New Zealand: Penalties for Worker Exploitation Toughened, Parental Leave Expanded, Zero-Hours Contracts Axed

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By Murray Griffin

March 15–The maximum penalty for corporate violations of employment standards has been quintupled, eligibility for parental leave has been expanded and “zero-hours” contracts have been outlawed under provisions of the Employment Standards Legislation Bill passed by New Zealand's parliament March 10.

The law raises the maximum penalty for serious breaches of employment standards from NZ$20,000 (US$14,000) to NZ$100,000 (US$68,000) for companies or three times the financial gain they derived from the breach, whichever is greater. The penalty for individuals for the same offence will also rise five-fold, from NZ$10,000 (US$6,800) to NZ$50,000 (US$34,000). Employers will also be publicly named if the Employment Relations Authority or Employment Court finds they have breached minimum standards.

More Eligible for Parental Leave

The bill also extends existing paid parental leave to:

  • casual and seasonal workers,
  • workers with more than one employer,
  • employees who recently changed jobs provided they meet the other work-related criteria and
  • grandparents who have permanent primary responsibility for the upbringing of a child under the age of six years.
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    In addition, parents of premature babies will now be eligible for up to 13 additional weeks of benefits.

    No More ‘Zero-Hours' Contracts

    The bill eliminates “zero-hours” contracts, under which employees are expected to be available for work at any time, but the employer does not commit to providing them with any minimum number of working hours.

    Under the new legislation, employers must not expect employees to be available without providing a genuine reason and reasonable compensation, must not cancel a shift without reasonable notice or compensation and must not place unreasonable restrictions on secondary employment.

    If an employer agrees to provide a set number of working hours when hiring an employee, those hours must be specified in the employment agreement.

    ‘Fair And Productive Workplaces'

    “The passing of this bill delivers on the government's commitment to improve New Zealand’s employment law framework to encourage fair and productive workplaces,” Workplace Relations and Safety Minister Michael Woodhouse said in a March 10 statement. The changes to paid parental leave “recognize the diversity of modern work and family arrangements and aim to better support families by making it easier for parents to stay connected to the workforce.”

    The bill will enter into force on April 1.

    To contact the reporter on this story: Murray Griffin in Melbourne at correspondents@bna.com

    To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

    For More Information

    More information on the Employment Standards Legislation Bill is available at here.

    For more information on New Zealand HR law and regulation, see the New Zealand primer.