Employment Relations Amendment Bill Update

12 September 2018

It is very disappointing that the Select Committee couldn’t reach a sensible conclusion on rest and meal breaks as the prescriptive approach in the Bill simply won’t work.  For example, it stipulates that in an 8 hour work period employees must have one unpaid half hour meal break and two paid 10 minute rest breaks.  Not all businesses suit that mold. 

For example, many businesses engaged in heavy physical work operate a system of two paid half hour breaks to give employees a proper break; and in others employees in sole charge graveyard shifts take their breaks “on the run” in the quiet periods and in return they get paid right through their shift and spend less time at work than their day shift colleagues. 

These two examples work well for both parties, but as things stand both arrangements will be unlawful in future.  The risk is even greater than before, because employers run the risk of a prosecution for non-compliance that, as recent cases show, may also result in bans from employing staff and hiring foreign labour.

From early 2019 (four months after the Bill receives Royal Assent), businesses employing 20 or more employees will be banned from using trial periods.  If you are in this category, you will be able to resort to probationary periods.  If managed effectively, a probationary period can be useful to set expectations for new employees and address any performance concerns by issuing warnings where necessary prior to dismissal.  They are however, subject to the usual rules of dismissal and so termination carries a higher risk than under a trial period.

The other minor tweaks made by the Select Committee include the following:

  • The term “wages” is defined, but this may well cause conflicts with references to wages in other statutes.
  • Union delegates undertaking union business must be paid the rate of pay they would have received if they were working at the time (which could be the overtime rate in some circumstances?) but there is a provision to allow employers to pay higher rates!
  • There are more prescriptive rules about the obligations on employers to provide prospective employees with information about the role and functions of unions, but this requirement will now be deferred until early 2019.
  • There are amendments as to what references to salary and wages must be incorporated into collective agreements. Instead of providing for a range of rates it will be compulsory to provide not only the minimum rates, but how the rates of pay may increase during the term of the agreement.
  • For employees who are not union members, in addition to being employed for the first 30 days on the terms and conditions of any applicable collective agreement, additional terms may be agreed provided they are “no less favourable” than the terms of the collective agreement (previously such terms could not be “inconsistent” with the terms of the collective agreement). After the first 30 days the employer and employee may vary the individual agreement on whatever terms they mutually agree.
  • The trial period provisions are now available to “small-to-medium-sized employers” which are defined as employers employing fewer than 20 employees at the time the trial period is offered.
  • Meal and rest breaks have been tidied to a very limited extent – by removing the overlap that existed in the original descriptions of the work periods.
  • The exemption from meal breaks for employers in essential industries has been widened to include employers engaged in "the protection of NZ’s national security".

There are signs that NZ First may be thinking the changes go too far.  They have expressed concerns about lack of flexibility and appear to be in favour of retention of trial periods, so perhaps it’s not over yet. 

At least the Government has read the tea leaves about business confidence and decided that FPAs are off the agenda for now.  Jacinda Ardern says there will be no more than two FPAs during the term of this Government, but the threat remains.  We now await the Working Group’s design principles.

You can read about the original provisions in the Bill here....