Recommendation

The Transport and Industrial Relations Committee has examined the Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill and recommends by majority that it be passed with the amendments shown.

Introduction

This bill amends Part 6D of the Employment Relations Act 2000 by removing the legislated minimums prescribed for rest breaks and meal breaks, and replacing them with a requirement for employers to

• either provide meal breaks and paid rest breaks, or take compensatory measures

• encourage employers and employees to agree in good faith on rest break and meal break arrangements

• ease the requirements regarding the timing and the number and duration of breaks, in order to make the criteria for what constitutes a break more flexible

• provide that rest and meal breaks can be subject to restrictions in certain circumstances.

The bill provides flexibility for employers and employees to agree on compensatory measures instead of a break, such as later start or earlier finish times, or time off at an alternative time.

Employer obligations under the Health and Safety in Employment Act 1992, which require employers to provide and maintain a safe working environment, will continue to apply.

Compensatory measures must be reasonable

The majority of us recommend that new section 69ZEB be inserted (clause 5) to make it clear that compensatory measures where rest breaks or meal breaks are not provided must be reasonable. In the bill as introduced clause 4 would amend section 69ZC of the principal Act to define a compensatory measure as “a measure that is designed to compensate an employee for a failure to provide rest breaks or meal breaks”. It provides that compensatory measures include (without limitation) time off work at an alternative time during the employee’s work period, for example by means of a later start or earlier finish time, or the accumulation of time off in lieu.

Employee’s entitlement to rest and meal breaks

The majority of us recommend that proposed section 69ZD(2)(a) (clause 5) be amended to make it clear that employees and employers may agree to restrictions on breaks. If there is no agreement, the existing threshold set out in the bill should continue to apply.

In the bill as introduced proposed section 69ZD(2) provides that an employer may impose certain restrictions on an employee’s breaks where it is reasonable and necessary having regard to the nature of the employee’s work. The majority of us note that this is a high threshold, which appropriately recognises that the right to impose restrictions on breaks should be exercised sparingly, particularly since meal breaks may be unpaid.

However, proposed section 69ZD(2) would not recognise instances where employers and employees mutually agree to restrict breaks and it is practicable to do so, but the restrictions do not meet the high test set out in the bill. Is it possible that there may be instances where restrictions have been mutually agreed (compensated or otherwise) that may not meet the threshold in proposed section 69ZD(2) as introduced.

Relationship between Part and employment agreements

In the bill as introduced proposed section 69ZG(2) provides that an employment agreement that excludes, restricts, or reduces an employee’s entitlements under section 69ZD(1) or section 69ZEA has no effect to the extent that it does so; but the employment agreement does not meet the definition of an illegal contract. The intention of this section is that an employment agreement should not, except in accordance with the bill, exclude or restrict an employee’s entitlement to breaks or, where breaks are not provided, to compensatory measures. For example, a provision in an employment agreement that required an employee to take no breaks, and did not provide compensatory measures, would exclude an employee’s entitlements and therefore have no effect.

Proposed section 69ZG does not extend to actions under section 69ZD(2) relating to restrictions on breaks, section 69ZD(3) relating to the payment of breaks, and proposed section 69ZE relating to the timing and duration of breaks. The majority of us recommend that proposed section 69ZG be amended to cover such actions.

The term “restrict” is used elsewhere in the bill with a specific meaning that is different from that intended in proposed section 69ZG(2). To avoid the possibility of confusion, the majority of us recommend that the term “restricts” be removed, except in reference to new section 69ZG(3), which enables restrictions only in accordance with section 69ZD(2).

New Zealand Labour and Green Party minority view

The Labour and Green Parties oppose this bill because we believe it is unjustified, unfair and unworkable.

Labour re-established minimum standards for rest and meal breaks to protect the health and safety of wage and salary earners, to reduce the risk of accidents, and to improve the quality of work and productivity in all workplaces.

A minimum standard for rest and meal breaks is fundamental to decent work and a basic requirement, especially as New Zealand has few other working hours protections.

The Labour and Green Parties believe this bill will bring back uncertainty for both employers and employees about statutory minimum requirements for meals and rest breaks.

The Government’s justification for this bill is that the current provisions are overly prescriptive and inflexible. The two examples used by the Government to justify amending this legislation—those of air traffic controllers and teachers—have been resolved under the existing legislation. Labour members heard no evidence to convince us that weakening the current law around meals and rest breaks was necessary.

In fact, evidence from an August 2010 Department of Labour report titled “The 2008 Rest and Meal Breaks Amendment to the Employment Relations Act 2000: a snapshot of the impact in the first year” shows widespread awareness and acceptance of the changes.

The report says that “in practice, employers and employees, were managing breaks to suit either the business needs of employers, the personal preferences of employees or the desire of either party for flexibility” and “the costs to employers of the break amendment appears to have been very limited. The small number of employers who had incurred costs (direct and otherwise) through the amendment considered these costs relative to benefits, to be marginally acceptable.”

We have particular concerns with the bill as follows:

• removing the timing and the explicit requirement for a 10-minute paid break and a half-hour meal break will increase uncertainty and arguments between employers and employees around the timing and duration of breaks

• allowing rest and meal breaks to be taken at times agreed between the employee and employer will expose vulnerable workers to having no breaks at all

• enabling employers to provide “compensatory measures” where rest and meal breaks cannot be provided (or agreed). During the select committee process a requirement that compensatory measures must be “reasonable” was added to the bill, but Labour remains unconvinced that the necessary protections are available to ensure employees will have a break

• providing that an employer can restrict rest and meal breaks if the restrictions are “reasonable and necessary” given the nature of an employee’s work—in other words, workers can be required to work during unpaid work time.

This bill represents an overreaction to the complaints of a very few, and to issues that could have been resolved under the existing Act.

The Labour and Green members believe it is a retrograde step in New Zealand’s employment relations and we believe it will add to, rather than remove, employment relationship problems and cause unfairness to thousands of vulnerable employees.