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4 October 202210 minute read

Employment law changes on horizon

While the Fair Pay Agreements Bill has held the spotlight in recent months, the wake of Covid-19 has seen Government introducing numerous Bills and initiatives aimed at improving employee rights and worker protections.  All demonstrate a clear theme of employee welfare and increased state resourcing.  As a result, many have been criticised for the increased compliance costs they will place on employers and the Government.

With a packed legislative and political calendar, the following year will be an interesting and potentially ambiguous time for employers as new obligations are introduced off the back of these Bills making their way through Parliament.  

In this update, we set out a summary of key upcoming legislation, some of which are still in their infancy while others will be taking effect imminently.

Employment Relations (Restraint of Trade) Amendment Bill

The proposed codification of what will, and what will not, constitute a valid restraint of trade has garnered significant media attention since it was introduced on 22 September 2022.  

The Employment Relations (Restraint of Trade) Amendment Bill proposes 3 major restrictions on the current ability for parties to mutually agree restrictions that apply post-employment:

  1. Restraints of trade would be ineffective against employees who earn less than 3 times the minimum wage;

  2. Employers will be required to compensate an employee for every week they are restrained an amount of at least half of the employee's average weekly earnings;

  3. No restraint could be imposed for longer than 6 months, regardless of an employee's seniority.

The aim of the Bill is to limit the number of low-medium income employees being restrained, and recognises that many unreasonable restraints are unchallenged due to the cost and expense of doing so.   If introduced, the Bill would provide greater certainty regarding enforceability of restraints from the outset of employment, and likely reduce litigation in this space.  However, it will significantly limit the ability for employers to negotiate longer restraints where there is a genuine need to protect their proprietary interests for periods in excess of 6 months.    

Privacy Act 2020

Government is considering amendments to the Privacy Act 2020 regarding notification requirements on agencies obtaining personal information through third parties.  Currently, an agency who is exempted from collecting personal information directly from an individual has no obligation to notify that individual when information is obtained from third parties.  Cabinet's indication of a legislative shift in this area is partly prompted by concerns raised by the European Commission as part of its review of New Zealand's privacy laws.

The Ministry of Justice has suggested 4 ways to broaden the notification requirement:

  1. Amending Information Policy Principle (IPP) 3 so that agencies collecting information from third parties must notify the individual;
  2. Narrowing the exceptions to IPP 2 which allow agencies to collect information from third parties;

  3. Amending IPP 11 to require the third party agency to notify the individual who's information is being disclosed; and

  4. Introducing a new IPP to address notification requirements of indirect collection of information.

The Ministry of Justice considers the changes would ensure New Zealand keeps up to date with privacy laws and best practices in overseas jurisdictions, supporting international trade and the cross-border flow of personal information as a basis for digital trade.   

However, expanding the notification obligation under IPP 3 would not provide individuals with any meaningful additional control over their personal information, and the extension of IPP 3 to cover indirect collections is likely to present a further administrative burden for New Zealand businesses.

Feedback on the suggested changes closed on 30 September 2022.  Due to the high importance of maintaining adequacy status in the eyes of the European Commission, it is likely a Bill will shortly follow.  

Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill

A Bill to extend the time for raising a personal grievance for sexual harassment has passed its first reading and is in the later stage of the select committee process.  

The genesis of the Bill is that raising claims sexual harassment can be difficult, and it is common for victims to wait a long time before coming forward, if at all, to raise their concerns.  For a person who has been the subject of sexual harassment, the current 90 day period for raising a personal grievance may not be enough, making it less likely victims of sexual harassment can formally raise concerns.

The Bill’s intent is to improve the personal grievance process for victims of workplace sexual harassment by allowing them sufficient time to consider what has happened to them before deciding to come forward.  It would cover any personal grievance that “involves allegations of sexual harassment”. 

If implemented, this would assist victims of sexual harassment pursue claims, but would potentially add uncertainty to employers as to whether a personal grievance claim may be raised, particularly after the ending of employment.  Confusion may also arise where a personal grievance claim involves allegations of sexual harassment in addition to other matters that would still be captured by the existing 90 day period.

