Employment law shakeup – what you need to know

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As New Zealand sets to revamp its employment legislation, employers and HR practitioners need to study up on the proposed changes to ensure they steer clear of any legal pitfalls.
Dundas Street employment lawyer Matt Harrop says the amendments are a “perfect opportunity” for HR departments to commence internal audits of their organizational practices to avoid future compliance issues.
“The Bill amends the key employment legislation in New Zealand, and so it is a perfect opportunity for employers and HR practitioners to carefully review existing practices to ensure that they are complying with minimum obligations,” Harrop told HC Online.
“Some employers continue to get basic matters wrong, like not providing employees with a written employment agreement, or ensuring that their holiday pay is paid appropriately,” he says.
Harrop says that under the new regime, employers will have a positive obligation to keep sufficiently detailed records to demonstrate compliance with minimum entitlements. Traditionally, employers in the hospitality industry and primary industries such as dairy and farming have come under fire for poor record keeping and will need to ensure they adhere to stringent new standards or face hefty penalties.
The Employment Standards Legislation Bill includes reforms to employment standards, “zero hours” contracts, health and safety reforms and extended maternity leave and was introduced last August in response to mounting concerns over enforcement of employment benefits, protections and employment standards.
Key highlights include extending paid parental leave from 16 weeks to 18 weeks, beefing up workplace health & safety practices to reduce the number of workplaces deaths and injuries, addressing “unfair employment practices” , allowing shop trading of Easter Sunday, and introducing the concept of licences for workers dealing with asbestos removal as part of the Health and Safety at Work Asbestos Regulations.
In its current form, the Bill will require brand new provisions to be added to employment agreements, so even well organised employers should be checking templates now, Harrop says.
“For example, restrictions on secondary employment, which are quite common in employment agreements, will have to specify a reason for the restriction,” he says.
Employers with shift workers will also need to specify a notice period for the cancellation of a shift and a compensation payment in the event that notice isn’t provided.
New Zealand’s small to medium business sector has been singled out for not meeting minimum standards, and thus HR managers should also ensure that their managers are well aware of the heavier emphasis being placed on compliance with minimum standards.
“It will be important to bear this in mind in day to day management of changes in working hours and preparing employment agreements for new employees,” Harrop says.
He says major legal pitfalls encompassed in the new legislation include the five-fold increase in penalties that can be awarded against an employer for serious breaches of minimum standards.
“While it is likely that these will only be handed down in the worst cases, these penalties are enough to sink a small business,” Harrop says.
“ It is said that the penalties for minor and moderate breaches will remain at current levels, but there has been a notable trend towards the Employment Relations Authority making penalty awards in the last 12 months or so,” he says.
Labour Inspectors will also be able to issue infringement notices and on the spot fines of $1000 for more basic record keeping matters such as failure to provide a written employment agreement, which should be a sharp wake-up call for businesses need to get their paperwork in order.
It is hoped that the new, tougher legislation will create a shakeup throughout the business world and stimulate a change in employer culture.
The Bill is a clear signal from the Government that it wants to shift employer culture in certain industries,” Harrop says.
“My view is that the recent media exposure of employers who have failed to meet minimum standards has gone some way to shift the culture and ensure that the playing field is being levelled.
“The public response to the issue of zero hours contracts shows that media exposure can lead to employers being forced to make changes to their businesses.”
The country’s top workplace lawyers will be discussing changes to New Zealand’s employment legislation at the upcoming <Employment Law for HR Managers> masterclass. Dates available in Auckland and Wellington.

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