TOPICAL EMPLOYMENT LAW AMENDMENTS, UPDATES AND PROPOSALS
(Kristina Andersen's paper presented at the Lexis Nexis Employment Law Conference 2009)
Immigration Temporary Work Permit Policy – Essential Skills Policy
The purpose of the new policy is to protect lower skilled workers already in New Zealand and to encourage the recruitment of highly skilled overseas workers. The new essential skills policy replaced the previous general work policy in July 2008.
Skill levels are determined in accordance with the Australia New Zealand Standard Classification of Occupations (ANZSCO). Skill level one occupations (generally skills at the level of at least a Bachelor’s degree) are the highest skilled and skill level five occupations (generally skills at the level of a compulsory secondary education) are the lowest skilled. The ANZSCO can be viewed at www.immigration.govt.nz/anzsco
As a result of the change in policy, different procedures apply to work permit applications by lower skilled workers compared to higher skilled workers, however, many of the aspects of the general work policy have been carried over to the new essential skills policy, for example:
The requirement that there must be no New Zealand workers available before an employer is allowed to recruit an overseas worker. If an occupation is included in the Long Term Skill Shortage List or the Immediate Skill Shortage List, Immigration New Zealand will accept that there is a demonstrated shortage of New Zealand workers, otherwise the employer needs to demonstrate failed genuine attempts to recruit a New Zealand worker.
The requirement that the terms and conditions of the employment, including the pay, meet those of the New Zealand market.
Highly skilled overseas workers applying for a visa or permit on the basis of an offer of employment for a skill level one occupation can now apply for a five year permit, provided their base salary will be above $55,000.
What can be done to make the application process smoother? In the case of overseas workers at level four or five on ANZSCO, Immigration New Zealand will investigate, via Work and Income New Zealand, whether there are unemployed New Zealanders available to take up the work (unless WINZ has informed Immigration New Zealand of a relevant regional labour shortage).
In order to avoid time delays with seeking to employ lower skilled workers, employers could consider initiating direct contact with WINZ to try to fill such vacancies. If they cannot be filled this should shorten the process with Immigration New Zealand. Providing the ANZSCO code in an application to Immigration New Zealand may also assist.
Applicants should also ensure that relevant documents are provided at the time of application, including: the employment agreement, job description, evidence of recruitment efforts made, curriculum vitae for the applicant employee, police checks and medical certificates.
Holidays (Transfer of Public Holidays) Amendment Act 2008
Previously section 44(2) of the Holidays Act had provided that:
However, an employer and employee may agree (whether in an employment agreement or otherwise) that any public holiday specified in subsection (1) is to be observed by the employee on another day.
In NZALPA IUOW Inc v Air NZ Ltd [2007] NZSC 89; [2007] 1 ERNZ 884; [2008] 2 NZLR 1 (SC), the Supreme Court determined that s 44(2) Holidays Act 2003 did not entitle an employer and employee to redefine the public holidays listed in s 44(1) and attach the status of a public holiday to another day. A public holiday could not be transferred from a specified public holiday to another day by agreement. The decision caused serious issues with some employment agreements and undermined flexibility. Not being able to transfer public holidays posed particular difficulties for shift workers and their employers.
The Holidays (Transfer of Public Holidays) Amendment Act 2008 inserted a new section 44A into the Holidays Act.
[44ATransfer of public holiday
(1)This section applies if—
(a)an employee is to start work on a day and finish work on the following day; and
(b)1 or both of those days are specified in section 44(1).
(2)The employee and his or her employer may agree in writing (whether in an employment agreement or otherwise)—
(a)that part of 1 or both days specified in section 44(1) is to be treated as not part of a public holiday; and
(b)that,—
(i)if the agreement relates to only 1 day specified in section 44(1), a period of 24 hours is to be treated as a public holiday if the period—
(A)is to start or finish during the day specified in section 44(1); and
(B)includes the period from when the employee is to start work to when the employee is to finish work:
(ii)if the agreement relates to 2 days specified in section 44(1), 2 separate periods of 24 hours are to be treated as public holidays if each period—
(A)is to start or finish during the days specified in section 44(1); and
(B)includes the period from when the employee is to start work to when the employee is to finish work.
