Curious about the ins and outs of New Zealand’s employment laws? You’ve come to the right place.
In this article we’ll be breaking down key legislation, from the Employment Relations Act to the Holidays Act, and explain what each law means for both employers and employees.
By the end of this article, you’ll get the knowledge you need to navigate New Zealand’s complex legal landscape for a fair, safe, and productive work environment. Stick around to learn how you can protect your business and support your employees with confidence. ⬇️
Key Employment Laws in New Zealand
Employment Relations Act 2000 (ERA)
The Employment Relations Act 2000 (ERA) is the foundation of employment law in New Zealand. This legislation is designed to encourage productive employment relationships built on good faith and fair processes. Here’s everything you need to know 👇
Good faith
Employers and employees should always deal with each other honestly, transparently, and fairly. This means having open communication and showing mutual respect for each other’s rights and obligations. For employers, it’s a smart move to document all communications and decisions. This way, you have a clear record that shows your commitment to good faith dealings.
Fair process
Employers need to follow fair decision-making procedures, especially when it comes to discipline or dismissal. This means:
- Giving the employee notice of the issue and a chance to respond before making any disciplinary decisions
- Conducting an unbiased investigation into any allegations of misconduct
- Allowing employees to have a support person or representative with them during disciplinary meetings
Mediation
Ideally, disputes should be resolved through mediation with a neutral third party. Mediation is less confrontational than going to court and often results in mutually beneficial outcomes. It’s a good idea to use mediation services early on to resolve issues before they get out of hand.
Minimum employment rights
This includes wages, working hours, and leave entitlements. To stay compliant with the Minimum Wage Act, make sure to regularly review employee wages. It’s also important to keep accurate records of hours worked and leave taken to avoid any disputes.
Discrimination and harassment
The law prohibits unfair treatment based on race, sex, age, disability, and more. To comply, implement comprehensive anti-discrimination policies and provide regular training for employees on these policies. Make sure there are clear reporting mechanisms in place for employees to report any instances of discrimination or harassment.
Health and safety
The law mandates a safe and healthy workplace. To comply, conduct regular risk assessments and make sure all safety protocols are up to date. Provide ongoing health and safety training for employees and encourage a culture of safety in the workplace.
Collective bargaining
The law encourages collective agreements between employers and unions. Respect employees’ rights to join unions and participate in collective bargaining. Engage in negotiations in good faith and aim to reach agreements that benefit both parties.
Ending employment
The law establishes fair dismissal or termination procedures. To ensure terminations are conducted legally and ethically:
- Provide adequate notice according to the terms of the employment agreement or relevant legislation
- Follow a fair process, especially in cases of dismissal for cause
- Offer redundancy payments where applicable, in accordance with the employment agreement or company policy
Dispute resolution
Sets up the Employment Relations Authority and Employment Court for resolving disputes. Familiarise yourself with the procedures of these bodies and consider seeking legal advice if a dispute escalates to this level.
Holidays Act 2003
The Holidays Act 2003 is a crucial piece of legislation that ensures employees in New Zealand receive their rightful entitlements for holidays and leave.
Entitlements
Employees are entitled to four weeks of paid annual leave and 11 public holidays per year.
Make sure that all employees receive at least four weeks of paid annual leave each year. This leave accrues progressively based on the employee’s length of service.
Public holidays include:
- New Year’s Day
- Waitangi Day
- Good Friday
- Easter Monday
- Anzac Day
- Queen’s Birthday
- Labour Day
- Christmas Day
- Boxing Day
- and two additional days that may be regional holidays.
Payment requirements
Holiday pay must be disbursed before employees go on leave. The holiday pay should be calculated at the greater of the employee’s ordinary weekly pay at the time the leave is taken or the average weekly earnings over the past 12 months.
Make sure the holiday pay is included in the normal pay cycle before the holiday period begins. This helps employees manage their finances and ensures compliance with the law.
Annual holiday loadings
Employees become eligible for annual leave after six months of continuous employment. For those who have not yet completed 12 months of service, their annual leave entitlement may be calculated on a pro-rata basis.
If an employee has irregular working hours, calculate their holiday pay based on their average earnings over the past 12 months to ensure they receive a fair amount.
Carryover provisions
Employees can carry over up to one week of unused holidays. While it’s best to encourage employees to use their annual leave within the year it is accrued to avoid excessive carryover, it’s also important to be flexible and accommodating if they need to carry over leave.
Implement a system to ensure employees take their leave regularly and don’t accumulate excessive balances. This promotes a healthy work-life balance and helps reduce burnout.