The vast majority of submissions during the select committee process supported the extension of time with some suggesting a period of 2 years or more.   Support for this Bill is therefore self-evident even at its early stages, indicating that it is likely to be passed into law.  

Worker Protection (Migrant and Other Employees) Bill

Introduced on the 29 September 2022, the Worker Protection (Migrant and Other Employees) Bill proposes 5 measures to enable immigration officers and labour inspectors to catch exploitative practices before they become significant offences.  These changes lower the threshold for breaches Immigration NZ and the Labour Inspectorate will actively prosecute, with any employer found in breach able to be 'named and shamed'.  Alongside the recent focus on modern slavery, these amendments signal a shift in focus to preventing worker exploitation and raising the profile of breaches. 

The proposed amendments include:

  1. Amending the Immigration Act 2009 to allow immigration officers to request employers of migrant workers to provide documents in addition to basic requirements such as wage and time records.  Information on any breach can then be shared with other relevant government bodies;

  2. Amending the Employment Relations Act 2000 to limit the time in which an employer must provide documents to 10 working days.  Failing to comply will allow both labour inspectors and immigration officers to issue infringement notices;

  3. Introducing three lower level offences under the Immigration Act 2009 allowing an employer to be charged with:
    a. Allowing a person who is not legally entitled to work in the employer’s service; 
    b. Failure to employ a person in accordance with a work-related condition of that person’s visa; and
    c. Failure to provide documents requested by an immigration officer.

  4. Extending the list of employers prohibited from supporting temporary and residence visa application to include employers convicted of any offence or issued an infringement notice;

  5. Amending the Companies Act 1993 so that employers convicted of exploitation or people trafficking cannot be directors, promoters or managers of any company.  

Organisations who employ many part-time and shift staff, especially in the retail, hospitality, cleaning, and construction industries can expect higher scrutiny from regulatory bodies. 
The Bill has had its first reading and is due to be considered by Select Committee.

Screen Industry Workers Bill

The Screen Industry Workers Bill has passed its third reading on 29 September 2022 and is awaiting royal assent.  

The Bill proposes a new model, developed by industry and supported by Government, to allow screen industry contractors to bargain collectively.  This appears to be the inevitable pendulum swing in response to the 2010 'Hobbit law' that declared film production workers independent contractors.  

The Government wants to restore screen production workers’ right to bargain collectively, while allowing them to continue working as contractors.

Whether someone meets the Bill’s definition of a “screen production worker” will depend on what productions they work on and the type of work they do.  Productions covered by the Bill are films, programmes, commercials and games. Programmes not covered include news, sports, and those for training and instructional purposes.

The Bill will not cover staff providing support services, such as legal, accounting, marketing or management services that make a peripheral contribution to the creation of a screen production. 

The Bill allows collective bargaining to take place at two levels (i) across entire occupational groups; or (ii) within a single production/company.  The Bill also allows enterprise-level collective bargaining, which takes place within a single production or company. Enterprise-level collective contracts can’t go below the minimum terms set in any applicable occupation-level collective contract.

Horizon Gazing 

In addition to the above, we anticipate yet further developments in the employment law landscape.  

The ADLS Employment Law committee has recently written to Workplace Relations and Safety Minister Michael Wood asking for independent employment advocates to be banned from appearing in the Employment Court.  The committee cited cases of unfair fee arrangements, intimidation, and poor conduct.  However as with all legal proceedings, access to justice remains a vexed issue which is likely the reason the call for a ban is not extended to the Employment Relations Authority.  The Minister has yet to comment, but we may potentially see some form of restriction or regulation on employment advocates at some point in the future. 

In light of the National Party's indication that they will scrap Fair Pay Agreements, it logically follows it will take a similarly unsympathetic approach to many of the Bills discussed above should there be a change in government in 2023.  They are all the more likely to do so as the economic impacts of Covid-19, both in New Zealand and internationally, signal a downturn.  

In the meantime, with legislative developments kicking into high-gear towards the end of the year and into the next, it is important that organisations are aware of which changes may impact them and keep on top of their obligations as they are introduced.  

For any questions you have on upcoming legislation or assistance you need, please reach out to one of the authors listed below.