It may be late in the year, but we are still required to keep our collective wits about us and cannot begin the slide into summer mode just yet! There are recent employment law shifts and rulings that will affect Kiwi businesses this side of Christmas, and looking ahead to next year. We have highlighted what we believe is most pertinent in this December edition of Employment Bytes, please keep reading for the key takeaways.
Fair Pay Agreements Act
The Fair Pay Agreements Act (the Act) came into force on 1 December. The Act is intended to lift and set minimum standards for workers in low wage occupations and industries, via industry-wide and occupation-wide collective bargaining. The aim is to create an efficient and constructive bargaining process, where businesses compete based on products and services.
How will it work?
Bargaining will be initiated by an application to the Chief Executive of MBIE and is required to meet one of two tests:
1. Representation test – where 1000 or 10% of the workforce needs to be supportive of initiation.
2. Public interest test - where a significant proportion of employees must be “low paid” and either have a lack of bargaining power, pay progression, and/or long unsocial hours.
Once initiated, certain topics must form part of the bargaining process. These include:
- Coverage of agreement (either occupation or industry-based agreement)
- Standard hours
- Minimum base wage rate
- Overtime rate
- Penalty rate
- Leave entitlements
- Training and development
If a Fair Pay Agreement (FPA) is ratified it would then be assessed and approved by the Employment Relations Authority (ERA), verified by MBIE, and brought into force by secondary legislation.
Is it reasonable to say that this Act has been controversial? Probably, there are numerous concerns that have been raised regarding the Act. Here are a few of the most frequently mentioned:
- Bargaining sides – whilst Unions will represent the employee bargaining side, it is still unclear who will represent employers. In situations where there is no union available to bargain for the workers, or no party willing to represent the employers, the ERA will be able to set the terms of a FPA, i.e. no actual bargaining to take place.
- Thresholds – in both tests these are very low.
- Notification process – the process is viewed not sound, with potential for late employer notification.
- Ratification process – this process doesn’t account for small businesses and their voice; larger businesses will dominate the process.
- Content – the working conditions included in the scope include broad terms that could possibly lead to restrictive outcomes.
Although regulations were created to provide further guidance on the application of the Act, there is still a lot that needs clarifying.
In November, the Government extended pay equity to all community and iwi organisations who employ social workers and receive funding from the Crown. This is expected to impact the lives of approximately 4,600 social workers, strengthening their work with children, rangatahi and whānau.
The decision sends a strong message that “the essential mahi of social work is valued and recognised."
including Median Wage Exemptions and Care Workforce Work to Residence Visa
Also in November, Immigration New Zealand (INZ) released an amendment where five sectors are now exempt from having to meet the median wage requirements for Accredited Employer Work Visa (AEWV) applications.
The care workforce, construction and infrastructure, meat processing, seafood, and seasonal snow and adventure tourism sectors now have agreements or exemptions that allow them to pay less than the median wage, for some roles, for a limited time.
INZ has also created a fourth type of resident visa under the Skilled Residence category, called the Care Workforce Work to Residence Visa. This will enable people who have worked in the Care Workforce sector to apply for a resident visa after 24-months of employment and be paid at a level 4 rate per hour (i.e. $28.25 before 31 December 2023) or above.
The other three visa types are Straight to Residence Green List Visa, Green List Work to Residence Visa and Highly Paid Visa. From 15 December 2022, registered nurses, midwives, and medical doctors will move to the Straight to Residence Green List visa pathway. This comes after significant pressure from the Health Industry. And from March 2023, 10 roles will be added to this visa pathway also, including auditors, civil construction supervisors, primary school teachers, all secondary school teachers and others. The Green List will next be reviewed in mid-2023.
Other recent immigration setting changes include:
- An additional 12,000 working holiday visas in 2023 and the extension of visas to 31 May 2023 for those already in the country.
- A Specific Purpose work visa will be added to help keep around 2500 critical workers in the country for up to three years.
- People who held a Post Study Work Visa but missed out when the borders closed in 2020/2021 will be eligible for a 12-month Open Work Visa (if they’re not already in New Zealand on another visa).
- An additional 3000 places for the Recognised Seasonal Employer Scheme, which is the largest increase in over 10 years.
