Employment law in New Zealand
Employment law in New Zealand is primarily governed by the Employment Relations Act 2000 (ERA) and other related legislation, such as the Health and Safety at Work Act 2015, Holiday Act 2003, and Wages Protection Act 1983. The law aims to create a fair, safe, and balanced working environment for both employees and employers. New Zealand's labor laws emphasize the protection of workers' rights, promoting fair treatment in the workplace, and fostering good-faith relationships between employers and employees.
1. Employment Contracts
Written Contracts: In New Zealand, all employees are entitled to a written employment agreement outlining the terms and conditions of employment. These contracts should include details about wages, working hours, job duties, leave entitlements, and the notice period required for termination. This contract must be signed by both the employee and employer.
Indefinite and Fixed-Term Contracts:
Indefinite Contracts: Most employment in New Zealand is governed by indefinite or permanent contracts that have no predetermined end date.
Fixed-Term Contracts: Fixed-term contracts are permissible for specific projects or roles with a set duration. However, they should be used only for legitimate reasons (e.g., seasonal work or temporary positions). Employers must justify the use of a fixed-term contract.
2. Wages and Salaries
Minimum Wage: New Zealand has a national minimum wage, which applies to most employees, including part-time and casual workers. As of April 2025, the minimum wage is NZD 22.70 per hour. This amount may be updated periodically by the government.
Training and Starting Out Wage: There are lower minimum wage rates for certain employees, such as youth workers or employees who are under 20 years old or new employees under 6 months of employment.
Payment Frequency: Wages are typically paid weekly, fortnightly, or monthly, depending on the employment contract. The payment method is usually through direct deposit or another mutually agreed method.
Overtime: Overtime is generally not required by law but may be part of the employment contract or collective agreement. If an employee is asked to work more than their agreed hours, they may be entitled to additional pay or compensatory time off, depending on the terms of their agreement.
3. Working Hours and Rest Periods
Standard Working Hours: The standard workweek in New Zealand is 40 hours, typically divided into 8 hours per day for 5 days a week. However, this can vary depending on the nature of the job or the sector.
Rest Periods: Employees are entitled to a minimum of 30 minutes of rest after working for 4 hours continuously, and to 10-minute breaks for every 4 hours worked.
Maximum Working Hours: Employees are not allowed to work more than 40 hours per week unless otherwise agreed upon, but they can voluntarily agree to work extra hours.
Public Holidays: New Zealand observes several public holidays (e.g., New Year's Day, Anzac Day, Labour Day, Christmas Day), and employees are entitled to paid time off on these days. If employees are required to work on public holidays, they must be paid time-and-a-half for the hours worked, and if they normally work on that day, they are also entitled to an alternative day off.
4. Leave Entitlements
Annual Leave: Employees are entitled to a minimum of 4 weeks (20 days) of paid annual leave after completing 12 months of continuous service. Leave should be taken at times mutually agreed upon by the employer and employee.
Sick Leave: Employees are entitled to 5 days of paid sick leave per year, which can be used for personal illness or to care for a sick family member. Employees can accumulate up to 20 days of unused sick leave over time.
Parental Leave:
Maternity Leave: Female employees are entitled to up to 26 weeks of paid parental leave (funded by the government) and up to 52 weeks of unpaid leave. After 26 weeks, employees may be eligible for additional unpaid leave if needed.
Paternity Leave: Partners (male or female) of a woman giving birth are entitled to up to 2 weeks of paid paternity leave in the first year after the birth.
Bereavement Leave: Employees are entitled to 3 days of paid bereavement leave if a close relative dies, including the employee’s spouse, child, parent, sibling, grandparent, or grandchild.
Public Holidays: Employees are entitled to paid time off on public holidays. If they work on a public holiday, they should be paid at least time-and-a-half and, if the holiday falls on their usual workday, they are entitled to a substitute day off.
5. Termination of Employment
Dismissal: Employers have the right to terminate employment, but they must follow proper procedures under the Employment Relations Act. Dismissal can be due to reasons such as misconduct, poor performance, or redundancy.
Notice Period: The notice period depends on the employment contract. It is typically 1-4 weeks, but this can vary.
Fair Process: Employers are required to follow a fair process for dismissing employees, which includes providing the employee an opportunity to respond to any concerns, conducting a thorough investigation, and following due process.
Severance Pay: If dismissed for reasons such as redundancy, employees may be entitled to severance pay, which is typically based on their length of service and terms outlined in the employment contract or collective agreement.
Resignation: Employees who wish to resign must also provide notice as per the employment contract. Typically, a 1-month notice period is required unless specified otherwise in the contract.
Unfair Dismissal: Employees who feel they have been unfairly dismissed have the right to file a claim with the Employment Relations Authority (ERA) or the Employment Court. Remedies may include reinstatement, compensation, or reparation.
6. Employment Rights and Protection
Non-Discrimination: New Zealand’s employment laws prohibit discrimination based on gender, age, race, disability, sexual orientation, religion, and other personal characteristics.
Employers are required to provide equal opportunities for all employees and to avoid discriminatory practices in hiring, promotion, and other workplace decisions.
Health and Safety: The Health and Safety at Work Act 2015 ensures that employers take all reasonable steps to provide a safe work environment. This includes identifying workplace hazards, providing training, and ensuring employees have the proper equipment to work safely. Employees also have a duty to take reasonable care for their health and safety.
Harassment: The law prohibits harassment, including sexual harassment, in the workplace. Employers are required to take steps to prevent harassment, investigate complaints, and take appropriate action to address any incidents.
Collective Bargaining: Employees in New Zealand have the right to join trade unions and participate in collective bargaining. Unions negotiate on behalf of their members to improve working conditions, wages, and benefits. Employers are required to engage in good faith negotiations with unions.
7. Social Security and Benefits
ACC (Accident Compensation Corporation): New Zealand operates a no-fault accident compensation scheme through the ACC, which provides financial compensation for employees who suffer an injury at work or elsewhere.
Employees who are injured at work are entitled to ACC benefits, including compensation for lost wages and medical treatment.
Superannuation (Pension): New Zealand has a universal pension system called New Zealand Superannuation for those over the age of 65. The pension is paid from general taxation and is not based on previous contributions.
8. Employment of Foreign Workers
Work Visas: Foreign workers must obtain a work visa to be employed in New Zealand. There are various types of work visas, including the Essential Skills Work Visa, Accredited Employer Work Visa, and Talent (Arts) Work Visa.
Work Permit Requirements: Employers wishing to hire foreign workers must ensure the worker has the appropriate visa. They may also need to apply to be an accredited employer under specific visa categories.
9. Dispute Resolution
Employment Relations Authority (ERA): Employees who feel their rights have been violated can file a complaint with the ERA, which can investigate claims of unfair dismissal, disputes over wages, and other employment-related issues.
Mediation: Before escalating a dispute to the ERA, employees and employers are encouraged to use mediation as a cost-effective and informal method of resolving conflicts. The Ministry of Business, Innovation and Employment (MBIE) offers free mediation services.
Employment Court: If mediation or ERA decisions are unsatisfactory, parties can take the matter to the Employment Court, which has the authority to issue binding rulings.
Conclusion
New Zealand's employment laws are designed to protect both employees and employers by ensuring fair wages, safe working conditions, and the resolution of disputes through legal channels. It is crucial for employers to comply with these regulations, particularly concerning fair treatment, wage standards, leave entitlements, and dismissal procedures. Workers also have robust protection against discrimination and harassment. Employers and employees alike should be aware of their rights and responsibilities to create a balanced and harmonious working environment.
RELATED Blog
0 comments