2013 set to bring significant changes to employment law

After a year of relative calm, 2013 looks to be a year when the government starts implementing its pre-election employment policies.

After 2012, when the major employment changes were driven by the courts, 2013 looks to be a year of greater legislative activity, with further progress on other areas of reform set for change in 2014.

Change afoot in collective bargaining regime
Changes to the collective bargaining regime were approved by the cabinet in May.  These changes aim to remove some of the obstacles employers currently face when engaged in collective bargaining.

In particular, there will be a return to the original position where the duty of good faith does not require the parties to conclude a collective agreement. 

The Employment Relations Authority will also be empowered to declare in certain circumstances that collective bargaining has ended. 

Ther is likely to be less protracted collective bargaining disputes, such as that of Ports of Auckland, as bargaining will simply be declared to be at an end in stalemate situations. 

In addition, employers will be allowed to opt out of multi-employer bargaining at the beginning of the bargaining process if they wish to do so, resulting in less time and administration being devoted to bargaining with unwilling employer parties.

A further welcome change for employers will be the removal of the “30-day rule” which requires non-union members to be employed under the terms and conditions of a collective agreement (where one is in force which covers their work) for the first 30 days of their employment. 

Employers will instead be able to employ non-union members on individual terms negotiated directly between the employer and employee from day one.  

There will also be a change allowing for partial pay reductions in cases of partial strike action. 

The value of this proposed change in practice is likely to depend on whether any such pay reduction is measured purely on a “time lost” basis or whether employers are able to take account of the “quality” of the work not performed (meaning that it could be used in work to rule cases or cases where employees structure their work to cause maximum disturbance for minimum time off).   

The troublesome “vulnerable worker” provisions
Another key area of the Employment Relations Act where change is expected is in Part 6A. 

Under Part 6A, certain employees (commonly referred to as “vulnerable workers”) have the right to elect to transfer to a new employer on their same terms and conditions of employment in sale of business or contracting situations.

There has been considerable confusion over how this is applied, with a number employers calling for the provisions to be scrapped in their entirety.

The Government has instead proposed a more moderate approach, tweaking the legislation to deal with some of the more common issues. 

The most significant change will be an exemption for small and medium sized businesses, making businesses with fewer than 20 employees exempt from the provisions of Part 6A where they are the incoming employer. 

This is good news for small and medium business (who may now be at an advantage in tender situations and will face less compliance costs). 

However, larger businesses may now be at a disadvantage by comparison and employee advocates have argued that this removes the protection of the legislation from the most vulnerable of the vulnerable workers.

We can also expect to see a process to help employers agree on how to apportion liabilities for accrued service-related entitlements of employees who are transferring. 

At present, although a new employer is required to take on the old employer’s annual and sick leave liability, the Act is silent as to who should bear the cost.  The High Court has recently ruled that the old employer is responsible for paying the amount of these accrued liabilities across to the new employer and it is likely that the new process will confirm that this is the case.

We will also be seeing some much needed administrative amendments, such as a requirement for the outgoing employer to forward individual employee information (such as PAYE records and employment agreements) to the incoming employer and a requirement that employees must decide to transfer to a new employer within 5 working days. 

Additional penalties and compliance orders for non-compliance with Part 6A will also be introduced. 

These changes will not resolve all of the issues with Part 6A, but should at least provide more clarity on some of the more difficult aspects of this legislation.

Maximum flexibility
The cabinet has also approved the extension of the right to request flexible working to all employees, rather than the right being restricted to those with caregiving responsibilities. 

This opens the way for employees to seek flexible working arrangements (such as shortened days, working from home, job sharing or compacted weeks) for work/life balance reasons such as sporting commitments or travel to a weekend property.

Changes have also been proposed to the process that employees need to follow to make a flexible working request, with much of the formality being removed from the process and a reduced 1 month period within which employers must make a decision on any request.

Widespread changes in health and safety legislation
A government-appointed Independent Taskforce on Workplace Health and Safety is currently assessing the performance of New Zealand’s present health and safety framework. 

Of particular concern to the government is the high rate of workplace injuries in New Zealand when compared with Australia and the United Kingdom.

The taskforce will be recommending practical measures to reduce rates of serious injury by 25% by 2020.  

The taskforce is expected to provide its final report to the government in April 2013.  This report will recommend a package of measures, which are likely to impose more onerous duties on company directors, employers, employees and contractors. 

It is expected that legislation will be introduced either later in 2013 or in 2014 to adopt the taskforce’s recommendations and to incorporate the recommendations flowing from the Pike River Royal Commission.

In the health and safety sphere, we can also expect to see a Court of Appeal judgment on the issue of health and safety inspectors’ powers in mid-2013. 

In the landmark 2011 decision of Bull v Utumapu, the High Court interpreted the Health and Safety in Employment Act 1992 in a way which limited a Labour Inspector’s powers to compel a company employer to provide someone to attend an in-person interview; narrowed the scope of questions an Inspector can ask; and required an Inspector to provide advance warning of the intended topics for questioning. 

The Ministry of Business Innovation and Employment has appealed the decision, meaning the Court of Appeal is expected to produce a judgment definitively dealing with these issues at some point next year.

Bringing the Privacy Act up to date
Changes can be expected to the Privacy Act 1993 next year after the Government announced earlier in 2012 current Act will be repealed and redrafted. 

This announcement followed a Law Commission review that made 149 recommendations to update the Act. 

Although formal details of the new Act are yet to be released, recommendations for change largely focus on clarifying and strengthening the principles-based approach of the current Act, in addition to filling in the gaps in the law that have resulted from technological advances and changing attitudes about information sharing over the past 20 years. 

Key recommendations include streamlining the privacy complaints system (with more certainty in those instances when a person asks to see the personal information a business holds about them), requiring mandatory notification by an agency if personal information is lost or seriously compromised, and modifying some exceptions to the information privacy principles to clarify that information can be passed to an appropriate person where, for example, there is a serious (but not necessarily imminent) threat to an individual’s health, or where criminal offending is suspected. 

The Government is considering the Law Commission’s recommendations and is expected to report back on these, along with more specific policy proposals in the New Year.

“Mondayisation” of Waitangi and ANZAC days
The Holidays (Full Recognition of Waitangi Day & ANZAC Day) Amendment Bill is due for its second reading in 2013. 

The bill proposes to “Mondayise” Waitangi day and ANZAC day, meaning that if either of those days fall on a Saturday or Sunday, which is not otherwise a working day for the employee, then the public holiday will be treated as falling on the following Monday. 

The Transport and Industrial Relations Select Committee recommended this month that the Bill not be passed due to its negative effects outweighing its positive potential. 

The Select Committee does, however, have a National party majority and the Labour and Green Select Committee members released minority views in support of the legislation. 

If supported by all non-National MPs (as the Bill was in its first reading) then the Bill would be passed into legislation next year, although it would not have any practical effect until 2015 (being the next time that either Waitangi Day or ANZAC Day will fall on a weekend).

After 2012, when the major changes in the employment arena were driven by the courts, 2013 looks to be a period of increasing legislative activity which, it appears, will continue well into 2014.  Watch this space.

Jennifer Mills is a partner and Christie Hall is a senior associate at Minter Ellison Rudd Watts.

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