New Zealand Law Society - Employment Standards Legislation Bill gets go-ahead

Employment Standards Legislation Bill gets go-ahead

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Parliament's Transport and Industrial Relations Committee has released its report on the Employment Standards Legislation Bill, with a majority recommendation that it be passed with amendments.

The omnibus bill amends various pieces of legislation affecting employment relations and employment standards. Its focus is on three distinct policy areas:

  • expanding eligibility for the parental leave scheme;
  • enhancing the enforcement of employment standards; and
  • prohibiting certain unfair employment practices that lead employees to bear disproportionate obligations compared to their employer.

The committee says it received 12,260 submissions on the bill, with 10,339 of these being form submissions. It says submitters particularly focused on how the bill's provisions would affect the legality of "zero-hour contracts".

"Although most submitters strongly supported the policy goal of prohibiting such employment practices, many questioned whether the bill as drafted could achieve this goal. Some were concerned that the bill may inadvertently legitimise these relationships by enshrining them in legislation."

The committee recommends several changes to clause 87, which covers the zero-hour provisions. These include rewording to emphasise the policy intent that any agreement on hours of work must be stated in the employment agreement. A new subsection would also set out what "hours of work" means.

An amendment to the proposed new section 67E of the Act would require genuine reasons, based on reasonable grounds, for including an availability provision in an employment agreement.

"We recommend inserting a non-exhaustive list of criteria for determining whether there are genuine reasons based on reasonable ground... We believe this change would dissuade employers from resorting to availability provisions rather than adequately planning for unpredictable workflows. We also note that this test accords with the test required for using fixed-term agreements."

The committee says the bill should also provide more guidance on how much employees should be compensated for their availability.

The Labour Party, Green Party and New Zealand First Party members of the committee did not support the bill.

The bill was introduced on 13 August 2015 and referred to the committee on 8 September 2015 with submissions closing on 6 October 2015. The commmittee heard from 53 submitters in person.

The New Zealand Law Society's submission found a lack of clarity in the provisions on zero-hour contracts. The submission also recommended amending the bill to provide for minimum criminal procedure standards, rather than the civil standard, to apply to the pecuniary penalty and banning order provisions in the bill. The report on the bill retains the civil standard.