New Zealand German Business Association Inc (AHK Neuseeland) Level 14, PwC Tower, 188 Quay Street, Auckland 1010 PO Box 95, Auckland 1140, New

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1 EMPLOYMENT LAW A comparison of labour regulations in New Zealand, Australia & Germany. New Zealand German Business Association Inc (AHK Neuseeland) Level 14, PwC Tower, 188 Quay Street, Auckland 1010 PO Box 95, Auckland 1140, New Zealand Phone ; Fax admin@germantrade.co.nz;

2 Employment Law New Zealand has a reasonably flexible system of employment law, regulated by a combination of statue and common law. The emphasis in New Zealand legislation is on freedom of contract, with employees being protected by a minimum floor of statutory rights. The Fair Work system is Australia s new national workplace relations system which aims to foster safer, fairer and more productive workplaces for employers and employees. The new system is a safety net of minimum employment conditions and modern awards. The German workplace regulations guarantee a high protection for employees. Although the legal sources of employment law are scattered amongst individual laws and individual provisions in general laws. In addition, under certain conditions employees can establish works councils. These have to represent the interests of employees to the employer and hold committed participation rights. This overview provides the minimum rights and obligations in New Zealand that apply by law to employers and employees in comparison to the regulations in Australia and Germany. This document was produced and published by the New Zealand German Business Association, Auckland, New Zealand with data and information available at editorial time. Information for New Zealand and Australia were updated as of May The information on the laws in Germany was last updated in It is recommended that readers get specialist advice when seeking information on employment laws. 2

3 Table of Contents Key Regulation... 4 Human Rights... 4 Employment Agreements... 5 Fixed-term Employees... 5 Trial Periods... 6 Unions... 6 Strikes... 7 Sale of Business/Contracting Out... 7 Ending the Employment Relationship... 7 Employment Relationship Problems... 9 Social Insurance... 9 Minimum Working Conditions Minimum Wage Annual Leave and Public Holidays Sick Leave Parental Leave Other Kinds of Leave Working Hours and Break Entitlements Health and Safety Privacy Regulations References

4 Key Regulation Employment Relations Act 2000 governs the employment relationship for all employees employed within New Zealand covers collective, individual and fixed-term employment agreements; collective bargaining and union related issues; flexible working arrangements and personal grievances Fair Work Act 2009 most employment relationships are covered by the national workplace relations system in the act covers workplace rights (including minimum wages and conditions such as leave), collective bargaining, protection from unfair dismissal for all employees and the freedom to choose to be represented in the workplace a summary of the Labour Code does not exist labour regulations according to the rank principle (1) law (2) collective agreement (3) company agreement (4) employment agreement employment laws are mainly mandatory laws; different agreements are possible if they are more convenient for the employees Human Rights protection against discrimination in the workplace an employer cannot discriminate in hiring, firing, paying, training or promoting an employee because of the employee s race, colour, national or ethnic origin, sex or sexual orientation, marital or family status (this includes pregnancy), employment status, age, religious belief or political opinion, any disability employees can t be disadvantaged in the workplace because of their race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer s responsibilities, pregnancy, religion, political opinion, national extraction, social origin employees can t be disadvantaged in the workplace because of their age, physical or mental disability, ethnic origin or race, sex, sexual preference, religion or belief, political opinion, language 4

5 Employment Agreements every employee must have a written employment agreement: individual agreement or collective agreement 1 (one involving a union) mandatory clauses must be included in employment agreements by law individual agreement or collective agreement 2 (one involving a union) employers have to give new employees a copy of the Fair Work Information Statement individual agreement or collective agreement (one involving a union) employers obligation to provide a written employment agreement at least after 1 months of the beginning of the employment mandatory clauses must be included in employment agreements by law Fixed-term Employees genuine reasons for temporary contracts are for example seasonal work, project work, filling in for a permanent employee on leave only for genuine reasons no statutory provisions 3 kinds of fixed-term contracts: time limitation: genuine reason or a maximum limitation of 2 years purpose limitation: genuine reasons age limitation: employee is at least 52 years old, maximum limitation of 5 years and the employee was before the beginning of temporary employment at least 4 months unemployed 1 Not comparable with German collective agreements. 2 Not comparable with German collective agreements. 5