Clearly outline in your employment agreements or company policies how unused leave will be managed. Specify the conditions under which leave can be carried over or paid out.
Some NZ employer best practices include ⬇️
- Keep detailed records of all leave entitlements, leave taken, and holiday pay calculations. This will help ensure compliance and resolve any disputes that may arise
- Inform employees of their leave entitlements and any company-specific policies regarding leave. Provide regular updates on their leave balances
- Consider using HR software to manage leave requests and balances. This can streamline the process and reduce administrative burden
- Encourage employees to plan their leave in advance, particularly around busy periods or when multiple employees might want to take leave simultaneously
- Regularly review your leave policies and practices to ensure they comply with the Holidays Act 2003. Seek legal advice if you are unsure about any aspect of the Act
Health and Safety at Work Act 2015 (HSWA)
The Health and Safety at Work Act 2015 (HSWA) is pivotal in ensuring a safe and healthy work environment for all employees in New Zealand. The Act emphasises proactive measures and shared responsibility between employers and workers.
Primary duty of care
Employers must take primary responsibility for the health and safety of their workers and anyone else who might be affected by their business activities 👇
- Ensure the physical work environment is safe and without health risks
- Develop safe work systems and procedures
- Provide necessary resources and support for maintaining health and safety standards
- Regularly monitor workers’ health and workplace conditions to detect and mitigate potential risks
Participatory approach
Workers have the right to be involved in health and safety decision-making processes.
- Appoint health and safety representatives (HSRs) and committees where appropriate
- Engage in regular consultation with workers about health and safety matters
- Establish systems for workers to report hazards, provide feedback, and suggest improvements
Prevention
The HSWA emphasises preventing workplace accidents and illnesses through proactive risk management.
- Conduct thorough risk assessments to identify potential hazards
- Implement control measures to eliminate or minimise risks
- Continuously review and update safety measures to address new risks or changes in the work environment
Employers’ duties
- Provide and maintain a safe work environment, equipment, and systems of work
- Regularly identify and assess potential risks
- Provide adequate training and supervision to ensure workers can perform their duties safely
- Establish and communicate clear emergency procedures
- Encourage the reporting of incidents and near misses, and investigate to prevent recurrence
Enforcement
WorkSafe New Zealand is responsible for promoting and enforcing workplace safety. WorkSafe conducts inspections and audits to ensure compliance with the HSWA.
It also provides guidance and support to businesses to help them comply with health and safety regulations and enforces penalties for non-compliance, including fines and prosecution.
Our HSWA advice for employers is ⬇️
- Prioritise health and safety in your workplace. Lead by example and encourage all employees to take health and safety seriously. Make it a core value of your organisation.
- Keep employees updated on health and safety practices with regular training sessions. This should include specific training for new employees and refresher courses for existing staff. Regularly updated training ensures everyone is aware of the latest safety protocols.
- Regularly conduct risk assessments to identify potential hazards and implement control measures. Involve employees in this process to ensure all potential risks are identified and addressed. Employee involvement can provide insights you might otherwise miss.
- Create and regularly review emergency procedures. Conduct drills to ensure all employees know what to do in case of an emergency. This preparedness can save lives and minimise injuries during unexpected events.
- Implement health monitoring programs to detect early signs of work-related illnesses and take preventive action. Regular health checks can help catch issues early before they become serious.
- Take advantage of resources and support from WorkSafe New Zealand. Attend their workshops, use their guidelines, and participate in their safety initiatives. These resources can provide valuable guidance and support to help you maintain a safe workplace.
Human Rights Act 1993 (HRA)
The Human Rights Act 1993 (HRA) is a crucial piece of legislation that safeguards individuals from discrimination and harassment in various facets of life.
Protection
The HRA prohibits discrimination based on race, sex, age, disability, religion, sexual orientation, gender identity, marital status, family status, and political opinion. This means everyone in the workplace should feel respected and valued for who they are.
Employers should develop comprehensive anti-discrimination policies. These policies should be clearly communicated to all employees and included in employee handbooks.
Regularly conduct training sessions to educate employees about their rights and responsibilities under the HRA. This training should cover recognising and preventing discrimination.
Harassment and bullying
The HRA makes it illegal to discriminate based on race, sex, age, disability, religion, sexual orientation, gender identity, marital status, family status, and political opinion. In other words, everyone in the workplace should feel respected and valued for who they are.
Employers should put together clear anti-discrimination policies and make sure these are communicated to all employees and included in the employee handbooks.
It’s also important to regularly hold training sessions to educate employees about their rights and responsibilities under the HRA. These sessions should cover how to recognize and prevent discrimination.
