Employment law changes - what you need to know

POSTED BY Duncan Coats
09 May 2016

posted in Business | Legislation | Employment



April 2016 saw the introduction of a number of key changes in employment law. The zero-hours, shift cancellation and secondary employment changes mentioned below apply to new recruits employed by a business on or after 1 April 2016. For existing employees (i.e. those employed on or before 31 March 2016) businesses will have until 1 April 2017 to make any required changes to their employment contracts.

You should review your current policies, procedures and contracts to check whether they comply with the new laws. We can help you with that if required.

Zero-hours contracts

With effect from 1 April 2016, zero hours contracts have effectively been banned for new recruits. If an employee’s work depends on an employer making work available to an employee (i.e. there is no obligation on an employer to provide work) and the employer requires that employees to be available to accept work (an availability provision), employers now have to provide some guaranteed hours to employees. In addition, employees are entitled to reasonable compensation for making themselves available for work under an availability provision.

Furthermore, if the employee’s employment contract does not provide for payment of reasonable compensation, then they are able to refuse to perform work over and above their guaranteed hours. Employers must not treat any employees failing within this category to any adverse treatment.

Shift cancellations

The rules on cancelling shifts have been tightened under new legislation. An employer can only cancel a shift if a shift-worker’s employment agreement specifies:
  • a reasonable period of notice for the cancellation; and
  • that reasonable compensation will be paid to that employee if an employer cancels a shift without giving the required reasonable notice.

Failing to comply with the new requirements could also lead to an employee being entitled to be paid what they would have earned for working that shift (for example if they are sent home early after commencing a shift).

Secondary employment

Employers will not be able to prohibit an employee from taking a second job unless:
  • they can justify doing so (e.g. the prohibition is required to protect confidential information or intellectual property or prevent an otherwise unmanageable conflict of interest, etc.); and
  • that justification is set out in an employee’s employment agreement.

Deductions from wages

Under existing law, deductions from an employee’s wages can only be made if they are lawful (e.g. deducting tax) or if an employer has an employee’s written consent to do so. Employers will now need to consult with employees before making a deduction from wages. This will need to happen for each specific deduction (even if there is a general deduction from wages clause in their employment agreement). Employers are also prohibited from making unreasonable deductions.

Minimum wages

From 1 April 2016 the minimum wage rates are:
  • Adults: $15.25 per hour;
  • Starting-out (certain employees 16-19 years old): $12.20; and
  • Training (certain employees aged 20+): $12.20.

Record keeping

There is now a greater onus on employers to keep accurate and detailed records to demonstrate their compliance with minimum employment standards. A failure to do so could lead to an infringement notice which attracts an infringement fee (i.e. an on the spot fine) of $1,000 per offence (capped at $20,000 for offences committed during a three month period).

Tougher enforcement of minimum employment standards

Enforcement of matters such as minimum employment standards has also been bolstered under the new law. For example serious breaches of minimum employment standards (e.g. holiday entitlements, minimum wage, etc.) could lead to a penalty of up to $50,000 (if an individual) or the greater of $100,000 or three times the financial gain (if a company). This is a significant increase on the previous maximum penalties which were $10,000 and $20,000 respectively.

Employers could also find themselves “named and shamed” if an Employment Relations Authority or Court finds that they have breached minimum employment standards.

Individuals who have committed persistent breaches of employment standards, or are convicted of exploitation of migrant workers, could be banned from acting as an officer of an employer, employing or being generally involved in the recruitment of employees. In addition, persons other than an employer (e.g. directors, senior managers, etc.) may also be held accountable for breaches of employment standards if they are knowingly and intentionally involved in breaches of employment law. Such cases can proceed against individuals even if the employer ceases to exist.

Parental leave

From 1 April 2016, eligible employees are entitled to paid parental leave of 18 weeks (up from 16 weeks). In addition, a number of other key changes have been introduced which include:
  • A wider scope of person who can benefit from parental leave – now seasonal employees, casual employees and those who have recently changed jobs can fall within the parental leave entitlements.
  • The creation of “keeping in touch days”. This allows an employee to work for up to 40 hours during the 18 weeks of paid parental leave (without being deemed to have returned to work and therefore having their parental leave entitlements stopped).
  • Employees can now resign but continue to receive their parental leave payments.
  • Additional leave will be available in respect of preterm babies. Eligible employees will be entitled to receive additional weekly payments for each week the baby was born prior to the 37 week gestation period (up to a maximum of 13 weeks’ payment).

POSTED BY Duncan Coats
09 May 2016

posted in BusinessLegislationEmployment



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