6 Trial Periods employees on trial works are entitled to minimum employment rights trial period up to 90 days (employee has to accept a trial period before the work starts) employees who are dismissed (usually shorter notice period than for a normal dismissal) before the end of a trial period can t raise a personal grievance on the grounds of unjustified dismissal (only on other grounds, such as discrimination, harassment or unjustified action by the employer) no provisions regarding trial periods (regulations for normal dismissal apply) trial period up to 9 months (depending on the job position) employers can dismiss an employee on trial work only if this possibility was agreed in the contract (usually shorter notice period than for a normal dismissal) Unions employees have the right to decide whether to join a union and, if so, which union once employees have joined a union, employers must, if asked, enter into bargaining for a collective agreement with that union union members can attend two union meetings (no longer than two hours each) per calendar year on pay and during normal working hours some members may be entitled to paid leave to attend employment relations education courses to entry the workplace unions must comply very strict conditions access (after informing the employer) and operation rights more important are works councils which have a lot of rights unions must gain an employer s consent to visit a workplace 6

7 Strikes if they relate to bargaining collective agreements (only employees can lawfully strike or be locked out who will be bound by the collective agreement being bargained for) for health and safety issues all employers, employees and independent contractors are free to participate or not participate in lawful industrial activities all employees and trainees are free to participate or not participate in lawful strikes (strikes are prohibited if they are not used as a necessary instrument to enforce collective agreements) Sale of Business/Contracting Out all employment agreements must contain an employee protection provision which protect employees in situations where business undertakings are sold, transferred or contracted out the new employer in a sale of business will be required to recognise an employee s service with the old employer for the purposes of the qualifying period, unless the new employer notifies the transferring employee in writing before their new employment begins, that their former period of service will not be recognised with a sale of business the new owner enters into all rights and obligations existing at the date of the transition of the employment the employment agreements/relationships are unchanged Ending the Employment Relationship several ways in which employment relationships may be ended: redundancy resignation, dismissal or employees/employers can end an employment arrangement by giving the specified notice period or by serious reasons a resignation/dismissal without any notice is possible if an employee believes that an employer acted unjustifiably in ending the employment relationship, the employee can challenge the employer s decision 7

8 Resignation: no specified notice period given: reasonable notice must be given Dismissal: only be terminated for cause (behaviour, medical incapacity, reasons in the person) employees have the right to be told what the problem is and that dismissal or other disciplinary action is a possibility; employees must then be given a genuine opportunity to tell their side of the story before the employer decides process reasonable notice must be given Restructuring and redundancy: employers must have genuine work-related reason and make a decision that a fair and reasonable employer could have made in all the circumstances employers to provide information to employees when they are considering changes that will affect their jobs and give them an opportunity to contribute to any decisions no compulsory redundancy compensation regime (is a Resignation: no specified notice period given: don t have to give notice Dismissal: only be terminated for cause (behaviour, medical incapacity, reasons in the person) termination due to the behaviour: the employee must be warned beforehand with an opportunity to respond to the warning the amount of notice is based on the length of service of the employee if the employee is over 45 years old and has completed at least 2 years' continuous service with the employer: 1 extra week of notice employer can pay an employee instead of giving notice Restructuring and redundancy: employers must have genuine work-related reason compulsory redundancy compensation regime (not for small business employers 3 ) Resignation: no specified notice period given: 4 weeks notice to the Fifteenth or to the end of the month Dismissal: only be terminated for cause (behaviour, medical incapacity, reasons in the person) termination due to the behaviour: the employee must be warned beforehand with an opportunity to respond to the warning the amount of notice is based on the length of service of the employee employers can dismiss a fixed-term employee only if this possibility was agreed in the contract Restructuring and redundancy: employers must have genuine work-related reason termination must be "socially justified" compulsory redundancy compensation regime (only if the employee doesn t challenge the employer s decision) 3 Is an employer who employs fewer than 15 employees. 8

