15 Aug 2022

Employers should prepare for law changes

As the Labour government moves towards its proposed changes to the Employment Relations Act, employers will need to adjust their sails to keep on course.

Submissions closed on March 30 and in April numerous parties were given the ability to speak in front of the Education and Workforce Select Committee which is considering the Government’s, Employment Relations Amendment Bill.

Depending on who you listen to, the proposed changes will restore power to workers or disrupt business and damage important industries such as tourism.

Irrespective of the outcomes that will eventually become public during this year, employers will need to make changes to their business to be compliant. What is the likely change that might impact your business?

1. Trial Periods – signals suggest that there will be some capping of who can use the trial period in future – businesses with less than 20 staff or potentially even less than 50 staff. Whatever the number in the end you may want to take this opportunity to review your hiring practices. Rather than using the trial period to make hasty hiring decisions – consider training all your recruiting leaders on best practice techniques. Yes, there is a talent shortage but at the end of the day it’s better to hire the right person every single time – trial period or not. Upskilling your decision-makers on the best way to attract and retain the right people for your team will always pay off in the end. You don’t need a full HR department to hire the best people, you just need great skills in the team you have.

2. Union Memberships and Relationships – love ‘em or loathe them, proposed changes under the Act will require a more collaborative approach with Unions. From a hiring perspective, if you have a collective employment agreement in place, you will need to roll-back your previous administration processes to bring new staff on board. Among other things this will mean offering the collective agreement for the first 30 days of employment – whether they are a union member or not. Our view has always been to build a mutual relationship of trust with Unions – so rather than immediately thinking combative, perhaps this ERA Amendment is an opportunity to refresh your thinking?

3. Rest and Meal Breaks – should the changes proceed, the amendment will look towards employers to reinstate set rest and meals breaks (with some limited exceptions). Many of our clients tell us they haven’t made many changes to how they allow staff to rest and recover in break times so it’s likely this change may not require a lot of energy. However, if you are an employer who requires complete flexibility and planning rest and meals breaks is difficult – start thinking now how you can work with your employees to make appropriate accommodations in the day. Try not to think of rest and meal break as an interruption to productivity – but opportunities for your staff to breathe, rest and become more productive. From a wellbeing point of view, it’s very difficult for any human being to work tirelessly without good breaks during the day.

Lastly, our advice through any change in legislation that impacts on your business is the same. Legislation is the minimum you are required to abide by as an employer in New Zealand. But here’s the trick – ask yourself “what is the culture that I truly want to create in my business?” What will make employees want to come and work for you? What sort of business climate will engage and retain a great team? High performing teams and businesses don’t just happen by chance and they certainly don’t happen by the enforcement of legislation. It requires a deeper connection with your employees and a vision of what looks great in your business.