From 1 April 2011 a number of significant changes to employment law will come into effect.

The most important change (and the one that seems to be receiving little media attention) is the change to the ‘test of justification’ in respect of personal grievances. Presently, when an employee complains of being unjustifiably dismissed the Courts look at what the employer should have done in all the circumstances. The test is to be relaxed to become what could a reasonable employer have done. Provided the employer’s actions fall within the range of a what a reasonable employer could have done then no personal grievance can be upheld.

Other changes include the extension of the 90 day grievance free probationary period to all employers and the ability for employees to ask that their fourth week of annual leave is cashed up.

To understand how these changes affect you please feel free to contact Chris on 07 872 0877 or 021 2421601.

Read the press release from the Minister of Labour below…

Minister of Labour Kate Wilkinson says the passing into law tonight of the Employment Relations Amendment Bill (No 2) and the Holidays Amendment Bill will provide New Zealanders with more opportunities and choice and boost business confidence.

“These two bills improve our employment law framework by promoting greater clarity where required and increasing flexibility and choice for both employers and employees,” Ms Wilkinson says.

“This Government is focused on creating jobs and providing the right conditions for economic growth.

“Ensuring that businesses have confidence in our employment framework and aren’t bogged down by compliance costs will increase investment in our economy and our communities.

“We want to see New Zealanders in work. We want them to be successful and we back them to make the right decisions for their families.”

Ms Wilkinson says a significant amount of work went into ensuring the reforms improved the employment law framework and the public was widely consulted.

“The extension of the 90 day trial period reflects our intention to provide New Zealanders with every opportunity to get a job. It has proved successful for small businesses and will prove successful for all employers.

“Other changes to the Employment Relations Act will enhance the personal grievance system, making it more effective and efficient.”

Under the Holidays Act, a formula for calculating leave and holiday entitlements for those whose hours of work or pay vary has been introduced – called Average Daily Pay.

Employees will also be allowed to cash up a week of leave or transfer the observance of a public holiday to another day if they wish to.

“The Holidays Act has long proved difficult for employers to interpret and the changes made provide more certainty and will reduce compliance costs.

“It will also bring greater choice for employees. The opportunity to cash up a week of annual leave at the employees request has enormous public support and I know many are looking forward to utilising it.”

The majority of the changes will take affect on April 1, 2011.