Bridget Smith – SBM Legal Partner and Board Member of the NBA

SBM Legal partner and Board Member of the Newmarket Business Association, Bridget Smith offers some insightful information on employment law, from trial periods to meal breaks.

You can’t stop progress…

We see that around the streets of Newmarket on a daily basis, most significantly with the redevelopment of 277. In terms of employment law, are the proposed changes progress, or is it more of a back to the future type situation?

The change that has attracted the most attention is arguably the proposal to restrict the use of trial periods to those employers with fewer than 20 employees. Why is this so significant? While 97% of New Zealand enterprises have fewer than 20 employees, only 29% of employees are employed by these smaller enterprises. What this means in practical terms is that the vast majority of employees are employed by larger employers who will no longer be able to use/rely on trial periods. It is worth noting as a side note that the figures are skewed a bit by enterprises who employ no other staff – one man band type situations. Those businesses bolster the 97%.

 width=What else is likely to impact on businesses in and around Newmarket? Changes to rest and meal breaks is another issue and another “back to the future” type situation. The proposed change is a move back to prescription in terms of breaks based upon duration of work and a default position that will apply in the absence of agreement.

There will be exemptions if the employer is engaged in an essential service; and continuity or production in the essential service is critical to the public interest; and the employer would incur unreasonable cost replacing the employee employed in an essential service during rest and meal breaks.

The reality is that as much I would like to convince my husband that shoe stores provide an essential service, they are not an essential service and shops who have one employee working will need to work out how to provide that employee with breaks or compensatory measures.

I’m not going to cover the collective bargaining amendments in any detail, as they won’t apply to many employers and employees but again, it is a back to the future scenario. Changes include the reintroduction of the 30 day rule, restoration of the duty to conclude bargaining unless there is a genuine reason not to, removal of the Authority’s power to determine that bargaining has concluded, removal of the ability for employers to refuse to bargain for a MECA (Multi Employer Collective Agreement) and restoration of the earlier initiation timeframes for unions in collective bargaining.

Parental leave is being increased; the next increase will be to 22 weeks from July this year and then to 26 weeks by July 2020.

What many Newmarket employers will be concerned about however is the proposed legislative framework to allow the creation of “Fair Pay Agreements”. These are essentially large scale collective agreements, across industries and covering all employers and employees in the industry. The Fair Pay Agreements, if introduced, would regulate basic standards including pay rates and other employment conditions. The intention is to provide a “floor” of minimum conditions. The indication is that a Fair Pay Agreement could be negotiated when a “sufficient percentage”of employers or employees call for one. What constitutes a “sufficient percentage” is unclear; but employers may well be apprehensive about employees in their industry, employed by competitors offering less favourable conditions, calling for an FPA across the industry.

Like everything in employment law, the devil will be in the detail. Employers would be well advised to ensure they are across the current obligations and the proposed changes and timeframes to allow sufficient time to implement necessary changes.

Bridget Smith

SBM Legal 

09 520 8700

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