New Government, New Employment Law
The new Government has implemented some long awaited changes for businesses.
90-Day Trial Periods
The use of the 90-day trial period has now been extended to all employers regardless of their business size.
All business are now able to utilise the 90-day trial period even if you employ 20 or more people.
We discuss below the benefits of including a 90-day trial period clause in your employment agreement, as well as potential pitfalls you may encounter.
Fair Pay Agreements
The new Government has repealed the legislation supporting Fair Pay Agreements. The repeal came into effect on 20 December 2023.
Fair Pay Agreements aimed to establish industry wide minimum standards or entitlements, with bargaining in progress for sectors like retail, bus drivers, hospitality, and early childhood education.
Now, employers have regained the ability to determine their own pay rates and conditions while still adhering to overall employment law obligations, unless there are pre-existing collective agreements in place.
Things that are likely to come in time:
Personal Grievances
There is an indication that the process for raising personal grievances may adopt principles similar to those in Australia, with eligibility based on income brackets (high vs. lower), however, there is currently no guidance on the specific income thresholds.
Additional suggestions pertain to the remedies available to employees after a successful personal grievance claim. One proposition suggests that if an employee is found at fault but still awarded a successful grievance claim, they may not be entitled to any financial remedies.
We imagine this process will take time, and would likely not occur until the middle or late next year and with plenty of warning.
Minimum Wage
Minimum wage increases implemented annually, typically taking effect around the beginning of April each year.
Over the last five years, the previous Government increased the minimum wage by approximately 37.5%. The new Government, however, has committed to more moderate, incremental minimum wage increases on an annual basis.
Announcements regarding these increases are generally made in the first quarter of the new year.
Health and Safety Reform
There has been significant discussion about streamlining compliance and regulation within the Health and Safety reform. While the reform aims to establish a simpler compliance framework for health and safety, specific details about its implementation remain scarce.
This process is expected to take some time, and currently there is limited information available. Significant developments are not anticipated until late next year.
While progress on the above amendments may vary in speed, we recommend proactively considering your employment documents and processes,
We’ll stay up-to-date about proposed changes to employment law, and keep you updated as we learn more.
Trial Periods whether to use them or not?
For employers unsure around the use of the 90-day trial period provisions in your employment agreements, here are some advantages:
Flexibility - a robust 90-day trial period offers the following benefits:
assessing the suitability of a new employee; and
evaluating the employee's performance to determine their fit for the job and their fit with your Company.
Skills assessment - during the trial period, employers can effectively evaluate the new employee’s skills, capabilities, and work ethic. This assessment aids both the employer and employee in making informed decisions about job compatibility and Company culture.
Time for adjustment – a trial period allows the employee to understand the expectations of their role, adjust and familiarise themselves with the company’s culture, policies, and ways of working. This ensures successful contribution.
Reduced risk - hiring a new employee involves having faith in their skills and abilities. The trial period helps determine if the employee is the right fit, reducing risk and providing a layer of protection when used correctly.
The 90-day trial period has posed challenges for some employers, particularly when employment agreements are not signed before starting work, or due to previous employment relationships. It is crucial to ensure your employment agreement provisions are accurate and that relevant processes are followed, to provide necessary protection. Failure to do so could result in significant liabilities.
If you are wanting to include the 90-day trial period provisions in your employment agreement, please contact us and we can support you in updating your employment agreements.
Please also get in touch if you would like to discuss the 90-day trial period, its application and what this means for your business.
Referrals
We are very grateful to our clients who provide us with referrals. If you know of an employer who needs support in managing employment matters, including those difficult issues that arise with employees please pass on our contact details or let us know and we will contact them to outline what we do.
Kind regards.
The Team at Knowhow
09 377 9891 | knowhow@knowhow.co.nz
Knowhow Limited
Information contained herein does not constitute a definitive or complete statement of law. Knowhow's Newsletters are designed to provide accurate and authoritative information on employment matters, and is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case-by-case basis the information provided herein is not intended to supplant professional expert or legal advice being sought in regard to a specific problem.