What you need to know about changes to the Employment Relations Act

The government’s new Employment Relations Amendment Bill has the population divided over the possible repercussions for employees and employers in New Zealand.

Prime Minister Jacinda Ardern, campaigned heavily on the back of introducing legislation that improves fairness in the workplace, equal pay rates, reinstatement of unions, and raising the minimum wage to $20 per hour by 2020. This was a significant selling point for Labour and, true their word, they are sticking to their 100 day plan with the amendment submitted in January 2018.

The main changes are:

  • reinstating set rest and meal breaks, with limited exemptions
  • limiting 90 day trial periods to employers with fewer than 20 employees
  • restoration of the duty to conclude bargaining unless there is a good reason not to

What does this mean?

Guaranteed rest and meal breaks

Employers will be required to provide prescribed rest and meal breaks for employees which could look something like this:

Limiting 90 day trials

Out of all the changes proposed by Labour, this one appears to be the most controversial. It is a complete turnaround from National’s “fire at will” policy.

Any company with more than 20 employees will be unable to use a 90 day trial period as a sole reason for a dismissal. This means that employers will no longer be able to sack an employee without a fair reason, and will be held accountable for any unfair treatment. Labour will also introduce a referee system to deal with any disputes, which will be a free service; negating the need for employees to pay hefty lawyers fees to issue proceedings against an employer.

Duty to conclude bargaining

The duty to conclude is one of several measures in the new legislation, announced today, that the Government hopes will strengthen collective bargaining and ultimately lift wages.

It was scrapped under the previous Government, and businesses have expressed concern that reinstating it might mean that unions could essentially force employers into collective agreements. The bill is aimed to strengthen collective bargaining, lift union numbers and ultimately lift wages, as part of a wider Government programme.

Labour is also taking measures to ensure that union members are not discriminated against by employers, and union representatives are paid for their time to ensure workers are not deterred or penalised from having an input into their conditions and pay rates.

Other Changes:

  • Ability to engage in low-level industrial action without the threat of pay deductions
  • The right to the same conditions as other workers on a collective agreement, if you’re a new worker
  • Guaranteed pay and conditions, if you’re a vulnerable worker and your employer changes
  • A requirement to include pay rates in collective agreements
  • A requirement for employers to pass on information about unions to prospective employees
  • Greater protections against discrimination on the basis of being a union member
  • Removing the ability of employers to opt out of multi-employer collective agreements

What we expect to see in the future:

  • lifting the minimum wage to $16.50 an hour by April
  • extending paid parental leave to 26 weeks by 2020
  • abolish youth rates, but that is in the body of work to be completed in the next 12 months
  • industry-wide fair pay agreements
  • providing foreign workers working for foreign companies in New Zealand the same protections, such as minimum wage rights, as New Zealand workers
  • Contractors to be included under an employee status


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