What the changes mean for you

Although the details of the changes haven’t been confirmed yet, here are our thoughts on what some of the changes might mean for your business.

Restriction of 90-day trials

For those that employ less than 20 people, there won’t be any change. However, if your numbers are creeping up towards 20, you will need to keep across that to ensure that you’re not including a trial period if you’ve become ineligible.

If you employ 20 people or more, you will lose the ability to use the 90-day trial. You will still be able to apply a probationary period. These were in play prior to the trial period being introduced and some employers have continued to use them instead of the trial.

For more information here on the potential changes to the 90 day trial period and probationary periods

Restoration of meal breaks

In 2015 there were changes to rest and meal break entitlements. Where previously there had been minimum entitlements, the 2015 changes made it up to employers and employees to negotiate when and how long rest and meal breaks should be. An employer is currently required to compensate employees where they cannot give an employee rest and meal breaks, but the legislation does not state what that compensation should be.

The upcoming change will see a re-introduction of required meal and rest breaks to be provided over a work day or shift. However, we don’t expect this to be a huge change for most employers. Many have chosen to continue to apply the same breaks as before the 2015 changes – either written into the employment agreement, or in practice. In addition, the current legislation does state that employees are entitled to breaks. If anything, this change will just provide clarity again on what this means.

Reinstatement restored as primary remedy for unjustified dismissal

Reinstatement as the primary remedy means that if an employee is dismissed and successfully challenges the dismissal (the Employment Authority finds that unjustified dismissal has occurred), reinstating the employee to their former role is the first remedy to be considered. In 2011 the Employment Relations Act was amended to remove reinstatement as the primary remedy for unjustified dismissal. However, since then it has still been available as an option and some commentators have pointed to a growing trend in reinstatement as a remedy in recent years.

It’s restoration as primary remedy is unlikely to have a widespread impact. Most employers rarely, if ever, end up in front of the Authority. Also, where reinstatement is genuinely not practical for either party, other remedies for unjustified dismissal can and will still be considered.

Employment Law Changes

This year we are expecting to see a significant shift in the employment legislation landscape, and last week’s announcement signals the start of these changes.

The following changes were confirmed last week:

• Trial periods will be restricted to small business (up to 19 employees) only. All employers will be able to use probationary periods, but unlike the 90-day trial, these do not allow unjustified dismissal
• Guaranteed rest and meal breaks
• A number of changes relating to collective bargaining, including removing the ability of employers to opt out of multi-employer collective agreements.

The bill is expected to have its first reading before February 3^rd. In addition, we have the following changes to paid parental leave and minimum wage coming up:

• The minimum wage will rise to $16.50 per hour ($0.75 increase) from 1^st April, with increases set to continue to a targeted $20 per hour by April 2021.
• Paid parental leave will extend from 18 to 22 weeks from 1^st July and to 26 weeks from 1^st July 2020

Other changes being indicated include:

• An increase in minimum redundancy protection for employees affected by restructuring. This could go as far as a statutory entitlement for redundancy pay of at least four weeks for the first year of service and two weeks for each subsequent year of service, up to a maximum of 20 years
• Contractors who work under the ‘control’ of an employer, but are not employees are likely to see their rights extended for more statutory protection
• Legislation may be introduced to make it easier for women to bring claims if they consider they are not being paid equally. In particular, changes are likely to give women in female-dominated industries better access to collective bargaining
• Reinstatement is likely to be re-introduced (it was removed in 2011) as the primary remedy for unjustifiable dismissal claims.
• Minimum employment standards being extended to apply to all employees working in New Zealand, including foreign employees working for foreign companies. This will impact employers with a globally mobile workforce.

It’s a case of ‘watch this space’ for the possible changes outlined above, followed by looking to see how changes will impact employers and industries when implemented. We’ll keep you informed via this blog, or follow us on LinkedIn or Facebook for regular updates. If unsure of anything, contact us.