Last night, Parliament passed amendments to a number of key pieces of employment legislation. These will come into force on 1 April 2016. In summary, these amendments aim to implement a single broad policy that (according to the Government) aims to promote “fairness and improve productivity in workplaces by enhancing protections and benefits for both employers and employees” and prohibit practices that lack sufficient mutuality.
Compliance with the new standards will be required immediately (i.e. from 1 April 2016) for all new employment agreements; however, a transition period of 12 months is permitted for any existing agreements. It is therefore prudent for employers to start thinking about how these changes might affect their business.
We have set out the most significant changes below.
No more “zero-hour contracts”
Availability provisions that require an employee to be available for work and to accept any work offered to them, without the reciprocal requirement that the employer actually provide work, will be prohibited, except where:
- The employer has genuine reasons based on reasonable grounds for including an availability provision; and
- The employee is reasonably compensated for making him or herself available to work.
One such genuine reason might be the inability of the employer to meet business demands without resorting to an availability provision in employment agreements. Where a genuine reason cannot be found for such a provision the employee can refuse to perform the work without any consequence.
Employers and employees also have the option of agreeing that a salaried employee’s remuneration includes compensation for making themselves available for work.
Agreed hours of work
Agreed hours of work will have to be recorded in each employee’s individual employment agreement. Hours of work” may include: any guaranteed hours, the days on which work is to be performed, start and finish times, and any flexibility in these arrangements.
Cancellation of shifts
Employment agreements will need to specify a reasonable period of notice that will be given by the employer to an employee before cancelling a shift. Agreements must also detail the amount of reasonable compensation payable if that notice period is not given. If these requirements are not met, the employee is entitled to be remunerated as if he or she had worked the shift.
Employers will need to state genuine reasons in employment agreements if they want to restrict employees from entering into secondary employment. Genuine reasons might include things like protecting the employer’s commercially sensitive information, intellectual property or commercial reputation.
Enforcement of employment standards
Employers will have to demonstrate that they are complying with minimum entitlement provisions by keeping detailed records of hours worked, including hours worked by salaried employees. This requirement can be met by having worker hours stated in the employment agreement, the wages and time record, or in a roster.
Deductions from wages
The Wages Protection Act 1983 has been amended in order to prohibit employers from making ‘unreasonable’ deductions from employees’ wages. Though the amendments do not define what is unreasonable, the explanatory note suggests that deductions from an employee’s wage as a consequence of customer theft or the actions of any other third party will be considered unreasonable. The amendments do confirm, however, that a clause in the employment agreement is sufficient to constitute “written consent” to deductions, as required by the Wages Protection Act 1983.
Extension to and increased flexibility in paid parental leave scheme
The Parental Leave and Employment Protection Act 1987 is amended in a number of ways, including:
- Expanding eligibility through new definitions. The new definition of “primary carer” will extend existing parental leave entitlements beyond the natural parents to individuals who assume primary responsibility for the day-to-day care of a child under the age of six. The new definition of an “eligible employee” will also extend paid leave to individuals with non-standard working arrangements.
- Extending entitlement to additional paid parental leave to primary carers of babies who are born prematurely.
- Introducing the concept of “keeping-in-touch days”, allowing an employee on paid parental leave to do up to 40 hours paid work without being treated as having returned to work.
- Allowing unpaid extended parental leave to be taken (by mutual agreement between employee and employer) in more than one block.
Paid parental leave is also being extended in duration from 16 weeks to 18 weeks, on 1 April 2016.
What you need to do:
If you are employing someone after 1 April 2016, the employment agreement will need to comply with the new requirements. You might need to include new clauses in your employment agreement if you want:
- An availability provision (i.e. to require employees to make themselves available for work);
- Agreed hours of work;
- The ability to cancel a shift;
- To prohibit secondary employment.
Please let us know if you need help with these clauses, or with any other aspect of the changes and how these may relate to your business.