Changes to Employment Law
There are two issues which have been given particular prominence in the media of late relating to employment practices. They are zero hour contracts and the reporting back on the Health & Safety Reform Bill from the Select Committee. This article looks at the implications of both Bills which are at different stages in the law-making process.
Zero hour contracts
‘Zero Hour’ contracts have been used in New Zealand for a long time. Effectively, a zero hour contract is where an employee is a casual worker and is guaranteed no minimum hours of work but would be required to attend work where work was offered. If they failed to be available for that work they could face disciplinary consequences. However, there is no compensation payable for that availability. Put another way, employers can expect employees to be available whenever required but do not have to commit to any particular minimum hours of work.
In the Bill to be introduced to Parliament later this year, this practice will be made unlawful. The main change will be a reciprocal right on the part of the employee to decline work without sanction, should it be offered. This matches the employer’s lack of obligation to offer any minimum hours.
Further to this, through the changes to legislation, employers will not be able to cancel a shift or send an employee home part-way through a shift without providing some kind of compensation. It is not entirely sure what this will look like but, effectively, employers will be required to give notice before cancelling work or compensate employees for late notice. It is likely that this will be some proportion of the expected hours.
Other employment changes
The proposed Bill also includes a few relatively minor changes, which largely put present practice into law, as follows:
- Employers will not be able to put unreasonable restrictions on secondary employment unless there is a genuine reason based on reasonable grounds to do so. While the grounds won’t be set out, they will generally provide that employers can only prevent secondary employment where there is a risk of loss to the employer, such as intellectual property. Employers will, however, be able to request employees disclose their secondary employment.
- Employers will be unable to unreasonably deduct from an employee’s wages where the employer has suffered a loss but which the employee had no control over and no contribution to through negligence. This is specifically to address recently highlighted issues where losses incurred by petrol stations for drive-offs was deducted from wages despite there being no fault on the part of the employee.
- The Employment Standards Bill will also contain strengthened enforcement of employment standards. This provides for tougher sanctions where employers are found guilty of exploitation of workers or, potentially, individuals could be banned from being employers if they commit serious and persistent breaches of employment standards. Further to this, record-keeping requirements are going to be made consistent across acts with respect to recording time worked and rates of pay. The costs of infringement could also be increased.
Employment breach accountability extension
One proposed change which has received little coverage in the media is the proposed extension of the person held accountable for breaches to people other than the employer. Effectively, where an officer of the company (being a director or other individual who occupies a position where they can exercise significant influence over the management or administration of the whole or a substantial part of the business) is knowingly and intentionally involved in a contravention of employment standards, they can be held accountable along with the employer. It is proposed that the accountability provisions go even further to cover individuals in a contractual relationship with the employer who aids the employer to avoid paying entitlements. This can include legal advisers or business advisers.
Effectively, most employers will see very little change but, as ever, employers should ensure they have the appropriate processes in place to ensure compliance with all the law.
Health & Safety Reform Bill
Employers will by now be generally familiar with the requirements of the new Health & Safety Reform Bill which received wide coverage. One outstanding issue was worker participation in Health & Safety processes. Following the Select Committee report, businesses with fewer than 20 workers will still be required to have worker participation in their Health & Safety practices but will not have to have a Health & Safety representative or establish a Health & Safety committee on request. Excluded from this exemption, however, will be businesses in high-risk sectors - although ‘high-risk’ is not yet defined.
Other changes that came out of the Select Committee are:
Coverage of volunteers under the Health & Safety obligations will remain as it is in the current law, ensuring volunteering will not be affected.
The duty to manage and control a workplace will not extend to people who are in a workplace for unlawful purposes.
Clarification with respect to farms has been clarified to make it clear that farmers’ duties with respect to Health & Safety extend to farm buildings and structures necessary for the operation of the business and the areas immediately surrounding them. Other parts of the farm will only be a workplace when farm work is actively being carried out in that part of the farm at the time. For example, a paddock where stock is grazing will only be considered a workplace when a farm worker is working there. There is also likely to be a change in that the family farmhouse will not be considered part of the farm workplace.
Health & Safety reform is not yet in its final shape and we can expect to have much more detail by the end of 2015. All employers would be wise to seek advice if they are unsure of their commitments, entitlements or obligations.
The information contained here is of a general nature and should be used as a guide only. Any reference to law and legislation is to New Zealand law and legislation. We recommend that before acting on it, you consult a member of our Employment team..