Significant Changes to Employment Legislation Proposed


Proposals to make major changes to employment legislation could have a big impact on your business and your relationship with your employees - find out more here.

There are several significant changes proposed to New Zealand’s employment legislation. These changes are employee focused and as a result increase employer obligations. This article looks at what the main proposed changes are.

Contractors and the minimum wage

The proposed amendment to the Minimum Wage Act 1983 would extend its cover to people engaged as contractors. Independent contractors do not currently enjoy the protection afforded by the Minimum Wage Act 1983, and thus, unlike employees, do not have to receive the minimum wage for each hour worked. This will mean those engaging contractors on a project basis will need to be careful that the amount paid to the contractor for the services performed covers the minimum wage for each hour worked by that contractor.

Parental leave

In addition to the increase in the paid parental leave entitlements in April 2016, the Employment Standards Legislation Bill (the ESL Bill) proposes to make further changes to the current parental leave legislation. The ESL Bill would make parental leave available to more workers, i.e. seasonal workers, as well as making more people eligible for the scheme by broadening the concept of primary caregivers. The ESL Bill would also provide greater flexibility for how parental leave is taken, and would introduce ‘keeping-in-touch days’ which would allow employees to work a limited number of hours during their parental leave without losing their parental leave entitlements.

Zero hour contracts

The ESL Bill also addresses one of the most contentious issues in the employment arena in 2015, zero hour contracts. Zero hour contracts are employment relationships where the employee is not guaranteed any hours of work, but is required to be available to work, and is prevented from working for another employer. This type of employment relationship is common in the fast food, supermarket and residential care industries, and the concern is that these types of agreements are seen to undermine the employment relationship as the risk and cost of flexibility is borne by the employee, with all of the benefit being enjoyed by the employer.

The ESL Bill would prohibit zero hour contracts, and provide strict requirements around hours of work and when shifts can be cancelled. It would also require employment agreements to record set hours of work where those hours have been agreed to at the outset of employment.

We suggest any employer currently using zero hour contracts contact us to discuss these changes.

Unreasonable Deductions

In addition, the ESL Bill will prevent employers making unreasonable deductions from employees wages. This issue attracted media attention earlier in the year in relation to petrol station attendants wages being docked where petrol was stolen during that employee’s shift. The proposed law would prevent employers from making such deductions where they are unreasonable, for example where the loss is caused by the action of a third party over which the employee had no control.

All Articles

Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.