Scope
The HRA covers not just employment, but also education, housing, and the provision of goods and services. This broad scope ensures that individuals are protected in all areas of their lives.
When it comes to the workplace, make sure that hiring practices, promotions, and other employment decisions are based on merit and free from discriminatory bias. It’s also important to make reasonable accommodations for employees with disabilities to help them perform their jobs effectively.
Wages Protection Act 1983 (WPA)
The Wages Protection Act 1983 ensures that employees receive their wages fully and promptly.
Payment in money
The WPA requires that wages be paid in money, not in kind (goods or services). This gives employees the flexibility to spend their earnings however they choose.
Make sure to give employees clear pay statements that show their gross wages, deductions, and net pay. Using direct bank transfers can also help ensure timely and secure payment of wages.
Timely payment
The Act ensures full payment of wages on time, typically on a regular payday agreed upon in the employment contract. This reliability helps employees manage their personal finances effectively.
Implement efficient payroll systems to manage wage payments and avoid delays. Clearly communicate the payment schedule to employees and notify them promptly of any changes.
Prohibition of unlawful deductions
Any deductions from wages must have the employee’s written consent, except those required by law (e.g., taxes). This protects employees from unexpected reductions in their pay.
Ensure that any deductions are clearly explained to employees and obtain their consent where necessary. Regularly review deductions to ensure they comply with legal requirements and avoid unauthorised deductions.
Some other WPA advice for NZ employers includes ⬇️
- Maintain accurate payroll records and make sure all wage payments and deductions are documented
- Regularly auditing your payroll processes can help ensure compliance with the WPA
- It’s also a good idea to include detailed wage payment schedules and deduction policies in employment contracts
Employment agreements in New Zealand
In New Zealand, all employees must have a signed, written employment agreement. Here’s a deeper look at what these agreements should include and practical advice for both employers and employees 👇
Job title and duties
- Employment agreements should clearly define the employee’s job title and specific duties. This clarity helps to avoid misunderstandings about what is expected
- Providing detailed job descriptions can prevent any confusion about roles and responsibilities. It’s also important to regularly review and update job descriptions to reflect any changes in the role
Wages and hours of work
- Clearly outline the employee’s wages, including any overtime rates and bonuses
- Specify the standard hours of work and any expectations regarding overtime or flexible working arrangements.
- Ensure that wages meet or exceed the minimum wage requirements and are fair for the role and industry
Leave entitlements
- Provide detailed information on various types of leave entitlements, such as annual leave, sick leave, parental leave, and bereavement leave
- Develop clear leave policies and ensure they are communicated to all employees
- Maintain accurate records of leave balances and usage
Termination rights
- Clearly state the conditions under which employment can be terminated, including notice periods and reasons for termination
- Ensure termination procedures are fair and comply with the Employment Relations Act
- Outline any severance pay or benefits that may be applicable upon termination
Employee rights and responsibilities
Minimum employment standards
Wages
Every employee is entitled to receive at least the minimum wage for all hours worked. This wage is reviewed and adjusted regularly to reflect the cost of living. To ensure compliance, regularly check your pay slips and understand your wage rate. If you notice any discrepancies, bring them to your employer’s attention promptly.
Hours
Your employment contract should clearly outline your working hours. This includes regular hours, overtime, and any flexible work arrangements. Be aware of your rights regarding breaks and rest periods to avoid overworking.
Leave entitlements
Familiarise yourself with your entitlements for annual leave, sick leave, parental leave, and public holidays:
- Annual leave: Typically, you are entitled to four weeks of paid annual leave per year
- Sick leave: You should receive a minimum number of paid sick days annually
- Parental leave: Entitlements vary, so check the specific provisions if you are expecting a child or planning for family growth
- Public holidays: You are entitled to paid time off on public holidays or compensatory time off if you work on these days
Protection from discrimination
The Human Rights Act protects employees from discrimination based on race, sex, age, disability, religion, sexual orientation, and other grounds. This ensures that all employees are treated fairly and with respect.
If you feel you’ve been discriminated against, document the incidents and report them to your HR department or a relevant authority. Many organisations have specific procedures for handling such complaints, ensuring they are addressed promptly and effectively.
Health and safety
Employers are legally required to provide a safe and healthy workplace. This includes conducting regular risk assessments, providing necessary safety equipment, and ensuring that work practices meet health and safety standards.
Participate in any safety training provided by your employer and always adhere to safety guidelines. If you notice any hazards, report them immediately to prevent accidents.
Collective bargaining
Union membership
Employees have the right to join a union, which can negotiate on their behalf for better wages, working conditions, and benefits. Union membership can provide additional support and resources if you face workplace issues.
