Changes to the ERA: what employers need to know

Wednesday 20 March 2019

Authors: Liz Coats and Courtenay Mercier

​​​​On 6 May 2019, a number of changes to the Employment Relations Act 2000 (ERA) come into force.

With less than two months to go, we have set out below the changes which are likely to have the most immediate practical impact for employers, and explain what you should do to prepare for them.

Trial period provisions

Trial period provisions for new employees will only be available for employers with fewer than 20 employees. Larger employers will therefore need to ensure that their template agreements do not include trial period provisions from 6 May onwards.

Additionally, larger employers may want to include probationary period clauses in their employment agreements instead of trial period provisions. Probationary period clauses continue to be available to all employers. However, an employee who is dismissed during a probationary period is still entitled to bring the full range of dismissal proceedings. This means that termination during a probationary period must still be justifiable (i.e. for good cause and carried out in a fair manner), and therefore provides less protection for employers than trial period provisions.

Rest and meal breaks

The flexible break requirements currently provided for in the ERA will be removed.

Instead, the ERA will prescribe each employee's entitlement to rest and meal breaks depending on how many hours the employee works on a given day. Rest breaks are paid and of 10 minutes' duration, and meal breaks are paid or unpaid and of 30 minutes' duration. There will be only limited exceptions to these requirements for employers engaged in national security matters and "essential services".

The new rest and meal breaks regime does not need to be set out in employment agreements. However, employers and employees can agree on the timing of an employee's prescribed rest and meal breaks (which may be within or outside the employment agreement). Any agreement that provides employees with less than their entitlements under the new regime will be unenforceable.

Penalties may apply for breaching these new provisions, and there is risk of a personal grievance for unjustified disadvantage if employees can show that they did not receive their rest and meal break entitlements. Therefore, employers should also determine how they will show that employees have been provided with the opportunity to take breaks in accordance with the ERA requirements.

30-day rule reinstated

The "30-day rule" will apply again from 6 May.

This means that for the first 30 days of employment, the individual employment agreement of a new employee who is not a union member but whose work is covered by a collective agreement must be on the same terms and conditions as the collective agreement. Additional terms and conditions may be negotiated in an individual employment agreement so long as they are no less favourable than the collective agreement.

The practical impact of this rule is that employers will be unable to offer something different from (or less favourable than) the collective agreement when one would cover the employee's work if they joined the relevant union. Employers will also need to ensure that they have the relevant precedent offer letters and employment agreements in place in anticipation of the 30-day rule being reinstated.

Information sharing requirements (unions and new employees)

Employers will be subject to new information sharing obligations in respect of new employees and unions concerning employees who are covered by the 30-day rule. In short, this will require an additional level of "paperwork" for these employees, and employers should adapt their on-boarding processes accordingly.

Information about the new employee to be shared with the union

Within 10 days of commencing employment, the employer must provide a new employee with an MBIE-approved active choice form, which provides information about whether the employee intends to join a union. Unless the employee objects, this form must be returned within the first 30 days of employment, after which it is to be provided to the union within 10 days. Penalties will apply for breaches of these provisions. MBIE has not yet released an approved active choice form, but we will notify our clients when this form becomes available.

Information about the union to be shared with the new employee

The employer must also provide information about the union to the new employee in a form the union has supplied, so long as that information is not confidential or something that would mislead/deceive the new employee or significantly undermine bargaining.​

Bell Gully's employment team is supporting a number of clients with the transition to the new requirements under these amendments. If you have any questions or concerns about how the amendments may impact on your workplace or processes, please get in touch with the authors or your usual Bell Gully advisor.​


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Liz Coats

    Partner Auckland
  • Tim Clarke

    Partner Auckland
  • Rachael Brown

    Partner Wellington
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