Client Update – October 2022

Restraint of Trade Bill

Our June 2022 update mentioned the Hon Helen White’s Restraint of Trade Bill.  That was recently drawn from the parliamentary ballot.  With only around 44 sitting days before Parliament dissolves for the general election in 2023, it remains to be seen if this Bill will advance before then.

In short, the Bill would:

• Restrict any Restraint of Trade (ROT) to 6 months;
• Allow a ROT only where an employee is paid more than 3 times the weekly adult minimum wage;
• Require an employer to pay reasonable compensation to an employee to which a ROT can apply an amount no less than half that employee’s weekly salary or wage for the duration of the ROT;
• Require the ROT to specify the proprietary interest the employer has; and
• Apply to all existing Individual Employment Agreements that have a ROT provision, 6 months after the Bill comes into force

Other employment law updates

Worker Protection (Migrant and Other Employees) Bill

This Bill would amend and strengthen the powers of immigration officers and labour inspectors and align the powers of the Labour Inspectorate and Immigration New Zealand to support greater collaboration to undertake compliance and enforcement activities.

Employers would be required, when issued a document production request by a labour inspector or immigration officer, to comply with that request within 10 working days.  Employers that fail to provide requested documents could be issued infringement notices.  Such documents that could be requested include wages and time records, leave records, employment agreements, bank statements, and financial statements.

There would also be an expansion of the “stand-down” list that currently restricts employers who have breached minimum employment standards from employing migrant workers, to include employers who had been issued with an infringement notice or convicted of immigration offences under the Immigration Act 2009.

Further amendments would be made to the Companies Act 1993 so that a person convicted of migrant exploitation or people-trafficking offences could be disqualified from being a director, promoter or manager of any company if the offending was enabled or otherwise related to the use of a company.  This adds to the banning order power of the Employment Court by allowing the District Court or High Court to permanently disqualify individuals convicted of immigration breaches, from being a director, promotor or manager of any company.

Screen Industry Workers Act 2020

This recently enacted legislation repeals the “Hobbit Law” which specified that screen production workers did not have the ability to challenge their working conditions, or challenge their employment status to determine if they were an employee or independent contractor.

The Act applies to individuals who are not employees that work in certain screen productions specified as being computer-generated games, films and programmes.  Those individuals can now bargain for individual or “collective contracts” which must include mandatory terms as specified in the Act. The Act also increases protections for individuals in cases of bullying and harassment.

Case law

E Tū Inc v Carter Holt Harvey Ltd

This is the first Employment Court judgment relating to the use of holiday leave during the COVID-19 Level 4 Lockdown in March 2020.

Carter Holt Harvey (CHH) required employees to take 8 days of annual leave during the third and fourth weeks of the Level 4 lockdown, from 9 – 22 April 2020.  CHH was to pay employees as normal from 26 March to 8 April.  No consultation was entered into with employees or their union.

The Court found that CHH failed to engage in discussion to reach agreement with the employees for the requirement for them to take annual leave, and so had acted unlawfully.

Interestingly however, the Court found that the Level 4 lockdown was not dissimilar to an annual closedown period.  Further, it stated there is no obligation on an employer to ascertain what employees will be doing during a period of annual holidays and then assess whether that, in fact, constitutes rest and recreation.

For any advice from our employment law specialists, please contact us via email or by mobile:

Paul McBride (Partner) – paul@mdjlaw.co.nz or 021 614 215

Guido Ballara (Partner) – guido@mdjlaw.co.nz or 021 782 891

Frances Lear (Partner) – frances@mdjlaw.co.nz or 021 237 7811

Saadi Radcliffe (Senior Solicitor) – saadi@mdjlaw.co.nz or 021 557 236

Alec Nash (Solicitor) – alec@mdjlaw.co.nz or 021 352 288

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