LawWorks News

Employment Law Update - December 2009



The National Government is gearing up to make some significant changes to employment law, on top of the new trial period and Kiwisaver changes introduced earlier this year.   


While there is no case law yet on the new trial periods, the general view is that it is a mistake to think a trial provision will provide absolute protection from all claims.  Employers using trial periods must ensure that their trial provision is compliant and they have met their legal obligations in negotiating for it as part of the employment agreement.  Employers should avoid relying on trial periods where dismissal is for reasons other than performance.  Good employers carry out a fair process and continue to ensure employees are told of problems with their performance and the potential for dismissal well before any decision is made.  With no law yet on the scope of the protection, employers should be conservative in this area.


There have been amendments to the protected disclosures legislation and further changes to KiwiSaver.  The Government has also introduced procedures so employers can allow employees to make charitable donations from their pay and receive an immediate tax benefit. 


A Holidays Act 2003 review is underway, which may lead to employers and employees being able to agree that some of their holidays are cashed up, along with other changes.  A report from the holidays working group is due this month.  Changes to rest and meal breaks to make the legal requirements much more flexible should become law by the end of December 2009 and there are also changes planned to the Health and Safety in Employment Act 1992.


There have been some significant cases on Part 6A and employee protection provisions (“EPPs”) in the last year or so.  EPPs must be included in the employment agreements of employees who don’t have a right to transfer in a sale of business or contracting out.  EPPs contain a process for negotiating about whether employees will be offered work by the purchaser or contractor (“new employer”).  The Employment Court has held that where a new employer agreed with the existing employer to take on its employees, this gave the employees a right to transfer enforceable against the new employer: Olsen v Carter Holt Harvey Limited [2008] ERNZ 557.  The Employment Relations Authority has also pulled up employers who have not complied with the strict process in their EPP: Hoyte v Hapag-Lloyd (NZ) Limited, 8 August 2008, L Robinson, (Authority Member) AA286/08.  Given the significance of the legal obligations, employers must get advice in a sale of business or other “restructuring” under Part 6A. 


This case law may not be relevant for long.  The National Government has recently announced a review of Part 6A.  Although this was already scheduled under the Labour Government enacted legislation, the scope will now include whether Part 6A should be scrapped altogether.


Please contact Michelle Dean, Associate, on 303 9913 if you have any questions about how the changes will impact on you. 

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