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The 5 changes you must make to your New Zealand employment agreements as of April 1

Last updated: 2021-06-02 (originally published on 2017-03-17)   — by Alex

Keeping up to date with changes to employment laws ensures that you both you and your employees are protected by the law. Retaining employees is one of the biggest challenges faced by small businesses – helping your employees to understand their rights and being transparent about any changes to those rights, is an effective way to build trust and encourage a transparent work environment.

Significant changes have been made to employment laws in New Zealand, and all businesses must update their Individual Employment Agreements (IEAs) prior to 1st April 2017.

The 5 changes you must make to your NZ employment agreements before April 2017

Below, we outline a summary of the new changes and how to incorporate them into your IEAs so that your business stays compliant.

 

Zegal have updated their IEAs to reflect these changes. Log in to your Zegal account to create a new agreement for your employee and get compliant today!

Don’t already have employment agreements in place? Sign up to a Zegal account today and put IEAs in place for your employees to stay compliant.

1. Trial period

The most significant change to employment laws concerns the trial period in IEAs. The most common length of a trial period is 90 days. IEAs must now specify ‘90 days’ (or they can elect a shorter time period), but it must not state ‘up to 90 days).

Employers must ensure their IEAs state:

  • the trial period commencement date;
  • that the employee can be dismissed within the trial period;
  • the notice period of the trial period.

To protect yourself as an Employer, you must ensure that the employment agreement is signed before work commences – note that paid training or induction is considered employment. The reasonable time for an employee to receive a contract before commencement is in between 5 to 7 days.

For best practice employment procedures, you should think about implementing a 30, 60 and 88 day review of the employee’s performance. This will allow the you and employee to jointly evaluate the performance and for you to act in good faith if you decide to terminate the employment within the trial period.

In the case the employer has the intention to dismiss the employee during the notice period, then the employee must be paid off.

Additionally, the notice period has to be stated in the IEA, and it can vary between an employee in a in a trial period and those who are not.

Finally, employees can be dismissed during their trial period but in order for this to happen they must be noticed on day 89 at the latest.

2. Agreed hours of work

Every employee agreement must indicate the specific agreed hours of work. This can be stated either as: the number of hours, or the days per week that should be dedicated to the work.

The changes also mean that if employers expect their employees to be available when required, they are obliged to :

  • commit to working hours;
  • give reasonable compensation;
  • have a legitimate reason based on acceptable grounds.

In addition, contracts must specify the start and ending times.

3. Availablity provisions

When it comes to the availability provisions in your IEAs, the agreed hours of work must be reasonable in order to avoid any conflicts. In addition, any compensation for requested availability has to be fair and rational. Moreover, there has to be a genuine reason for the requirement.

4. Shift cancellation

Based on the new changes, you can now cancel a shift as long as you first:

  • give a reasonable notice for cancellation; and
  • reasonable compensation in case there are any late notices

When considering reasonable compensations in case of a shift cancellation you must:

  1. Figure out how much your employee would have earned during the shift; and
  2. the preparation costs for the shift

In addition, the employee is entitled to be paid if the shift has already started or if it is cut short.

5. Secondary employment

As an Employer, you may prohibit an employee from taking on a second job if the following requirements are met:

  • You have a genuine reason behind prohibiting or limiting the secondary employment; and
  • The reason is specified in detail in the individual employment agreement (i.e. restraint of trade, non-solicitation, etc.

Final thoughts

These changes will affect all businesses, so it is important that your agreements are updated to reflect the new laws. Having up-to-date agreements will help to protect your business and limit your liability. Keeping your employees informed of the changes to their rights and responsibilities will also help to create an environment of trust and compliance within your workforce.

 

Start managing your legal needs with Zegal today.

Zegal have updated their IEAs to reflect these changes. Log in to your Zegal account to create a new agreement for your employee and get compliant today!

Don’t already have employment agreements in place? Sign up to a Zegal account today and put IEAs in place for your employees to stay compliant.

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