Employers - Do you know your stuff?

Because your staff probably do…

It is important for employers to keep up-to-date with changes to employment law, particularly when those changes involve such sensitive subjects as holidays, and pay rates. There are a raft of alterations to the Employment Relations Act and Holidays Act being implemented shortly (with the bulk of changes occurring on 1 April 2011). Are you ready for them?

Have you been involved in a personal grievance?

If so, you may be familiar with the "test of justifiability" the Employment Relations Authority use to ascertain if your actions were "what a fair and reasonable employer would have done…". From 1 April 2011, that test will become "what a fair and reasonable employer could have done…". Such a big difference for the change of only one word. The altered wording gives the employer a range of actions that "could" have been taken by a fair and reasonable employer, rather than the prescriptive one action that an employer "would" have taken.

The amended section 103A goes on to lay out the minimum requirements for employers when considering making a decision which could affect their employee’s position:

• Whether the concerns were raised with the employee before action was taken by the employer;
• Whether the employee was afforded reasonable opportunity to respond;
• Whether the employer genuinely considered the explanation.

The specific directions simply set out in legislation the approach that is currently taken.

The Authority will also consider the resources of the employer, and whether in light of those resources the employer carried out sufficient process. The amended section also directs the Authority not to find a dismissal or action unjustified because of minor procedural errors, where those errors do not result in unfairness.

What about the 90 day trial period?

From 1 April 2011, this trial period will be available to all employers, rather than just those with under 20 employees. However, if you are considering using this trial period, it is critical that you meet the stringent requirements. Any breach of those requirements will render the trial period ineffective, and if you have dismissed your employee under that period, you will have no protection from an unjustifiable dismissal claim.

The employee must not have previously been employed by you. Obviously this covers ex-employees. However the Stokes Valley Pharmacy case also illustrates that this covers an employee who has already commenced employment (even for just one day) when an employment agreement containing a trial period is given to the employee to sign.

Employers using a 90 day trial period MUST have an employment agreement containing the trial period provision, signed and returned to them in acceptance of the position, PRIOR to the employee commencing work.

Please contact us to discuss how best to make an offer of employment.

There are other alterations too, covering:

• union access to the workplace;
• the removal of reinstatement of a dismissed employee as the primary remedy for an unjustifiable dismissal;
• collective bargaining communications;
• and an increase in penalties for a breach of the Act to $10,000.00 for an individual and $20,000.00 for a company.

"My staff are interested in the Holidays Act amendments…"

From 1 April, employers and employees may agree to cash up the fourth week of the employee’s annual leave entitlements.

They may also transfer a public holiday to another day, by consent.

An "average daily pay" calculation will be made if an employee has irregular hours and/or pay and it is not possible to calculate "relevant daily pay" for the purposes of leave and public holidays.

An employer is also able to request a medical certificate after one days’ sickness, however, if they choose to do this, the employer must pay for the costs of the employee obtaining the certificate.

And finally, from 1 July…

All employers are required to keep a signed copy of the each staff members' employment agreement on file. Once again, we recommend that signed agreements are obtained as "acceptance" of the position and as part of the pre-employment discussions. This will remove any chance of an employee commencing work without a signed agreement.

If you have any queries on any of the finer points of the employment law changes, please don’t hesitate to email or call one of our employment law team.