Posted on: Mar 23, 2017

The Wages Protection Amendment Act 2016 has added the statutory requirement to consult before making deductions from employees’ wages.

In accordance with the Wages Protection Act 1983, an employer may make deductions from wages payable to an employee for any lawful purpose with the employee’s written consent.  Written consent includes consent in a general deductions clause in the relevant employment agreement, or on the employee’s written request.  Under s 5A of the Act, an employer must not make a deduction, however, if that deduction is unreasonable.

If a deduction is made from wages paid, or that would have been paid but for the deduction, and there was no written consent or request from the employee, then the amount deducted is recoverable by an action in the Employment Relations Authority.

The Wages Protection Amendment Act 2016 brought about changes to the way that deductions can be made from employees’ pay.  The changes were inserted to prevent examples where unfair wage deductions had been made for losses to the employer over which the employee had no control.

In the Amendment, s 5(1A) was inserted, adding that “an employer must not make a specific deduction in accordance with a general deductions clause in a worker’s employment agreement without first consulting the worker.”  This is consistent with the good faith obligations of s4 of the Employment Relations Act 2000.

This can be seen from a case that was decided before the 2016 Amendment.  In Jonas v Menefy Trucking Ltd [2013] NZEmpC 200, the employee’s agreement provided in a general clause for deductions for damage caused by negligence. The employee accepted that he had negligently damaged a gate while driving a truck but contended that the amount of the deduction should have been discussed with him in accordance with the good faith obligations of the Employment Relations Act.

Judge Ford agreed, saying:

[62] … The provisions of the Wages Protection Act 1983 are mandatory. Under those provisions, an employer must pay the entire amount of wages payable to a worker without deduction unless the worker otherwise consents or in certain circumstances where there has been an overpayment. In cases such as the present, however, where a general deductions clause in an employment agreement is relied upon rather than an individualised written consent then, consistently with its good faith obligations under the Act, an employer must, at a minimum, consult with the worker before making any deduction. Without such a safeguard, the protection intended to be afforded by the Wages Protection Act 1983 would be illusory.

So while the good faith requirements of the Employment Relations Act already required the employer to consult before making deductions, this Amendment adds an express statutory requirement to consult in accordance with the Wages Protection Act.

How does this impact employers?

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Mar 23, 2017

State Services Minister Paula Bennett has welcomed an agreement with unions which will see the Government’s new pay equity principles applied for the first time.

In November 2016, the Government announced it had accepted the recommendations of the Joint Working Group on Pay Equity. The Principles were developed by the Joint Working Group on Pay Equity to make it easier for women to file pay equity claims with their employers, and assist employers in addressing those claims, rather than having to go through the courts.

These legal changes are not yet in effect but the State Services Commission, on behalf of the government, and the Council of Trade Unions on behalf of unions, have agreed to apply the principles to current pay equity claims.

The first claims that will be progressed are:

“It’s great to see the principles being used in this way and I would like to thank the unions for the pragmatic and collaborative approach they are taking to progressing these claims,” Mrs Bennett says.

The Government will amend the Equal Pay Act and the Employment Relations Act to implement recommendations and a Bill is expected to be introduced this year.

“There will no doubt be things we learn as we apply the new principles in a real life negotiation process. This experience will help to refine and improve the changes to legislation that will be required to formally give effect to the principles.

“Pay equity is a priority for this Government. Occupations that are mostly made up of a female workforce shouldn’t be lower paid just because this work is and has been mainly undertaken by women,” Mrs Bennett says.

Source: beehive.govt.nz, 28 February 2017

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Mar 23, 2017

As of 1 April 2017 the new minimum wage rates are:

What you’ll need to do:

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.