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Employment Law Update – What’s on the horizon in 2016?

Home Insights Employment Law Update – What’s on the horizon in 2016?

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Contributed by: Richard McIlraith, Kylie Dunn and Olivia Marlow

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Published on: February 05, 2016

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2016 is set to be a big year for employment law in New Zealand. Below we have compiled our 2016 “must watch” list!

Employment Standards Legislation Bill

The Employment Standards Legislation Bill was introduced by the Government in August 2015 in response to growing concerns with enforcement of employment standards, employee protections and benefits. Its stated intention is to promote fairer and more productive workplaces for employees and employers by way of a number of changes to the minimum framework.

The Bill proposes to be wide-reaching, with amendments proposed to the Employment Relations Act 2000, The Parental Leave and Employment Protection Act 1987, Minimum Wage Act 1983, Holidays Act 2003 and Wages Protection Act 1983.

Key changes proposed are:

  • Extended eligibility for paid parental leave and increased flexibility, with mechanisms such as ‘keeping in touch’ days.
  • Strengthened enforcement of employment standards and tougher sanctions, including:
    • increased maximum penalties for not providing minimum employment standards;
    • additional penalties for employers who knowingly and intentionally break the law; and
    • publically naming employers found to have breached minimum standards.
  • Changes to address “unfair employment practices” such as:
    • “zero-hour contracts” unenforceable unless compensation provided; and
    • deductions from pay for losses outside of an employee’s control (eg – customer theft) would be unenforceable.
  • Clearer record keeping requirements, harsher penalties and new enforcement mechanisms.

The Select Committee report on the Employment Standards Legislation Bill is due to be released to the House by 12 February 2016. If passed, the Bill is scheduled to come into force on 1 April 2016.

Health and Safety at Work Act 2015

4 April 2016 marks the day that the much awaited Health and Safety at Work Act comes into force. The Act introduces new responsibilities and duties for everyone in the workplace with the purpose of providing a balanced framework to secure the health and safety of workers and workplaces. To complement the purpose of the Act WorkSafe has set an aim of reducing the number of serious work-related injuries and deaths in New Zealand by at least 25 percent by 2020. 

While many of you will have been preparing for the new legislation for some time now, it would pay to ensure you are familiar with the key concepts and make sure your business is compliant with the new requirements come 4 April. Last year our team presented seminars to directors, managers and employees on what the Act meant for them and we are more than happy to present a seminar focused on your business or industry.  Please get in touch with a member of the team if this would be of interest to you.

The regulations to support the Act are currently being drafted. Consultation concluded on the Worker Engagement, Participation and Representation Good Practice Guidelines on 4 December 2015. A copy of the draft Guidelines can be found here. Currently, the Ministry of Business Innovation and Employment is seeking feedback on the draft regulations for work involving hazardous substances. Submissions are due by 5pm on 26 February 2016 and you can find out more information about how to submit your feedback here

The final regulations (ie those regulations where consultation has closed) are expected to be released in early 2016. We will be keeping an eye out for these and will provide updates as they arise.

Changes to working on an Easter Sunday

The Shop Trading Hours Amendment Bill proposes a reform to New Zealand’s traditional Easter trading laws. The Bill proposes to allow local councils to pass bylaws that permit trading on Easter Sunday. As Easter Sunday is not a public holiday under the Holidays Act, the Bill also sets minimum rights for employees who may be asked to work on Easter Sunday.  

The Bill states that employees who work in or from a shop that is permitted to open on Easter Sunday may refuse to work on Easter Sunday without being required to give reasons for this. Instead, an employer who wants an employee to work on Easter Sunday must notify that employee of their right to refuse to work on this day at least 4 weeks out from the Easter Sunday that the employer requests the employee to work. Under the Bill in its present form, an employer may not:

  • compel an employee to work an Easter Sunday (such as making this a condition of their employment or exerting undue influence over an employee to require them to work); and/or
  • treat an employee adversely as a result of their decision not to work. 

This will not apply to other employees (outside of shop workers) who work on Easter Sunday.

The Bill has passed its first reading and has been referred to the Commerce Committee with a report due on 3 May 2016. Should the Bill be relevant to you, we recommend reviewing your employment agreements and leave policies to ensure compliance with the new regime for Easter trading.

The “must watch” cases of 2016

There are a number of rulings set to be made this year that should prove interesting. In particular, the widely reported H v A, Terranova Homes and AFFCO cases are likely to be heard this year with potentially far-reaching implications.

H v A
We understand the Court of Appeal will consider the Employment Court's decision in H v A in May this year.  We expect the ruling to canvass the standard required of employers when carrying out investigations in the workplace for the purposes of the test for justification of dismissal or disadvantage under section 103A.  A 'must watch' issue for all employers.

Terranova Homes
Pay equality will again be in the spotlight in 2016 with the Employment Court set to rule on the Equal Pay Act 1972. Following direction from both the Supreme Court and Court of Appeal, we expect to see the Employment Court stating the principles to be observed for the implementation of equal pay pursuant to section 9 of the Equal Pay Act 1972. These principles should provide a framework within which to determine the original substantive claim, providing employers with guidance as to their obligations under the Act.

AFFCO
In the first of its kind, AFFCO has applied to the Authority under section 50K of the Act for a determination that bargaining for a collective agreement with the Meat Workers Union has concluded. How this application is treated by the Authority will no doubt set a precedent for all future applications, and perhaps influence how often this new provision will be utilised by parties.

Minimum entitlement increases

Paid parental leave is increasing from 16 to 18 weeks on 1 April 2016. This extension is the second step in changes to parental leave (on 1 April 2015 last year, paid parental leave increased to 16 weeks from 14 weeks).

2016 may also see another increase to New Zealand’s minimum wage. Workplace Relations Minister Michael Woodhouse is set to make a recommendation as to whether the minimum wage should be raised (and if so, by how much) to cabinet within the next month. While Minister Woodhouse has not confirmed details of his recommendation, he has previously commented that the government was considering a minimum wage increase to $15 an hour. The minimum wage is currently $14.75 an hour, after increasing by 50c last year. Traditionally, changes to the minimum wage come into force on 1 April.

Please feel free to get in touch with a member of the team to discuss any of these issues.

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This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice.

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