Final warning over amendments to ERA

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A leading industry lawyer has issued a final warning to employers as the deadline for compliance with last year’s Employment Relations Amendment Act fast approaches.

“From 1 April 2017, all individual employment agreements will need to comply with new employment standards under the Employment Relations Act,” says Phillipa Muir, partner with Simpson Grierson.

Employers were given a one-year grace period when the amendment was passed and, currently, only employment agreements established after 1 April 2016 must be compliant. However, the grace period has almost expired and the changes will soon apply to all individual agreements.

According to Muir, the key changes relate to shift cancellations, secondary employment, and zero-hour contracts – now referred to as availability provisions.

“If employees are required to be available to work additional hours, and the employee is required to accept any work made available, this is likely to amount to an availability provision,” she explains.

Muir says availability provisions can only be included in employment agreements if the employer specifies the hours which an employee is expected to be available and provides staff with compensation as well as some guaranteed hours. Organizations must also have a genuine need based on reasonable grounds.

Muir also offered some clarification on a contentious issue which has been causing some confusion.

Recently, some legal commentators have claimed that popular “hours of work” clauses in employment agreements – which state that the salary covers additional hours necessary to complete the role – will be unlawful unless the number of hours is specified and reasonable compensation paid.

However, Muir denies this will be the case and insists it’s not what parliament intended when the law change was passed.

“The requirements relating to availability provisions are intended to apply to situations where an employee is required to be effectively ‘on-call’ to work additional hours, without (until now) any guarantee of work,” she explains.

When it comes to secondary employment, Muir reminded employers that they will soon have less power when it comes to restricting staff from taking on an additional job.

“Employers can only restrict an employee from undertaking secondary employment if they have genuine reasons based on reasonable grounds for including such a provision in their employment agreement,” she clarified.

Finally, employers will also be expected to include a reasonable notice period for cancelling a shift in employees’ employment agreements – as well as the reasonable compensation that will be paid if this notice period is breached.

“This means that if an agreement does not comply and an employer cancels a shift, then the employee is entitled to what they would have earned for working that shift,” says Muir.

For employers that don’t amend their employment agreements before the deadline, Muir warns that they could soon face personal grievance claims, penalties or being unable to enforce non-compliant clauses.

 

The upcoming Employment Law for HR Managers Masterclass features an expert-led session on the recent Employment Relations Act amendments. Attendees will be guided through some of the finer points of the changes and a top legal figure will clarify the more ambiguous sections.

For more information on the May event – due to be held in both Wellington and Christchurch – can be found online.

 

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