Following on from last month's article: The Government has approved a package of measures to strengthen enforcement of employment standards.
These changes will be reflected in an Employment Standards Bill which will be introduced to Parliament this year (2015). The Bill will go through a normal select committee process including public submissions before it is passed into law.
Increased tools for labour inspectors
- Information sharing: There will be enhanced information sharing powers with other regulators such as Immigration New Zealand, the Companies Office and Inland Revenue to improve the ability of labour inspectors to identify and investigate alleged breaches.
- Information requests: Labour inspectors will be able to request any record or document from employers that they consider will help them determine whether a breach has occurred – for instance financial records or bank statements.
What protections will accompany the new information sharing powers for labour inspectors?
- All information shared (both business and personal) will continue to be subject to the protections of the Privacy Act. Memoranda of Understanding and Approved Information Sharing Agreements (AISAs) will outline the necessary checks and balances for how labour inspectors and other regulatory parties with whom they share information are required to handle both business and personal information.
- Only in very specific circumstances in which there is an Approved Information Sharing Agreement (AISA) between labour inspectors and another regulator, would the Privacy Act’s information sharing principles be modified or overridden to allow for specific personal information to be used or disclosed. However, an AISA must specify the safeguards to ensure that any interference with an individual’s privacy is minimised. The Office of the Privacy Commissioner will work with MBIE on the development of AISAs.
Why do labour inspectors need more information from employers?
- Labour inspectors may request further records and documents from employers when they need to obtain supporting evidence to substantiate an alleged breach – for example, when the required wages and time records are incomplete or not evident.
- Labour inspectors will need to have a reasonable belief that the records and documents they request will assist in determining whether or not a breach of an employee’s minimum entitlements has occurred.
Changes to Employment Relations Authority’s approach to employment standards cases
- More employment standards cases, particularly those that involve more serious and systemic and/or intentional breaches of employment standards will be resolved at the Employment Relations Authority or Court, rather than being automatically directed to mediation services in the first instance as is now the case.
- If it wishes, the Authority will continue to be able to send standards cases to mediation if they are mixed up with other employment relationship problems, or if it considers that mediation will contribute constructively to addressing the problem (for example, through clarifying the facts of the case).
- Employees will be able to seek penalties at the Employment Relations Authority for any minimum entitlement breach – currently this is only possible for breaches of the Wages Protection Act.
Why will the role of mediation be reduced for standards cases?
- For many employment standards cases, particularly those that involve more serious and systemic and/or intentional breaches, mediation is not appropriate because:
- alleged standards breaches are matters of fact to be determined, as opposed to other employment relationship problems for which mediation between the employer and employee is more suitable
- it cannot provide the enforcement outcomes sought (i.e. sanction/deterrence)
- it can result in the case being prolonged if mediation cannot determine the breach as the case will end up back at the Authority
- The statutory obligation to direct standards cases will be removed and instead the Authority will be required to consider them.
- However, the Authority will retain discretion to send standards cases to mediation if they are mixed up with other employment relationship problems, or if it considers that mediation will contribute constructively to addressing the problem (for example, through clarifying the facts of the case).
Why can employees seek their own penalties at the Employment Relations Authority?
- Employees can already seek penalties under the Wages Protection Act. Extending this right to the Minimum Wage Act and Holidays Act is consistent with the ‘self-enforcement’ nature of the employment legislation.
- It means that the opportunity for the Authority to penalise employers will not be dependent on who brings the case (i.e. an employee or a labour inspector).