New bills address withholding of wages, time to file sexual harassment grievance
Struggling to keep up with the breakneck speed of recent employment legislation news? In this article, we provide a round-up of legislation and regulatory updates for New Zealand employers, including analysis and insight on how they may affect your business.
New Theft by Employer Bill
Ibrahim Omer MP’s Member Bill, The Crimes (Theft by Employer) Amendment Bill, proposes to amend the Crimes Act 1961 to clarify that not paying an employee their wages is theft and creates a new offence to capture employers who owe wages and intentionally do not pay them to employees. This new offence intends to capture the unlawful withholding of wages, salaries, and other monetary entitlements within an employment relationship.
The explanatory note says that current processes are too complex and will provide clear direction to employees that they have the right to be paid what they are due.
The Bill provides that upon conviction, for an individual, the maximum penalty is one year’s imprisonment, a fine of $5,000, or both. For a legal entity, the maximum penalty is a fine of $30,000.
A bill seeking to criminalise wage theft in New Zealand was introduced at the House of Representatives.
Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill
The Education and Workforce Committee’s Report on the Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill was presented to the House on 1 November 2022 with the unanimous recommendation that it be passed.
If passed, the Bill will extend the time available to raise a personal grievance of sexual harassment from 90 days to 12 months. It aims to improve the personal grievance process for victims of sexual harassment by allowing them more time to consider what has happened to them before deciding whether to raise a personal grievance.
All employment agreements must include an explanation of the services available to resolve employment relationship problems, including a reference to the period of 90 days within which a personal grievance must be raised. If passed, the Bill will require employment agreements to provide a specific reference to the 12-month period for raising personal grievances relating to sexual harassment – and employers should ensure new employment agreements provide the new time frames.
New Holidays Act delayed
Employers have been waiting with bated breath to see the new Holidays Act Bill after the Government accepted all of the Holidays Act Taskforce’s 22 recommendations on suggested improvements to the Holidays Act.
The Government had hoped to introduce legislation to implement the recommended changes to the Holidays Act in mid-2023.
However, MBIE has announced that it will not happen before the election. Minister of Workplace Relations and Safety Michael Wood said because the draft Bill is “highly technical and complex” with wide-reaching implications on the economy, the Government wishes to ensure there will be a full and robust select committee process which is not possible in this Parliamentary term.
The Human Rights Commission failed to adequately address sexual harassment claims, according to a 2018 government report.
Public consultation on the legal definition of a contractor shelved
In recent months, the Government has been considering how workers it has called “vulnerable contractors” can be better protected by the law; this included the possibility of a new test to determine who is a contractor and who is an employee.
However, Prime Minister Chris Hipkins has now deferred public consultation on a new test to determine who is a contractor and who is an employee. Hipkins said that the “recent [Uber] Employment Court ruling has significant implications on the legal definition of a contractor, so rather than pushing ahead with our proposed consultation on changes we will put our work on hold until all appeals of the case are heard.”
As a reminder, late last year the Employment Court held that four drivers (a mix of Uber and Uber Eats drivers) were in fact employees under section 6 of the Employment Relations Act 2000. Uber confirmed in January that it has sought leave to appeal to the Court of Appeal.
We look forward to the possibility of having appellate guidance in this area.
HR’s biggest challenge is compliance with legislation, according to a global survey.
Rapid fire
The Employment Relations (Restraint of Trade) Amendment Bill is still awaiting its first reading. The Bill aims to prohibit the use of restraint of trade clauses in employment agreements for lower income employees. It will also require an employer to pay the employee during the restraint period.
Committee’s Report on the Worker Protection (Migrant and Other Employees) Bill was presented to the House on 20 March 2023 with the unanimous recommendation it be passed. The omnibus Bill will amend the Immigration Act 2009, the Employment Relations Act 2000, and the Companies Act 1993 to improve compliance by expanding the powers of the Labour Inspectorate and Immigration New Zealand and supporting greater collaboration between the two regulators to deter employers from exploiting migrant workers.
The Health and Safety at Work (Health and Safety Representatives and Committees) Amendment Bill is currently with the Education and Workforce Committee with their Report due on 22 May 2023. The Bill seeks to enhance worker access to formal worker engagement and representation mechanisms by removing current thresholds that limit worker access to health and safety representatives and health and safety committees for smaller PCBUs.
Cabinet has decided to keep the few remaining Covid-19 restrictions for at least the next two months. This means people still must self-isolate for seven days if they test positive for Covid-19. As we head into winter months, it is likely that we will see increased infection numbers which will put pressure on workflow and staffing levels within workplaces.
Lastly, on 1 April 2023, there were increases to the minimum wage. The new minimum hourly rates of pay are $22.70 per hour for adult workers – up from $21.20 per hour; and $18.16 per hour for starting-out workers and trainees – up from $16.96 per hour.
Alison Maelzer is a partner and Matthew Morrissey is a solicitor, both practicing employment law at Hesketh Henry in Auckland.
