Kia ora,
Incredibly, we’ve just snuck past the mid-point of the year. This July edition of Employment Bytes demonstrates the way that the wheels really do keep on turning in employment law, albeit slowly in some areas (ahem, the Holidays Act). Immigration and the treatment of migrants is somewhat of a theme this edition. Read on to ensure your business is up-to-date with the latest, and as always, our friendly team are here for advice and questions.

Fair Pay

The second set of regulations relating to the Fair Pay Agreement (FPA) became enforceable on 8 June,  consisting of the following:

  1. FairPay Agreements Amendment Regulations 2023
  2. Employment Relations Authority (Fair Pay Agreements) Amendment Regulations 2023
  3. Employment Court (Fair Pay Agreements) Amendment Regulations 2023

The Fair Pay Agreements system brings together unions and employer associations to negotiate minimum employment terms for all employees covered within a specific industry or occupation. The FPA Amendment Regulations 2023 outline the necessary specifications for some of the fundamental mandatory terms within a finalised Fair Pay Agreement.

While these regulations do not include all mandatory terms, there are additional terms that still hold compulsory status. However, the bargaining parties have the flexibility to define these terms in any mutually agreed format, as long as it aligns with the requirements outlined in the Act. The Employment Relations Authority (ERA) and Employment Court Amendment Regulations establish or modify the necessary forms that the parties involved must utilise, when bringing forth a matter related to Fair Pay Agreements before the ERA and the Employment Court.

As of early June 2023, seven worker groups have applied to begin the FPA process. So far, these sectors include security guards, early childhood education, supermarkets, bus drivers, commercial cleaners, stevedoring (dock workers) and hospitality.

Employer action
  • If you haven’t already, it’s worth taking stock of your workforce, identify if you have roles that fall in the sectors that are likely to have FPAs negotiated first.
  • It’s also important to get really familiar with the FPA framework, so that you understand what bargaining may look like for your sector.

ERA ruling on vulnerable migrants

As you will have seen there has been a lot of recent press coverage about the treatment of migrants in Aotearoa.  In a relevant recent ruling, the Employment Relations Authority (ERA) ordered the trustees of Jesus Aroma Church to pay over $164,000, after exploiting two vulnerable migrant workers including taking payments from them for providing them with jobs.

Described as an ‘elaborate wage scam’, the trustees received donations from Korean Churches and employed migrant Song Choi at Dunedin Taekwondo Academy, which was operated as a commercial entity by the Church. Song, who was supposed to work as a pastor, was instead employed as an assistant to a Taekwondo instructor, Andrew Jeon, who was also exploited.  

The ERA ruled that the trustees must pay Song $71,848 in arrears for wages, holiday pay, and a payment of $64,172 that he had made to the trustees. They were also ordered to pay Andrew $49,634 for the payment he had made, along with outstanding interest. Additionally, the trustees were fined $42,750 for breaching minimum employment standards.

The Labour Inspectorate criticised the trustees for targeting vulnerable migrant workers and failing to provide proper wages and records. The Ministry of Business, Innovation and Employment (MBIE) is conducting a review on migrant worker exploitation in New Zealand, and the government introduced the Worker Protection (Migrant and Other Employees) Bill last year which will offer more support and protection to migrant worker communities.

Workplace Sexual Harassment law change

A new law concerning workplace sexual harassment was passed on 12 June, bringing changes to the Employment Relations Act 2000 ("the Act"). These amendments extend the timeframe within which an employee can raise a sexual harassment grievance against their employer. The extended timeframe applies to employees who wish to raise a sexual harassment grievance for incidents that occurred, or came to their notice, after the commencement of the new law.

Usually, personal grievances must be raised within 90 days of the incident occurring or coming to the notice of the employee. This change to extend the timeframe to 12 months was made because compared to other personal grievances, such as unjustified dismissal, very few sexual harassment grievances are brought before the Employment Relations Authority and Employment Court. There are several barriers contributing to this, one of which is the fact that victims of such behaviour often take longer than 90 days to disclose their experiences, seek advice, and feel comfortable pursuing a claim.

