News Article

latest news in employment law

Upcoming Law changes for 2016

Published 10 Feb 2016

Most employers will be aware that new health and safety legislation will come into force from April of this year.  You may not be aware however that there are other less publicised, but as influential, employment legislation that is waiting in the wings and also expected to be enacted this year.

Employment Standards Legislation Bill
The intention of the Employment Standards Legislation Bill is to promote fairer and more productive workplaces through a raft of changes to record keeping requirements, parental leave, unfair employment practices and the enforcement of employment standards.  These changes will be particularly felt by small-to-medium businesses. 

Record Keeping
The current record keeping requirements are inconsistent across various legislation and the Bill aims to change this.  Employers will be required to produce a record of the number of hours worked each day in a period, and pay for those hours, in an easily accessible form on request from the employee or from a labour inspector.  Most employers are already recording the necessary information and will require little changes, but should be aware that there will be harsher penalties for employers who fail to do so.

Parental Leave
As announced in the 2014 Budget, paid parental leave will be extended from 14 to 18 weeks by 1 April 2016.  The Bill introduces further changes to the parental leave scheme, including:

  • Extending parental leave to non-standard workers and those who have recently changed jobs;
  • Extending entitlements to “primary carers” other than biological and formal adoptive parents;
  • Enabling workers to take the unpaid parental leave flexibly and not in one continuous block;
  • Introducing “Keeping in Touch” days where employees are allowed to work up to 40 hours during the 18 weeks paid leave (the baby will need to be at least four weeks old).
  • Extending unpaid leave to workers who have been with their employer for more than six months but less than 12;
  • Allowing workers to resign and still receive payments;
  • Increasing the penalty for fraud; and
  • Extending parental leave payments for parents of preterm babies.

Zero-hour contracts
Following issues with zero-hour contracts being widely reported by the media, the Bill prohibits;

  • Employers not committing any hours of work, but expecting employees to be available when required;
  • Employers cancelling a shift without reasonable notice or compensation to the employee; and
  • Employers putting unreasonable restrictions on secondary employment of employees;

Prohibiting unreasonable deductions
Under the current law, the employee and the employer must agree to deductions in wages.  Under the Bill even where there is a consent, it must not be unreasonable.  Deductions from pay for losses outside of an employee’s control (e.g. breakages, theft) are unlikely to be enforceable.

Enforcement of employment standards
New Zealand already has a range of minimum employment standards protecting vulnerable workers and ensuring workplaces are fair and competitive e.g. minimum wage, annual holidays, written employment agreements.  The Bill includes a number of measures to strengthen the enforcement of these standards. 
There will now be tougher sanctions.  The most serious breaches, such as exploitation, carry a penalty of $50,000 for and individual and at least $100,000 for a company (previously $10,000 and $20,000 respectively).  Employers found to have breached minimum standards will be publically named and individuals may be banned as a manager.   Directors, senior managers, legal advisors and other corporate entities may also be held accountable for breaches if they were knowingly and intentionally involved.
To ensure enforcement, information sharing between labour inspectors and regulators i.e. Immigration New Zealand, Companies Office, and Inland Revenue will be enhanced, and employers will have to make available any record or document that the inspector considers will help them determine whether a breach has occurred. 

Shop Trading Hours Amendment Bill
This Bill proposes to change New Zealand’s traditional Easter trading laws by allowing local councils to pass bylaws permitting trading on Easter Sunday.  As Easter Sunday is not a public holiday under the Holidays Act, the Bill sets out rights of Employees working in or from shops that are permitted to be open. 
Employees are entitled to refuse to work Easter Sunday and do not need to provide any reason.  Any employer who wants their staff to work must give at their employees at least four weeks’ notice that they wish for them to work and notify them of their right to refuse to work. 
This Bill has passed its first reading and been referred to the Commerce Committee with a report due on 3 May 2016.  This means that Easter 2016 will not be affected but it is a good time for employers to review their policies in anticipation of Easter 2017.

In addition to the Health and Safety legislation, new Asbestos regulations are being introduced.  From April 4 workers wanting to remove more than 10sqm of asbestos, or materials containing asbestos, will need a WorkSafe removal licence.

Minimum Wage
Although the government has not yet made any announcement, Workplace Relations Minister Michael Woodhouse has previously commented that the government is considering increasing the minimum wage to $15 per hour (from $14.75).  Traditionally any changes to the minimum wage come into force on 1 April.