw.co.nz
Guido Ballara (Senior Associate) – guido@mdjlaw.co.nz
Frances Lear (Senior Associate) – frances@mdjlaw.co.nz

Disclaimer – this newsletter is necessarily brief and general in nature. You should seek professional legal advice before taking any action in relation to any matter dealt with in this newsletter. © McBride Davenport James.

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