(3)To avoid doubt, a period of 24 hours agreed under this section to be treated as a public holiday is a public holiday whether or not the employee works during that period.
(4)An agreement under subsection (2) must not diminish the total number of paid public holidays that would otherwise be available to the employee in any year
Example
An employee is to work from 10 pm on 24 April to 6 am on Anzac Day and from 10 pm on Anzac Day to 6 am on 26 April.
The employer and employee can agree to treat 10 pm to midnight on Anzac Day as not part of a public holiday in exchange for treating a period of 24 hours that finishes on Anzac Day as a public holiday. Just when the 24-hour period starts before or finishes after a work period is a matter for the parties to agree on. For instance, they could agree that it runs from midday on 24 April to midday on Anzac Day."
The new provision affects the transfer of public holidays for employees whose work shift crosses midnight. It gives employers and employees better flexibility around night shifts as it provides that if an employee’s shift spans two calendar days, and one of those days is a public holiday, an employer and employee can enter into an agreement to transfer the public holiday to a 24 hour period that begins or ends on the public holiday, if the employee is due to work a shift in that 24 hour period. Similar provisions apply in cases where an employee’s shift spans two public holidays (for example an employee who starts work on Christmas Day and finishes on Boxing Day).
Agreements concerning public holidays need to be in writing. Agreements to transfer public holidays cannot lead to an employee receiving a reduction in the number of paid public holidays. This is ensured by an employee receiving time and a half for working during a public holiday and an additional day off, or an entire shift off on the agreed public holiday.
Code of Employment Practice for Casual and Non Standard Employment
Non standard employment can encompass part time, contracting, temporary or casual work. Work of such a nature often suits the employee as it may, for example, allow the employee to fit their work around family obligations that would not be an easy fit with permanent full time employment. On the other hand, research indicates that employees engaged in non standard employment are more likely to be from marginalised groups. They may enjoy fewer employment benefits and protections than workers in standard employment and there may be ignorance of their legal rights. The potential vulnerability of casual and non standard employees lay behind the wish of the previous government to seek to strengthen the position of such workers. In addition, because of the flexibility inherent in much non standard work the nature of the employment relationship could change unclearly over time.
The proposed new section 65AAB to the Employment Relations Act 2000 is as follows:
"65AAB Power to determine certain terms and conditions of employment
"(1) This section applies if an employee and employer cannot agree about 1 or more of the following:
"(a) whether or not the employee is employed for a fixed term:
"(b) whether or not the times the employee is to work are fixed:
"(c) if the employee's times of work are fixed, what the times of work are.
"(2) A Labour Inspector or the Authority may, if requested by the employee or the employer, determine 1 or more of the matters specified in subsection (1).
"(3) In making a determination, a Labour Inspector or the Authority must have regard to the following matters:
"(a) any written agreement containing, in whole or in part, the employee's terms and conditions of employment; and
"(b) whether, for the purposes of subsection (1)(a), section 66 has been complied with; and
"(c) the employee's patterns of work; and
"(d) whether the employee works for the employer only when work is available;
and
"(e) the employer's work rosters or any other method of allocating work; and
"(f) the employer's expectations as to whether the employee, when requested, will be available for work; and
"(g) any other relevant factors.
"(4) In making a determination, the Labour Inspector or the Authority must comply with the principles of natural justice.
"(5) For the purposes of subsection (3), a Labour Inspector or the Authority is not to treat as a determining matter any written agreement containing, in whole or in part, the employee's terms and conditions of employment.
"(6) A determination by a Labour Inspector or the Authority under this section—
"(a) is binding on the employee and employer; and
"(b) is to be treated as a term or condition of the employee's terms and conditions of employment and therefore may be varied by subsequent agreement between the employee and employer; but
"(c) in the case of a determination by a Labour Inspector, is subject to any determination of the Authority.
