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Employment Law in New Zealand

Published October 31, 2023 (last updated on December 4, 2023) | Adam Wyatt - Copywriter and Content Creator

Under New Zealand employment law, employers and employees both have clearly defined workplace rights and responsibilities. Employers must treat employees fairly by paying them at least the minimum wage, providing safe work conditions, and meeting all their other employment law obligations. 

What is employment law in New Zealand? 

Employment law in New Zealand is a complex body of law that governs the relationship between employers and employees. It covers a wide range of topics, including: 

  • Minimum employment standards, such as minimum wage, hours of work, and leave entitlements 

  • Discrimination and harassment 

  • Health and safety 

  • Collective bargaining 

  • Ending employment 

Why is employment law important? 

Employment law is important for a number of reasons. First, it protects the rights of employees. By setting minimum standards and prohibiting discrimination and harassment, employment law helps to ensure that all employees are kept safe while conducting their work and treated fairly by the people around them. 

Second, employment law helps to promote a stable and productive workplace. When employers and employees know what their rights and obligations are, it is easier to resolve disputes and avoid conflict. 

Finally, employment legislation helps to ensure that businesses compete on a level playing field. By requiring all businesses to comply with the same basic standards, employment law helps to prevent unfair competition from businesses that exploit their employees. 

What are the different types of legislation? 

The Employment Relations Act 2000 

The Employment Relations Act 2000 (ERA) is the main piece of legislation governing employment relations in New Zealand. It sets out the minimum employment standards and the procedures for resolving employment disputes. It helps to ensure that all employment relationships are conducted in a fair and reasonable manner. 

The ERA is based on several key principles, including: 

  • Good faith: Employers and employees must act in good faith in all aspects of their employment relationship. This means being honest, transparent, and fair with each other. 

  • Fair process: Employers must follow fair procedures when making decisions about their employees, such as when disciplining or dismissing an employee. 

  • Mediation: Mediation is the preferred method for resolving employment disputes. Mediation is a voluntary process where a neutral third party helps the parties to reach an agreement. 

The ERA covers a wide range of topics, including: 

  • Minimum employment rights: The ERA sets out the minimum wages and hours of work, leave entitlements, and other employment standards that employers must comply with. 

  • Discrimination and harassment: The ERA prohibits discrimination and harassment based on prohibited grounds, including race, sex, age, and disability. 

  • Health and safety: The ERA requires employers to provide a safe and healthy workplace for their employees. 

  • Collective bargaining: The ERA promotes collective bargaining between employers and unions who represent their members. 

  • Ending employment: The ERA sets out the procedures that employers must follow when dismissing or terminating an employee. 

  • Dispute resolution: The ERA establishes the Employment Relations Authority (ERA) and the Employment Court, which are responsible for resolving employment disputes. It also provides a process for employees to raise personal grievances against their employers. 

The ERA is a complex piece of legislation, but it is important for both employers and employees to have a basic understanding of its key provisions. Beyond the ERA, New Zealand has a long list of other important employment legislation. 

Holidays Act 2003 

The Holidays Act 2003 is legislation that sets out the minimum annual leave and public holiday entitlements for employees in New Zealand. It also covers how annual holiday pay is calculated and paid. 

The Holidays Act 2003: 

  • Entitles all part-time and full-time employees to four weeks of paid annual leave and 11 public holidays per year. 

  • Requires employers to pay employees their annual holiday pay before they go on leave.

  • Provides for annual holiday loadings for employees who have been with their employer for at least six months. 

  • Allows employees to carry over up to one week of unused annual holidays to the following year 

  • Entitles part-time employees to the same number of annual holidays as full-time employees, pro rata based on their hours of work. 

  • Entitles casual employees to accrue annual holidays at a rate of 8% of their earnings. 

The Holidays Act 2003 is an important law that helps to ensure that employees have a break from work and are paid for their time off. 

Health and Safety at Work Act 2015 

The Health and Safety at Work Act 2015 (HSWA) is the main piece of legislation governing health and safety in the workplace in New Zealand. It sets out the duties of employers, workers, and other persons in relation to health and safety, and provides a framework for managing and responding to health and safety risks. 

The HSWA is based on the following key principles: 

  • Primary duty of care: Employers have a primary duty of care to ensure the health and safety of their workers and other people in the workplace. 

  • Participatory approach: Workers have the right to participate in health and safety decision-making at the workplace. 

  • Prevention: The HSWA promotes the prevention of workplace accidents and illnesses, rather than simply responding to them after they occur. 