Actively participate in union activities and stay informed about collective bargaining agreements that affect your employment.
Personal grievance
If you believe your rights have been violated or you have been unfairly treated, you have the right to file a personal grievance. This might include issues such as unjustified dismissal, discrimination, or unsafe working conditions.
Understand the grievance process within your organisation, which typically involves formally documenting your complaint and following set procedures for resolution. Seeking advice from a legal advisor or your union can also be beneficial.
Employee responsibilities
Perform job duties to a reasonable standard
It’s a good idea to aim to perform your job duties efficiently and to a high standard. This generally means completing tasks on time, hitting performance targets, and continuously improving your skills and knowledge.
Taking advantage of training and development opportunities provided by your employer can also boost your skills and keep you up-to-date in your field.
Lawful and reasonable employer instructions
Follow lawful and reasonable instructions from your employer. If you’re ever unsure about an instruction, don’t hesitate to ask for clarification to avoid misunderstandings. Being flexible and willing to adapt to new procedures or changes in the workplace is also really helpful.
Avoid conflicts of interest and protect employer’s property
Being honest in all your dealings at work is really important. It’s best to avoid conflicts of interest and always act in your employer’s best interests. Protecting sensitive company information and making sure it’s not disclosed without authorisation is crucial.
This includes safeguarding intellectual property and customer data. Taking care of company property, whether it’s physical equipment, digital assets, or financial resources, and reporting any misuse or damage right away, helps maintain trust.
Follow safety procedures and report hazards
Following the safety procedures laid out by your employer, like using personal protective equipment (PPE), sticking to safety protocols, and attending safety training sessions, helps keep the workplace safe. Reporting any hazards or unsafe conditions as soon as you notice them can prevent accidents and make the workplace safer for everyone.
Employer rights and responsibilities
Rights
Hire, fire, set wages, and conditions
As an employer, you have the right to manage your business, which includes making decisions about hiring, firing, and setting wages and conditions. This allows you to create a team that aligns with your company’s goals and culture.
Give instructions and oversee performance
You have the right to give instructions and oversee employee performance. This helps ensure that the work being done meets your standards and contributes to the overall success of the business.
Address poor performance or misconduct
Addressing poor performance or misconduct is within your rights as an employer. This might involve giving feedback, implementing improvement plans, or taking disciplinary action if necessary.
Terminate employment: Following fair procedures and legal requirements
Terminating employment is also a right, but it must be done following fair procedures and legal requirements. This helps protect your business and ensures that employees are treated fairly and ethically.
Responsibilities
Treat employees fairly and comply with all employment legislation
Treating employees fairly and complying with all employment legislation is a fundamental responsibility. This means adhering to laws and regulations that protect employee rights and promote a fair working environment.
Ensure health and safety standards
Providing a safe workplace is crucial. This involves ensuring that health and safety standards are met, conducting regular risk assessments, and addressing any potential hazards promptly. A safe workplace not only protects your employees but also enhances productivity and morale.
Pay wages in full and on time, without unlawful deductions
Paying wages in full and on time is a key responsibility. Make sure that your payroll processes are accurate and that employees receive their correct pay without any unlawful deductions. This helps build trust and ensures financial stability for your employees.
Dispute resolution
Mediation
Mediation is often the preferred method for resolving workplace disputes. It involves a neutral third party who helps both sides come to a mutual agreement.
This process is typically less formal and less stressful than going to court, and it can be a great way to reach a solution that works for everyone. If you find yourself in a dispute, consider suggesting mediation as a first step.
Employment Relations Authority
If mediation doesn’t resolve the issue, the next step is the Employment Relations Authority (ERA). The ERA is an independent body that investigates disputes and makes decisions based on the facts presented.
It’s a bit more formal than mediation but still focuses on finding a fair resolution. If you’re dealing with a dispute that couldn’t be settled through mediation, the ERA is there to help.
Employment Court
For more complex or unresolved disputes, there’s the Employment Court. This is the highest level of dispute resolution and involves a more formal legal process. The Employment Court handles cases that are too complex for the ERA or where decisions made by the ERA are being challenged. While this step is more intensive, it’s designed to ensure that all aspects of the dispute are thoroughly examined and resolved.
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💡 Navigating the complexities of employment law can be challenging, but you don’t have to do it alone. At SubscribeHR, we’re committed to helping you create a fair, compliant, and productive work environment.
Contact us today to learn how SubscribeHR can make managing your HR needs simpler and more effective. Let’s work together to build a better workplace! 🚀
