Contract Law: Give them a break – law changes focus on wellbeing

26 Feb 19

Column written by Dunedin Partner John Farrow, published in the business section of the Otago Daily Times on Tuesday 26 February.

By now, the Christmas holidays will be a distant memory. However, we all understand the importance of a break away from the daily grind. In October 2017, the Mental Health Foundation and Health Promotion agency launched a toolkit to support workplaces to boost wellbeing. Research shows that without taking adequate breaks from work, employee productivity, mental wellbeing and overall work performance begin to suffer. Overworked employees often experience chronic stress and burnout.

New Zealand law recognises the need for rest and meal breaks and the contribution these make to employees working safely and productively. Employees are entitled to rest and meal breaks that give them a reasonable chance during work periods to rest, refresh and take care of personal matters, and are appropriate for the length of their working day. Employers must pay for minimum rest breaks but don’t have to pay for minimum meal breaks. The current legislation does not specify how long a rest or meal break should be, however the length of breaks are to be negotiated, in good faith, between the employer and employee.

A number of factors are relevant to the length of the breaks. These include the length of the work period and nature of the work; relevant health and safety considerations; the interests of the employee and the employer’s operational environment and resources. An employer does not currently need to provide rest and meal breaks if a break is not practical because of the nature of the employee’s work. However, employers must provide reasonable compensation if no break is given where a break would otherwise have been appropriate. The focus is still on alternative time off rather than monetary compensation.

There are other legislative requirements to factor in. For example, truck drivers are subject to limited worktime hours and compulsory breaks (Land Transport and Licencing Provisions).
In addition to specific employment legislation, such as the Employment Relations Act, both employers and employees have health and safety obligations. People can’t keep performing at high level without breaks. In situations where fatigue can lead to harm, employers must take all practicable steps to ensure that fatigue is not likely to cause harm. WorkSafe has published guidelines regarding managing stress and fatigue in the workplace.

On May 6 this year, changes to the Employment Relations Act will take effect providing for more prescriptive rest and meal breaks. The law has seesawed over the past decade. In April 2009, the legislation was amended to provide for a minimum number of, and timing for, breaks depending on how many hours an employee worked. This was amended by the National government in 2015.
Under the current legislation, employees are entitled to rest breaks and meal breaks that ‘‘provide the employee with a reasonable opportunity, during the employee’s work period, for rest, refreshment and attention to personal matters and are appro­priate for the duration of the employee’s work period’’.

The employee’s entitlement to rest breaks and meal breaks may be subject to restrictions but only if the restrictions are reasonable and necessary having regard to the nature of the employee’s work or are reasonable and agreed between the employer and the employee.From May 6 this year, employers will again be required to offer set meal breaks with specific rules about payment, length and timing. The intention is to seek to balance the importance of rest and meal breaks with the need for breaks to be practical for each workplace.

The new legislation details the employee’s entitlement to, and the employer’s duty to provide, rest breaks and meal breaks. The legislation divides work periods into two-hour blocks. An employee is entitled, as a minimum, to 10-minute paid rest breaks and 30-minute unpaid meal breaks. The Section further prescribes the exact entitlement to those breaks depending on the number of two-hour periods worked. The timing of rest and meal breaks can be agreed between the employer and the employee. However, if there is no agreement, the employer must, as far as is reasonable and practicable, provide the employee with breaks which are, in effect, evenly spaced between work periods. Exceptions apply to employers engaged in the protection of New Zealand national security or an essential service. ‘‘Essential services’’ are services which, if interrupted, would endanger the life, health or personal safety of the whole or part of the population.

Employers and employees in national security and essential services may agree that rest breaks and meal breaks are taken in a different manner (including the number and timing of the breaks). However, if they are unable to reach agreement, the employer must provide the employee with compensatory measures which are reasonable and designed to compensate an employee for a failure to provide rest breaks. Such measures can include time off work at an alternative time during the employee’s work period (for example, a later start or early finish time); financial compensation or both.

The amendments are prescriptive about the compensation to be provided, such as the amount of time off work and the amount of the financial compensation. It is clear that the changes to the legislation provide for minimum breaks. The intention is to ensure workers actually receive and take those breaks rather than agree to be paid instead. The focus is on improving employees’ mental wellbeing and overall work performance. While for some employers it will result in some inconvenience, it should also result in improved morale and productivity.


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