Employers have numerous duties under the HSWA, including the duty to: 

  • Provide a safe and healthy workplace for their workers and other people in the workplace. 

  • Identify and manage health and safety risks. 

  • Provide information and training to workers on health and safety. 

  • Monitor and review health and safety performance.

Workers also have numerous duties under the HSWA, including the duty to: 

  • Take reasonable care to ensure their own health and safety and the health and safety of others at the workplace. 

  • Follow their employer’s lawful instructions and comply with any reasonable health and safety policy or procedure. 

  • Cooperate with their employer to comply with the HSWA. 

The HSWA is enforced by WorkSafe New Zealand, which is a government agency responsible for promoting health and safety at work and enforcing applicable legislation. 

Human Rights Act 1993 

The Human Rights Act 1993 (HRA) is a law in New Zealand that protects people from discrimination based on race, sex, age, disability, religion, sexual orientation, and other prohibited grounds. The HRA also protects people from harassment and bullying. 

The HRA is based on the principle that everyone has the right to be treated with dignity and respect, regardless of their personal characteristics. The HRA aims to create a society where everyone has equal opportunities to participate in all aspects of life. 

The HRA applies to a wide range of situations, including employment, education, housing, and the provision of goods and services. 

Here are some examples of discrimination that are prohibited by the HRA: 

  • An employer refusing to hire someone because of their race.

  • A school expelling a student because of their disability. 

  • A landlord refusing to rent a property to someone because of their religion. 

  • A shop refusing to serve someone because of their sexual orientation. 

Here are some examples of harassment that are prohibited by the HRA: 

  • Making unwanted sexual advances or comments. 

  • Bullying or intimidating someone. 

  • Displaying offensive or discriminatory material. 

The HRA is part of a broader set of New Zealand legislation that reaches beyond the workplace and helps to create a more just and equitable society for everyone. 

Wages Protection Act 1983 

 The Wages Protection Act 1983 (WPA) is a New Zealand law that sets out how wages must be paid and prevents unlawful deductions from wages. The WPA applies to all employers and employees in New Zealand, regardless of the industry or occupation. 

Key provisions of the WPA 

The WPA includes the following key provisions: 

  • Wages must be paid in money, not in kind. 

  • Wages must be paid in full and on time. 

  • Employers cannot make any deductions from wages without the employee’s consent, or unless the deduction is required by law. 

  • Employees have the right to recover unpaid wages from their employer. 

Examples of unlawful deductions 

The following are some examples of unlawful deductions from wages: 

  • An employer deducting money from an employee’s wages for a broken tool, unless the employee was negligent. 

  • An employer deducting money from an employee’s wages for a late arrival, unless the employee has agreed to a deduction in their employment agreement. 

  • An employer deducting money from an employee’s wages for a training course that the employee is required to attend as part of their job. 

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The 30-day rule for new employees in New Zealand 

 The 30-day rule in New Zealand employment law states that new employees must be employed under terms consistent with the collective agreement for the first 30 days, if there is a collective agreement in place for their industry or occupation. After 30 days, the employer and employee may agree to more favourable terms. 

This rule is designed to ensure that new employees are not disadvantaged for the first 30 days of their employment. Collective agreements typically contain more favourable terms and conditions of employment than the minimum standards set out in the Employment Relations Act 2000

The 30-day rule does not apply to all new employees. It only applies to new employees who are covered by a collective agreement. A collective agreement is a contract between an employer and a union that sets out the terms and conditions of employment for union members. 

If you are a new employee and you are unsure whether you are covered by a collective agreement, you can ask your employer or contact the union for your industry or occupation. 

Here is an example of how the 30-day rule might apply: 

  • A new employee is hired as a retail worker. The employer has a collective agreement in place with the Retail Workers Union. 

  • Under the collective agreement, retail workers are entitled to a 10% discount on all products sold by the employer. 

  • For the first 30 days of their employment, the new employee must be employed under terms consistent with the collective agreement. This means that they must be given a 10% discount on all products sold by the employer. 

  • After 30 days, the employer and the employee may agree to more favourable terms. For example, the employer may agree to give the employee a 15% discount on all products sold by the employer. 

The 30-day rule is an important piece of employment law in New Zealand. It helps to ensure that new employees are treated fairly and that they have the same rights as existing employees. 

Employment agreements 

An employment agreement is a contract between an employer and an employee that sets out the terms and conditions of their employment. Employment agreements must be in writing and must be signed by both the employer and the employee. 

