the Employment Standards Legislation Bill — What it Means for Your Business
The recently passed Employment Standards Legislation Bill changes aspects of employment relationships. If you are an employer you need to be aware of there changes and how they affect your business.
All employment agreements entered into after 1 April 2016 must comply with the new standards. Existing agreements are subject to a transition period, where employers have until 1 April 2017 to make changes to ensure compliance. This means that all employment agreements already in existence need to be reviewed for compliance with the new changes to the law. Employers should also review any employment agreement template they use so that any new agreements they enter into going forwards are compliant.
Prohibition against zero-hour contracts
Employers can no longer offer contracts which do not provide any guaranteed hours (zero hours), unless the employment agreement contains an "availability provision". Such a provision must provide for the payment of reasonable compensation to employees for making themselves available to perform work under an availability provision.
Cancellation of shifts
Employers are now prohibited from cancelling an employee's shift unless that employee's employment agreement provides for:
a. a reasonable period of notice being given before the cancellation of a shift; and
b. reasonable compensation that must be paid to the employee if the employer cancels a shift without giving the specified notice.
An employee is entitled to what he or she would have earned for working a shift if:
a. the shift is cancelled and the employment agreement is not compliant with the requirements set out above; or
b. the shift is cancelled, but the employee had not been notified of the cancellation until the commencement of the shift; or
c. the remainder of a shift is cancelled after a shift has begun.
Secondary Employment
Employers are prohibited from stipulating that an employee may not take on another job (secondary employment) unless:
a. the employer has genuine reasons based on reasonable grounds for including the provision (such as the protection of commercially sensitive information, intellectual property rights, commercial reputation, or preventing a conflict of interest);
b. the reasons are stated in the employee's employment agreement; and
c. the inclusion of a secondary employment provision in an employee's employment agreement is necessary having regard to the reasons for which the provisions is included.
Common and standard form provisions relating to secondary employment have typically not included this information in the past. It is worth noting that these requirements do not limit of affect the law relating to restraint of trade provisions.
Tougher sanctions are imposed with these changes, with the maximum penalty for individuals increased from $10,000 to $50,000, and the maximum penalty for a company increased from $20,000 to the greater of $100,000 or three times the financial gain for a company.
These changes require the review of all existing employment arrangements and any standard forms used. We are happy to help deal with these changes to employment law.
Please contact Elspeth Horner at elspeth.horner@mbhlaw.co.nz or Diako Ishmael at diako.ishmael@mbhlaw.co.nz.
Elspeth can also be contacted on 04 974 4702 and Diako on 04 974 4707.