- Removal of the qualification requirement for chefs to be hired through an AEWV.
- Re-opening of the Pacific Access category and the Samoan quota.
- A new Active Investor plus category to attract growth capital to Aotearoa.
- For those employers whose first accreditation is for before 4 July next year, their accreditation will be extended by one year, effectively accrediting them two years from the start.
Four Uber drivers deemed employees not contractors
The Employment Court recently issued a decision on four Uber drivers, who challenged their status as independent contractors. Chief Judge Christina Inglis assessed the ‘real nature of the relationship’ and made the determination that Uber asserted a high level of control and subordination over the drivers, and that this characterised the relationship with them. The four drivers will be entitled to the statutory employment protections during the period they were with the company. These protections include minimum wage, annual leave, sick leave, Kiwisaver contributions, and the right to unionise and collectively bargain. This recent decision follows a decision by a different Employment Court Judge in 2020, where an Uber driver was found to be operating as a business on his own account under the Uber brand.
The takeaway message is that employing contractors is still an area of uncertainty and legal risk.
Bill to restrain Restraint of Trade clauses wins spot in ballot
A Bill sponsored by Labour list MP Helen White to limit employers’ ability to enforce the restraint of trade clauses on departing employees is now before the House.
This Bill proposes to limit the use of restraint of trade clauses in four ways:
- Where an employee earns less than three times the minimum wage, they will have no effect.
- They can be applied only in cases where the employer has a proprietary interest to protect.
- For each week the restraint is in force, the employer will be required to pay half of the employee’s weekly earnings.
- The restraint will reduce to a maximum period of six months.
We will be keeping an eye on this one, as should employers who currently use restraint of trade clauses freely, with consideration particularly on point two: ‘proprietary interest’ to be given when using these clauses in employment agreements.
Employment Court finds Carter Holt Harvey did not adequately consult
CHH did not adequately consult before directing employees to use eight days leave (either annual or unpaid leave) over the Level Four lockdown.
This was the first case to examine the application of the Holidays Act against an employers’ ability to manage the disruptive effects of Covid-19.
E Tū, supported by the Council of Trade Unions (CTU) argued that CHH:
- Failed to provide the required 14 days advance notice of a requirement to take leave.
- Had an obligation to seek an agreement with its workforce on when leave should be taken.
- Couldn’t force workers to take Annual Leave as they were restricted to their homes and therefore had limited opportunity for rest and recreation.
For the most part, the Court largely rejected these arguments. However, it found that while CHH had given sufficient notice of the requirement to take leave, it had failed to consult with its employees before doing so.
The key learning from this case is that an employer can only give notice requiring that leave be taken after consultation has taken place (and without resolution/agreement being reached between the parties).
Upcoming changes for 2023
Holidays Act reform
We are still sitting tight in anticipation of changes to the Holidays Act: we are awaiting any legislation to be drafted. We now anticipate the reform will take effect in the first quarter 2023, and we will of course provide updates as soon as they happen.
Extended time for sexual harassment PG
The Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill (the Bill) has been introduced into Parliament, with a purpose to extend the time available to raise a PG on the grounds of sexual harassment from 90 days to 12 months. The Bill is currently at third reading stage.
Under the Holidays Act, employees currently become entitled to 10 days paid sick leave after six months continuous employment. The Government has begun work on implementing a Holidays Act Taskforce recommendation that gives employees access to sick leave from day one of employment.
Visa requirements- partners of temporary work visa holders
The Minister of Immigration announced on 5 Dec that planned changes for the visa requirements of partners have been deferred to April 2023. These changes were initially set to come into effect in December 2022. In the meantime, partners of migrants holding a work visa will continue to have open work rights in New Zealand. Any subsequent changes will only apply to new visas issued after the implementation date.
As you can see, there’s still plenty for employers to check and review before the festive break, and it’s worth scheduling a little time to get up to date in the first quarter of 2023, in anticipation of further changes.
The People Place can help you with ensuring your compliance with employment law changes and updating the relevant policies in your business. We are also available for chats and questions; we love to talk all-things-employment with Kiwi businesses! Please do get in touch if you’d like to talk, or if you want to plan some policy work for 2023. Call us on +64 9 300 7224.