Time to update your employment agreements - changes to employment law are about to become mandatory

14 March 2017

Last year the Employment Relations Act 2000 (Act) was amended to prohibit certain unfair employment practices. These changes came into effect on 1 April 2016, and applied to all employment agreements entered into after that date. To allow employers time to update any agreements already in existence, individual employment agreements dated before 1 April 2016 have until 1 April 2017 to become compliant with the amendments.

The amendments to the Act protect employees by:

  • regulating zero hour contracts, by:
    • requiring an employer to include any agreement on hours of work in an employment agreement, including the number of guaranteed hours of work, the days of the week on which the work is to be performed, the start and finish times of work, and any flexibility in the days and times;
    • only permitting an availability provision (where an employee is required to be available to accept any work that the employer makes available) in an employment agreement that also includes guaranteed hours of work;
    • requiring employers to have genuine reasons, based on reasonable grounds, for including an availability provision in an employment agreement;
    • specifying that reasonable compensation must be paid for the employee’s availability; and
    • prohibiting an employer from treating adversely an employee who refused to perform additional work, if there was no appropriately compensated availability provision;
  • requiring employment agreements to state the necessary period of notice before a shift is cancelled and the compensation payable if a shift was cancelled without this period of notice; and
  • imposing limitations on provisions in employment agreements that prohibit or restrict an employee’s secondary employment, by requiring employers to have genuine reasons, based on reasonable grounds (which must be set out in the employment agreement), for including such a provision.

These changes have been having a wider impact than may have been intended. They cover typical 'zero hours' arrangements, but also particularly impact on workforces which require an element of flexibility around hours of work.

In the last year, we have found that most of the employment agreements we have reviewed have required some amendments.

Every employer, if they have not yet done so, should be checking their existing employment agreements, to ensure that they comply with the Act. There are now just a few weeks to go before compliance is mandatory.

If you have any questions or would like to double check that your employment agreements comply with the Act, please contact our employment team.

Disclaimer: the content of this update is not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.