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Proposed changes to Employment Law


Labour has announced the first proposed changes to Employment Laws, most of which reverse changes made by the National Government, by way of the Employment Relations Amendment Bill (“the Bill”) which had its first reading in Parliament on 1 February 2018. 

The Bill is quite detailed, and therefore following is a very general summary:

1. 90 Day Trial:  The 90 day trial provisions are proposed to be restricted to businesses with fewer than 20 employees.  There was initially an indication from Labour that it would establish a “referee” service to hear any claims regarding trial periods but this has not been taken further in the Bill.  

Employers with more than 20 employees will still be able to take advantage of probation periods, however it is important to understand that these differ considerably from trial periods.  

2. Rest and Meal Breaks:  You may recall that last year the law changed in relation to meal breaks by disposing of the obligation to grant breaks within certain periods, and rather instigating a meal and break regime that was based on agreement between the parties.  The Bill restores the law to what it was previously with specified break times with some allowances for certain industries.  

3. Sale and Transfer:  The Bill proposes to introduce further protections for “vulnerable employees” where there is a sale or transfer of a business.  It further proposes to remove the exemption from these rules for employers with fewer than 20 employees. 

4. Unions and Collective Bargaining:  There are extensive changes proposed that will have an effect on employers with a collective employment agreement.  These include restoring the duty to conclude bargaining, initiation timeframes for unions and union access without employer consent, and removing the law relating to partial pay deductions for partial strikes.  The most significant of these changes for employers is likely to be the restoration of the 30 day rule whereby new employees must be employed under terms consistent with the collective agreement for the first 30 days of their employment.  Additionally, the Bill seeks to have the inclusion of pay rates in a collective agreement, a requirement for an employer to pass on information about new employees to the union and reasonable paid time for union delegates to represent other workers.

In addition, reinstatement is proposed to again be the primary remedy for unjustified dismissal.  Our view at this stage is that it is not likely to have a considerable impact on the current practice, given that when reinstatement was previously the primary remedy, there were very few employees who utilised it. 

What Next?

The Bill has now been referred to the Select Committee with its report due on 1 August 2018.  Therefore it is unlikely that any changes would be instigated until late 2018 or early 2019.  Accordingly, although there is not an urgent need to undertake a complete revamp of your practices, it would be wise to start thinking about how any potential changes may impact on your business.

If instigated in its entirety, the Bill will require employers to think about not only changing their employment agreements for new employees, but also undertake a review of policies and procedures relating to rest and meal breaks, trial periods, probation periods (if a business with more than 20 employees) together with, if applicable, collective bargaining.  We will continue to keep you updated with the progress of the Bill and will be ready to provide you with advice specific to your business needs to ensure compliance with any legislative changes.

Aimee Lander