Employment Standards Legislation Act 2015
New employment legislation came into force on 1 April 2016. The Employment Standards Legislation Act 2015 (the Act):
- Expanded the parental leave scheme
- Enhanced enforcement of employment standards
- Banned zero-hour contracts.
The Act amended the following legislation:
- Employment Relations Act 2000
- The Parental Leave and Employment Protection Act 1987
- Minimum Wage Act 1983
- Holidays Act 2003
- Wages Protection Act 1983
In order to achieve compliance, employers may want to rethink the policies and procedures they currently have in place. The new changes apply to employment agreements entered into after 1 April 2016. Pre-existing employment agreements will need to be updated within 12 months of the Act coming into force.
Expanded the parental leave scheme
The parental leave scheme was expanded in a number of ways:
a) Primary carers: The parental leave scheme now extends to individuals who take permanent primary responsibility for the care, development, and upbringing of a child who is under the age of 6 years. This means that if, for example, a child under the age of 6 goes to live with a relative who intends to permanently raise the child as their own, then that relative is entitled to parental leave.
b) Non-standard workers: casual, seasonal, temporary and fixed-term employees, workers with more than one employer and workers who have recently changed jobs are also entitled to paid parental leave (PPL).
a) 18 weeks: An employee is now entitled to 18 weeks (previously 16) of PPL.
b) Extension for premature births: PPL is extended by each week the child is born prematurely.
a) Non-continuous: employer and employee can agree that unpaid parental leave does not have to be taken in one continuous block.
b) Availability for paid work: employees can work up to a total of 40 hours during the 18 weeks paid leave without losing their entitlement to PPL.
Enhanced enforcement of employment standards
The Act is a move by the Government to crack down on rogue employers:
1. Obligation to record employees work-hours: Employers must record an employee’s work-hours by stating those hours on documents such as payslips or rosters.
2. Tougher sanctions: For example, the maximum fine for an individual’s breach of employment standard has increased from $10,000 to $50,000. Recidivist employers may also be publically named or banned as a manager.
3. Accountability of persons outside the employment relationship: a person who knowingly and intentionally assists an employer in breaching employment standards may be held responsible. Directors, senior managers, legal advisors and other corporate entities should be put on notice.
4. Labour inspector powers: labour inspectors have new information sharing powers and be able to request a range of documents from employers.
Banned zero-hour contracts
"Zero-hour contracts" are a controversial type of employment agreement where the employer does not guarantee hours of work, yet expects employees to be available as required. The Act specifically prohibits the use of such agreements, and introduces the following rules for when parties to an employment agreement agree to a set amount of hours:
1. Agreed contracted hours must be in writing: where parties to an employment agreement agree to a set amount of hours, the agreed contracted hours must be in writing. Note that in casual employment agreements there are rarely agreed contracted hours.
2. Employee’s right to refuse work above their contracted hours: The employer must recognise an employee’s right to refuse work above their contracted hours on a case-to-case basis without penalty.
3. Employee’s right to compensation for working above contracted hours: The employment agreement must specify compensation for when the employee is required to be available. Parties may agree that the total remuneration package for salaried employees includes compensation for being so available.
4. Employers cannot cancel an employee’s shift without reasonable notice or compensation: The amount of notice an employee must give depends on a number of factors such as the ability of the employer to control or foresee cancellations. Similarly the amount of compensation depends on factors such as the length of the notice period and the remuneration the employee usually receives for the shift.
5. Prohibition on unreasonable restrictions to secondary employment: Unless there is a genuine reason based on reasonable grounds, an employer can not prohibit an employee from seeking secondary employment. For instance, if an employee sought to also work for a competitor, that may be a sufficient reason for the employer to restrict this secondary employment.
6. Breach of the above prohibitions: An employee who has entered into a new employment agreement after 1 April 2016 may seek a remedy through the personal grievance process for breach of the above prohibitions. Employers with pre-existing employment agreements have 12 months from April to achieve compliance with the new rules.