Regulatory Systems (Workplace Relations) Amendment Bill

  • enacted

Regulatory Systems (Workplace Relations) Amendment Bill

Government Bill

187—2

As reported from the Transport and Industrial Relations Committee

Commentary

Recommendation

The Transport and Industrial Relations Committee has examined the Regulatory Systems (Workplace Relations) Amendment Bill and recommends that it be passed with the amendments shown.

Introduction

The Regulatory Systems (Workplace Relations) Amendment Bill is one of three omnibus bills that would amend legislation administered by the Ministry of Business, Innovation and Employment. The bills seek to reduce the chance of regulatory failure by maintaining the efficiency and effectiveness of the regulatory systems established by the Acts they would amend.

This bill would amend the Employment Relations Act 2000 and the Parental Leave and Employment Protection Act 1987 to clarify certain provisions.

Under section 32 of the State Sector Act 1988, the chief executive of the Ministry of Business, Innovation and Employment is responsible to the relevant Ministers for the stewardship of the legislation that the ministry administers. The proposed amendments were identified as part of this responsibility.

This commentary covers the main amendments that we recommend to the bill. It does not cover minor, technical, or consequential amendments.

Amendments to the Employment Relations Act

We recommend the following amendments to take into account changes made in 2016 to the Employment Relations Act regarding the grounds on which an employee may take a personal grievance.

Grounds for which an employee may take a personal grievance

Section 67B(3) of the Employment Relations Act allows an employee on a trial period to make a personal grievance claim on the grounds specified in section 103(1)(b) to (h) of the Act. The Employment Relations Amendment Act 2016 extended the grounds to include subsections 103(1)(i) and (j), namely that:

  • the employee has been treated adversely for refusing to perform certain work

  • their employer has failed to pay them the compensation to which they are entitled when a shift has been cancelled

  • their employer has treated them adversely for a prohibited health and safety reason or has contravened section 92 of the Health and Safety at Work Act 2015.

We recommend inserting new clause 3A, which would amend section 67B(3) by replacing the reference to “section 103(1)(b) to (h)” with “section 103(1)(b) to (j)”. This would allow employees to take a personal grievance on the grounds specified rather than having to rely on establishing an unjustified disadvantage.

We considered whether this amendment should be retrospective from the commencement date of the Employment Relations Amendment Act 2016. We were particularly concerned about the right to natural justice for those undertaking a 90-day trial period. However, we were advised that this was unnecessary. Under section 103 of the Act, employees could still have made a personal grievance claim on the grounds of unjustified disadvantage.

Adverse conduct for prohibited health and safety reasons

Section 110A(5) of the Act sets out an employer’s possible defence to a personal grievance claim for prohibited health and safety reasons. We recommend inserting new clause 3B to replace the cross-reference “section 103(1)(h)(i)” with “section 103(1)(j)(i)”. This would ensure that employers have the correct defence available if an employee makes a personal grievance claim on the grounds that they have been treated adversely for a prohibited health and safety reason.

Amendments to the Parental Leave and Employment Protection Act

Keeping-in-touch days

Section 71CE(3) of the Parental Leave and Employment Protection Act provides that parental leave payments can be recovered as an overpayment when an employee performs work in certain circumstances while on parental leave. We recommend inserting new clause 5A to amend section 71CE(3)(b) of the Act by inserting the word “paid” before “parental leave”. This would make it clear that the ability to recover overpaid parental leave payments applies only in relation to work performed during a period of paid parental leave. There are no restrictions on the paid work that an employee can do while on unpaid parental leave.

Clarifying entitlements to preterm baby payment

Clause 6 of the bill as introduced would replace section 71K(2) of the Act to allow a person who is entitled to a preterm baby payment to return to work before recommencing their parental leave. Although they would forfeit their preterm baby payment, they would still be eligible for parental leave payments.

To eliminate potential confusion, we recommend inserting clause 5B to amend section 71DA. New section 71DA (5A) would clarify that the two groups the provision covers are:

  • a person who has a preterm baby, returns to work and forfeits some or all of their preterm baby payment, then commences the parental leave payment period no later than the original expected due date

  • a person who has already started their parental leave payment period early (for example, to take bed rest on a doctor’s orders), has a preterm baby and has their parental leave payments suspended, returns to work forfeiting some or all of their preterm baby payments, then recommences their parental leave payment period no later than the original expected due date.

Enabling paid leave entitlements to be taken before parental leave

Section 71K of the Act was amended in 2016 and, as part of rationalising the provisions of the Act, the separate provisions for employees and self-employed were consolidated. It now provides that parental leave payments for employees and the self-employed begin on the earlier of the date the person begins parental leave or the expected due date. Before the amendment, parental leave payments for employees began on the date on which their parental leave commenced.

Since this amendment, it has become apparent that many employees prefer to take their paid leave entitlements, such as annual holidays or time off in lieu, before starting their parental leave payments. This allows them to start their parental leave payments at a later date.

Although employees have up to a year to apply for the parental leave payment if they have not returned to work, the actual parental leave payment is fixed as the 18 weeks from the date of the birth (at the latest). This means that employees who choose to take their annual holiday entitlement at the same time may have to pay secondary tax or receive the parental leave payments as backdated lump sum payments.

To address this, we recommend amending clause 6, section 71K(2), to provide that an employee may start their parental leave payment period after taking their paid leave entitlements, such as annual holidays.

Commencement date

We understand that allowing an employee to take their paid leave entitlements before commencing parental leave would require updates to the application forms, publications, and website information. Businesses may also need time to prepare for the changes and adjust any internal human resources and payroll policies. Therefore, we recommend amending clause 2(1) (Commencement) to provide that Part 2 of the bill would come into force on 1 June 2017. This would allow time for Inland Revenue to make the necessary updates and for the Ministry of Business, Innovation and Employment and Inland Revenue to communicate the changes to employers and employees prior to implementation.

We recommend amending clause 2(2) to provide that the rest of the Act would come into force on the day after the date of Royal assent.

Appendix

Committee process

The Regulatory Systems (Workplace Relations) Amendment Bill was referred to the committee on 18 October 2016. The closing date for submissions was 1 December 2016. We received and considered one submission.

We received advice from the Ministry of Business, Innovation and Employment.

Committee membership

Jonathan Young (Chairperson)

Andrew Bayly (until 8 February 2017)

Hon David Bennett (from 8 February 2017)

Iain Lees-Galloway

Peeni Henare

Clayton Mitchell

Sue Moroney

Dr Parmjeet Parmar

Denise Roche

Alastair Scott

Hon Maurice Williamson

Dr Jian Yang