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Government to zero in on zero hour contracts

13 July 2015

​The Government will legislate to require employers to commit to a minimum number of hours where the employee is expected to be on call.

Workplace Relations and Safety Minister Michael Woodhouse characterised the move as requiring a “principle of mutual obligation” in an employment relationship.

We detail the proposed changes below.

Key reform proposals

The key changes, to be incorporated in an Employment Standards Bill which will be introduced into Parliament later this year, are:
  • where the employer requires the employee to be available for work additional to any hours agreed, the employee must be compensated for that availability.  Employees will be free to decline any hours above the minimum agreed
  • an employer will not be able to cancel a shift or send an employee home early without providing reasonable notice or without paying compensation
  • reasonable notice and compensation will not be defined in the Bill but should be agreed as part of the terms and conditions of the employment contract
  • employers will not be able to restrict employees from taking on secondary employment without reasonable grounds.  These will not be prescribed in the legislation but will be related to the risk of loss to the employer of knowledge, property (including IP), or competitive advantage, and
  • employers will not be able to deduct money from employees’ pay for losses beyond the employee’s control or not involving any negligence on the employee’s part – e.g. theft by customers.

Chapman Tripp comments

The Bill will continue to allow casual employment agreements.  The distinction will be where the employee is expected to be on call.  Where that is the case, the employer will be required to provide reasonable compensation.
Employers, particularly those with existing part-time or shift work arrangements, will need to be mindful of the Bill’s provisions and to ensure new notice and compensation requirements are provided for in their employment agreements.
They will also need to be aware the definition of what is reasonable will be a matter for negotiation between the parties.
There will be the opportunity to make submissions on the Bill.

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