Important changes to Employment Law Imminent - Employment Lawyer – Business Lawyer - Dukesons Business Law

April 2019

Be Prepared - Important Changes to Employment Law are Imminent

“The times, they are a changin”, yet again in relation to employment law. I’ve referred to them in a prior blog.

This blog focuses only on the extent to which individual employment agreements will be affected by important changes that will take effect from 6th May 2019.

It will be an offence not to have a written EA

At present, the Employment Relations Act 2000 provides that an individual employment agreement must be in writing. An employer who fails to comply is liable for a penalty imposed by the Employment Relations Authority.

Under the Employment Relations (Infringement Offences) Regulations 2019, it will be an infringement offence if there’s no written individual employment agreement. The infringement fee for a breach of section 65(1)(a) will be $1,000.

Trial Period Provisions limited to Employers with less than 20 employees

Employers with 20 employees or more won’t be able to use trial period provisions. Accordingly, trial period provisions in EA templates for such employers won’t be able to be used. Note that an employee includes any type of employee, including a casual employee. So, where an employer regularly uses casual employees, they may find that on some days they have 19 or fewer employees and on some days, 20 or more employees.

An option will be to use probationary period provisions, which are recognised by s67 of the ERA. Also, probationary periods can be used for past employees who come on board again and there's no specified time limit for probationary clauses.

However, probationary clauses are less flexible than trial period provisions and it can be questioned to what extent they add any significant benefit. The ERA specifically states that they don’t affect the law relating to unjustified dismissal. An employee who is “on probation” can’t be dismissed for performance issues without a performance management process being implemented. Termination may be possible if they commit misconduct that is serious, but normal disciplinary procedures would need to be followed. Any flexibility provided by the use of a probationary clause may be no more than a recognition that there is a limited period of time within which to assess an employee’s suitability and for allowing an employee a reasonably opportunity to improve their performance where performance is in issue.

Any probationary period has to be reasonable. It would be unlikely that a particularly lengthy period would be reasonable.

Rest and meal breaks

An employer and employee will be able to agree on when rest and meal breaks are to be taken but the duration and frequency of the breaks will be cast in stone – the few exceptions that are provided for won’t apply to the vast majority of employers.

Details of the breaks don’t have to be set out in an employment agreement.

Employers who breach the law in relation to these breaks may face personal grievances and penalties can be imposed.

30-day rule resurrected

Where there is an applicable collective agreement (covers the same work that a new employee will do under an individual employment agreement even though the employee isn’t a member of the union), the employee’s individual employment agreement must for the first 30 days be on the same terms as the collective agreement. The employer and employee can agree to additional terms provided that they’re no less favourable than the terms of the collective agreement.

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