As previously announced by the government the adult minimum wage will increase, from $18.90 to $20.00 per hour on 1 April 2021.
The starting-out and training minimum wage rates will also increase on 1 April 2021, from $15.12 to $16.00 per hour.
As an employer, you need to ensure your payroll systems and processes are updated.
Changes to the Employment Relations Act
We reported on the Employment Relations Amendment Bill earlier in the year. In summary, the amendments introduce greater union and employee rights, and the described aim of the changes was to increase fairness between employees and employers (see our previous article here, outlining details of the changes).
The Bill proposed some significant employment law changes and has therefore taken some time to go through readings and Select Committee processes. Following endorsement by the majority of the Education and Workforce Committee and then the Bill passing it’s third reading on 5 December 2018, we can now confirm that the proposed changes are going ahead.
How might the changes impact our clients?
The changes reintroduce more rigid rest and meal break requirements, together with new calculations for how breaks are paid. If you have applied flexibility to break times and frequency, this may be something you need to change. Check what you have included in your employment agreements too.
If you have 20 or more staff, you will no longer be able to utilise a 90-day Trial Period for new employees.
Also, if your workplace has a collective employment agreement or union membership, there may be a number of changes that will be relevant to your workplace, such as union representative entering the workplace without consent, pay deductions can no longer be made for partial strikes and businesses must now enter into bargaining for multi-employer collective agreements, if asked to join by a union, for example.
When do the changes take effect?
Most changes take effect at two times: the day after Royal assent (expected the week of 10 December), and on 6 May 2019.
Changes we are asked about frequently, including the changes to rest and meal break requirements and employers with 20 or more staff no longer being able to use a Trial Period, will be effective 6 May 2019.
To see all of the specific changes effective on each of these dates, follow this link to MBIE’s employment website: https://www.employment.govt.nz/about/employment-law/employment-relations-amendment-bill-2018/
If you would like to discuss how any of these changes may potentially affect your business, policies, employment agreements or processes, please contact us on 03 545 0877 to speak to one of our team.
Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
We have seen an increased occurrence of employees resigning and then raising a PG, stating that their resignation was constructive dismissal and unjustified. In many instances they haven’t previously raised their concerns with their employer or the issues raised appeared minor with the employer believing each was addressed at the time as no further concern was raised by the employee. However, post-resignation, the employee might list all of the minor issues trying to prove that a trend existed. They may even claim an illness that they believe resulted from issues in their employment.
It is reassuring to see the Employment Relations Authority reject a recent claim of constructive and unjustified dismissal by Kathryn Gifkins that she was forced to resign from her position at Marinoto Rest Home in Taranaki.
The claim followed two incidents; one regarding a false accusation of Gifkins dragging a resident and the other about her being stalked by a dementia patient. Gifkins claimed her manager did nothing about either incident and so felt she had no option but to resign i.e. her resignation was constructive dismissal and was unjustified.
Gifkins was employed as a healthcare assistant at Marinoto Rest Home in July 2016. Two issues arose, shortly after she started which she said were of “significant concern for her”.
She soon realised that she was expected to dispense medication to patients which was something she felt uncomfortable doing in case she made a mistake and also felt it was a a registered nurse duty.
Her manager, Barbara Kay, said Gifkins did not convey her concerns about making a mistake and commented that Gifkins was “very competent” at providing medication and had no concerns about her confidence.
The Authority was satisfied the dispensing of blister pack medications was a reasonable activity for Gifkin’s position.
The second issue Gifkins had was with a dementia patient who became “infatuated” with her.
The patient told her he wanted to marry her and proposed to her. He continuously sought her out, giving gifts, making phone calls to her home and following her to the car park.
Despite complaining to Kay about feeling harassed, she said her concerns were never addressed.
However, Kay argued she told Gifkins she did not have to go to the area of the rest home where the patient was living, she did not have to care for him or communicate with him.
Gifkins said it was difficult to distance herself from him due to the size of the rest home.
The Authority member said it was clear Gifkins received unwanted attention from the resident, but she could not apportion blame to the rest home as options were given to her by management to reduce the interaction.
In May 2017, Gifkins resigned. This followed an incident which Gifkins described as “the final straw”.
Gifkins claimed that earlier that day Kay falsely accused her of dragging a patient when she and another carer were trying to lift a patient off the floor into a chair.
Gifkins claimed Kay yelled “Are you dragging him or lifting him?”. Kay admitted she said those words, but denied she yelled them, or directed them solely at Gifkins.
