Working across the ditch - the differences between New Zealand and Australian Employment Law
One of our frequently asked questions pertains to the differences between Australian (AU) and New Zealand (NZ) employment laws.
Having head offices in AU and employees in NZ can pose challenges if you are not familiar with the variations in employment legislation and the requirements of employing staff in these two countries.
While AU and NZ share many common principles, there are key differences that if overlooked, can lead to complications and real implications for offshore AU businesses.
We aim to break down these differences for those of you in this situation.
Differences between Australia and New Zealand
NZ employment law has an overarching obligation of “good faith” - this forms all aspects of the employment relationship. This principle essentially serves as the foundation for the interaction between employers and employees.
NZ does not have minimum ‘Awards’. Instead, it adheres to minimum entitlements set out in key legislations such as the Employment Relations Act, the Holidays Act, and the Minimum Wages Act.
Prescribed requirements in an Employment Agreement
NZ and AU have similar titled clauses in their employment agreements, however the details are different as we attempt to explain below.
Notable differences are that in NZ employment agreements there are mandatory clauses relating to Resolution of Employment Relationship Problems and Employee Protection provisions - AU do not have these.
We have provided below an overview of some of the differences.
Key Differences
We have broken down some differences between NZ and AU - while this list is not exhaustive, it serves to highlight that although similarities may exist there are fundamental differences between the two countries.
Differences in Employment Relations
Personal Grievances
This is where things can become a bit complicated. In New Zealand, an employee can file a claim for unjustified disadvantage on various grounds, such as disciplinary action, changes to the job, performance management, and being treated unfairly or unreasonably in processes, among other things.
This framework allows employees to challenge any treatment they perceive as unfair in the workplace, therefore it’s extremely important to protect your business by having the right processes in place to mitigate risks.
High Income Thresholds
In New Zealand there is no income cap of who can raise claims against employers. This differs from Australia and means that all employees, from CEO’s and General Managers to Retail Staff, are entitled to the same fair process in NZ.
Employment Periods
In Australia, there is a minimum employment period before you can raise an ‘unfair dismissal’ claim.
In NZ there is no minimum employment period unless you are under a 90-Day Trial Period where raising a Personal Grievance may be impacted.
Trial Periods
In New Zealand, you can have a 90-day trial period provision (recently amended to include all employers regardless of the number of employees).
There are specific requirements around timeframe of signing the employment agreement, how the provisions are drafted, and other requirements that you must follow.
Active and Constructive Consultation
Active and constructive consultation is a requirement in New Zealand and for Australian company’s requires careful attention. Specific processes must be followed to ensure the adherence to all employee’s rights.
Employees should have the chance to actively and constructively participate through consultation, feedback and submissions on all processes such as redundancy, performance management, disciplinary, job changes or any decision that has potential impact to the employee.
This process differs significantly in Australia and can pose risks if not executed correctly. It is crucial to ensure that your consultation processes in New Zealand are accurate when handling these procedures to mitigate risks to yourself and your businesses.
Here are some other key differences to note:
Handling key employment issues for New Zealand employees while business operations are in Australia may require advice on the differences in practice. If you need advice or support on any of your processes, employment agreements or compliance, please contact us.
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
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. Knowhow's Newsletters are 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 legal and other expert advice being sought in regard to a specific problem.