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Zero Hour Contracts

Posted on: Mar 23, 2016

The Government wants to prevent unfair employment practices, and have now (from 1 April 2016) legislated against the use of Zero-hour contracts under the Employment Relations Amendment Act 2016.

The essence of employment arrangements of this kind is that the worker is offered work as and when the employer or work-user wishes without the guarantee to the worker of a minimum number of hours of remunerated work in any given period of time. The  concern is that the use of this kind of work arrangement is apparently becoming more extensive, so that a large proportion of workers find themselves in situations of highly precarious employment.  Zero-hour contracts can make it difficult for employees to plan their financial and personal lives.  Furthermore, depending upon the precise nature of the arrangement in each case, the worker’s employment rights may be uncertain.

The changes aim to retain flexibility where it is desired by both, employers and employees, but also increase certainty by ensuring that both parties are aware at the beginning of the working relationship of the mutual commitment that they have made. The changes mean that where the employer and employee agree to hours of work, they will be required to state those hours of work in the employment agreement.

Under the new legislation (set out in s 67C to 67H of the Act), employers won’t be allowed to:

  • expect employees to be available to work with no guarantee of hours without paying reasonable compensation
  • require employees to be available to work for more than the agreed hours without paying reasonable compensation for the number of hours the employee is required to be available
  • cancel a shift without giving employees reasonable notice or reasonable compensation, both of which must be set out in an employment agreement
  • make unreasonable deductions from wages
  • unreasonably restrict an employee’s secondary employment.
What if there are no agreed hours?

The employer and the employee do not have to agree on hours, times or days, but when they do, anything that is agreed must be recorded in the agreement. This will ensure employers and employees are clear in their commitments to each other.  In cases where no hours were agreed to, the employer must provide an indication of the arrangements relating to the employee’s working times. This is consistent with the current law.

Employees will be able to apply to the Employment Relations Authority for a penalty against their employer, if they agreed on hours, but have failed to record these in the employment agreement.

For more information on these changes visit the MBIE website.

These changes will take effect 1 April 2016.

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.

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.

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