Gifkins said she was unhappy with the way she had been treated and felt distressed that Kay had not listened to her or been responsive.
The Authority member noted that Kay’s manner, along with the words used at the time of the incident, may have been “insensitive and unhelpful in the moment” and added “I accept, however, that Ms Gifkins was unhappy and resentful as a consequence, but I am not at all persuaded that the interaction could be regarded as a breach of Ms Gifkins’ employment, let alone one that could be fairly characterised as dismissive or repudiatory conduct that would make it reasonably forseeable Ms Gifkins would resign, an employer is under no contractual obligation to behave sensitively towards its employees.”
A constructive dismissal occurs where an employee resigns from employment but really the resignation was forced or initiated by the action(s) of the employer.
The Authority assessed whether a substantial risk of resignation was reasonably foreseeable and found that it was not in this case.
While the Government must review the Minimum Wage annually the new Government has already pledged to get it up to $20 per hour by 2020. The first step to this target is the increase that comes into effect from 1st April 2018
The new minimum wage rates are:
Adult – $16.50 an hour
Starting-out – $13.20 an hour (up from $12.60)
Training – $13.20 an hour (up from $12.60)
If you already pay above the minimum wage there is no obligation to increase it proportionally.
If you have any employees earning less that $16.50 an hour then you MUST increase their pay rate to the appropriate new minimum wage
Employees who are paid wages need to be paid for the actual hours they work. This includes any extra hours completed.
For Salaried staff you need to consider if they are being paid below minimum wage for total hours of work.
The first wave of changes to legislation in the employment arena were announced last week. There was nothing unexpected, except for possibly the usefulness of NZ First to act as a hand brake for more widespread changes.
One of Labour’s flagship policies was the abolition of the 90 day trial period. The great news for SME’s is that if you have 19 or less employees, the trial period will still be available to you. An unexpected turn of events and a moved that has disappointed unions. Unions however did get a number of changes they were seeking.
The purpose of this Bill is to implement the Government’s post-election commitments to restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. Read here a summary of the changes, and over the next few weeks we will detail how the changes may affect how you operate your business.
The proposed amendments include:
Natalie Cornelius was employed as a crew member in a café in Napier. She became concerned by her employer’s practice of deducting 30 minutes wages from her pay each day. This was allegedly to cover breaks which she is adamant she was never allowed to take.
Ms Cornelius tried to raise her concerns in writing and verbally however she says her employer inevitably reacted in a rude and belligerent manner and failed to address her concerns. Things got to a point where Ms Cornelius felt she had no choice but to resign.
Ms Cornelius subsequently raised a claim of unjustified dismissal, albeit constructively, by her employer, HPG Private Ltd (HPG). The claim was heard in the Employment Relations Authority in May 2016 where Authority Member Loftus agreed with Ms Cornelius that she had been constructively dismissed and awarded her the sum of $4,000 as compensation for hurt and humiliation.
In regards to the 30 minute deductions from Ms Cornelius’s pay each day for her breaks that she said were not taken, Member Loftus accepted Ms Cornelius’s calculations and awarded her $2,080. In all Ms Cornelius was awarded a total of nearly $12,000 for lost wages, inappropriate pay deductions, hurt and humiliation, plus costs.
Under recent changes to the Employment Relations Act, the duration and time of breaks is no longer strictly regulated. In the past, stringent rules governed how long rest and meal breaks had to be, and when they had to be given. For example, one 10-minute paid rest break during a work period of between 2 hours and 4 hours; one 10-minute paid rest break and one 30-minute meal break (unpaid unless agreed otherwise) during a work period of between 4 hours and 6 hours and so on. Now there are no specific rules for how long, or when, rest and meal breaks should be.
Employers and employees should bargain in good faith over the timing and length of breaks. All employers are required to provide employees with rest and meal breaks which give employees a reasonable chance during their work period to rest, refresh and take care of personal matters.
Under this legislation, some employers may be exempt from giving breaks. For example when employees agree to reasonable compensation in exchange for breaks, or where the employer cannot reasonably give the employee rest and meal breaks because the workplace environment or position make it impractical (for example, emergency medical staff, a sole charge customer service position, etc). However, the employer will always be required to compensate the employee if this situation arises. Compensation could be alternative time off equivalent to the missed break (i.e. finishing 15 minutes earlier but being paid until the end of the shift), or extra remuneration.