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Legislation Update - July 2012

Written by Jim Roberts & Michael O"Brien on July 27th, 2012.

What’s new in the world of employment-related legislation? A real mix of developments in legislation dealing with adventure tourism, parental leave, the controversial “starting out wage”, rest and meal breaks coming under review, public holidays, and constructive dismissal.  We also have the names of the new Authority members.  Read on…
 
The Department of Labour is No More
 
The Ministry of Business, Employment, and Innovation (also known as ‘MoBIE’) came into existence on 1 July 2012, and has replaced the Department of Labour (at least in name).
 
MoBIE is a super-ministry that has acquired the existing functions of the Department of Labour, the Ministry of Economic Development (including the Ministry of Consumer Affairs), the Ministry of Science and Innovation, and the Department of Building and Housing.  Steven Joyce is the responsible Minister.
 
The Government believes that the merger of the four ministries/departments under one umbrella will allow it to move faster and in a more co-ordinated way to deal with issues that matter to business.  The Government also believes that the merger will allow it to deliver cheaper, faster, and easier to use services for business.
 
At present, the four old ministries/departments that make up MoBIE are acting as separate units much like before.  However, it is anticipated that the various powers and functions will become more consolidated over the next 18-24 months.
 
Starting Out Wage
 
Fulfilling one of National’s election promises in 2011, the Labour Minister has confirmed the introduction of a new starting out wage that aims to provide young Kiwis with more opportunities to get into the workforce.
 
The Minimum Wage (Starting out Wage) Amendment Bill provides for eligible 16 to 19-year olds to be paid 80 per cent (but no less than that figure) of the minimum wage (which is currently $13.50 an hour).  In essence, those on the starting out wage will be paid $10.80 an hour.
 
Three groups will be “eligible” for the starting out wage:
 
  • 16 and 17-year olds in their first 6 months of work with a new employer (it does not matter whether it is the individual’s first job or not, provided it is a new employer);
  • 18 and 19-year olds entering the workforce after more than 6 months on a benefit; and
  • 16 to 19-year old workers in a recognised industry training course involving at least 40 credits a year.
 However, an individual will not be “eligible” if they are training or supervising other staff – those individuals must be paid the minimum wage.
 
The Bill will go through the select committee process – including public submissions – before final decisions are made on exactly how the starting out wage will be implemented.  While the timetable for submissions has not yet been decided, the Government plans to allow employers to offer the starting out wage from 1 April 2013.
 
Drugs, Alcohol, and Adventure Tourism
 
In an attempt to help prevent drug and alcohol-related tragedies in the adventure tourism industry, the Labour Minister has announced proposed changes to the Heath and Safety (Adventure Activities) Regulations 2011.  These amendments are not only designed to reduce risk, but preserve New Zealand’s reputation as a tourist destination.
 
“Adventure activity” is defined in the Regulations as a land or water-based activity where the participant pays and is guided, taught, or assisted to participate in the activity, provided that the main purpose is for recreation, and the activity deliberately exposes the participant to serious harm.  Obvious examples include caving, glacier walking, kayaking, scuba diving, and bungy jumping.
 
However, “adventure activity” does not include abseiling, rappelling, or rock climbing provided that these are done indoors, ice-skating on a human-made surface, snow activities done indoors or within a patrolled ski area, and activities provided by sports clubs or schools.
 
From mid-December 2012, operators of adventure activities will be required to monitor and manage safety risks associated with drug and/or alcohol impairment.  The operators will then have their drug and alcohol management checked as part of regular independent safety audits by MoBIE. 
 
The first audits will be done of the “highest risk operators”, starting in January 2013, and all operators will be required to pass a safety audit by 1 November 2014 at the latest.
 
The Prime Minister has also waded into this topic, recently telling the Tourism Industry Association that if they did not clean up drug use in the industry, then the Government would impose mandatory drug testing.  While the Prime Minister was speaking to the tourism industry as a whole, not just adventure tourism, his remarks signal that the Government may take a hard line in an attempt to protect New Zealand’s image and maintain visitor numbers.
 
Minimum Wage
 
A Private Member’s Bill that sought to increase the minimum wage to $15.00 an hour by 31 March 2012 has been rejected by Parliament at its first reading. 
 
The final vote was 59-61, with the Government and its coalition partners all voting to reject the proposal.
 
The effect of this vote is that the minimum wage will remain at $13.50 an hour – and is unlikely to change unless the Government decides to increase the figure, as it has the numbers in Parliament to block any proposals by the Opposition.
 
