EMPLOYMENT LAW NEWS

September 2010

Issue No: 17

EMPLOYMENT LAW CHANGES PROPOSED BY GOVERNMENT

In a series of announcements from the National Party in July, the Government signalled a number of changes to New Zealand employment law which is summarised as follows:

 90–day trial period: 

• The voluntary 90-day trial period for new employees will be extended to cover all employers.

 The government is satisfied that the current trial period has been operating successfully and is prepared to apply that provision to all employers.

 Fixing the system: 

• The Employment Relations Authority will be given the ability to filter out “vexatious” or “frivolous” claims early on.

 It is unclear as to how this provision will operate, but any decision by the Authority in this regard will be appealable to the Employment Court. What is unclear is how the Authority or the Court will deal with appeals other than to hear the merits of the case. 

• The Authority will promote mediation by giving priority to mediated cases. 

This may not change much in the way the Authority operates. The Authority, in our experience, generally directs mediation if the parties have not attended before filing. Few cases are heard that haven’t been to mediation. 

• Behaviour that delays the Authority will be penalised. 

This amendment seems to be restricted to at parties not attending the investigation meetings or filing a late claim without good reason. 

• Employer’s processes will not be the subject of pedantic scrutiny. 

This will consist of the change of s103A from ‘would’ to ‘could’. This is discussed later in this newsletter. 

• The Authority will be moving to a more judicial mode of operation, with the right to cross-examine witnesses. 

This is a common practice with some Authority Members already, but controlled at the member’s discretion. 

• Rules on Union access to workplaces will change, so that any access will require consent of the employer. That consent cannot be unreasonably withheld.

 This amendment recognises that the employer has the right to confirm who comes into their workplace which is important in terms of Health and Safety, productivity etc. 

The most significant changes for large employers will be the 90-day trial extension and the “fixing the system” changes. The change of s103A of the Employment Relations Act from ‘would’ to ‘could’ will have a significant effect on the personal grievance law. That section reads as follows: 

“…the question of whether a dismissal or an action was justifiable must be determined, on an objective basis, by considering whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer would have done in all the circumstances at the time the dismissal or action occurred”.

 The government has said that the current law puts too much emphasis on the employer’s processes and not enough focus on the employer’s action. Changing the word from ‘would’ to ‘could’ reflects the principle that it is not for the Court or the Authority to substitute its own view for that of the employer. Issues of fairness will be dealt with through minimum requirements of a fair process as an amendment to the Act. The removal of “pedantic scrutiny” means focus will be on the merits of the employer’s decision rather than on complete procedural fairness.

 The consideration that the employer’s resources will be taken into account is intended to increase employer confidence that they will be treated fairly when defending a personal grievance.

 There are some amendments to the Holidays Act also, but we will discuss those in a later newsletter.