Employers urged to be ready for 6 May changes

Thursday, May 2, 2019

Small business owners across New Zealand are being urged to make sure they’re ready for the next round of changes to the Employment Relations Act, which come into effect next week.

From 6 May, employers will have to comply with new provisions around rest and meal breaks, 90-day trials, vulnerable workers, union rights, collective bargaining and collective agreements.

The changes are set to have a big impact on small businesses and they need to be prepared, says Ashlea Maley, advice team leader from workplace relations consultancy Employsure.

“The Employment Relations Amendment Act ushered in significant changes to the national workplace relations system that affect every employer in the country,” Maley said. “It will be really difficult and risky to implement these changes retrospectively after 6 May. Our message to small business owners is to have the changes in place before the deadline.”

Perhaps the biggest change set to affect business owners will be the restriction of 90-day trials to businesses of 19 or fewer employees. 

“As of 6 May 2019, having a 90-day trial in an employment agreement will be restricted to businesses that employ fewer than 20 employees,” Maley said. “Since 2011 all employers had been able to put new staff on a 90-day trial, effectively allowing them to assess the new employee’s ability to perform the role, and – if things didn’t work out – dismiss them without risk of a personal grievance relating to the dismissal.

“For medium-sized businesses who employ 20 people or more, it will mean putting greater emphasis on the recruitment and management of new staff as the protection of the 90-day trial will be removed.”

Employers will also need to be aware of the introduction of set rest and meal breaks, with specific rules in terms of payment, length and timing.

“While it could be argued this adds a layer of complexity for business owners when employing and managing staff, it also adds greater certainty around an entitlement to reasonable breaks that had previously been a source of confusion,” Maley added. “This change means both employers and employees know exactly where they stand when agreeing to rest and meal breaks.”

With less than a week until the final changes are enforceable, Maley said employers needed to be vigilant about adopting the changes.

“The best thing small business owners can do is be aware of the changes, implement them into their business and get proper advice around any areas of confusion. Non-compliance could have serious consequences, so it’s best to be on the front foot.”