Notable employment law changes in 2016

Notable Employment Law Changes In 2016

2016 saw a host of changes to employment laws aimed at improving the productivity and fairness of New Zealand workplaces. To help you prepare for a successful 2017, we have identified the most notable developments that took place in the past year.

Parental leave

A number of changes were made to the Parental Leave and Employment Protection Act to increase the flexibility of the scheme and ensure it better reflects the diversity of modern work and family arrangements. The legislative changes that came into effect from 1 April 2016 provide families with greater choice in the way they manage caring for their new children and staying connected with their workplace.

Pregnant Office Worker

“The new provisions also allow employees to go back to work, by agreement with their employer, for occasional activities on a ‘keeping in touch’ basis without losing their entitlements so long as they do not exceed 40 hours of paid work.”

The entitlement to parental leave payments has been extended from 16 weeks to 18 weeks, allowing parents and permanent carers to take more time off work to spend with the new addition to their family.

Parental leave payments have been extended to benefit people with non-standard working arrangements, including casual, seasonal, temporary and fixed-term employees, workers with more than one employer and workers who have recently changed jobs. These workers may now qualify for parental leave payments provided they have worked at least 6 of the 12 months prior to their child being born.

The concept of ‘primary carer’ has been afforded a wider definition, being a person who takes permanent primary responsibility for a child who is under the age of 6. The effect is that parental leave payments are now available to primary carers who are not biological or adoptive parents, for example, a grandparent who intends to raise the grandchild in place of the parents.

The changes allow employees, with the agreement of their employer, to take their extended unpaid leave over more than one period, meaning the employee can return to work for a time and then take the remainder of the time at some later point. The new provisions also allow employees to go back to work, by agreement with their employer, for occasional activities on a ‘keeping in touch’ basis without losing their entitlements so long as they do not exceed 40 hours of paid work. The idea is that the employee can stay in touch and keep up with training and skills development, which should help ease their return to work when the time comes.

Another new aspect is the introduction of pre-term baby payments for employees who give birth before the 37th week of pregnancy. These payments cover the time between the baby’s birth until the end of the 36th week of pregnancy for a maximum of 13 weeks, after which regular parental leave payments start.

Changes to the hours of work

Following changes to the law on 1 April 2016, employees must now have guaranteed hours and reasonable compensation for availability. The changes were aimed at retaining flexibility where it is desired by both employers and employees but they also increase certainty.

Previously, it was permissible to have zero-hour contracts where the employer is not required to offer work but the employee is required to be available for work. Under this arrangement, staff were only paid when they were needed, which was often at short notice. Shifts could be cancelled without reimbursement, and holiday pay, sick pay and other employment rights were not guaranteed. These unfair employment practices, which were commonplace in companies such as McDonald’s and Burger King, were often used to exploit vulnerable workers and undermined New Zealand’s reputation as a good place to work and do business.

Legislative changes in 2016 mean that zero-hour contracts are a thing of the past. Employers are now prohibited from not committing to any hours of work and expecting employees to be available when required. Every employee must have a written employment agreement. Where the employer and employee agree to a set amount of hours, they will be required to state those hours in the employment agreement. This will ensure employers and employees are clear in their commitment to each other. Employers are prohibited from requiring employees to be available above their agreed hours stated in their employment agreement unless employees are compensated for that availability as agreed in the employment agreement. Employers are not obliged to offer, and employees are free to decline, work that is above the agreed number of hours. An employer will not be able to cancel an employee’s shift without providing reasonable compensation. Employers will be required to either give employees the agreed reasonable notice before cancelling a shift or provide them with reasonable compensation for late notice before the shift commences. Employers will be prevented from restricting secondary employment in their employment agreements unless they have a genuine reason based on reasonable grounds to do so.

New health and safety laws

The Health and Safety at Work Act 2015 completely overhauled health and safety in New Zealand. It places wide duties to ensure safety in the workplace, so far as reasonably practicable, on any person conducting a business or undertaking. Persons occupying positions that influence the management of the business or undertaking are also responsible for safety under the Act.

Unlike previous largely ineffective sanctions, this Act carries penalties that are both significant and likely to be imposed.

Tougher sanctions for employers who breach minimum entitlements

There are a number of minimum entitlements owed to employees including entitlements to annual holidays, public holidays, sick leave, bereavement leave, minimum wage and so on. These standards protect vulnerable workers and help ensure workplaces are fair and competitive. Legislation changes introduced in 2016 strengthen the enforcement of these standards by introducing measures that target the worst transgressions of employers without imposing necessary compliance costs on employers in general.

The new legislation improves the range of actions that can be taken against employers who breach their obligations in relation to these minimum entitlements. The most significant change is an increase in fines from $10,000 to $50,000 for an individual and from $20,000 to the greater of $100,000 or three times the financial gain for a company. It is hoped that this shift towards more punitive penalties will be more successful in protecting extremely important minimum standards of employment.

A requirement was introduced into the legislation that employers be able to produce a record of the number of hours worked each day in a pay period, and the pay for those hours, in an easily accessible form on request from an employee or labour inspector. Good record keeping ensures that an employee’s entitlements are correctly met.

The new laws also make it easier to hold third parties such as directors or senior managers accountable for breaches of employment standards if they are knowingly and intentionally involved in those breaches.

Labour inspectors also now have the power to issue infringement notices for clear breaches of obligations in relation to employment standards, reducing the need to take proceedings to the Employment Court or Authority.

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