Employment law: what’s ahead in 2020?

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This newsletter wraps up the progression of several key pieces of employment legislation in 2019, what’s ahead in 2020, and what it all means for employers.

Fair Pay Agreement Bill delayed while further consultation is considered

The new Fair Pay Agreement Bill’s introduction to the House has been delayed to allow for further consultation, as the Government tries to create a practical implementation regime. The job appears to be more difficult than first thought, with the most recent discussion paper posing over 90 questions. Consultation wrapped up on 27 November; it is not expected that the matter will advance until the first quarter of 2020.

What is a Fair Pay Agreement?

It is proposed that Fair Payment Agreements (FPAs) would sit alongside existing Union Agreements. FPAs would prescribe mandatory sector-specific minimum employment standards, such as rates of pay for all occupations within an industry, a mechanism for increases to rates of pay, overtime/penal rates, redundancy provisions, leave entitlements, skills development/training requirements and ordinary hours and days of work. These minimum employment standards would be agreed through bargaining between affected workers and employers, and then would become legal requirements in that sector.

How will it work in practice?

Designing a system of bargaining that sets minimum terms and conditions of employment across industries and occupations, employees (and potentially contractors) and employers is fraught with difficulty. At this stage it is unclear how FPAs would, for example:

  1. deal with representation of non-union members when those individuals have elected to represent themselves or alternatively how it would ensure smaller employers were heard at the bargaining table, or
  2. deal with geographical issues. Would there be a centrally-recognised negotiating body for each sector, or would separate discussions take place throughout New Zealand and then get collated? Who would be responsible, and more importantly where would the resources come from?

Equal Pay Amendment Bill ready for its second reading

The Equal Pay Amendment Bill seeks to improve the process for raising and progressing pay equity claims. It also aims to eliminate and prevent discrimination on the basis of sex in remuneration and employment terms and conditions, for work done within female-dominated jobs.

The Bill, one of several currently before the House that loosely deal with the same issue, is ready for its second reading but is not expected to advance until early 2020.

Employment Relations (Triangular Employment) Amendment Bill will become law by June 2020

The Employment Relations (Triangular Employment) Amendment Bill received Royal Assent on 27 June 2019, to be enacted in law in 12 months’ time (or earlier if another date is appointed by the Governor-General).

The Bill provides more robust protections to the growing number of New Zealanders who work in triangular employment arrangements (that is, employees who work under the direction of someone who is not their employer). Under the Bill, 16 new clauses will be inserted into the Employment Relations Act 2000, including clauses to broaden the reach of the personal grievance mechanism for these employees.

Industries likely to be affected by this change are those involved in labour hire arrangements, those in sectors affected by seasonal fluctuations, and those who hire a temporary workforce. The Bill will also apply to employees on secondment to another business or organisation.

What will it mean in practice?

The Bill specifically applies to employment relationships where employees are employed by an employer, but also work under a “controlling third party,” who exercises or is entitled to exercise, control or direction – similar to that of an employer – over the employee. Employees in the relevant working arrangement will have the ability to apply to join a controlling third party to an existing personal grievance claim against their employer. This is subject to the same 90-day notification period within which the employee can raise a personal grievance against their employer. An employer can also apply to join a controlling third party to a personal grievance proceeding they are facing, provided they notify the controlling third party within 90 days of the personal grievance being raised.

Where the Court or Authority determines a successful personal grievance, it will be required to consider the extent to which the employer and the controlling third party caused or contributed to the personal grievance and apportion any award of reimbursement and/or compensation accordingly.

Holidays Act Amendments unlikely any time soon

Earlier this year, the review of the Holidays Act was delayed by two months to allow the Government Task-force more time to run tests, with the deadline for final recommendations to the Minister for Workplace Relations and Safety extended to the end of September. It has also been reported that advice from payroll companies was excluded from the Task-force’s review. Given the key role of payroll providers, this may lead to some serious issues with the findings of the Task-force.

To date, we have not been made aware if the Task-force has given its recommendations to the Minister for Workplace Relations and Safety. Given the drafting requirements and allowance for system providers to make changes, it is unlikely that we will see any amendments to the Holidays Act in the immediate future.

Workplace policies/employment agreements should consider Domestic Violence Leave

It has now been over six months since the Domestic Violence Protection Act 2018 came into force. The Act entitles an employee (after six months of employment) to take up to 10 days of paid domestic violence leave every 12 months, to deal with the “effects of domestic violence”. The effects are not limited to the employee and includes the effects on the employee and/or any child they are looking after. The violence does not have to occur during the employment relationship.

Unlike sick leave, domestic violence leave does not roll over every year, and it is highly unlikely there will be circumstances where it can be booked in advance like annual leave.

The Act also enables employees to request a short-term variation of their ordinary work arrangements (i.e. ordinary days or hours of work, and duties) for a period of up to two months. An employer can only refuse the request on limited grounds and must provide a response to the employee within 10 working days of the request.

While employers can request ‘proof’ of domestic violence, the Act does not provide any guidance on this area and doing so may cause difficulty for employers. We strongly advise that employers handle any requests for proof very carefully.

It would be wise for employers to take some time to review their employment agreements and work place policies to ensure they reflect their obligations under the Act.

Further changes to Parental Leave coming up in 2020

The Parental Leave and Employment Protection Amendment Bill came into effect on 1 July 2018, and provides for additional parental leave and monetary support to help parents to develop close bonds with their child and reduce parental and family stress. The amendments were split; some came into force on 1 July 2018 and some will come into force on 1 July 2020.

Paid primary carer leave is now set to increase from 22 weeks to 26 weeks from 1 July 2020 (having already increased from 18 to 22 weeks on 1 July 2018).

The Act also extended the number of hours that can be worked as “Keeping in Touch days”. Keeping in Touch days allow an employee on parental leave (upon agreement by the employer) to perform paid work from time to time without being considered as returning to work, provided the work is not within the first 28 days after the birth of the child and does not exceed the prescribed number of hours under the Act.

The number of total hours of paid work an employee can do while on parental leave will be extended to 64 hours from 1 July 2020 (having already been extended to 52 hours on 1 July 2018).

Time’s up for “free” compulsory overtime

Employment law changed in 2016 to ensure staff get paid more than their usual hourly rate if they are required to work overtime (rather than just offered it). The changes were intended to deal with “zero hours” contracts, giving employees certainty about their hours of work or fair compensation for more flexible arrangements.

Until now, it was ambiguous whether ordinary full-time or part-time contracts fell under the rules, or only contracts with no guaranteed hours (“zero hours” contracts). However, the recent court decision Postal Workers Union of Aotearoa Inc v New Zealand Post has confirmed that the law applies to any employment agreement where an employee is required to work overtime.

The extra compensation is not for the hours worked, but an additional amount for the hassle/uncertainty of having to remain available. The Court gave an example of an employee who couldn’t plan a range of family/ community obligations outside his normal work hours because he never knew if he would be required to work.

It is important to note that the provisions only apply if an employer needs to require the employee to work. There is nothing stopping an employer offering, and an employee accepting, extra work at their usual rate so long as the hours are safe.

Plenty of businesses will have employment agreements which still say “we can require you to work additional hours at your usual rate”. This is risky. If an employee raises a claim the employer could find themselves counting back additional pay for a number of years.

The Postal Workers decision underlines the fact that a “one size fits all” employment agreement is simply no longer enough for the modern workplace. Thought needs to go into the hours and overtime requirements of each employee.

If you’re unsure about whether the overtime rules affect your employment agreement(s), now could be a good time to speak to our employment team.