9 matter of contract between the employee and employer) Employment Relationship Problems firstly talk to each other to try to resolve the problem (possibly involving a support person or union/ association representative or use information about rights and obligations from the Ministry of Business Innovation and Employment) problem can t be resolved by talking: employees or employers can attend mediation organised by the Ministry of Business Innovation and Employment. An employee may also seek to raise certain matters with a Labour Inspector (e.g. failure to pay the minimum wage) national workplace relations tribunal: Fair Work Commission if employees believe they were unfairly dismissed, they can apply to the Fair Work Commission for a remedy: need to do this within 21 days of the dismissal taking effect employees of small businesses cannot make a claim for unfair dismissal in the first 12 months after being hired/employees of larger businesses are able to make a claim for unfair dismissal at 6 months a conciliation is arranged to help both sides resolve the matter by agreement if employees believe they were unfairly dismissed, they can apply to the Employment Court for a remedy: need to do this within 21 days of the dismissal taking effect a conciliation is arranged to help both sides resolve the matter by agreement if a resolution can t be reached, a hearing will be held problems that remain unresolved: can be taken to the Employment Relations Authority or later to the Employment Court if a resolution can t be reached, a conference or hearing will be held the employee has to raise a personal grievance within 90 days after the problem has taken place Social Insurance 9

10 no compulsory insurances opportunity to participate in the KiwiSaver superannuation scheme where an employee chooses to join KiwiSaver, a percentage of their gross income is deducted for KiwiSaver contributions (currently 3%, 4%, or 8% of gross pay). In addition, there is a compulsory employer contribution of 3% of the employee s gross salary no compulsory insurances employers are required to have a workers compensation insurance policy compulsory insurances for unemployment, health, pension and nursing care each party is responsible for a part of the contribution compulsory workers compensation insurance (employers are responsible for the contribution) no workers compensation scheme: workplace accidents are covered by the ACC Act Minimum Working Conditions Minimum Wage 4 adult minimum wage rates apply for employees aged 16 or over: NZ$14.75 an hour, NZ$ per day, or NZ$ for a 40-hour week starting-out workers and employees on the training: NZ$11.80 an hour, NZ$94.40 per day, or NZ$ for a 40-hour week exemptions for people with disabilities full-time minimum wage: AU$16.87 per hour or AU$ for a 38-hour week 5 special national minimum wages for trainees, apprentices and juniors (different %-rates of the full-time minimum wage) 2 special national minimum wages for employees with disability no uniform minimum wages rates the normal minimum wage rates are the wage collective agreements no wage collective agreement: prohibited to dropping the wage more than a third below the usual wages in the industry sector 4 As of April The minimum wage rates are reviewed every year. 5 AU$16.37 = NZ$17.70, AU$ = NZ$ (exchange rates as of 30 April 2015). 10

11 Annual Leave and Public Holidays 6 4 weeks paid annual leave after 12 months of employment 11 public holidays 4 weeks paid annual leave for each year of service with the employer, plus an extra week for some shift workers 8 public holidays + any other day or part-day declared or prescribed as a public holiday 4 weeks paid annual leave after 6 months of employment (before this time employees are entitled for proportionally leave) young persons and disabled persons have a increased minimum entitlement of annual leave 10 public holidays + any other day or part-day declared or prescribed as a public holiday Sick Leave after 6 months continuous employment: 5 days sick leave and 5 days sick leave for every 12 months after that can also be used as carer s leave allowed to carry over up to 15 days sick leave from one year to the next (this means that in any year the employee can have a maximum entitlement of 20 days sick leave) employees (except casuals) are entitled to 10 days paid personal leave 7 (for sick and paid carer s leave) per year 2 days unpaid carer s leave employees are entitled to 6 weeks paid sick leave further 6 weeks paid sick leave if the employee was temporarily healthy and have worked and then again, but because of another disease is incapacitated 10 days unpaid carer s leave Parental Leave if employees have worked for the same employer for an average of at least 10 hours per week, and at 18 weeks paid parental leave 12 months unpaid leave (if employees have worked for for all parents who are employed 14 weeks paid leave for the mother: 6 weeks 6 All of them are paid days off work, if it was a day that the employee would have worked normally. 7 Paid personal leave accumulates from year to year. 11

