Employment law to change in 2019

18 December 2018

The Employment Relations Amendment Bill passed its third reading on 5 December, meaning changes to employment law are coming. Some amendments will come into force as soon as the Governor-General gives Royal Assent. Some will be operative from 6 May 2019.

Many of these changes are a return to the law in force when Labour was last in government. The amendments are said to be intended to restore key minimum standards and protections for employees and strengthen collective bargaining and union rights in the workplace with the goal of introducing greater fairness in the workplace.

The Changes

Rest and meal breaks

The Bill provides for minimum standards in relation to rest and meal breaks - including defaults where the employer and employee have not agreed on breaks. These break entitlements are dependent on the length of time an employee works; for example, if an employee works between 4 hours and 6 hours they are entitled to one 10-minute paid rest break; and one 30-minute unpaid meal break.

Changes to collective bargaining and collective agreements

A number of the changes are said to be intended to promote and strengthen collective bargaining. A key change is that the duty of good faith will require that parties bargaining for a collective agreement must conclude the agreement unless there is a genuine reason not to. Genuine reasons do not include opposition to bargaining for a collective agreement, opposition to including wages or salary rates in the collective agreement or disagreement about including a bargaining fee clause. However, in the case of multi-employer collective agreements (MECAs), opposition to concluding a MECA can be a genuine reason if it is based on reasonable grounds.

Additionally, if there is a collective agreement in force, any new employees who are not union-members must be employed on the same terms and conditions of the collective agreement for the first 30 days of their employment.

Increased union rights

Union rights will also be enhanced. Union delegates will be entitled to reasonable paid time to represent employees (however this cannot unreasonably disrupt the employer's business or the delegate's performance of their duties). Further, a union may request an employer with whom they have a collective agreement to pass on information about the role and functions of the union to prospective employees.

One of the more controversial changes is that a union representative will be able to enter a workplace for purposes related to the union's business or members, without the consent of the employer, so long as there is a collective agreement in force or a collective agreement is being bargained for. Union representatives still need consent if there is no collective agreement covering employees at the workplace.

These changes provide unions with greater access to their members and to non-member employees and impose greater obligations on employers to cooperate with unions.

Limits to 90-day trials

A 90-day trial allows an employer to dismiss an employee within the first 90 days of employment and the employee will not be entitled to bring a personal grievance in respect of the dismissal. At present, any employer can include a 90-day trial in a new employee's employment agreement. From May 2019, 90-day trial periods will be limited to employers with less than 20 employees.

Employers with more than 19 employees must be aware that from May 2019 they will no longer be to use trial periods.

Protection of Vulnerable Workers in restructures

Presently, an employer with less than 20 employees who takes over a contract for services could choose not to employ existing employees currently performing the services. The Bill removes this exemption and requires that a business that takes over a contract involving vulnerable employees must employ the employees currently performing the work on the same terms and conditions if the employees elect to transfer to that business.

Reinstatement

Reinstatement is a remedy for a personal grievance whereby the Employment Relations Authority or Employment Court can require an employer to restore an employee to their previous role. As a result of the Bill, reinstatement will again be the primary remedy where employee seeks to be reinstated. However, the Authority or Court will only order reinstatement if it is practicable and reasonable to do so.

This change is intended to shift the focus of personal grievances to look at whether there is any opportunity to "restore the relationship".

What do the changes mean?

These amendments are wide-ranging and employers should gain an understanding of how it affects them.

Employers should take notice as they will have increased compliance obligations under the Employment Relations Act when the amendments come into force. Notably, several of these changes will affect common provisions in employment agreements. Employers ought to bear these changes in mind as they make new hires in 2019.