Under the proposed legislative change, employees and employers would more easily be able to clarify their relationship using a test developed by the Employment Court. The Bill also provides that where an employer and employee are unable to come to a common understanding of the nature of the employee’s employment (for example: whether or not the employee is employed on a fixed term agreement, or whether or not the employee's times of work are fixed (and if so, what they are)), then either party may request a Labour Inspector or the Employment Relations Authority to determine these matters for them. The Labour Inspector's or Authority's determination will provide certainty for the parties about what the terms and conditions of a casual employee's employment actually are.
It is also proposed that the rights of employees in a triangular employment relationship would be strengthened so that unionised employees whose employer contracts to a controlling third party would receive terms and conditions at least as favourable as those enjoyed by unionised workers employed directly by the third party.
The Bill also seeks to expand the areas in which codes of practice can be issued.
KiwiSaver – Total Remuneration approach to Compulsory Employer Contributions
The area of total remuneration has been subject to several, often sudden changes. The National government’s KiwiSaver reforms were passed in December 2008 and they reintroduce a total remuneration approach similar to that in force previously. Section 101B of the KiwiSaver Act 2006 now provides as follows:
101B Compulsory contributions must be paid on top of gross salary or wages except to extent that parties otherwise agree after 13 December 2007
(1)The purpose of this section is to ensure that, for contractual arrangements of parties to an employment relationship (as defined in section 4(2) of the Employment Relations Act 2000), compulsory contributions are paid in addition to an employee's gross salary or wages described in section 101D(3).
(2)The contractual arrangements of parties to an employment relationship must not have the effect of defeating the purpose of this section described in subsection (1).
(3)A contractual term or condition has no effect to the extent to which it is contrary to the purpose of this section described in subsection (1).
[[(4)However, on and after 13 December 2007, parties to an employment relationship are free to agree contractual terms and conditions that disregard the purpose of this section described in subsection (1), and, to the extent of such agreement, subsections (1) to (3) do not apply, unless, in respect of the employer and employee,—
(a)section 60(1)(a), (b) or (c) first applies on or after the day of assent for the Taxation (Urgent Measures and Annual Rates) Act 2008; and
(b)the contractual terms and conditions do not account for the amount of compulsory contributions the employer is required to pay.]]
[[(4A)In the circumstances described in subsection (4)(a) and (b), despite subsection (4),—
(a)compulsory contributions must be paid in addition to an employee's gross salary or wages described in section 101D(3), in accordance with the purpose of this section described in subsection (1); and
(b)subsections (2) and (3) apply.]]
[[(5)For the avoidance of doubt,—
(a)the duty of good faith described in section 4 of the Employment Relations Act 2000 always applies when parties to an employment relationship bargain for terms and conditions relating to compulsory contributions and associated matters; and
(b)Repealed.]]
(6)In this section, compulsory contributions means an amount of employer contributions equal to the amount of compulsory employer contributions that would be required by this subpart in the absence of section 101D(5)(a).
The total remuneration approach means that a fixed remuneration amount can apply to an employee and any KiwiSaver contribution (including the employer’s contribution) would come out of the amount that the employee would otherwise have been paid. KiwiSaver contributions do not have to be paid over and above salary or wages. KiwiSaver and non KiwiSaver contributors are treated the same. This approach gives employers certainty regarding remuneration costs, and allows non-KiwiSaver members to take what would have been their KiwiSaver employer contribution as cash.
Total remuneration gives employers certainty in remuneration costs. Non KiwiSaver employees may also be better off as they should receive the maximum remuneration relevant for their position. Total remuneration gives greater flexibility to both parties, however, it may allow pressure to be placed on more vulnerable employees in regard to not joining KiwiSaver and it provides a disincentive to joining.
Employers should check that any total remuneration clauses comply with the new provisions. For example total remuneration agreements entered into before 13 December 2007 may be invalid. New agreements should be entered into in such a case. In addition, any total remuneration agreements must "account for the amount of compulsory contributions required". Quite what this means is uncertain. It would be safest for the total remuneration clause to express that the employee’s remuneration is inclusive of the employer’s compulsory KiwiSaver contribution and to state the amount of the employer contribution.
Please feel free to contact us on (09) 5235284 or info@worklaw.co.nz with any questions.
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