Happy new year! We hope your holiday season break was as restful as you needed, and you have returned to work feeling relaxed and ready to get back into work.
Let’s kick off this shiny, fresh-out-of-the-box 2024 with an employment law update. Back in November 2023, we published a Post-Election Update, where we included what our new Government had in store for its first 100 days that would directly impact businesses and employment law. Here is what we can now confirm has changed, and the areas that will potentially change in the near future.
90-day trial periods restored for all businesses
As of 23 December 2023, 90-day trial periods are available for all employers, no matter their size. This means that any employer can now provide a new employee with an offer of employment which includes a trial period. Please note that a trial period must be agreed by the employer and the employee in writing, and in good faith, before the employee starts work, as part of an employment agreement.
We are not yet sure how this will impact Job Check applications, as to date, Immigration New Zealand’s (INZ) position has been that accredited employers will not be able to use trial periods in employment agreements submitted with Job Check applications.
Fair Pay Agreements Act repealed
A mere year after it came into effect, the Fair Pay Agreements (FPA) Act has been repealed, effective 20 December 2023. The FPA regime provided unions and employer associations with a system to bargain for minimum employment terms for all employees covered in an industry or occupation, resulting in binding agreements.
With the FPA process no more, the approach for negotiations involving unions that remains is collective bargaining.
New requirements for employers under the Worker Protection Act
The Worker Protection (Migrant and other Employees) Act was made law in mid-2023 under the previous Government and came into force on 6 January 2024. The primary purpose of this new law is the prevention of migrant exploitation; it expanded Labour Inspector and Immigration New Zealand powers in relation to compliance and enforcement.
An important law change is that employers who are unable to immediately comply with a Labour Inspector’s requirement to supply copies (or produce records for inspection) must now meet this requirement within 10 working days. Failure to do so can result in penalties of up to $20,000.
The Act also brings changes to the Immigration Act 2009 that has impacts for employers hiring migrant workers. Namely, employers are now required to provide employment-related documentation within 10 working days of it being requested by an immigration officer, and there has been an introduction of three new immigration infringement offences:
- Allowing a person who is not entitled under the Immigration Act to work in the employer’s service to do that work.
- Employing a person in a manner that is inconsistent with a work-related condition of that person’s visa.
- Failing to comply with a requirement to supply documents within 10 working days.
Additionally, the Chief Executive of MBIE has been enabled to publish the names of employers who offend against the Immigration Act.
In most cases, the new infringement offences do not change employers’ obligations, but adding them to the Act strengthens and normalises the sanction for non-compliance with these requirements. MBIE will not begin publishing the names of non-compliant employers immediately in January 2024. This power is intended to support the publication of an immigration stand-down list, where the names of non-compliant employers are published alongside a “stand-down” period, during which they are not able to support further visa applications. The offences that will lead to a stand-down, and the formula for calculating a stand-down period are still to be approved by the government. MBIE will not start publishing the stand-down list until these details are confirmed.
Median Wage Rate Update
The planned increase to the median wage rate, set to be implemented under the Employer Accreditation Scheme in February 2024, has been temporarily stopped by INZ. This means the existing median wage rate of $29.66 per hour remains applicable for Accredited Employer Work Visas and Job Check applications until further notice from INZ. Sector agreement rates and exemptions to the median wage rate remain unchanged.
The new median wage rate of $31.61 per hour will still be enforced from February 2024 for various other visa categories, including the Skilled Migrant Category and Parent Category.
Case Law: Restaurant owners who exploited migrant workers ordered to pay over $420,000
The former owners of two North Island eateries were in mid-December found liable for mistreating migrant workers and violating multiple minimum employment standards, resulting in penalties, compensation, and arrears exceeding $330,000. The exploitation of the seven workers of Indian descent happened between December 2017 and December 2018.
An Employment Court Judge has also mandated Ajay Sharma and Kavita Sharma, the previous owners of Prisha’s Royal Cambridge Indian Restaurant in Cambridge and Roquette Restaurant and Bar in Whakatāne, to cover costs totaling $78,429. This takes the total they must pay to over $420,000. The Judge said that the Sharmas displayed little remorse for their compliance breaches and even fabricated documents to justify some of their actions.
The Labour Inspectorate deemed it appropriate that the restaurant owners compensate the exploited workers and settle wage arrears. He emphasized the gravity of the situation, including the distress suffered by the vulnerable workers due to the deliberate and systematic offending across both businesses.
The Judge emphasized the credible testimony of the employees, who described the stress and feelings of being "caged" or like a "slave."
Potential upcoming employment law changes
Further change is on the horizon as National works through their coalition agreements with ACT and NZ First. Below are some specific areas we have heard being mentioned:
- A review of health and safety laws and regulations.
- Consideration is to be given to simplifying personal grievances, including removing the eligibility for remedies if the employee is at fault, and setting an income threshold above which a personal grievance could not be pursued.
- Remove the eligibility for contractors who have entered a written contracting arrangement to challenge their employment status in the Employment Court.
- National and New Zealand First Parties are committing to “moderate” increases to the minimum wage every year.
The long-awaited Holidays Act simplification doesn’t appear to be a current priority for our new Government.
That’s all for our January update, but as always, we will keeping a close eye on ongoing developments and will share relevant updates as they come in.