Public Holidays
 
As we mentioned in our last edition of Employment News, the Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill passed its first reading in Parliament on 15 July 2012.  This Bill seeks to “Monday-ise” both Waitangi Day and ANZAC Day so that if the actual day falls on the weekend, the holiday will be observed the following Monday. 
 
The Bill is currently with Select Committee, which is due to report back to Parliament in January 2013.
 
The Bill is not Government policy – it was introduced as a Private Member’s Bill by a Labour MP.  In fact, the Government has threatened to veto the Bill if it progresses any further.
 
We will keep an eye out on the progress of this Bill and report any developments in our next edition of Employment News.
 
Parental Leave
 
A Private Member’s Bill introduced by a Labour MP would change the current parental leave laws significantly.
 
The Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill seeks to extend parental leave to 26 weeks (the current law is 14 weeks).  The period of leave proposed in the Bill is in line with World Health Organisation recommendations that breastfeeding be continued up to 6 months of age.  The stated aim is to support families and create jobs as employers engage staff to replace those on parental leave.
 
The Bill passed its first reading of Parliament on 25 July 2012.  It is currently with Select Committee, which is due to report back to Parliament on 25 January 2013.
 
However, the Government has stated it will exercise its right to veto the Bill (should it progress any further) due to the financial impact of extending paid parental leave.  It says that paid parental leave currently costs the Government (i.e. the taxpayer) $157 million every year, and that increasing the period from 14 to 26 weeks would add a further $157 million per year to that figure.
 
Relaxation of Rest and Meal Breaks?
 
The Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill is still sitting out in the wilderness. 
 
The current law under the Employment Relations 2000 sets out statutory requirements for when an employer must provide an employee with rest breaks and meal breaks, and how long those breaks may be.
 
The Bill would remove the current statutory requirements altogether.  It aims to ease requirements regarding the timing, number, and duration of breaks.  It also would enable employers to provide compensatory measures instead of granting employees breaks.
 
The Bill was introduced to Parliament in October 2009, passed its first vote (by a 69-51 margin) in April 2010, and had a Select Committee report recommending its passage issued in September 2010.  Nothing has happened since then – a gap of over two years.
 
However, it is a Government-introduced Bill, meaning that there is a strong likelihood that it will eventually pass into law (assuming the Government remembers it exists).
 
Constructive Dismissal
 
In its election manifesto on employment relations, National promised it would review constructive dismissal by 2014. 
 
Constructive dismissal is the term used when employees are not dismissed directly, but are forced out of their job.  The factor that “forces” the employee from the job can be, for example, an unsafe workplace, false accusations of misconduct, bullying or abusive conduct, the employer unilaterally varying the terms of employment, sexual harassment, unmanaged stress, and others.
 
The Government believes that the current law relating to constructive dismissal is too employee-friendly, and that it is used inappropriately during employment disputes.  It therefore proposes to review the law surrounding constructive dismissal to ensure that it is used less often by employees “as an allegation of last resort”.
 
Despite the promise to review constructive dismissal, the Government has not undertaken any such review as of the time of writing.  However, given that it promised that it would, and that it has been one year since the election, it is likely that something will happen in the near future.
 
We will keep you updated if the Government decides to act on its promise.
 
Workplace Health and Safety
 
The Government has announced plans to introduce a Safety Star Rating system to make the good safety records of businesses more visible. 
 
Part of the large push to reduce the number of workplace accidents and deaths in New Zealand, the idea is that visible ratings will show evidence of a safe working environment for current and prospective employees, and will be an advantage for businesses when tendering for future work. 
 
The Government hopes that by introducing a visible rating system other businesses will strive to attain the same level, thus benefitting all employees at the same time.
 
The system will be introduced in three stages:
 
  1. April 2013; employers using existing Workplace Safety Management Practices and the Accredited Employer Programme; and
  2. Mid-2013: all small businesses who have completed the Workplace Safety Discounts programme; and
  3. Late-2013: an e-learning programme will be launched to enable all other employer and the self-employer to be eligible for a Safety Star Rating.
 Occupational Outlook
 
The Government has announced that the Ministry of Business, Innovation and Employment will produce an annual Occupational Outlook that will set out information collected from industries and businesses on the expected demand for key occupations in the years ahead.
 
The Government believes that this will ensure young people are better informed about the skills needed in the economy, and what to train for.
 
New Employment Relations Authority Members
 
The Labour Minister has recently announced the appointment of two new Members of the Employment Relations Authority – Tania Tetitaha, who will sit in Auckland, and Patricia MacKinnon, who will sit in Wellington.
 
If you have any questions regarding these issues email us on employmentnews@heskethhenry.co.nz or call us on (09) 375 8699. 
 
Topics: Employment Law
 
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