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Employment standards - time to up your game

08 August 2016

Employment law has seen a shake-up in 2016, with the ‘employment standards’ legislation coming into force on 1 April. The legislation has made significant changes designed to stamp out unfair employment practices. This is a good time to review your individual employment agreements (IEAs) and ensure that managers are up to speed on employment compliance issues.

Key changes include:

Availability provisions – zero hour contracts gained media attention earlier this year and are now a thing of the past. If employers want their employees to be available for work (on-call), they need to provide some guaranteed hours and also reasonable compensation for the time the employee is on-call.

Agreed hours of work – must be specified in IEAs. This means any details which are agreed on, such as start and finish times and total weekly hours, must be recorded in the IEA.

Wages and time record – employers must keep a record of the hours worked by employees and their pay for those hours. This now applies to employees on salaries as well.

Restrictions on secondary employment – an employer can only prevent an employee from having a second job if there is a genuine reason for the restriction based on reasonable grounds. Reasonable grounds include protecting commercially sensitive information or preventing a real conflict of interest; e.g. stopping an employee from working for a competitor.

Cancelling a shift – if an employee does shift work in accordance with a roster, their employer can only cancel a shift by giving reasonable notice, or by paying reasonable compensation (these options must be set out in the IEA).

Deductions from wages – an employer must consult with its employees before making any deduction from their wages; e.g. to retrieve an overpayment. This means the employer must get the employee’s feedback on the proposed deduction before going ahead. Note the requirement to consult now applies even if the employee’s IEA contains a general provision allowing deductions.

Amendments to parental leave – parental leave has increased from 16 to 18 weeks and there is more flexibility over how it can be taken. Parental leave now applies to non-standard workers, such as casual and fixed-term employees.

The new legislation also tightens up on enforcement of minimum employment obligations. It is important to realise that ‘officers’ of the employer can face personal liability if there are serious breaches of the law. Officers include directors and other people who are in a position to exercise significant influence over management of the organisation. Liability can include penalties of up to $10,000 against a person or $20,000 against a corporation.

Fortunately, there is a lot you can do to avoid compliance issues:

  • Don’t panic! Ignorance of the law is not an excuse, so take some time to learn your obligations. The MBIE website is a good starting point for information (mbie.govt.nz), and we can provide you with specific advice.
  • Have your IEAs and systems reviewed against the new provisions.
  • Train managers and staff responsible for payroll and HR, and ensure directors or board members are aware of the requirements.

 

This article is intended to provide a general guide on this topic. Legal advice should be sought about your specific circumstances.

 

Edwin Sheppard is a Solicitor in the Court & Disputes/Employment team at Norris Ward McKinnon. You can contact Edwin at edwin.sheppard@nwm.co.nz

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