Many commentators have stated we’re entering into one of the biggest shake-ups in employment law for decades – and, from where I’m sitting, they’re looking to be on the money.
The nature of the economy in the Upper Clutha and wider Queenstown Lakes District means many of our businesses fall outside the typical 9-5 workforce – and, therefore, rely heavily on interpreting the Holidays Act in assessing correct entitlements around pay and leave.
In May, the Government announced a full review of the Act, amid revelations potentially thousands of workers had been short-changed due to incorrect pay entitlement calculations.
I must emphasis first-up, this review does not mean businesses that have underpaid staff, even accidentally, are off the hook for now. It is imperative, if, as an employer, you so much as suspect you might have miscalculated payments that you take urgent legal advice. All employers are expected to pay workers correctly, and to put right any historical underpayments of holiday and leave pay. If there is a problem, the time to scope and tackle it is right now.
The Holidays Act has been an ongoing bugbear for many businesses, and in a move that’s been supported by both employers and unions, the Government has appointed the Holidays Act Working Group to not only conduct the review, but also, ultimately, recommend a new system that provides more clarity and certainty.
Comprising business, worker and government representatives, the group is chaired by Gordon Anderson, a law professor at Victoria University, who brings extensive experience in employment law. While the key focus is the provision of, and payment for, holidays and other leave, this working group also has the power to consider other issues that arise in the course of its work. Professor Anderson and his team are due to report back within a year, bringing recommendations for clear and transparent rules around leave and payments that can be readily implemented, and that are applicable for an increasingly diverse range of work and pay arrangements.
However, any new regime is tipped to be two-to-three years away. The review won’t consider remediation of historical underpayments of holiday and leave pay, so – again – any employers who have, even inadvertently, fallen foul of current law remain very much at risk and should seek legal guidance as soon as possible.
Paid parental leave changes
We’ve seen major employment changes implemented already after the Parental Leave and Employment Protection Amendment Bill was passed.
Paid parental leave was extended to 22 weeks, as of the beginning of July. In 2020, that will increase further to 26 weeks.
The changes aim to support working families with newborns and young children, and help reduce financial stress. It allows parents, who are not in a position to take additional unpaid leave, more time for bonding with their children. It’s also designed to enable more babies to be breastfed for the first six months, in line with World Health Organisation recommendations.
One area of the law that doesn’t typically attract as much publicity is “Keeping in Touch” days. These allow parents to do limited work while on paid parental leave, if they choose. This provision is designed to help support employers and employees stay in touch, and for employees on paid parental leave to continue the likes of professional development, or to stay in touch through team building events.
As at the start of July, the Keeping in Touch days increased from 40 to 52 hours, and, from next July, will rise again to 64 hours.
It’s really important to note that there are special rules around working during paid parental leave, so it’s vital both employers and employees are up with the play and take advice.
More change pending
The Employment Relations Act Amendment Bill, which is at Select Committee stage, provides another window into the new Government’s priorities during this term. It includes proposals to:
- Restore statutory rest and meal breaks
- Limit 90-day trials to businesses with fewer than 20 employees
- Restore reinstatement as the primary remedy to unfair dismissal
- Increase protections for vulnerable workers, such as cleaners and caterers, when a business is transferred or restructured
- Strengthen collective bargaining and union rights in the workplace
Employers must also continue budgeting for increases to the minimum wage. In April, it rose from $15.75 per hour to $16.50, and will rise, incrementally, to $20 over the next four years.
Stay up-to-date
There has been a lot of commentary around businesses feeling concerned about the number and breadth of changes, together with the resultant direct and indirect costs. For many businesses, the incremental rises in the minimum wage are beginning to bite to the extent some are worrying about basic survival.
With a raft of further changes in the pipeline, the pressure on businesses – both time-wise and financially – doesn’t look like letting up any time soon.
My overarching advice to employers is don’t take your hand off the wheel: stay right across all of the changes, and ensure all new laws are properly understood and reflected in workplace employment agreements and policies.
If you’re unclear on anything, don’t muck around: run it past your legal adviser. The headlines surrounding employers now having to dig very deep to repay years of underpayments are a warning bell to businesses large and small that contractual oversights do come back to bite, often very deeply and even years down the track.