The government has announced proposed changes to employment law, and the Bill containing these has now been published.

The area that has generated the most questions is the proposed end to 90 day trial periods. The initial proposal for a ‘fast track, referee service’ has gone - instead, the Bill allows employers with less than 20 employees to continue to use trial periods, but completely removes trial periods for larger employers with 20 or more employees. Whilst this will be unwelcome news for larger employers who have trial periods firmly embedded in their recruitment and induction process, it is good news for smaller employers who would face disproportionately high costs in dealing with employment issues that can arise during those first 3 months if the trial period is removed altogether.

Mandatory breaks are proposed to be re-introduced for almost all employers. This reverts back to the previous position of two paid 10 minute breaks and one unpaid 30 minute break in a shift of 6-8 hours, that was in place up until April 2016. In practice this is unlikely to have a significant impact on most employers, as the ability to agree when breaks are taken with employees using a common sense approach remains.

All employers of ‘vulnerable workers’ (generally cleaning and catering service providers) will be required to allow employees to choose to transfer to a new employer, if the work they are doing transfers through a business sale or subcontracting arrangement. So for example, if a catering company loses a contract with a client to another catering company, the first catering company will be required to allow the employees doing the catering work to choose to transfer to the second catering company if they want to. This has been the case for a while for employers with 20 or more employees, but it will now apply to all employers regardless of their size.

Employers who have a collective agreement with a trade union are going to experience a number of significant changes. Many (but not all) of the changes the National government made in April 2016 to assist employers are to be reversed to encourage and assist trade unions to develop membership numbers and bargain effectively for collective agreements.

There are other changes that are more technical or that will impact smaller numbers of employers. This article just outlines the main ones.

These are all proposed changes that are now going through the parliamentary consultation process before a vote is taken on whether to pass them into law. This is unlikely to occur until much later this year. Many of the most significant changes will take place 4 months after they are passed into law, intended to give employers time to adapt. None of the changes are proposed to impact employers retrospectively.

The government is considering changes in other more complicated areas such as pay equity (how to ensure female dominated work is paid equally to ‘comparable’ male dominated work), whether or how to introduce or encourage ‘fair pay agreements’ or industry wide bargaining, and whether to introduce minimum employment rights for dependent contractors in a longer term work programme.

In summary then, changes are coming but they are being introduced more slowly and carefully than might first have been expected when the new government was elected. Employment relations is always a careful balancing act between the needs of employers and employees, and it appears that the importance of getting this right is being acknowledged. However, both the current proposed changes and the longer term work programme reflect the government’s underlying view that employee protection and wages need to be increased, and that collective bargaining through trade unions is an effective vehicle to achieve that. This inevitably leads to more costs, obligations and/or risks being introduced for employers. Employers need to plan ahead by introducing effective HR management practices to adapt effectively to this changing environment.


To discuss these proposed changes, to find out more about what’s happening, or for advice on what HR management practices need to be considered to adapt effectively to them, contact the Chamber or ER Resolutions on 022 513 1269 or