12 least 1 hour in every week or 40 hours in every month, for either the 6 or 12 months before the expected due date of the baby or the date of adopting 6-month employment eligibility criteria: 16 weeks paid parental leave 8 (some can be transferred to a partner if they also meet the 6-month criteria) 12-month eligibility criteria: 16 weeks paid parental leave 9 + up to 52 weeks unpaid extended leave (less any parental leave taken) - this can be shared with a partner if they also meet the 12-month eligibility criteria the 16 weeks paid parental leave is up to a maximum of NZ$ a week before tax. a partner with 6 months service may be entitled to an additional 1 weeks unpaid paternity/ partner s leave, and a partner with 12 months service may be entitled to 2 weeks unpaid paternity/partner s leave (the partner must meet the minimum hours test above) 10 days unpaid special leave for pregnancy-related the same employer for an average of at least 12 months before the expected due date of the baby or the date of adopting ) both parents can take 12 months unpaid leave to care for a new-born or adopted child 2 weeks paid leave for working partners unpaid special leave for pregnancy-related reasons (employee needs to meet the eligibility criteria for unpaid parental leave) no dismissal for being pregnant or for applying for parental leave but the law does not prevent from being dismissed for legitimate reasons employees who are been on parental leave are entitled to come back to the job they had before they went on leave (if the job doesn t exist anymore, the employer has to offer the employee a suitable available job) + right to request flexible working arrangements if an employee wants to end the employment while on parental leave, they need to give the right before and 8 weeks after childbirth both parents can take unpaid parental leave to care for a new-born or adopted child until this is 3 years old paid special leave for pregnancy-related reasons no dismissal for being pregnant, during the pregnancy and for a period of 4 months after the birth + special dismissal protection during parental leave employees who are been on parental leave are entitled to come back to the job they had before they went on leave (if the job doesn t exist anymore, the employer has to offer the employee a suitable available job) + right to request flexible working arrangements a woman can resign without notice during pregnancy and during the 8 weeks after birth 8 Will increase to 18 weeks on 1 April Will increase to 18 weeks on 1 April

13 reasons no dismissal for being pregnant or for applying for parental leave but the law does not prevent from being dismissed for legitimate reasons amount of notice (up to 4 weeks) notice of return: employees are required to write to the employer 21 days before the leave ends and advise them of the intention to return (or not!) to work; if the employer was not able to keep the job open during the parental leave, the employee should instead tell the employer 21 days in advance the date one will be available for work (this date is the start of the 6- month preference period) Other Kinds of Leave after 6 months continuous employment, employees are entitled to paid bereavement leave: 3 days on the death of a spouse/partner, parent, child, sibling, grandparent, grandchild, or spouse/ partner s parent 1 day if the employer accepts they ve suffered a bereavement involving another person not included above up to 10 days paid leave for jury service (after 10 days is unpaid) unpaid leave for voluntary emergency work long service leave is a period of paid leave for employees who have been working for the same business for a long period of time (>10 years continuous service) 2 days compassionate leave (unpaid for casuals) paid special leave for the death of a family member, jury service, marriage, transition to an authority, relocation (the exact period of special leave depends on the individual case) 13

