Legal Update – December 2022

Fair Pay Agreements

The Fair Pay Agreement Act was passed into law on 26 October 2022, and took effect from 1 December 2022.  It is anticipated that the timeframe for bargaining and finalising a Fair Pay Agreement (FPA) will take around 12 months.

Fair Pay Agreements are a substantive change to the employment marketplace, and add to the existing collective bargaining framework.  While collective employment agreements (CEA) can still be negotiated at an enterprise level, Fair Pay Agreements can be negotiated between approved employee and employer representatives at an industry level.  Any negotiated agreement that is concluded, and ratified, will apply to all workers in that industry, regardless of union membership status.  Employees who have an individual employment agreement and work in an industry that is covered by a FPA will also have the option to choose the specific terms of employment that are more favourable to them.

There are obligations for both approved employee and employer representatives when bargaining for a FPA.  If you would like to know more about how FPA’s are likely to impact you, please contact us.

Potential employment law changes

There are a number of employment related bills currently in the ballot.  There are two bills that may be of interest and we will provide a future update if either of these are drawn.

Employment Relations (Privacy of Parties to Proceedings) Amendment Bill

This proposes that parties who are wholly or substantially successful in proceedings in the Employment Relations Authority can request anonymity when Authority determinations are made unless the decision is deemed to be of high public importance.  In addition, it would become unlawful for employers (and potentially that would include recruitment agencies or similar) to ask potential candidates whether they have pursued a personal grievance against an existing or former employer.

Crimes (Theft by Employer) Amendment Bill

This bill makes it a criminal offense for employers not to pay money owed to employees under the employment agreement or as required by law.  If an employer is found to have intentionally failed to pay money, that employer is liable to a fine of up to $30,000.  If the employer is an individual, they can be liable for a term of imprisonment of up to 1 year or a fine of up to $5,000 or both.

Case law

E Tū Inc v Rasier Operations BV

This is the “Uber” case where the Employment Court found that the four named employees in this case taken by E Tū were employees of Uber, and not self-employed.  The employer, Rasier Operations BV, has indicated they are appealing the decision, which is likely to be heard in 2023.

It is important to note that the Employment Court decision only relates to the four named drivers as employees of Uber.  It does not extend to declaring that all Uber drivers are employees.

Idea Services Ltd v Attorney-General (Court of Appeal)

This case was about the Government’s attempt to extend collective agreements until 12 months after the COVID pandemic had ended, using what is called an Immediate Modification Order (IMO).  The IMO (under the Epidemic Preparedness Act 2006) was part of the Government response to the Covid-19 pandemic.  An IMO temporarily changes the law if certain prerequisites are met.  The Minister needed to be satisfied that the legal requirement or restriction was impossible or impracticable to comply with, because of the effects of the epidemic.

A collective agreement usually continues in force for 12 months, after its stated expiry, if bargaining for a replacement has been initiated before expiry (s53).  The IMO sought to delay the 12 months starting until the epidemic ended.  The lawfulness of the IMO was challenged.

Idea Services Ltd submitted that there was ‘executive overreach’ in what the government had done: it had gone too far and its actions were not authorised by law.

The Court of Appeal found that there were fundamental constitutional issues, and  agreed that the IMO was invalid.  We acted for IDEA Services.

Annual closedown and 2023 open

This is our last client update for 2022.

Our office will be closed for the end of year break from 2pm Thursday 22 December and reopening on Monday 16 January 2023.  If you have any urgent employment matters that require assistance during the break, you can contact Paul, or Frances.

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