Employment agreements can cover a wide range of topics, including: 

  • Job title and duties 

  • Wages and hours of work 

  • Leave entitlements 

  • The employee’s termination rights 

  • Any other relevant terms and conditions of employment 

It is important for employers to have well-drafted employment agreements in place. This helps to ensure that the terms and conditions of employment are clear and that both the employer and the employee know what their rights and obligations are.  

Employee rights 

Employees in New Zealand have a variety of rights under employment law, including: 

  • Minimum employment standards: All employees are entitled to minimum wages and hours of work, leave entitlements, and other minimum employment standards. These standards are set out in the ERA and other legislation. 

  • Protection from discrimination: Employees are protected from discrimination based on prohibited grounds, including race, sex, age, disability, and sexual orientation. This protection is provided for in the Human Rights Act 1993

  • Health and safety rights: Employees have the right to a safe and healthy workplace. This right is protected by the Health and Safety at Work Act 2015

  • Collective bargaining rights: Employees have the right to join a union and to bargain collectively for better wages and working conditions. This right is also protected by the ERA. 

  • Personal grievance rights: Employees have the right to raise a personal grievance against their employer if they believe that their employer has breached their employment agreement or the ERA. Personal grievances are resolved by the Employment Relations Authority or the Employment Court. 

In addition to these general rights, employees also have specific rights under various pieces of legislation, such as the Holidays Act 2003, the Parental Leave and Employment Protection Act 1987, and the Domestic Violence Victims’ Protection Act 2018

Employee responsibilities 

Employees in New Zealand have multiple obligations under employment law, including: 

  • To perform their job duties to a reasonable standard: Employees must perform their job duties to a standard that is reasonable in the circumstances. This means meeting deadlines, completing tasks to a satisfactory standard, and following their employer’s instructions. 

  • To obey their employer’s lawful instructions: Employees must obey their employer’s lawful instructions. This includes instructions about how to perform their job duties, how to behave in the workplace, and what safety precautions to take. 

  • To be honest and loyal to their employer: Employees must be honest and loyal to their employer. This means avoiding conflicts of interest, not disclosing confidential information, and not competing with their employer. 

  • To take care of their employer’s property: Employees must take reasonable care of their employer’s property, including equipment, tools, and vehicles. 

  • To comply with health and safety requirements: Employees must cooperate with their employer to comply with health and safety requirements at the workplace. This includes following safety procedures, using safety equipment, and reporting any hazards. 

In addition to these general obligations, employees may also have specific obligations under their employment agreement or under other legislation. For example, employees who drive company vehicles may have obligations under the Land Transport Act 1998

Here are some specific examples of how employees can fulfill their obligations: 

  • An employee arrives on time for work and completes their assigned tasks to the best of their abilities. 

  • An employee follows their manager’s instructions and complies with the company’s health and safety procedures. 

  • An employee keeps their employer’s sensitive information confidential and avoids conflicts of interest. 

  • An employee takes reasonable care of the company’s equipment and vehicles. 

  • An employee reports any workplace hazards to their manager and cooperates with health and safety investigations. 

Employer rights 

According to New Zealand employment law, employers in New Zealand have a range of rights in the workplace. These include the right to: 

  • Manage their business: Employers have the right to decide how their business is run, including the right to hire and fire employees, set wages and working conditions, and allocate resources. 

  • Direct and control their employees: Employers have the right to direct and control their employees’ work, including the right to give instructions, assign tasks, and oversee performance. 

  • Discipline their employees: Employers have the right to discipline their employees for poor performance, misconduct, or other breaches of the employment agreement. 

  • End the employment relationship: Employers have the right to end the employment relationship, subject to the terms of the employment agreement and the requirements of the ERA. 

In addition to these general rights, employers also have specific rights under various pieces of legislation, such as the Health and Safety at Work Act 2015, and the Human Rights Act 1993

However, these rights are not unlimited. Employers must exercise their rights in a way that is fair and reasonable, and they must comply with all applicable employment legislation. 

Cases of interest 

There are several interesting cases that have been decided by the New Zealand courts in recent years. Here are a few examples: 

  • In 2022, the Employment Court ruled that an employer had discriminated against an employee by refusing to give her a flexible work arrangement to accommodate her caring responsibilities. 

  • In 2021, the Employment Relations Authority awarded a worker nearly $200,000 in compensation after she was bullied and harassed by her manager. 

  • In 2020, the Supreme Court ruled that an employer had constructively dismissed an employee by making her working conditions intolerable. 

These cases highlight the importance of employers complying with all applicable employment legislation and treating their employees fairly. 

For free initial advice about employment relations and health & safety at work obligations, Kiwi business owners can call Employsure’s Advice Line on 0800 568 012.

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