New Zealand’s employment regulations up for debate again at election time

28 Sep 20

Column written by Dunedin Partner John Farrow, published in the business section of the Otago Daily Times on Monday 28 September.

It’s election time and with every election comes a raft of promises about changes to employment law. Under a National-led government mandatory meal breaks could be a thing of the past. National has pledged to repeal the Government’s changes to the Employment Relations Act and initiate a review of WorkSafe.  National believes that 90-day trial periods should be fully reinstated to encourage large businesses to take on new staff. It has also pledged to:

  • repeal the Government’s changes to the Employment Relations Act;
  • simplify the employment dispute resolution process;
  • get rid of the ‘‘no win, no fee’’ provisions in the Employment Relations Act;
  • ensure New Zealand laws and policies get the right balance between health and safety and productivity.

National is yet to detail exactly what aspects of the Government’s changes to the Employment Relations Act it intends to repeal and how it intends to simplify the employment dispute resolution process. It’s also not clear exactly how meal break legislation will be repealed.

Since Labour came to power it has implemented a number of changes. The Employment Relations Amendment Act 2018 reinstated the right to set rest and meal breaks and restricted 90-day trial periods to businesses with less than 20 employees. Employees in vulnerable industries were able to transfer on the current terms and conditions of employment in the event their work was restructured. A number of changes were implemented to provide unions with a greater ability to bargain and achieve benefits for their members. These included the obligation to conclude bargaining, the requirement to include pay rates in collective agreements and provide reasonable paid time for union delegates to carry out their duties. Labour has also implemented the Employment Relations (Triangular Employment) Amendment Act. The Equal Pay Amendment Act is due to come into force on November 7 this year. The Fair Pay Agreement Working Group, headed by Jim Bolger, has filed its report with the Government’s decision on a detailed Fair Pay Agreement system yet to come. The Holidays Act review is still a work in progress, while there have been increases to minimum wage and paid parental leave.

Labour’s focus in reinstating the right to set rest and meal breaks was to ensure that employees are able to work safely and productively. Set rest and meal breaks are intended to give employees a reasonable chance during work periods to rest, refresh and take care of personal matters. These are intended to be appropriate for the length of the working day. The legislation prior to Labour’s amendments did not specify how long a rest or meal break should be. It was open for employers and employees to negotiate the length of breaks. The employer was not required to provide rest and meal breaks if a break was not practicable because of the nature of the employee’s work. However, an employer was required to provided reasonable compensation if no break was given in situations where a break would otherwise have been appropriate. The changes implemented by Labour in May 2019 divided work periods into two-hour blocks with an employee being entitled, as a minimum, to 10-minute paid rest breaks and 30-minute unpaid meal breaks. The requirement to pay for 10-minute breaks has been the subject of recent case-law, with the meat work industry leading the charge. The decision of Ovation New Zealand Limited v NZ Meatworkers and related Trades Union Inc dealt with whether ‘‘piece rates’’ incorporated payments for rest breaks and whether this was lawful. The court concluded that Parliament did not stipulate the means by which payment for rest breaks would be made and therefore the employer and employee were free to agree that payments for rest breaks were to be included within the employees’ piece wage. However, these payments must be paid at the same rate the employee would have been paid at the time of the break.

Contrary to Labour’s claimed emphasis on health and safety, the amended legislation allowed employer and employee to agree on the times when the employee could take their rest breaks and meal breaks. This allowed for situations where the breaks could be taken at the beginning of the day, before work had even commenced, or at the end of the day, meaning that employees would actually leave to go home early. The expressed purpose of providing employees with a reasonable chance during work periods to rest, refresh and take care of personal matters is not achieved when the breaks are taken at either end of the day. For a number of businesses, however, that is the only way they could comply with the law and continue to operate. It is now not uncommon to see signs on retailers’ windows advising that the store is closed while the sole employee takes their break. Who knows; if National regains power, those signs may again be a thing of the past.

For more information contact:

John Farrow