Understanding key changes to employment law

This year HAS seen a number of key employment law changes that have important ramifications for businesses. Here is a summary of a few notable cases and an overview of the current stage of the Employment Relations Bill.

Public holidays and days in lieu

Having staff on variable hours is popular for businesses that require flexibility. This can, however, cause problems when determining whether employees are entitled to an alternative day’s holiday (or a day in lieu) for working on a public holiday.

The Holidays Act entitles employees that work on a public holiday to receive an alternative day of holiday if the public holiday worked would otherwise have been a working day for them. Employers have generally answered the question of what would otherwise be a working day by reviewing the three weeks leading up to the public holiday. For example, if a public holiday is on a Monday and the employee has not worked for the last three Mondays, that day is not otherwise a working day for them.

The recent case of Wendco (NZ) Limited v Labour Inspector of MBIE successfully challenged this “three-week rule”. Wendco explicitly included the “three-week rule” in their employment agreements, however, the authority noted that this unofficial rule ran the risk of targeted rostering and restricting, or reducing, some employees’ entitlements to alternative holidays.

The authority determined an individual assessment over a three to six-month period had to be carried out to determine whether the public holiday would otherwise be a working day for the employee. If that day of the week had been worked for a majority of the previous three to six-month period, then the day would be deemed to be a usual working day, entitling the employee to an alternative day’s holiday. This case makes it clear that an individualised approach is the price an employer pays for the benefit it gains from variable rosters.

Morning briefings and cashing up

Another recent case, Labour Inspector v Smith City Group Limited, has confirmed that pre-work meetings and after hours cashing up, or waiting for the last customers to leave is “work” for the purpose of the Minimum Wage Act. Employers are therefore obliged to pay employees for their time during these periods (even if it is only 10-15 minutes).

Availability provisions

Tighter rules for employers around availability provisions and zero-hour contracts have been in effect for more than a year now. An Employment Court decision has provided interesting guidance about how availability should be approached.

An “availability provision” is a clause in an employment agreement to the effect that: whether an employee works or not is conditional on the employer making work available; and the employee is required to be available to accept work. These provisions are often seen in businesses where a degree of flexibility is required in rostering.

Since the new rules around availability provisions have come into effect, any use of an availability provision in an employment agreement must also provide for guaranteed rostered hours and “reasonable compensation” for the employee making themselves available if required.

Employees in Fraser v McDonald’s Restaurants (NZ) Limited brought a claim that their employment agreements were not in accordance with the new rules. The court concluded that the employees were required to provide their employer with their availability, but they were not required to work additional hours that were offered during these times and were given 24 hours to decline. This was said to be a request rather than a requirement and such a request could be rejected without penalty. The clause therefore operated lawfully and was not a true availability provision.

This case provides a useful example of how rostering can be flexible and still comply with the rules applying to availability provisions.

Update on Employment Relations Amendment Bill

Earlier this year, the Employment Relations Amendment Bill (the Amendment Bill) was referred to the Education and Workforce Committee (the committee). The committee heard public submissions on the Amendment Bill and released its report on 7 September 2018. By majority, the committee recommended that the Amendment Bill be passed into law with only minor changes and clarifications, none of which substantively change what was initially proposed.

To recap, the Amendment Bill focuses on restoring greater union and employee rights. Some of the key changes include removal of the 90-day trial period for employers with 20 employees or more, prescribed rest and meal breaks and restoring reinstatement as the primary remedy for employees in cases of unjustified dismissal (just to name a few).

If the Amendment Bill is passed into legislation, the changes may well cause challenges for many businesses. Employers should continue to watch this space with interest to make sure they don’t get caught out.

About the author

Jessie Lapthorne has extensive experience as an employment law specialist, both in New Zealand and the United Kingdom.  She is a partner in Duncan Cotterill’s growing employment, health and safety team and is based in Auckland.

Contact on Jessie on 09 374 7156 or jessie.lapthorne@duncancotterill.com

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