During 2019, New Zealand employment law experienced many new reforms, which included changes to the 90 day trial period, rest and meal break entitlements, the introduction of Domestic Violence Leave and a minimum wage rate increase, to name a few.
While we do not anticipate seeing as many legislative reforms in 2020, the legal landscape is constantly changing and this will require employers to keep abreast of the changes and ensure they adopt compliant practices. Here are some of the trends from 2019 and future changes for the year 2020:
Personal Liability for Breaching Employment Law:
In 2019, MBIE took steps to hold individuals personally liable for employment law breaches. During this period, MBIE took 19 cases to the Employment Relations Authority (ERA), or Employment Court, resulting in total awards of $259,083 in wage and holiday pay arrears and $475,176 in penalties to be paid personally by individuals. MBIE has also set up a debt collection unit targeting employers and individuals who have ignored orders to compensate workers. We expect to see MBIE continuing this trend for 2020.
Compensation Levels Awarded by the ERA and Employment Court in 2019:
Employment New Zealand released compensation figures which were awarded by the ERA and the Employment Court for personal grievance claims for 2019. The claims were for humiliation, loss of dignity and injury to the feelings of the employee.
For the period January 2019 to June 2019, 68 claims were awarded compensation, which showed an eight per cent decrease in the number of successful claims during the same period in 2018. However, the claims awarded were higher than 2018 with 16 percent of successful claims awarded more than $25,000 in the first half of 2019, compared to 4 per cent in the 2018 period. During the period July to December 2019, 71 cases were awarded compensation, with 10% of these being awarded over $25,000.
Another potential change to watch for is the Government’s discussion paper on better protections for contractors which was released in November 2019. The Government provided an opportunity for feedback submissions which closed 14th February 2020. Matters being considered include:
– Deterring employers from misclassifying workers as contractors instead of employees
– Changing who is an employee under New Zealand law
– Enhancing protections for contractors without making them employees
-Considering whether a new, third worker status should be established which would sit somewhere between that of an ‘employee’ and an ‘independent contractor’- which would be referred to as an ‘dependent contractor’
Triangular Employment Laws to be Implemented:
From June 2020, the new Employment Relations (Triangular Employment) Amendment Act 2019 will come into force. This will enable an employee or employer (in certain circumstances) to join a ‘Controlling Third Party’ to a personal grievance proceeding. Triangular employment relationships arise where an employee is employed by a company, such as a labour hire company or recruitment company, but the employee works under the control or direction of a third party. Businesses who engage labour-hire companies or ‘temp’ agencies are most likely to feel the effects of this new law change.
MINIMUM WAGE INCREASE
From 1st April 2020 the minimum wage rate will rise from $17.70 to $18.90 per hour. The starting out and training wages will also see an increase, with a rise to $15.12 per hour, or 80 percent of the adult minimum wage.