However, the current administration clearly decided that some changes couldn’t wait. In the last few months, a number of important employment law amendments have been passed while other Bills have been put before Parliament. This article summarises the recent changes and outlines what the main parties have in store if they are able to lead the next government.
The Government recently passed the Employment Relations (Breaks and Infant Feeding) Amendment Act. Somewhat remarkably, an Amendment, which in its original drafting dealt exclusively with breastfeeding and rest breaks, was altered at the 11th hour to also amend the KiwiSaver Act.
Under the KiwiSaver Act, employers are required to make compulsory contributions to employees’ KiwiSaver schemes, increasing from 1% of total salary up to 4% of total salary in 2011. Many employers sought to address the resulting increase in costs by introducing a “total remuneration package” (TRP) approach to remuneration. Under a TRP scheme, employees are given a number representing the total cost of their package and are allowed to select various components within that package.
In terms of KiwiSaver, the TRP approach allowed an employer to give staff the choice of joining the scheme and having the cost of the employer contribution deducted from the total package, or taking the cash equivalent as salary. TRP also gave an employer certainty in terms of remuneration costs.
However, the Government has now effectively made a TRP approach to Kiwisaver unlawful. Employers must now ensure that any employee in KiwiSaver does not receive less salary or wages than someone in a comparable role who is not in the scheme, if the reason for the difference is in any way based on the cost of the employer’s contribution.
One obvious consequence of this change is that employees now have an added incentive to join the scheme. If two employees do the same job for the same pay, the one who joins KiwiSaver will effectively be receiving additional compensation from the employer, in a manner that should not impact at all on what he/she receives in terms of take home pay.
For those employers already using a TRP approach, the good news is that the law change doesn’t apply to agreements entered into before 2 September 2008. However, some caution is needed because for any variation to an employment agreement after that date the new law applies and the TRP approach is unlawful. Employment agreements are often varied (arguably, even an annual change in salary constitutes a variation). Accordingly, over time, even existing TRP schemes are likely to become unlawful.
Although employees have always had a legal right to a safe and healthy working environment, New Zealanders have never had a statutory right to specific breaks from work. However, from 1 April 2009, employees working a ‘normal’ eight hour day will have a statutory right to receive two paid 10 minute breaks, together with a 30 minute unpaid meal break.
For those working shorter shifts, the number of breaks they are entitled to, depends upon the hours worked. For those on longer shifts, the pattern of entitlements begins again after 8 hours.
The Act specifies when these breaks are to occur “so far as is reasonably practicable.” Employers can also provide enhanced entitlements.
Employees who are breastfeeding must be provided with breaks and, “where reasonable and practicable” the facilities to do so. The breaks will be in addition to those mentioned above.
The extent of those facilities depend upon what is “reasonable and practicable” to that particular workplace. Considerations are likely to include the operational environment, the employer’s resources and the number of staff in the workplace. The extent of employer’s obligations for breastfeeding will be clarified further through a Code of Practice that the Department of Labour is developing.