Employment Law Update - Employment Relations Standards Bill
The Employment Relations Standards Bill comes into force on 1 April 2016.
Among other things, it contains changes dealing with hours of work, cancelling shifts and the ability of employers to restrict their employees from working for other employers.
Hours of work
The new law requires any agreed hours of work to be set out in the employee’s employment agreement. This doesn’t mean you can’t have flexible hours of work, but any agreed hours must be included in the employment agreement.
If no hours of work are agreed, the employment agreement must still contain an indication of the arrangements relating to the times the employee is to work.
The new law sets rules for “availability provisions”. An availability provision is essentially one that requires the employee to turn up for work when work is available.
Availability provisions may only be included in an employment agreement if the employment agreement specifies some agreed hours of work and guarantees some minimum hours of work. The availability provision relates to work over and above those agreed hours.
An employer will need to have genuine reasons, based on reasonable grounds, to have an availability provision. For weather-dependent or seasonal employment, this might include the need for employees to be available when the weather is good or to be available to work during the season.
If there is an availability provision, it can only be enforced if it provides for “reasonable compensation” to the employee. That will need to be determined on a case-by-case basis after taking a number of factors into account.
If you don’t have a availability provision that complies with the requirements above, you can’t require an employee to turn up to work over and above their guaranteed hours, and you can’t take any action against them or subject them to any detriment (e.g. disciplinary action, dismissal, cutting their hours, offering them less work) if they refuse to work over and above their agreed hours.
An employee who believes they have been disadvantaged by a non-compliant availability provision may take a personal grievance. For example, they might say they had to turn down other work because they had to be available for the employer and if there is no compliant availability provision, there may be grounds for a personal grievance.
If your employees undertake “shifts”, then you will no longer be able to cancel their shifts without providing reasonable notice of cancellation. The period of notice must be set out in the employment agreement. For a weather dependent business, the period of notice probably won’t have to be too long, as the employer can’t control the weather.
If you don’t provide the agreed notice of cancellation, you’ll need to provide “reasonable compensation”. That’s not defined, but there are a number of factors to take into account in deciding what “reasonable compensation” is, including whether or not the employee had to incur any costs in preparing for the shift, such as if the shift is cancelled while they’re driving to work.
A shift is defined as “a period of work performed in a system of work in which periods of work are continuous or effectively continuous and may occur at different times on different days of the week”.
If your employment agreements don’t comply with the above requirements and a shift is cancelled, the employee can claim payment for the whole cancelled shift. If you cancel the shift after the shift has started, or if the employee hasn’t been told of the cancelled shift before it starts, the employee is also entitled to payment for the whole shift.
Also, an employee may bring a personal grievance if a shift is cancelled and the employment agreement does not have a reasonable notice period for cancelling shifts or does not provide for compensation if that notice is not given.
Secondary employment provisions
A “secondary employment provision” is one that restricts the employee’s ability to work for someone else or requires the employer’s consent before the employee can work for someone else.
If you’re going to have a secondary employment provision, you must have genuine reasons based on reasonable grounds for having one, and you must state those reasons in the employment agreement.
For example, you might have a secondary employment provision because you’re worried about health and safety and fatigue and you don’t want your employees working all night for someone else and turning up to work if they’re too tired.
The secondary employment provision must be no wider than is necessary.
A person adversely affected by an unlawful secondary employment provision may bring a personal grievance. For example, if work for another employer was available but they couldn’t take it because of an unlawful secondary employment provision, they might be able to claim compensation.
Employment agreements – do they need updating?
These rules apply to any new employment agreements entered into after 1 April 2016, but existing employment agreements will need to be amended by 1 April 2017 if they contain availability provisions, secondary employment provisions, or if employees are working shifts and there is a possibility shifts might be cancelled.