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Government announces first round of changes to employment laws

January 25, 2018


Partners Phillipa Muir, John Rooney, Samantha Turner, Shan Wilson
Senior Associates Carl Blake, Bronwyn Heenan, Lucy Jenkins, Rebecca Rendle

Government reform and public policy Employment (inc Employment Relations Amendment Bill)

The Government has today announced the first round of its employment law reforms. While changes to employment laws were expected, the Government has moved on its pre-election 100-day manifesto in relation to trial periods. 

In the run-up to the 2017 election, Labour campaigned that it would retain trial periods, but in a different form. Today the Government has confirmed that instead all employers with more than 20 employees will not have access to trial periods. This will be of concern to many larger employers. 

The Government intends to introduce a new Bill to largely repeal the National Party's amendments to the ER Act over its nine years in Government. The changes announced today target collective bargaining and wages as well as minimum standards and protection of employees: the Government says the aim is to restore fairness in the workplace.

Rights for employees

The main changes the Bill will introduce are:

  • reinstating the right to prescribed rest and meal breaks (subject to exceptions for workplaces where it is not possible for workers to take breaks at the same time ie air traffic controllers);
  • restricting 90-day trial periods to only employers of less than 20 employees;
  • extending rights for employees in "vulnerable industries";
  • requiring employers to notify employees of their right to review and ask for corrections of personal information; and
  • restoring reinstatement as the primary remedy available to the Employment Relations Authority.

Changes for unions

In relation to strengthening collective bargaining and union rights in the workplace, the Bill proposes to:

  • reinstate union representatives' rights to access the workplace to conduct union activities, where employees are members, without prior consent of the employer;
  • require employers to provide union contact details, information about the role of unions and the option to join a union to new employees;
  • reinstate the 30-day rule where for the first 30 days' new employees must be employed under terms consistent with the collective agreement;
  • reinstate a union's opportunity to initiate collective bargaining first;
  • reinstate the principle that the duty of good faith requires parties to conclude a collective agreement;
  • remove the ability for employers to opt out of multi-employer collective once bargaining has been initiated;
  • require that collective agreements must set pay rates and that rates of pay be agreed during collective bargaining;
  • extend the grounds for discrimination against union members;
  • require employers to allow union representatives reasonable time to perform their duties within working hours; and
  • remove an employer's ability to deduct pay as a response to partial strikes.

90-day trial periods

For large businesses, use of 90-day trial periods will be unlawful and only businesses that employ less than 20 employees will be able to use them. Based on MBIE figures, 29% of all workers work for a business with fewer than 20 employees. The number of employees may be calculated using an 'associated person' test which means that employees of subsidiaries or holding companies (for example) will be treated as being employed by one employer.  

Going forward

It is expected that the Government will introduce the Bill to Parliament by 3 February 2018 before the 100-day deadline.

The transitional arrangements in the Bill will require close attention by all employers who are going into bargaining in 2018 or have not concluded bargaining prior to the introduction of the changes. A key change for many employers will be the requirement to include rates of wages and salaries in collective agreements.

We will update you once the Bill is released. In the meantime, if you would like more information, please contact one of our experts listed above.