New Zealand: Critical Employment Law Changes

New Zealand employers should be aware that there are several significant legislative changes to the Employment Relations Act 2000 (the Act) taking effect this spring. This article briefly reviews key amendments that recently took effect, or take effect today. We also highlight potential changes to privacy laws in New Zealand.

Trial Periods Abolished

Under current law, any employer in New Zealand is able to employ workers for a trial period of 90 calendar days. Trial periods are used by employers to let employees prove that they are well suited for the position based on their performance and demonstration of their skills. Employers are permitted to dismiss the employee within that 90-day period if they decide that the employee is unsuitable for the position. Starting on May 6, 2019, however, only employers with a maximum of 20 employees will be allowed to employ a worker on a 90-day trial period. An exception applies for employees who had already entered a trial period prior to the amendment’s effective date: their trial periods continue to be valid.

Employers should note that there is a difference between the 90-day trial period and probationary periods. When an employee is on a trial period, an employer cannot be liable for personal grievance of unjustified dismissal claims. A personal grievance is a type of complaint that an employee can bring against an employer or a former employer. Unjustifiable dismissal is one of the many complaints that can be brought forward by the employee, who may initiate proceedings before the Employment Relations Authority.1 If an employee is on a probationary period, the employer must follow established termination procedures, whereas an employee under a 90-day trial can be dismissed at any time. To avoid any misunderstanding about the nature of employment, employers should ensure that any trial period is agreed upon in the employment agreement, in good faith, with the employee. The employment agreement should explain that during the trial period the employer can dismiss the employee and employee cannot bring a personal grievance claim or any other legal proceedings associated with dismissal. If the employer intends to terminate an employee’s trial period, a notice of dismissal must be given to the employee.

Other than the potential for dismissal, employees on a trial period have similar rights and responsibilities as employees with a different employment arrangement. For example, employees on a trial period can still bring a claim on grounds such as:

  • discrimination;
  • sexual harassment;
  • racial harassment;
  • union membership pressure;
  • continuity of employment as per Part 6A of the Act; or
  • any action from the employer which unjustifiably disadvantages the employee.

In addition, New Zealand employers should bear in mind that employees who are union members cannot work on a trial period if it would be inconsistent with the terms and conditions included in their collective bargaining agreement.

Collective Bargaining Changes

Recent changes will also affect certain collective bargaining procedures and obligations.

Restoration of the “30-Day Rule”

Under the “30-day rule,” new employees are employed under terms and conditions that are consistent with the collective agreement effective in that workplace, even though they are not yet considered members of the union. This rule previously existed in the Act but was removed in March 2015.

On May 6, 2019, the 30-day rule will recommence. With that reinstatement, the rule will give new employees a chance to experience the potential benefits of being under a collective agreement without the obligation of becoming a union member at the start of their employment. This opportunity ensures that employees are aware of the terms (including unfavorable terms) of the collective agreement before agreeing to join the union.

Duty to Conclude Bargaining

Parties to a collective bargaining2 must conclude (that is, they must reach agreement) unless genuine reasons based on reasonable grounds are present to continue negotiations or declare an impasse. The purpose of this change is to ensure that parties to the collective bargaining will genuinely attempt to reach an agreement.

Union Access to New Hires and Work Premises

As of May 6, 2019, employers will be obligated to pass on information regarding the union’s role and function to prospective employees. The union will bear the cost for this process. In addition, if the employee intends to join the union, the employer must provide the employee with a prescribed form3 within the first 10 days of his or her employment. This procedure ensures that the employee will have adequate time to discuss intentions to join the union with a union representative. 

Union representatives are also now permitted to enter workplaces without the employer’s consent, as long as employees at the workplace are covered under a collective agreement. While in the workplace, the rights of union representatives remain limited to certain purposes associated with the collective agreement. Union representatives must still be respectful of the workplace operating hours, and they must ensure that they are following health and safety procedures.

