Update on Employment Law Changes in 2018

Topics covered in this article: Business Owners, Employment

Tania Reweti

Senior Associate

Senior Associate

Phone: +64 7 927 0543
Email: treweti@clmlaw.co.nz


Bachelor of Arts,  Bachelor of Laws (Hons), University of Waikato


The new Labour-led Government recently announced a new Bill that would amend the Employment Relations Act 2000. The majority of the changes are roll-backs of amendments made by the previous government and generally provide greater rights for employees. 

The key proposed amendments include:

  • Restoring statutory rest and meal breaks: These will be subject to a very limited exception for workers in essential services who cannot be replaced (such as air traffic controllers).
  • Limiting 90 day trials to small / medium employers with fewer than 20 employees: This is one of the most talked about changes as it removes the ability for large businesses to dismiss a new employee within the first 90 days if things just aren’t working out. Allowing small to medium employers to continue using the 90 day trial period seems to recognise the popularity that the trial period provisions have had for smaller businesses in assessing the suitability of new employees.
  • Restoring reinstatement as the primary remedy for unfair dismissal: Reinstatement is intended to be restored as the primary remedy for unfair dismissal claims but in practice this remedy was infrequently used due to the usually severe breakdown in an employment relationship by the time it reaches the stage of an unfair dismissal claim. It is likely that this will continue with most employees preferring to seek compensation rather than reinstatement. .  
  • Increasing protections for vulnerable workers such as cleaners and caterers, when a business is transferred or restructured: These changes repeal the exemption from coverage for small and medium businesses and provide more time for employees to decide whether to transfer to a new employer.
  • Strengthening collective bargaining and union rights in the workplace: Changes in this area are mostly reversions to the previous law and include:
    • Restoration of the duty to conclude bargaining unless there is a good reason not to;
    • Repeal of the process to have bargaining declared over; 
    • Restoration of the earlier initiation timeframes for unions in collective bargaining;
    • Removal of the Multi Employer Collective Agreement (MECA) opt out where employers can refuse to bargain for a MECA; 
    • Restoration of the 30 day rule where for the first 30 days new employees must be employed under terms consistent with the collective agreement; 
    • Repeal of partial strike pay deductions where employers can garnish wages for low level industrial action; and 
    • Restoration of union access without prior employer consent.

Proposed changes that are new rather than repeals of changes made by the previous government are: 

  • Pay rates to be included in collective agreements: This change is based on recent case law and may include pay ranges or methods of calculation. 
  • Employers must  provide reasonable paid time for union delegates to represent other workers (for example in collective bargaining). 
  • Employers must pass on information about unions in the workplace to prospective employees along with a form for the employee to indicate whether they want to be a member. 
  • Greater protections against discrimination for union members including an extension of the 12 month threshold to 18 months relating to discrimination based on union activities and new protections against discrimination on the basis of being a union member. 

The Bill will be introduced to Parliament in February 2018 and will then go to select committee, where the public will be able to make submissions on the Bill. Check back to our website soon for another update on these changes.