Sweeping legislative changes come into effect

New Zealand Security Magazine, April-May 2019

Embraer KC-390
Employment Relations

New Zealand Security Association CEO Gary Morrison outlines a number of legislative changes that stand to significantly impact on providers of security services.

Over the next few months businesses will be faced with a number of workplace reforms that will have considerable impact, particularly for the providers of manpower services. Given their significance, I do encourage our members to obtain specialist advice, particularly around the drafting of employment agreements.

Whilst I have provided a brief summary and commentary on these changes in my report, the NZSA has worked with Jaime Rose-Peacock from Marbles Business Solutions, a specialist in the field of Human Resources and Employment Relations, to provide a more in-depth analysis of the changes. The report from Jaime will be forwarded to members only under separate cover.

There is also longer-term uncertainty from a business perspective with the potential for an industry-wide Fair Pay Agreement (security and bus drivers are rumoured to be the first industries to be covered by FPAs), the proposed reform of the Vocational Education sector that will see the merging of all polytechnics and ITOs, and Capital Gains Taxes for the sale of privately-owned businesses.

Increase to Minimum Wage

The minimum wage will increase to $17.70 an hour on 1st April, an increase of $1.20 per hour. This will obviously have a significant impact on those operating within the guarding sector but will also have wider ramifications as employees seek to maintain pay parity.

Most providers have been proactive in approaching customers on this issue, and there has been a general acceptance on the need to pass on the immediate cost increase. The challenge, however, is in gaining customer awareness and acceptance of the ‘pay parity’ flow-on effect of those staff not directly affected by the minimum wage increase but who still will require an increase in their pay rates.

We recommend adopting an open book disclosure policy, and reassure customers that necessary increases relate directly to increased costs rather than a movement in margins.

Domestic Violence Victims Protection Act 2018

This Act, which comes into effect on 1stApril, provides any victim of abuse (physical, sexual or psychological) with the right to access 10 days paid domestic leave (in each 12-month period), the right to request temporary flexible working arrangements (for up to two months) and the ability for the employee to raise a personal grievance if treated adversely. The Act also covers people who are the victims of historic abuse and are still suffering.

Leave is not pro-rated – like sick leave, all staff can claim a full 10 days within a year. including part-time or casual employees, however, it cannot be accrued if not used within the year. Employees can also claim this entitlement if they have dependents living with them (17 years or under) who are affected by domestic violence.

The law provides that the employer can request proof, before granting the leave and flexible working. However, if the employer doesn’t get suitable proof, they can’t deny the leave altogether.

The employer would have to allow the leave being taken (either unpaid, or via other types of leave) and would still need to consider the flexible working arrangements under the current flexible working laws.

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Licensing for Monitoring Operators

In our last newsletter we advised that an amendment to the Private Security Personnel and Private Investigators (Minimum Training) Regulations 2018 would come into effect on 1st April 2019, and we understand that this is still on track.

The change will confirm that Monitoring Operators are required to be licensed under the Property Guard classification in the Act, but will provide them with an exemption from the Minimum Training Unit requirements.

Associated changes will be made to the Certificate of Approval application and renewal process to ensure that Property Guard applicants are identified as either frontline (Security Officers) or non-frontline (Control Room or Monitoring Centre Operators).

Employment Relations Amendment Act 

Some minor changes occurred when the Bill was introduced in December 2018, however, the majority of changes will come into effect on 6th May. The key changes for businesses who operate under IEAs, and not collectives, are:

  • 90 Day trial periods will be limited to businesses with less than 20 employees
  • Prescribed meal and rest breaks are being reinstated
  • Employees in specified ‘vulnerable industries’ will be able to transfer on their current terms and conditions in their employment agreement if their work is restructured
  • Employers will need to provide new employees with an approved Active Choice form
  • Employers will need to allow for reasonable paid time for union delegates
  • Employers will need to pass on information about the role and function of unions.

Removal of 90 Day Trial Period

From 6th May, businesses employing 20 or more staff will not be able to include a 90-day trial clause in their employment agreements.

It should be noted, however, that businesses with staff being employed between now and the 6th May can still use the 90-day trial period as long as the employment agreements are offered and signed before the 6th May, in which case the trial period can still run for the full 90 days and be in effect.

Despite removal of the 90-day trial period, any business (including those with less than 20 staff) can use a Probationary Period clause to enable assessment of an employee’s skills against the role responsibilities.

Rest and meal breaks

The Act reinstates the right of employees to have set rest and meal breaks. The benefit of rest and meal breaks is that by operating safely, workplaces help to ensure their staff’s wellbeing. Employers must pay for minimum rest breaks but do not have to pay for minimum meal breaks.

How long, and how often the breaks are, will be dependent on the hours worked. There are no set rules on how long the breaks are or when they can be taken, but they must be a suitable length and at a suitable time during their work.

Where employers and employees can’t agree on when to take the breaks, the law will require the breaks to be in the middle of the work period, so long as it is reasonable and practical to do so.

All employers must allow employees to take paid rest breaks and unpaid meal breaks unless there is a very good reason for any restrictions. Restrictions must be reasonable and necessary, or reasonable and agreed to by the employee.

If breaks cannot be provided by the employer, the employee must be offered reasonable compensation. Employers cannot just pay employees not to take breaks – there has to be a very good reason, e.g. security personnel who can’t leave their post.

Government procurement rules 4th edition

The Labour-led coalition government has stated that government procurement should be used to support wider social, economic and environmental outcomes that go beyond the immediate purchase of goods and services, and has encapsulated this within a draft 4th edition to the Government Procurement Rules that is currently under consultation.

The proposed rules introduce four priority outcomes:

  1. Access for NZ business
  2. Construction sector skills and training
  3. Employment standards
  4. Reducing emissions and waste

Outcome 3 is of particular importance to the security sector:

Improve conditions for workers and future-proof the ability of New Zealand business to trade:

Government agencies will require suppliers in targeted industries to ensure their business, sub-contractors and domestic suppliers comply with employment standards and demonstrate good health and safety practice. This priority aims to protect workers from unfair and unsafe behaviour and incentivise well-performing firms while ensuring they are not undercut by firms who have reduced costs through adopting poor labour practices.

Draft 4th edition to the Government Procurement Rules

The initial industry sectors to be targeted are Security, Cleaning and Forestry.

Whilst the practicalities of determining good suppliers and poor suppliers is not specified, the cabinet briefing papers refer repeatedly to the important role Industry Associations will play in the process. We are confident that NZSA membership will be used as a key determinant in identifying those suppliers who government agencies deem as being appropriate to contract with. We will keep you posted on this.


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