Under the Act, an employee must typically raise a personal grievance with their employer within 90 days from when the incident occurred or came to their notice. However, a sexual harassment personal grievance now falls into a new category, allowing a period of 12 months for it to be raised.

Do businesses need to update their employment agreements?

Yes, employers need to update their Individual Employment Agreements (IEAs) to include the extended timeframe for all new employees, however, are not required to amend IEAs for employees who commenced prior to 12 June. Employers should also ensure that the IEAs include a clause stating that engaging in sexual (and/or other) harassment is considered serious misconduct, which may lead to disciplinary action, including dismissal. Employers can be held responsible for their employees' conduct if they fail to take reasonable steps to prevent such behaviour.

Failure to update employment agreements entered into once the Act comes into force:

  • could give rise to a potential penalty of up to $20,000; and
  • provides employees with a defence if they fail to raise a personal grievance for sexual harassment within the Extended Timeframe.

We recommend that employers should also review their company policies, particularly those concerning the resolution of employment relationship issues, harassment, and bullying. If these policies make reference to timeframes or procedures for raising a personal grievance, it is important to update them in order to align with the Extended Timeframe.

Reach out to us if you need guidance on the updates you are required to make to your company documentation.

New Employment Relations (Protection for KiwiSaver Members) Amendment Bill

A new bill was introduced on 8 June to restore the protections provided for by the principal Act before it was amended in 2008, and ensure that the majority of workers cannot be discriminated against simply because they are members of a KiwiSaver scheme, or a complying superannuation fund. Currently, under the principal Act, employers are not legally obliged to offer workers enrolled in KiwiSaver the same terms of employment, salary or wages, conditions of work, fringe benefits, or opportunities for training, promotion and transfer, as a worker not enrolled in the scheme. Employers are also permitted to offset pay increases against workers’ KiwiSaver contributions. According to the members in charge of the bill, these legislative loopholes have the potential to significantly disadvantage New Zealanders saving for their retirement. Watch this space for updates on how this bill progresses.

Holidays Act reform

The largest overhaul of the Holidays Act in the last two decades has been further delayed as the bill is expected to be introduced to Parliament later this year. The highly complex nature of the Act has resulted in significant impacts to businesses across industries in New Zealand, and is the reason provided for the further delays. The new laws are expected to change how leave entitlements and holiday pay are calculated, and will require an overhaul of current payroll software to support implementation of these changes. This is another topic we will be keeping a close eye on, due to the potentially massive impacts to Kiwi employers; we’ll keep you updated also.

Immigration changes

More on migration!  There have been a couple of changes to existing immigration settings that may make it simpler for migrants wishing to enter New Zealand, as well as employers hiring international talent.

Firstly, the Skilled Migrant Category Resident Visa has had some significant amendments. From 9 October 2023, the current settings will be replaced with a simplified  points system, that sets a clear skills threshold for residence, and offers several ways for people to demonstrate their skill level.

From this date, migrants will need 6 points to apply for this category visa (in contrast to the previous system of 180 points). Points are claimed from New Zealand occupational registration, qualification (Bachelor’s degree or higher), or income from your job or job offer (earning at least 1.5 times the median wage in New Zealand). Other aspects, such as the character, health, language and age requirements, have stayed the same. You can find full details at Immigration NZ.

Accredited Employer Work Visa changes: The Government is introducing a maximum continuous stay of 5 years on an AEWV, for anyone who is unable to demonstrate that they are on a pathway to residence. People will need to spend 12 months outside of NZ to be eligible to apply for a further AEWV. From November 2023, the maximum duration of an AEWV will be extended from 3 years to 5 years to align with the introduction of the 5-year maximum continuous stay for AEWV holders.

That’s a wrap for our mid-year employment law update. As mentioned, our team can answer any questions you have, particularly around action required by small to mid sized  Kiwi businesses, in relation to some of these updates.  We stay connected with what’s going on in employment law, so you can check back here for the latest, or, make sure you are subscribed to our Editions newsletter, to ensure you don’t miss any emerging updates.