Employment Law Update: January 2020
After a very busy time of law changes over the past few years, employers may be hopeful that they can have a bit of break to catch their breath. Unfortunately, it’s not quite the time to take your eye off your obligations in the employment law space with the first part of 2020 marking some significant changes for employers in “triangular relationships”, amendments to parental leave and minimum wage, and the prospect of Fair Pay Agreements looming in the horizon.
Triangular Employment Relations
The Employment Relations (Triangular Employment) Amendment Act 2019 received its Royal Assent on 27 June 2019 and will come into force on 27 June 2020. It is a significant change to the law for those that are in triangular relationships – where one company employs workers and then contracts with another organisation to supply those workers (known as the “controlling third party”).
The new rules set out a system for employees to raise personal grievances with their employer, and for the controlling third party to also be joined to the proceedings. The Act is a sure sign from the Government that controlling third parties will no longer be able to treat a worker in an unacceptable way, while avoiding liability.
There are a few important matters for employers to be aware of:
In order for an employee to claim that they are in a triangular relationship, there has to be at least one employer-employee relationship. Therefore, a number of traditional contractor relationships will not fall within the Act. However, it is possible that the Act may extend to “secondment” relationships.
The Act does not seek to change contractors to be employees or to create “joint employment”.
The employee must first raise a personal grievance with its employer, and then the employee or the employer can apply to the Employment Relations Authority to join the controlling third party. Additionally, the Employment Relations Authority may join the controlling third party if it wishes.
If the employee is successful in his/her personal grievance, remedies may be awarded against both the employer and the controlling third party.
Recommendations
If you are in triangular relationships, we suggest that you consider carefully your employment practices, taking a careful look at the way that you address issues with all types of workers regardless as to whether they are employees or contractors. Encourage temporary hire or contractors to speak with you when any issues arise and provide them with a line of communication in which to do this.
Reminders of Changes
Parental Leave
Two significant changes are to take effect in relation to parental leave from 1 July 2020 being:
An increase of the duration of parental leave from 22 weeks to 26 weeks;
An increase of “Keeping in Touch” hours from 51 hours to 64 hours
Minimum Wage Increase
The minimum wage will increase to $18.90 an hour from 1 April 2020. Remember that the Government has committed to raising the minimum wage to $20.00 by April 2021 and so we suggest you factor these increases into your forecasting.
Changes in the Horizon
Fair Pay Agreements were one of Labour’s proposed law changes, and if instigated, would see workers in an industry or occupation covered by an agreement that would set minimum employment terms and conditions such as wages, hours of work, redundancy and overtime. The proposed changes mirror Australia’s Modern Awards system which was introduced in 2010 and provide minimum terms and conditions for all workers in an industry and encompasses pay, hours of work and breaks on top of Australia’s National Employment Standards.
In June 2018 a Fair Pay Agreement Working Group was set up and in October 2019 the Government released a discussion paper for feedback on a number of options for the design of a Fair Pay Agreements Systems. The consultation period closed on 27 November 2019.
The instigation of fair pay agreements will signal a significant change for some sectors, and so we will be keeping a close eye on progress and informing you with progress.
We’re here to help guide you through the changes. If you have any questions surrounding these and any other changes, please give us a call 09 299 2525.
Shelley Kopu
Employment Law