Several changes to employment laws in force from 1 April 2016. These changes include restrictions on deductions from wages, recording of hours worked and payments made, recording of agreed hours of work, restrictions on zero hours contracts, payment for cancelled shifts, restrictions on prevention of secondary employment and penalties up to $200,000 and/or 3 years imprisonment and/or 10 year bans from being an Employer.

Wages Protection Act

Under the current law an employer can make deductions from payments to an employee with the employee’s written consent or at their written request (plus recovery of overpaid wages in certain circumstances)

The new law allows deductions based on specific written consent and general consent in an employment agreement. 

However, an employer will not be able to make specific deductions on the basis of a general clause in the employment agreement without first consulting the worker. As employees can give notice to revoke a written consent (including one in an employment agreement) at any time, the requirement to consult could trigger a withdrawal of consent.

Employers must action the withdrawal of consent as soon as practicable which will prevent the deduction of any payment the employee does not still agree to (despite prior agreement) with the exception of overpaid wages (in some circumstances).

The new law also requires that deductions must not be unreasonable.

Holidays Act

The new law requires the recording of hours worked each day in the pay period and the amount paid for those hours.

If the employer and employee agree on the hours to be worked and the employee works those hours then it is sufficient to record those in the wage and time records or employment agreement or in the roster record normally used in the workplace.

Any additional hours worked must also be recorded.

Employment Relations Act

Key records must be kept in sufficient detail to demonstrate compliance with minimum entitlements (e.g. Holidays, Minimum Wages, Wages Protection etc).

Employers must specify in the employment agreement the agreed hours of work including detail on:

  • Number of guaranteed hours;
  • Days of the week on which work to be performed;
  • Start & finish times; and
  • Any flexibility in days/times.

“Zero hours” contracts have been restricted. If an employment agreement provides that the employee will be available for work the “availability” provision relates only to hours in addition to the guaranteed hours.  The employer must have genuine reasons for including an availability provision and for the number of hours specified and must provide reasonable compensation for the employee being available for those extra hours.

In deciding if there are genuine reasons the following must be considered:

  • If it is practicable to meet business demands without an availability provision;
  • The number of hours the employee is required to be available; and
  • The proportion of those hours to the agreed hours of work.

In deciding what is reasonable compensation under the availability provision all relevant factors must be taken into account including:

  • The number of hours the employee is required to be available;
  • The proportion of those hours to the agreed hours;
  • Any restrictions that arise from the availability provision;
  • The rate of pay for work available for; and
  • If paid by a salary, the amount of the salary.

Employees may agree that their salary includes compensation for availability.

Employees can refuse work if there is no proper compensation provision.  It is unlawful for a worker to be adversely treated for refusing to perform work if there is no compensation provision.

Adverse treatment is given a wide meaning and includes the terms of employment, conditions of work, fringe benefits, training, promotion, transfer, dismissal or detriment or retires or requires or causes an employee to retire or resign.

Cancellation of Shifts

If an Employee is required to undertake shift work the Employer must not cancel a shift unless the employment agreement stipulates a reasonable notice period; and reasonable compensation for cancellation without the required notice. The Employer must then give the notice or pay the compensation.

The period of notice is to be determined by all relevant factors including the nature of business and ability to control or foresee circumstances giving rise to cancellation and the nature of the employee’s work and the likely effect of cancellation on the employee and the nature of the employment arrangement, agreed hours and guaranteed hours.

The compensation is determined by all relevant factors including the period of notice, what remuneration would have been paid (if they had worked the shift) and any costs the employee incurred in preparing for the shift due to the nature of work.

The Employee will be entitled to full pay if the shift is cancelled and the agreement does not comply, the shift is cancelled but no notification until the start of the shift or the shift is cancelled part way through the shift.

Secondary Employment

An employer cannot prohibit an employee taking on secondary employment unless there are genuine grounds for the prohibition and those reasons are in the employment agreement.

The genuine reasons can be protecting employer’s rights (eg commercially sensitive information, intellectual property, commercial reputation) and preventing conflicts of interest that cannot be done without the prohibition of secondary employment.

In addition the restrictions must not be greater than necessary.


Persistent offenders can be fined up to $100,000, have to pay compensation and/or be banned from being an employer, being an officer of an employer and/or being involved in hiring or employment of employees.

The ban can be up to 10 years. Anyone breaching a ban can face a fine up to $200,000 or three years in prison or both.

To make sure Employers personally pay the fines it is unlawful to take out insurance against fines.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.