14 Working Hours and Break Entitlements maximum 40 hours, 5 day work week no prescribed number or duration of rest and meal breaks an employer must provide a reasonable opportunity for rest, refreshment, and attention to personal matters, and which are appropriate for the duration of the employee s work period. if the employer and employee cannot agree on the timing and duration of breaks, the employer may specify reasonable times and durations to allow it to maintain continuity of service or production. usually 38 hours in a week, unless the extra hours are reasonable no provision for rest breaks in the National Employment Standards usually 40 hours in a week, unless the extra hours are reasonable one unpaid 30-minute break or one 15-minute breaks for more than 6 hours work one unpaid 30-minute break and two 15-minute break for more than 9 hours work special break entitlements for young persons breaks can be subject to restrictions in limited circumstances. where breaks cannot reasonably be provided, they can be replaced by reasonable compensatory measures. Health and Safety employers must provide a safe workplace with safety instructions, supervision and equipment (this duty includes identifying, assessing and managing hazards, investigating health and safety incidents) employers are required to report serious injuries at work to the Ministry of serious safety incidents are intended to be notifiable to a special regulator under certain conditions employers must employ a work safety specialist and a 14

15 Business Innovation and Employment 10 company medical doctor employers are required to report all injuries at work to the compensation insurance Privacy protection of the privacy of dates from employees in relation to the collection, use, access, correction and disclosure of personal information Contact people: Hesketh Henry: Michael O Brien Solicitor Phone: Fax: michael.o brien@heskethhenry.co.nz AHK Neuseeland: Anne Schettler - Manager Consulting Services Phone: Fax: research@germantrade.co.nz 10 The current legislation (the Health and Safety in Employment Act 1992) is to be replaced by the Health and Safety at Work Act. This change is expected to occur in the second half of 2015/first half of

16 Regulations New Zealand: Accident Compensation Act 2001 Employment Relations Act 2000 Equal Pay Act 1972 Health and Safety in Employment Act 1992 Holidays Act 2003 Human Rights Act 1993 KiwiSaver Act 2006 Minimum Wage Act 1983 Parental Leave and Employment Protection Act 1987 Privacy Act 1993 Australia: Fair Work Act 2009 Fair Work Regulations 2009 Privacy Act 1988 Work Health and Safety Act 2011 Work Health and Safety Regulations 2011 Germany: Allgemeines Gleichbehandlungsgesetz Arbeitsschutzgesetz Arbeitssicherheitsgesetz Arbeitsstättenverordnung Arbeitszeitgesetz Betriebsverfassungsgesetz Bundesurlaubgesetz Bürgerliches Gesetzbuch Datenschutzgesetz Entgeltfortzahlungsgesetz Grundgesetz Kündigungsschutzgesetz Mutterschutzgesetz Nachweisgesetz Sozialgesetzbuch Teilzeit- und Befristungsgesetz Verordnung zur Arbeitsmedizinischen Vorsorge 16

17 References Australian Business Consulting & Solutions, Workplace Info: com.au/default.asp Australian Government, Department of Employment: Australian Government, Employment and Workplace: Australian Government, Fair Work Ombudsman: Chamber of Commerce Muenchen, Employment Law A-Z: Arbeitsrecht/Arbeitsrecht-von-A-bis-Z/ Federal Ministry of Labour and Social Affairs, Our Topics: Topics/content.html Hensche Lawyers, Law Firm for Employment, Guide Employment Law: Rechtsanwalt_Arbeitsrecht_Handbuch.html Hesketh Henry, Doing Business in New Zealand, Labour and Employment: co.nz/publications/documentlibrary/pdfs/doingbusinessinnewzealand-english2013.pdf Mills Oakley Lawyers, Workplace Relations, Employment & Safety, Sale of Business: Ministry of Business, Innovation & Employment, Labour Information, Employment Relations: Ministry of Justice, Law Access, Employment: Employment Springer Fachmedien Wiesbaden GmbH, Encyclopedia, Employment Law: gabler.de/definition/arbeitsrecht.html Important Advice This document was produced and published by the New Zealand German Business Association, Auckland, New Zealand with data and information available at editorial time. However, readers are recommended to take specialist advice or collect information referring to his specific kind of interest. This document of basic information shouldn t be used as single source of evidence. In no case does the New Zealand German Business Association take responsibility for any eventual losses, which may result from this publication. Copyright 2015 New Zealand German Business Association (New Zealand) All rights reserved. Any form of copying or reproduction is strictly forbidden, other than what is negotiated with the New Zealand German Business Association as originator. 17