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Employment Law Update - November 2010


Employment Law Update

As flagged in the last issue of exchange Parliament has now passed legislation which makes significant changes to the Employment Relations Act and the Holidays Act. Most of the amendments will be effective from 1 April 2011. 

A summary of the main changes follows. For and further information please contact George Ireland on 303-9923.

·               90 day trial period EXTENDED to all employees.  Presently the 90 day trial period is limited to employers with 20 or less employees.  The legislation would extend this to all employees provided that it is included in their employment agreement.

·               Test of justification for dismissal amended.  The Act currently requires the Authority or the Court to consider whether the employer’s decision making process was what a fair and reasonable employer would have done in all the circumstances.  The Bill proposes to change the test from would to could reinstating the test that existed prior to 2004.  This change is intended to ensure that minor or technical defects in the employer’s procedure would not jeopardise an otherwise justifiable dismissal or action.

·               The Bill also amends the current legislation to set out the minimum requirements for a fair and reasonable process.  In deciding this the Court or Authority will consider whether:

(a)      The employer sufficiently investigated allegations (having regard to the resources available to the employer);

(b)      Whether or not the concerns were raised with the employee;

(c)      Whether or not the employee was given a reasonable opportunity to respond to the employers concerns; and

(d)      Whether or not the employer genuinely considered the employee’s explanation

·               Reinstatement as a primary remedy removed.  The Bill proposes to remove reinstatement as a primary remedy where a dismissal is found to be unjustified.  Reinstatement is to remain as a remedy which could be ordered where "practicable and reasonable to do so.”

·               Paying out annual holiday entitlement.  The Bill will allow an employee and an employer to agree that the employer may pay out one week only of the employee’s annual leave. 

·               Medical certificate for sick leave – the Bill proposes that an employer may request a medical certificate in relation to any period of sick leave (there is no minimum threshold) without the need to establish reasonable grounds to suspect that the sick leave is not genuine.  Employers would be required to meet an employee’s reasonable expenses in obtaining the medical certificate. 


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