February 2011 Issue 20

EMPLOYMENT LAW NEWS

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Issue No: 20

NEWSLETTER FEBRUARY 2011

The employment law changes that have been in the wind for some time have now been passed into law. The changes come into force over three periods.

The first change to come into effect relates to changes to the Holidays Act regarding employee’s rights to be paid for public holidays that occur during a seasonal shutdown. As this predominantly occurs over the Christmas period, the amendment came into force immediately upon the Act receiving royal assent on the 26 November 2010, the remainder of the changes come into force on the 1 April 2011.

The main changes to the Holidays Act 2003 are;

1.After the employee has been employed for 12 months continuously, they may request the employer to cash up one weeks holiday pay without needing to take the holiday. An employer may refuse to grant the request without needing to give reasons.

2.The public holidays listed in the Holidays Act may be observed on days other than the normal day of observation.

3.Penalties for breach of the Act by an employer have doubled from $5,000 to $10,000 for individuals and $10,000 to $20,000 for a company.

The main changes to the Employment Relations Act are;

1.Unions must obtain consent before they enter a workplace which may not be unreasonably refused.

2.The 90 day trial period extends to all employers (note this law is not as clear cut as it looks so beware of the trappings).

3.The justification test for dismissal has been lowered to make it easier for an employer and subject to the good faith obligations in Section 4 ERA, returns the law to what is was in 2004. The test is “what could a fair and reasonable employer do, rather than what would a fair and reasonable employer do”. The effect of this law change takes away the uncertainty that existed because the real question was what an adjudicator or judge would do if they were the employer. The judicial officers were in fact, for the purpose of answering the question, ‘notional employers’ and had to substitute their views for those of the employer on trial to get the answer. This change comes into force on the 1 April 2011.

4.From the 1 July 2011 all agreements must be in writing and signed by an employee. Even if the employee refuses to sign, the terms must be kept by the employer and provided upon request. An employee is not bound by terms if they do not sign the agreement.

5.Labour Inspectors have the power to commence penalty proceedings against employers who do not comply with this requirement (and many more).

6.Penalties against an employer brought by a Labour Inspector have been raised from $5,000 to $10,000 for individuals and from $10,000 to $20,000 for a company.

Best practice is to follow the law and have an uncompromising policy that NO EMPLOYEE who is offered written terms of employment, commences that employment until they have confirmed their acceptance by signing the employment agreement and returning it to the proposed employer BEFORE THEY COMMENCE EMPLOYMENT.

A failure to comply with the above, will among other things, render a 90 day trial period invalid (as it does not apply to existing employees) and from the moment a new employee commences work they are as a matter of law, existing employees and it will be too late.

Our services also include:

Restructuring/ Redundancies
Employment advice
Contract negotiations
Drafting employment agreements
Disciplinary guidance
Private mediator
General HR advice and best practice
Computer analysis, employee monitoring. Keep your eyes on employees using email and internet
Data recovery, useful when staff leaves employment and delete vital files
Email recovery, useful to see the traffic sent and received during employment, especially with confidential information