Legislation Update

Given the summer holiday, one would expect little to report in the way of proposed legislative changes to employment law.  The Government clearly didn’t get that memo!  Since November, it has announced changes about the transfer of employees and when employers have to disclose information, introduced a new apprenticeship scheme, announced an increase to the minimum wage, and, finally, appointed a new Labour Minister!

‘Mondayising’ Public Holidays

In the July 2012 edition of Employment News we reported that a Private Member’s Bill had been introduced that sought to restore to New Zealanders all of their 11 designated public holidays in every year.  The Bill aimed to do this by ‘Mondayising’ Waitangi Day and ANZAC Day.

The Bill was not part of the Government’s policy – indeed, the Government threatened to veto it due to the financial impact.

However, it has been supported by the Opposition parties to the extent that the Government has now withdrawn its veto threat, and it looks set to become law in the near future.  It is likely to pass its second reading as we go to print.

If/when the Bill passes, it won’t have any real impact until 2015, which is the next time either ANZAC Day or Waitangi Day falls on a weekend.

New Minimum Wage

On 26 February 2013 the Labour Minister announced that the minimum wage was to rise from $13.50 an hour to $13.75 an hour.

The training and new entrants’ minimum wage will increase from $10.80 an hour to $11.00 an hour, which is 80 per cent of the adult minimum wage.

These changes will come into effect on 1 April 2013.

Apprenticeship Scheme

In his State of the Nation speech in January, the Prime Minister announced that the Government would create a new combined apprenticeship scheme.

At present the apprenticeship scheme is available to 16-21 year olds only.  There are also a number of other schemes.  The Government’s plan is to combine these into a single programme known as New Zealand Apprentices.

As part of the scheme, the first 10,000 apprentices of any age will be provided with a $1,000 contribution towards tools and off-job course costs.  Those in priority construction trades will be given $2,000.  The scheme was originally due to start on 1 April 2013.  However, the Government announced on 6 March 2013 that it would commence immediately.

The Government estimates that there will be 14,000 new apprenticeships starting training over the next five years, in addition to the 7,000 already in apprenticeships.

Business Restructure Obligations set to Change

The object of Part 6A is to provide protection to employees whose work is affected when a business is restructured or sold.

Cabinet has approved a number of changes to Part 6A of the Employment Relations Act 2000.  According to Cabinet, amendments to Part 6A are necessary to “provide more certainty and clarity for employers while at the same time protecting key benefits for affected employees”.

Under the changes approved by Cabinet, the biggest is that small and medium businesses – defined as being those with fewer than 20 employees – will be exempt from Part 6A where they become the incoming employer.  That is, if the small/medium business takes over part of the business/contracts of another company, the employees of that other company will not be able to transfer their employment to the small/medium business as a right.

The other changes are that:

  1. The outgoing employer will be required to forward employees’ information (such as employment agreements, PAYE, wage and time or leave records) to the incoming employer;
  2. There will be a process to help the employers agree how to apportion their respective liabilities for the accrued entitlements of employees who are transferring;
  3. There will be a requirement that employees must decide to transfer within 5 working days; and
  4. There will be additional penalties and compliance orders available for non-compliance with Part 6A.

These changes will be included in a new Bill to amend the Employment Relations Act 2000 sometime in the next few months.  We will keep an eye out for that Bill, and report back on its progress.

Disclosure of Personal Information and the Duty of Good Faith

In Vice-Chancellor of Massey University v Wrigley, the Employment Court held that the duty of good faith in section 4 of the Employment Relations Act 2000 requires employers to disclose information to employees when considering changes that may have a potential impact on the employee’s continued employment.

Cabinet has approved changes to the duty of good faith – it will be amended to clarify that employers are not required to provide employees with confidential personal information about another person, or evaluative material about the employee concerned.

The stated aim is to align the good faith requirement to provide access to relevant information more closely with the privacy principles in the Privacy Act 1993.

This change to good faith will be incorporated in the same Bill as the changes to Part 6A discussed above, and will be introduced to the House of Representatives in the next few months.

Relaxation of Rest and Meal Breaks?

In the October 2012 edition of Employment News, we noted that the Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill was still sitting out in the wilderness, as it had been doing since September 2010.
The Bill proposed easing requirements regarding the timing, number, and duration of breaks. It also would enable employers to provide compensatory measures instead of granting employees breaks.

Well, in terms of progress, the Bill has been discharged by the Government as of 26 February 2013.  Our understanding is that this means the Government has withdrawn the Bill from circulation, at least in its own right.

What the Government is planning on doing is incorporating the contents of the Bill within a larger Bill to amend the Employment Relations Act.

This larger Amendment Bill will incorporate the Government’s policies on rest and meal breaks, changes to Part 6A (as described above), changes to the duty of good faith (as mentioned above), flexible work arrangements, and collective bargaining.

Redundancy Protection

On 8 December 2012, the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill was introduced to Parliament.

Yet to receive its first reading before the House of Representatives, the Bill’s stated purpose is to insert a new Part 6E into the Employment Relations Act 2000 to provide minimum statutory entitlements for employees who are dismissed due to redundancy.

The wording of the Bill indicates that the qualifying factors for statutory entitlements are that the employee (a) has been in a continuous employment relationship with an employer for one calendar year or longer; and (2) is made redundant.  “Redundancy” is broadly defined as being the substantial disappearance of the work performed by the employee, whether due to the restructuring, downsizing, going into receivership or administration, or cessation of operations of the employer.

If an employee qualifies for protection, the Bill states that, upon suffering a redundancy, they will be entitled to receive:

  1. Notice of dismissal of no less than 4 weeks; and
  2. Compensation for redundancy of 4 weeks for the first full year of employment; and
  3. Further compensation for redundancy of 2 weeks for each subsequent full or partial year of employment, up to a maximum of 26 weeks.

The Bill is not Government policy – it was introduced as a Private Member’s Bill by Labour MP Sue Moroney.  In fact, the Bill was first introduced in 2010 but was defeated at its first reading.  However, given a new parliamentary term started after the 2011 election, Ms Moroney has reintroduced it in the hope that it will pick up support from other parties.

Although it has not expressed an opinion to date, given its position on previous matters, the Government is likely to oppose the Bill.

We will keep an eye on the progress of this Bill and report any developments in our next edition of Employment News.

New Minister of Labour

Simon Bridges was appointed the new Labour Minister in January.  He replaces Kate Wilkinson, who resigned in November 2012 after the Royal Commission released its report into the Pike River tragedy.

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