Employment law pānui – Further changes to the Employment Relations Act 2000

Further to our earlier pānui in March, a raft of further changes to the Employment Relations Act 2000 (“the Act”) come into effect from 6 May 2019.  Our advice is to get on top of these changes early, assessing how they may affect the day-to-day operational running of your business or policies you have in place.  We summarise some of the key changes below.

90 day trial periods

The days of relying on a valid 90 day trial period to dismiss an employee with full immunity from a personal grievance for unjustified dismissal are over for many employers.  Only those who employ fewer than 20 employees at the time of hiring them (referred to through the Act as a “small-to-medium-sized employer”) will be able to use a 90 day trial period from 6 May. 

Employers who employ 20 or more staff will no longer be able to include 90 day trial period clauses in employment agreements, and will be required to follow proper processes should they wish to dismiss the employee in those early stages of employment.  This exposes them to the risk of a personal grievance for unjustified dismissal which they will no longer be protected against.

For those unable to use 90 day trial periods moving forward we recommend upskilling management in how to handle performance management, as well as reviewing your current hiring procedures.  These employers may wish to include a “Probationary Period” in employment agreements for new staff as a way of managing performance from the outset and allowing a proper review at the end of the first three months of employment.  However, employers should proceed with caution as probationary periods can be particularly onerous on management and leave a lot of room for error, so may be better used on a case by case basis.

“Set” rest and meal breaks

Rather than allowing for rest and meal breaks that are “reasonable” for rest and recovery, an employer will have a duty to provide specific and set rest and meal breaks in accordance with the new laws. 

The Act sets out how many breaks, as well as their duration, that an employee will be entitled to in any given work period.  For example, if an employee works more than 6 hours, but not more than 8 hours in any given day, they must be provided with at least two 10 minute rest breaks (paid) and one 30 minute meal break (unpaid).

The changes encourage agreement between the parties as to exactly when those breaks are taken, but failing agreement, indicates at what stage in the day those breaks should be taken “as far as is reasonable and practicable”.  This suggests that some flexibility in when the breaks occur will be allowed.  Employers may want to cover any flexibility that could occur in rest and meal breaks in the employee’s individual employment agreement so that expectations are clear from the outset.

Collective bargaining and unions

Changes have also been made in regards to Collective Bargaining and Union involvement in the workplace.

Among those changes, the Act sets out processes to be followed when a Union requests the employer provide information about the Union roles and functions to prospective new employees, and only allows limited reasons for such a request to be declined.  It also sets out rules about what terms new employees can be hired on where there is an operative collective agreement, but the employee opts for an individual employment agreement. 

The Act then looks to provide some clarity around the already quite rigid process of collective bargaining, such as when the parties may initiate bargaining, how the parties should proceed when a matter is at deadlock in negotiations and reiteration of the expectations for the parties to act in good faith and conclude a collective agreement at the end of bargaining. 

Restructuring in the workplace and vulnerable employees

The changes see additional definitions for terms used in relation to a restructure as well as clear examples of what constitutes contracting in, contracting out and subsequent contracting.

Employers need to be aware that when dealing with “vulnerable employees” under the Act, they must give clear notice to the employee of their right to make an election to transfer to the new employer, or not.  This new requirement provides that at least 20 days before a restructure takes effect, an employer must provide employees with the relevant information and inform them of their right of election.

Before making any structural changes in the workplace which may adversely affect employees, employers should make sure they are familiar with all of their obligations under the Act.

Next steps for employers

Employers are going to need to take a deeper look into how they are operating in order to incorporate these changes into their workplace.  Reviewing current employment agreements and policies are the first step for employers to ensure they are in line with the law.  To compliment updated documentation, however, we suggest a second step for employers as taking a more proactive approach in the day-to-day running of their workplace to give effect to the changes that continue to arise in the employment realm. 

If you would like further information please contact Renika Siciliano on 07 958 7429.