The first new legislation to be passed by the new Parliament was the Employment Relations Amendment Act. These amendments will take effect from 6 March 2015 and we will discuss the first three changes in this newsletter and the remaining three in the December newsletter.
It is important to first note the aims of the new legislation:
- create and uphold an employment relations framework that increases flexibility and choice
- ensure a balance of fairness between employees and employers
- reduce regulation where needed and decrease compliance costs, in particular for small and medium-sized enterprises (SMEs)
- ensure that businesses that value employee rights can continue to grow.
The three main changes in the new legislation that will be discussed are flexible working arrangements, rest and meal break rules and Continuity of employment – Part 6A of the Employment Relations Act 2000
Flexible work
The changes to flexible working arrangements aim to improve people’s participation in the labour market and to better reflect modern lifestyles. Flexible working arrangements help employees find the right work-life balance for them and their employer. The key changes are:
- extending the statutory right that caregivers currently have, to request flexible working arrangements, to all employees
- removing the requirement of six months’ prior employment with the employer, so employees can ask for flexibility from their first day on the job
- removing the limit on the number of requests an employee can make in a year stops people contracting out of legal rest and meal breaks or the requirement to give compensation instead of breaks
- reducing the timeframe within which an employer must respond to a request from 3 months to 1 (and requiring that the response be made in writing and include an explanation of any refusal).
The current flexible work arrangement came into effect in 2010 and we at Employers Assistance only very rarely have had to deal with any request or question regarding flexible work hours. As stated above this arrangement is currently only available to caregivers and the amended legislation is allowing all employees the opportunity to apply for flexible working arrangements. We will have to wait and see if it will be used in any way by the broader work force.
Rest and meal breaks
The amendments make the rest and meal break rules in the Employment Relations Act (the ER Act) more flexible. The Act aims to balance the importance of rest and meal breaks with business continuity needs. The Act determines that employees are entitled to reasonable rest and meal breaks to rest, eat, drink and take care of personal matters. The Act also enables employers and employees to negotiate, in good faith, rest and meal breaks that meet legal requirements and allow the business to work.
The Act:
- allows reasonable limits to be agreed or imposed as to when rest breaks and meal breaks can be taken
- gives employers the ability to say when breaks will be taken, if they cannot agree with employees
- gives employees the right to be reasonably compensated where the employer cannot reasonably give the employee rest and meal breaks
- requires employers to pay employees for rest breaks
- stops people contracting out of legal rest and meal breaks or the requirement to give
- does not overrule any other law that makes an employee take rest and meal breaks in a certain way.
This amendment was overdue and the current system of time specific rest and meal breaks are outdated in many organisations and business sectors. Regular and set times for these breaks still have a place in production and manufacturing environments. Our experience is that many sectors of today’s workforce are mature and responsible enough to decide and manage their rest and meal breaks without direct supervision.
If employers would like to introduce changes on and when rest and meal breaks are taken we suggest that you first discuss these plans with us in order to approach and implement these changes correctly and with the minimum of risk. Please do not implement any changes unilaterally.
Continuity of employment – Part 6A of the Employment Relations Act
The ERA defines some employees as "vulnerable employees". These employees attract special protections in the case of restructuring if their work is to be contracted out by their employer or their part of the business is to be sold. They may elect to transfer their employment to the organisation where the work has been transferred. In 2012, the Government completed a review of the continuity of employment provisions (Part 6A) in the ER Act. The review found that businesses found it difficult to put the law into practice. The problems came from transferring employees’ entitlements and information to a new employer. The Act aims to fix these issues. The Act will give more certainty and clarity to employers while keeping key benefits for affected employees. The main changes include:
- Employers with fewer than 20 employees are exempt from the ‘vulnerable employee’ provisions in Part 6A, provided they give a warranty about the number of people they employ
- setting timeframes during the election process including a timeframe for employees to choose to move to a new employer (elect to transfer)
- requiring that the old employer gives the new employer detailed information on each employee that is transferring
- introducing a mechanism for apportioning liabilities for service-related entitlements between employers where the parties are unable to agree between themselves
- giving the new employer protection from unjustified increases in employee costs or changes to terms and conditions of employment
The current legislation is mainly focused on the employers engaging the following category of employees and this will remain the same:
- cleaning services, food catering services, caretaking or laundry services for the education, aged-care and health sectors
- orderly services in the aged-care sector
- cleaning services or food catering services in the public service or local government sector
- cleaning services or food catering services in relation to any airport facility or for the aviation sector, and
- cleaning services or food catering services in relation to any other place of work.
Next month we will discuss the following three changes to the Employment Relations Act
- the collective bargaining framework (including strikes and lockouts)
- the duty of good faith
- provisions for the Employment Relations Authority (the Authority)