What’s in store for employment law in 2019?
Twelve months of dynamic change in employment law culminated in the passing of the Employment Relations Amendment Act on 5 December 2018.
In addition to the amendments introduced in the new Act, we can expect a raft of changes and some key legislation in the coming year.
Here are our top 10 picks for employment law in 2019:
- Goodbye to trial periods: On 6 May 2019, many of the substantial changes included in the new Act will come into effect. One key change is that businesses with 20 or more employees can no longer include trial periods in their terms of employment. The effect on employment rates in a tight labour market, and the degree to which this signals a return to probationary periods, will become evident during 2019 and beyond.
- Statutory protection and domestic violence: From 1 April 2019, those affected by domestic violence will be entitled to up to 10 days’ paid leave each year. Employees can take this leave as and when it is needed, in a similar way to existing sick leave and bereavement leave. Employees can also request short-term variations to their working arrangements, including changes to hours of work, location and duties. Employers who have introduced these benefits have not found them to be widely used but they signal a change in the way businesses think about non-work issues that affect employees’ wellbeing.
- Holiday pay changes: The Holidays Act 2003 has resulted in significant non-compliance issues across a wide range of New Zealand businesses, with many embarking on costly and time-consuming remedial processes. The Holidays Act Taskforce was formed in May 2018 to consider how the current legislation might be improved. Its recommendations are due midyear. While legislative change will not happen in 2019, the report’s release is likely to swing the focus of the conversation from remediation to reform.
- Fair pay agreements: At the start of its term, the government indicated it would implement a legislative framework to provide fair pay agreements, setting minimum conditions relating to wages, allowances and leave entitlements across a particular industry. In August 2018, the Prime Minister indicated one or two agreements would likely be concluded during this term of government. In December last year, the Fair Pay Agreement Working Group, tasked with reporting back on the design of these agreements and led by former Prime Minister Jim Bolger, reported back to government. It remains to be seen whether these agreements will have a large uptake in the relevant industries and whether this signals a move closer to an Australian awards-based approach to minimum employment rights.
- #Metoo movement impacts: This has moved beyond Hollywood and firmly into the New Zealand business environment, with several taskforces and investigations taking place within the legal profession, along with an independent review into bullying and harassment in the Parliamentary workplace and several high-profile inquiries into high-performance sporting cultures. The fallout from these reports will continue in 2019 as the ability to call out unacceptable behaviour is supported and we adjust to changing expectations in the workplace.
- Evolving definitions: Employment cases in 2018 have called into question traditional definitions of employees, contractors and labour hire workers, and these will continue to evolve. With a rise in gig working arrangements and signals that the government will look at the issue, further change is likely this year. Dependent contractors, who effectively work under the control of an “employer” but do not receive the usual legal protections employees are afforded under the law, are likely to get more statutory protection. The Employment Relations (Triangular Employment) Amendment Bill is currently at select committee stage. This seeks to ensure those employed by one employer, but working under the control and direction of another business, are not deprived of their rights to allege a personal grievance. The government and courts will continue their efforts to balance the protection of vulnerable workers against the need for business flexibility.
- Statutory redundancy compensation: A 2008 ministerial advisory group recommended a statutory redundancy compensation for at least four weeks’ pay for the first year’s service and two weeks’ pay for each subsequent year of service, capped at 20 years. In its election manifesto, Labour wanted to begin consultation on improving minimum redundancy protection within its first 12 months of government. With its flagship employment legislation now passed, we anticipate progress will be made on redundancy this year.
- Greater union visibility: Last year saw increased strike action, with nurses, teachers and court staff calling on their members to undertake industrial action with a view to securing better pay and/or working conditions. We anticipate this trend to extend into 2019 as several of these negotiations are ongoing. In addition, the Employment Relations Amendment Act 2018 has given unions extra powers and access rights to workplaces, has placed a higher obligation on parties to conclude bargaining and has required employers to provide unions with more information.
- Bigger awards: In the past couple of years, there has been an increase in awards for hurt and humiliation. This has narrowed the gap between awards in the employment jurisdiction and those in the Human Rights Review Tribunal (largely discrimination and interference with privacy). We are not expecting the highest awards to increase appreciably, but larger awards are likely to be made more often and standards awards for low-level claims will be higher.
- Pay equity: The government introduced the Pay Equity Bill in September 2018, claiming it was better than the previous government’s draft legislation. The Bill aims to improve the process for raising and progressing pay equity claims, and to eliminate gender-based discrimination in female-dominated jobs. The select committee is due to report back on the Bill in April. In the interim, public sector settlements in several industries, including teacher aides, social workers and mental health workers, were achieved in 2018 and are expected to continue.
Frank Peters is an associate in EY Law’s employment and health & safety team.