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90-day trial periods remaining for small businesses; but other parts of employment law changing

January 31, 2018

90-day trial changes are afoot, along with other changes to employment law. Here’s a run down of what might affect your business.

The Government has proposed changes to the Employment Relations Act 2000. This will see a number of changes to employment law, chief amongst them the restriction of 90-day trial periods to only businesses with less than 20 employees.

The Employment Relations Amendment Bill, introduced Monday, aims to “restore key minimum standards and protections for employees, and to implement a suite of changes to promote and strengthen collective bargaining and union rights in the workplace”.

Parliament is expected to hold the Bill’s first reading in early February.

90 day trial changes: the interview becomes even more important

The major changes for employees and employers

Per the Beehive summary:

Rights for employees

  • Restoration of statutory rest and meal breaks. These will be subject to a very limited exception for workers in essential services who cannot be replaced (such as air traffic controllers).
  • Restriction of 90-day trial periods to SME employers (less than 20 employees).
  • Reinstatement will be restored as the primary remedy to unfair dismissal.
  • Further protections for employees in the “vulnerable industries” (Part 6A).

Collective bargaining and union rights

Most of these modifications are roll-backs of the previous Government’s changes:

  • Restoration of the duty to conclude bargaining unless there is a good reason not to. This is complemented by repeal of the process to have bargaining declared over.
  • Restoration of the earlier initiation timeframes for unions in collective bargaining.
  • Removal of the MECA opt out where employers can refuse to bargain for a multi-employer collective agreement.
  • Restoration of the 30 day rule where for the first 30 days new employees must be employed under terms consistent with the collective agreement.
  • Repeal of partial strike pay deductions where employers can garnish wages for low-level industrial action. Employers have deducted pay for actions such as wearing t-shirts instead of uniforms.
  • Restoration of union access without prior employer consent. Union access will still be subject to requirements to access at reasonable times, and places having regarding to business continuity, health and safety.

New proposals

  • A requirement to include pay rates in collective agreements. This is based on recent case law. Pay rates may include pay ranges or methods of calculation.
  • A requirement for employers to provide reasonable paid time for union delegates to represent other workers (for example in collective bargaining)
  • A requirement for employers to pass on information about unions in the workplace to prospective employees along with a form for the employee to indicate whether they want to be a member.
  • Greater protections against discrimination for union members including an extension of the 12 month threshold to 18 months relating to discrimination based on union activities and new protections against discrimination on the basis of being a union member.

90 trial changes and New Zealand employment law changes

What this means for employers

  • Higher wages as a result of the increase to the minimum wage to $16.50 this year and then incremental increases to reach $20.00 by April 2021. This will inevitably result in relativity adjustments for other employees.
  • Pay equity data publication will be required by all businesses to prove that there is no gender or other discrimination.
  • Increased employee rights with regard to rest and meal breaks, minimum redundancy payouts, parental leave and including a requirement to adequately compensate employees working more than 40 hours per week for the extra hours worked.
  • Contractor rights including job security and other employment rights, which signals a shift from their present distinct position to something more in line with employee rights.
  • Strong unions with extended powers in collective bargaining, collective agreements, access to workplaces and payment to union delegates for the time they spend discharging their union role.

At this stage, all changes are proposed, and it may be that not all will happen in this exact form. But if you’d like guidance about how your business may be affected, or how you could prepare, chat with our Litigation & Dispute Resolution team: David Ballantyne and Holly Weston.

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