By Sophie Diedrichs, Solicitor, Aspiring Law
As well as the major health and safety overhaul, employers and workers have had a busy year getting their heads around another flurry of changes that have been introduced through the Employment Standards Legislation.
The new employee protection laws came into effect earlier this year, and included the controversial “zero-hour” contracts. (Crucially, such agreements haven’t been banned – more on that in a moment.)
The wave of changes also included amendments to parental leave and increases to the minimum wage, as well as a tightening of the law around employers’ documentation practices.
Zero-hour contracts
Must a contract now guarantee an employee a minimum number of hours per week?
No. Notwithstanding some commentary in the media hinting at the complete abolishment of the zero-hour contract, it is still completely legal to have an employment agreement that doesn’t specify hours of work. However, the scope of these agreements has been significantly curtailed. Under the old law, employers could demand employees be available to work at specified times, but bosses didn’t have to actually give them any work or provide any compensation if an employee didn’t end up getting any work. Under the new law, however, such clauses – known as “availability provisions” – are not permitted in zero-hour contracts.
Okay – so when can an employment agreement have an availability provision?
Employers can expect employees to work additional hours over and above their agreed hours, as long as their agreement includes:
- the total number of guaranteed hours
- the days of the week
- the work to be performed
- the start and finish times
- any flexibility as regards days of the week and start and finish times
- the specified period which the employee needs to be available to work
The employer must also have a genuine reason to include an availability provision.
What is a genuine reason?
When an employer is considering whether they have a genuine reason to include an availability provision, they must think about:
- Does the business actually need employees to be available over and above their normal hours in order for it to function? If the answer is no, then it’s likely the circumstances aren’t going to meet the “genuine reason” threshold.
- Is it fair – for example, expecting an employee to be available for large swathes of time, but offering only a couple of set hours of work per week in return probably isn’t going to pass the test.
Are employers obliged to pay employees a retainer for being available?
Yes – the law does not give employers a free ride on this one. If businesses require staff to be available to work, then the law demands they will compensate workers accordingly.
Cancelling shifts
Can my boss cancel my shift?
In order to legally cancel a shift, that ability must be set out in the employment agreement. The agreement also needs to specify that the employee will be told of the shift cancellation with reasonable advance warning. Further, the agreement must set out what compensation the worker will be paid if the employer fails to comply with the notice period.
What is a reasonable period of notice?
Ultimately, it depends on the nature of your business. However, the legislation does provide some guidance. As always, the guide is “reasonableness”, taking into account the needs of the business and the impact of the situation on the employee. Importantly, if an employment agreement does not include the notice period and the amount of compensation and a shift is cancelled, the employer will have to pay the employee for the full shift.
Can my boss stop me from working elsewhere?
A bugbear under the old law was that bosses could nail down staff in a zero-hour contract, not guarantee them any work and then, to add insult to injury, stop them from working for other businesses. Such clauses, known as “secondary employment provisions” are still allowed under the new law, but they can only be included in agreements that have guaranteed hours. They are prohibited in zero-hour contracts.
When are secondary employment provisions okay?
These provisions are not allowed in an agreement unless:
- the employer has genuine reasons based on reasonable grounds for including them
- those reasons are set out in the agreement, and they need to demonstrate why the inclusion of the provision is necessary
- any restrictions on the employee are not more than what is absolutely necessary
A genuine reason might relate to:
- the protection of commercially-sensitive information
- the protection of an employer’s intellectual property rights
- the protection of an employer’s commercial reputation
- the prevention of a real conflict of interest that can’t be managed without including a secondary employment provision
But, wait – there’s more. As mentioned, the legislative changes brought amendments in other areas, as well.
New pay rates
Thankfully, in comparison, the changes around the minimum wage are pretty straightforward.
The least employers can now pay an adult worker is $15.25 per hour. The minimum for an employee who’s starting out or in training is now $12.20 an hour (up from $11.80).
Remember, too, you can always agree to pay more than the minimum, but this must be documented in the employment agreement.
Parental leave boost
The legislative stork also made a special delivery – an increase in the period for paid parental leave, as well as broadening the entitlement for the payments.
Any employee who has worked for an employer for between six and 12 months will now be eligible for six months’ parental leave – 18 weeks paid, plus eight weeks unpaid.
More workers are also now eligible including:
- casual and seasonal workers
- workers with more than one employer
- employees who’ve recently changed job
- people who take on the permanent care of children under six – for example, home for life and whāngai arrangements.
There are new provisions, too, for parents of premature babies, who’ll receive weekly payments for each week prior to 37 weeks’ gestation. So, if a baby is born at 30 weeks, the parent will be entitled to an additional seven weeks of paid leave.
Document, document, document
While there has been an on-going legal requirement for employers to keep records, the new Employment Standards Legislation serves to give the law some added teeth.
The legislation now stipulates specifically what records an employer is expected to keep for all employees, namely:
- the number of hours worked by employees each day in a pay period
- their pay for those hours
If you’re in any doubt whatsoever about how the changes affect you, please don’t hesitate to give us a call – often it takes only a short amount of time to provide a whole lot of clarity and direction.
Last updated 6 December 2016