Paid Time for Union Activities

Union members will be entitled to paid time within their work hours to carry out activities associated with their union duties, i.e. related to representing employees in collective bargaining. The arrangement for paid time will need to be reasonably agreed upon between the employer and the employee who is a union member. Employees must provide notice to their employers in advance, to give the employers sufficient opportunity to assess the request for paid time. The employer may deny the request if the use of paid time for union activities will unreasonably disrupt the business or the performance of the employee’s regular duties.

Changes to Rest and Meal Breaks

Commencing May 6, 2019, employees are entitled to set the length and timing of their own rest and meal breaks. This is a departure from the flexibility of the prior legislation, which allowed the employer and the employee to reasonably negotiate the duration of the breaks in good faith. When discussing a new rest and meal arrangement, an employee can address this topic with the employer alone or take a representative with them for support. If the employee is having difficulty reaching an agreement, then the parties may seek mediation assistance as an option. Free mediation services with an independent mediator are offered by the Ministry of Business, Innovation and Employment New Zealand. Employees can choose to represent themselves in mediation or have someone who is a friend, whanau member, an experienced community leader or a professional advisor such as an employment advocate or a lawyer. All new meal and rest break arrangements between the employee and the employer must be in writing.

Employers should recognize that the sequence of breaks will likely depend on the hours worked by the employee. When determining the type of breaks to be provided and the duration and timing of the breaks, employers should take into account the length of an employee’s shift. The common practice for employees with an eight-hour work day is to provide at least two 10- to 15-minute rest breaks and one 30-minute meal break. This practice may vary depending on other factors such as:

  • the nature of the work;
  • health and safety issues, i.e. fatigue, existing medical issues etc.;
  • employee’s needs; and
  • employer’s operational environment, i.e. is there a break roster involved to accommodate the break needs of various employees on a shift?

Employers may restrict rest and meal breaks only if there is a reasonable basis to do so. Grounds for limiting break times could stem from the nature and industry of the workplace.  Break times already specified in the employee’s employment agreement will also continue to apply where reasonable.

Domestic Violence Leave Entitlements

As of April 1, 2019, employees who are victims of domestic violence are entitled up to 10 days’ paid leave each year, which is in addition to employees’ usual paid leave entitlements. However, this type of leave cannot be “rolled over” or added to the following year’s leave entitlements. The 10-day entitlement will simply refresh each year. Employees may take this type of leave as and when required. The entitlements are limited to employees who have worked for the employer for at least six months on an average of at least 10 hours per week, or 40 hours per month.

In addition, employees now have the statutory right to request to make a short-term (two months or shorter) change to their working conditions. This type of request must be in writing and include details about the length of time proposed for the variation (or accommodation). The request should also specify how the variation of working conditions will assist the employee in dealing with the effects of the domestic violence. The variation could include changes to their work hours, location or duties or other situations appropriate to their circumstances.

Penalties of up to NZD $20,000 can apply for employer breach of these new laws. Employers should review all workplace policies to ensure compliance with these new requirements, and we recommend considering a new or updated domestic violence leave policy.

Privacy Law Reform

In addition to the changes to the Employment Relations Act 2000 discussed above, a proposed Privacy Bill (Bill) is working its way through the New Zealand Parliament and aims to strengthen the protection of confidential and personal information. The Bill is intended to replace current law in July 2019, modernizing privacy regulations and partially adopting provisions included in the European General Data Protection Regulation (GDPR).

Among other amendments to the Bill, the Privacy Commissioner will have increased enforcement powers, including the ability to issue compliance notices to organizations — including private employers — to take specific steps to enforce compliance with privacy laws, and the ability to approve or deny requests for access to personal information.

Readers interested in more information about the Bill should consult our prior article, found here. We will continue to provide updates regarding the upcoming implementation of the Bill.

See Footnotes

1 This an independent body formed under the Act. More information is available here.

This is the process of negotiating the terms and conditions for the collective agreement.

3 This form indicates the intention to join a union and can be found here.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.