There will be significant changes to our employment legislation and there has been notable discussion about this over the past few months.
On review, it is evident that it will have an impact on New Zealand businesses.
Unfortunately, we can’t address all the changes only the ones that our clients are most concerned about.
It seems the "trial period" has got their attention. Most companies we talked to are concerned about the potential risk of an increase in employees claiming unjustified dismissal. More of a concern is that “a fast referee service” may not have the expertise to manage the negotiation process in a way that is best for all parties.
"The government intends to modify trial periods to require those dismissed to provide reasons for their dismissal. Employees can also bring a form of unjustified dismissal claim to be heard by a "simple, fair, and fast referee service". Lawyers will be locked out of the dispute resolution process, compensation will be capped and referees' decisions will not be open to appeal.”
Another area of concern is the reinstatement of redundancy compensation especially for the more senior roles where the remuneration packages are already quite high.
Introduction of statutory redundancy compensation
"The 2008 Ministerial Advisory Group report on redundancy and restructuring recommended a statutory entitlement for redundancy of at least four weeks' pay for the first year's service and two weeks' pay for each subsequent year of service, up to a maximum of 20 years.”
The general consensus is that the changes are heavily weighted in favor of the employee making it more difficult for small businesses to address employee issues. This may be partially true however managers and business owners need to address what they can do to prevent themselves from being in a position where the law will dictate the outcome.
These changes will increase the importance for employers to have a robust recruitment and selection process and a stringent and documented appraisal system. This will support them should they be faced with an unjustified dismissal. The fact that unjustified dismissals will be dealt with by a referee service will place an even greater emphasis on providing supporting documentation.
The start of this year is the time to address how you manage, train, document and develop your people in a way that is best for them and the company.