Employers Beware – Watch Out For These Changes
We have already seen significant changes to New Zealand’s employment law landscape following the election of the new Coalition Government in November 2023. These changes are aimed at providing stability and economic growth, and will impact businesses nationwide. Some of these are already in effect, while others are proposed to be implemented in the near future.
Summary of Key Changes
90-day Trial Period
Employers can now include 90-day trial periods in their employees’ employment terms, regardless of the business’s size. This prevents an employee from bringing an unfair dismissal claim during the first 90 days of their employment. Personal grievances can still be raised during this period for other reasons, including discrimination or harassment. A 90-day trial period needs to be expressly provided for in an employee’s individual employment agreement.
Fair Pay Agreements
The recently-introduced Fair Pay Agreements Act 2022 has been repealed, removing the bargaining framework that had allowed employer associations and unions to bargain for minimum entitlements among their respective sectors. The legislation had attracted criticism from many businesses, who believed it would impose unnecessary conditions on them and consequently increase their costs.
Worker Status
Recent cases in the Employment Court have sought to clarify the status of workers – i.e. is a worker an employee or a contractor? Historically this came down to the nature of the relationship between the parties, regardless of whether they were engaged under a contractor agreement or an individual employment agreement.
Prior to the election, ACT proposed amendments to the Employment Relations Act 2000, preventing workers who had expressly signed a contractor agreement from challenging their worker status. It remains unclear whether this will be enacted into legislation or whether a worker’s status will continue to be subject to the Court’s discretion.
Flexible Working Arrangements
Following the recent shift towards flexible working arrangements, employers should be aware of their obligations under the Employment Relations (Flexible Working Arrangements) Amendment Act 2007. Under this Act an employee has a statutory right to request to work remotely and an employer must consider such request, acting fair and reasonably. For some roles (such as hospitality staff) which may be incapable of being performed remotely, an employer declining a staff member’s request to work from home would not likely be seen as unreasonable.
Reforming the Holidays Act 2003 and the Health and Safety at Work Act 2015
Workplace Relations have recently revealed the Government’s plans to reform the laws around holidays and workplace health and safety. The proposed changes to both Acts are aimed at simplifying the language so that businesses and employees clearly understand their legal requirements and entitlements.
Personal Grievances
There is some discussion that the personal grievance regime may be updated, including reducing the remedies available to employees where their conduct has contributed towards the alleged grievance. In addition to this it was been proposed that if an employee’s salary exceeds a certain threshold, they may not be eligible to pursue a personal grievance claim.
The implementation of new laws introduces a level of uncertainty for businesses, requiring an adaptation to the changes. While the goal may be to streamline existing laws and procedures, the process of navigating significant changes can potentially create additional challenges for businesses, particularly in the short term. Businesses should consider their obligations under these new laws and seek legal advice where necessary.
Chloe Wilson
Senior Solicitor
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