New Zealand employment law: an overview
New Zealand’s employment law includes two types of employment rights: some set the minimum pay and conditions employees must receive, while the others set the way employees should be treated in the work environment.
Health and safety
Employers must provide employees with a safe working place, proper supervision, training and equipment. Employees must, in turn, take reasonable care to keep themselves and others safe during the course of their work. The Department of Labour’s Health and Safety site provides greater detail about the rights and obligations of employers and workers in relation to health and safety.
Employment agreements
Written employment agreements have been mandatory in New Zealand since 2000. These can either be individual or collective agreements. To help business owners and managers with creating employment agreements, the Department of Labour has created the Employment Agreement Builder.
Minimum wage
There are two levels of minimum wage, one for new entrant employees aged 16-17 (or those on the minimum training wage), and another for employees aged 16 and over. The minimum wage must be paid to people who are:
- Full-time employees
- Part-time or casual employees
- Home-workers
- Paid totally or partly by commission on a piece rate
As of 1 April 2010, the adult minimum wage will be set to $12.75 per hour, representing an increase of 25 cents from the current rate. This will translate into $102 for an eight hour day and $510 for a 40 hour week.
The new entrants and training minimum wage will be $10.20 per hour ($81.60 for an eight hour day, and $408 for a 40 hour week).
Holidays
Employees in New Zealand are entitled to four weeks paid annual holidays, usually on each anniversary of the commencing employment. The leave can be taken at any time, so long as agreed between employer and employee. Employees must be given the opportunity to take at least two of the four weeks leave in a continuous period, if they wish to do so.
If an employee leaves a company before completing a full year of employment, holiday pay owning will be 8% of the gross earnings.
There are 11 public holidays in New Zealand each year, as per the Holiday Act 2003. If a holiday falls on a day when the employee would normally be working, they are entitled to be paid for that day. If an employee does work on the public holiday, they must be paid the greater of time and a half or the rate included in the employment agreement, and if it falls on a day when they would normally work, they are also entitled to an alternative holiday.Sick, bereavement and parental leave
After six months with the company, the employee may become entitled to sick leave, bereavement leave and parental leave.
Employees are allowed at least five days’ paid sick leave per year. That leave can be taken for themselves, their partner, or person dependent on them for care in the event of sickness or injury. Unused sick leave can accumulate up to 15 days, making possible a total entitlement of 20 days.
Employees are also allowed to take bereavement leave of three days on the death of a spouse, parent, child, sibling, grandparent, grandchild or their spouse’s parent. They may also be entitled to one day bereavement leave if the employer accepts that they have suffered bereavement on the death of any other person not mentioned before.
Employees who have worked for the same employer for an average of at least 10 hours per week, for either the immediately preceding six or 12 months before the expected due date or adoption of a child, may be entitled to parental leave.
Employees who meet the six-month employment eligibility criteria, or people who have been six-employed for six months, may be entitled to 14 weeks’ paid parental leave (some or all of which can be transferred to an eligible spouse/partner). If the employee meets the 12 month eligibility criteria, they might be entitled to up to 52 weeks’ extended parental leave (less any paid parental leave taken).
Other employment rights
The law requires that employer and employee both act in good faith towards each other. Employers must not discourage employees from participating in collective bargaining or being covered by a collective agreement.
According to the Employment Relations (Flexible Work Arrangements) Amendment Act 2007, eligible employees have the right to request a variation to their work hours, days of work, or place of work. To be eligible for this, an employee must be caring for someone and have been employed by their employer for at least six months.
Probationary period for new employees
As of 1 March, 2009, New Zealand small businesses with fewer than 20 employees have the right to dismiss an employee within his or her first 90 days of employment without the employee having the right to lodge a personal grievance case against the employer for unfair dismissal, as part of the Employment Relations Amendment Act.
Employment disputes
In the event of a dispute, if the employee and the employer cannot resolve an issue between themselves, they can contact the Department of Labour on freephone 0800 20 90 20 for guidance. Employees are allowed to bring union representatives, family members or any other representatives to meetings with their employer.
If a consensus cannot be reached, the next step is to involve a mediator or a labour inspector. The service is free of charge. If mediation or the labour inspection still doesn’t solve the problem, the employer or employee can opt to take the matter to the Employment Relations Authority or the Employment Court.
