Employment Legislation Update 2009

90 Day Trial Period

1^st March 2009 saw the introduction of the 90-day trial period into employment law. 

You are only affected if you employ fewer than 20 employees.  The trial period must be in the employment agreement, negotiated between the parties and is not retrospective.  It’s only real effect is to allow an employer to terminate the employee during or at the end of the 90 day period without fear of a personal grievance for unjustified dismissal.  However, this does not stop an employee taking a grievance for harassment, disadvantage nor indeed for serious breach of good faith.  

This law has been passed quickly and there may be a number of issues that will need to be ironed out, probably by precedent. 

You must remember to give notice of termination before the end of the trial period.  If the notice period expires after the 90 day period the employee will still not be able to take a grievance for unjustified dismissal but any new dismissal during the notice period would attract the usual rights. 

The obligations of good faith remain in tact but your obligations to consult and provide information prior to dismissal have been removed. 

You can have both a trial period and the existing probationary period.  The existing probationary period can be of any length and have a different notice period, but it does attract the right to a personal grievance.

Employees terminated under the trail period will still be able to make claims for unjustified disadvantage.

Meal and Rest Breaks

From 1^st April it will be compulsory for all employers to provide meal and rest breaks for employees.   For those of you not already doing so there is now a minimum obligation.  For those of you that do provide for rest and break periods in your employment agreements it would pay to check these to ensure that they comply with this new legal minimum entitlement.  If you have questions give the help line a call.

The minimum requirements are now:

If an employee works for 2 hours but not more than 4 hours they are entitled to one 10 minute paid break

If an employee works for more than 4 hours but not more than 6 hours they are entitled to one 10 minute paid break and one 30 minute unpaid meal break

If an employee works for more than 6 hours but not more then 8 hours they are entitled to two 10 minute paid breaks and one 30 minute unpaid meal break.

If an employee works more than 8 hours they become entitled to the breaks as if their employment periods had started at the 8^th hour.

The breaks should be taken as agreed by the employee and employer, which needs to be in writing.  If there is no agreement then the breaks should be taken in the middle of the work period.

Where you have an employee who works no more than six hours then the 10 minute break should be provided no more than one third of the way through the work period and the 30 minute meal break at two thirds of the way through.  In other words once the employee has completed 2 hours work and then again on completion of 4 hours work. 

Where someone works 8 hours unless an agreement exists otherwise, you must provide the breaks at the 2 hour, 4 hour and 6 hour point.

There does not seem to be an obligation on you to ensure your employees take these breaks, only to make them available.  However, it has always been good practice to monitor breaks and encourage staff to take them.

Breast Feeding at Work

From 1^st April 20009 you will, were reasonably practical circumstances allow, have to provide facilities and breaks for employees who wish to breast feed in the workplace or during work periods.           

By circumstances they mean your operational environment and resources.

The breaks are additional to the normal meal and rest breaks also provided for in the act although if you both agree then they can be the same breaks.  Any extra breaks need only be paid breaks if you agree to this 

KiwiSaver changes

From the 1^st April the minimum employer contribution rate will be capped at 2%.  There will be no further increases as previously planned.  The minimum contribution an employee can make has been reduced to 2%.  However, the employer tax credit has been removed so it may now cost you to provide this 2%.  The $40.00 fee subsidy has also been removed. 

Your existing members will not automatically move back to 2% unless they request a new contribution rate. 

If you decide to contribute more than 2% you may need to consider the tax liabilities for the additional sums.  This employer contribution superannuation tax, ESCT of 33cents in the dollar could be dealt with in a number of ways.   For example you could agree with your employee to treat it as salaries and wages.  Get advice from your accountant.

You may have to make changes to any information you currently hold on KiwiSaver including reviewing your induction packs and contracts. 

KiwiSaver now attracts the possibility for a personal grievance if an employee feels that their employment has been adversely affected because they are a member of a KiwiSaver scheme or other complying superannuation scheme.  This could be because they feel they have not been given the same bonus payments, promotion or training expressly because they are a KiwiSaver member. 

Flexible Working

As of 1^st July 2008 employees have the right to request flexible working arrangements.  Simply put, an employee can now request that the employer considers a request to change their hours, days and place of work if they have someone to care for.  For example an employee with young children may make a request to work school hours only and have the school holiday periods off work, or work from home during the school holidays. 

To be eligible the employee must have worked for you continuously for the last six months, not made a previous request during the preceding 12 months and have a need to care for someone. 

In considering the request, you need to remember the premise of good faith which underpins the Employment Relations Act.  You need to give the employee a decision within 3 months of the request being tabled.  Although no strict process is laid down in law, the general rules of consultation should be adhered to and discussions and meetings recorded in writing. 

There are various reasons you can turn a request down such as the inability to re-organise work among your existing staff, or if the change would be detrimental to the business in terms of quality of product/service or performance.  Perhaps there is not enough work available during the time period requested by the staff member, or it may cost you more money and not enable you to meet your customer needs.  Any of these circumstances would be considered reasonable 

If the employee is not happy with your decision there is not a lot they can do unless you have not followed adequate process when considering and responding to the request.  Even here the maximum penalty would be $2000.00

Minimum Wage and Remuneration Amendment

Further changes to the minimum wage come into place on the 1^st April 2009 

New entrants will now receive $10.00

Minimum wage for adults will be $12.50

The qualifying criterion remains the same.  To be eligible for the adult minimum wage a person must be 16 and have worked for 200 hours or 3 months employment, be a supervisor or train other people.  Work carried out prior to the age of 16 does not count.  There is no minimum wage for people under 16. 

Holidays Act Amendments

Public holidays can no longer be transferred by agreement between you and your employees.  However, where an employee shift spans 2 calendar days and one of those days is a public holiday you can agree between you to move the public holiday to a 24 hour period that begins or ends on the public holiday.