Changes to the Employment Relations Act - how they may impact you

The Employment Relations Amendment Act 2018 was passed on 5 December 2018 and could have some potentially big impacts on the way you run your business or the nature of your employment. The amendments are being rolled out in two stages, the first of which is already in effect.

We suggest getting in touch with our Employment team to have your employment documentation reviewed if you think it might be in need of a refresh. In our experience, it’s much easier, cheaper and less stressful to be ahead of the curve and have your documentation and employment processes in order.  This prevents ending up on the back foot defending personal grievance claims and similar that potentially could have been avoided.

Operational (came into effect on 12 December 2018)

• Reinstatement the primary remedy for unfair dismissal where expressly requested: in instances where an employee proves a personal grievance claim and wishes to have their job back, reinstatement must be provided wherever practical and reasonable. It is questionable how much ‘air-time’ this one will actually get. In our experience, when employment disputes are litigated it is unlikely the wronged employee will be keen to return to the workplace given that’s where they were bullied, discriminated against, or treated unfairly.
• Collective bargaining and union rights bolstered: these changes are a mix of re-instatement of previous rights rolled-back by the last government and completely new additions. A few of the key ones are listed below and include:
  • There is now a duty to conclude bargaining in every case unless one of the specified reasons not to exists. 
  • Restoration of the 30 day rule.  For the first 30 days new employees must be employed under terms consistent with the collective agreement, even where they are not a member of the union; 
  • Pay deductions for partial strike action have been repealed;
  •  Union representative's access to workplaces without prior employer consent has been restored except in some specific circumstances;
  • Greater protections against discrimination against employees because of their union membership status. These protections have been extended from 12 months to 18 months after the date of the union activity;
  • Employers must provide reasonable paid time for union delegates to represent other workers within their standard working hours; and
  • Employers must provide union information to prospective and new employees.

Comes into effect on 6 May 2019:

• Rest and meal breaks will be more prescribed: after 6 May 2019 employee’s breaks must be at the exact intervals prescribed by the act unless both parties have agreed they be taken at a different time. In both cases, the minimum entitlement varies depending on different total hour work periods. For example, if working a shift of between 4 and 6 hours, an employee is entitled to one paid 10 minute rest break and one unpaid 30 minute meal break. Those breaks must be taken at one third and two thirds of the way through the work period respectively, unless the parties have agreed they be taken at a different time. Any agreement between parties that rest and meal breaks will be taken at different times to those set out in the act needs to be recorded in writing. This enables employers to rebuff any claims by disgruntled employees that no such agreement was ever arrived at. 

National security employers and essential services employers are exempt from the new breaks regime where they would incur an unreasonable cost in replacing an employee for the period of their rest and meal breaks.

• 90 day trials only available to employers with fewer than 20 employees: as a bit of a memory jog, a ‘trial period’ is a period of not more than 90 days which starts at the beginning of employment. During that period an employer can dismiss the employee for, effectively, any reason whatsoever (other than reasons such as discrimination) and the employee is prohibited from bringing a personal grievance or other claim against the employer in respect of that dismissal.

This change may assist small to medium sized employers when recruiting, as it’s often those employers who are exposed to greater risks of personal grievance claims as they may not have designated HR teams to manage the dismissal process.

• ‘Vulnerable employees’ such as cleaners and caterers will be able to be transferred to the new business on sale or restructure: restructure includes contracting out work to a third party previously undertaken by the business’s own employees. Or indeed, a contractor who decides to sub-contract work out to a third party. In both cases, any ‘vulnerable workers’ have the right to transfer to the new business (i.e. the contractor or sub-contractor) undertaking the services. The same applies when a business is sold and the obligation to comply with the act falls on both the outgoing employer/business owner and the new employer/business owner, so this is definitely something to be aware of when purchasing a business which provides cleaning and food preparation services.

If any of the above is relevant to your business or you have any questions then please contact our Employment Team specialists Sophie Diedrichs (Wanaka) at [email protected] or Fran Hesp (Queenstown) at [email protected] or call us on 03 441 2743.