The Transport and Industrial Relations Select Committee has recently reported back on the Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill.
The purpose of the Bill as introduced was to allow employees earning over $150,000/annum to contract out of the personal grievance provisions in the Employment Relations Act 2000. A personal grievance is a type of legal action that employees can take against their employers for a wide range of things including dismissal, disadvantage in employment, and sexual and racial harassment. In effect the original Bill allows a high-earning employee, as part of the give-and-take involved in negotiating their employment contract, to forgo their right to take such a personal grievance.
The Bill was designed to reflect the practical reality of terminating higher earners; they often negotiate a settlement sum without taking specific legal action. However, by contracting out of all the personal grievance provisions, the Bill in its original form was far reaching and included employees contracting out of basic human rights.
The Select Committee have made a number of changes to limit and clarify the scope of the Bill. So if it passes in its current form, what will it look like?
The $150,000 doesn’t include:
Whether the Bill does pass in its current form could very much depend on the outcome of the upcoming election. The Bill won’t have its second reading until Parliament reconvenes post election. Both Labour and NZ First are opposed on grounds of principle.
If the Bill passes, implementation is likely to be something of a minefield (much like our beloved 90 day trial periods!) If you have any questions or would like further advice about this proposed legislation or any part of an employment agreement, please get in touch with us.