New Zealand Employment Law Update: August 2023

Employment Relations (Restraint of Trade) Amendment Bill

Almost a year since its introduction, the Employment Relations (Restraint of Trade) Amendment Bill has progressed to the Select Committee stage.

The Bill proposes three major limitations on the current ability for parties to mutually agree restrictions that apply post-employment:

1. Restraints of trade will be ineffective against employees who earn less than three times the minimum wage;
2. Employers will be required to compensate an employee for every week they are restrained for an amount of at least half of the employee's average weekly earnings;
3. No restraint can be imposed for longer than 6 months, regardless of an employee's seniority.

The aim of the Bill is to limit the number of low-medium income employees being restrained, and it recognises that many unreasonable restraints are unchallenged due to the cost and expense of doing so. If introduced, the Bill will provide greater certainty regarding enforceability of restraints from the outset of employment, and likely reduce litigation in this space. However, it will significantly limit the ability for employers to negotiate longer restraints where there is a genuine need to protect their proprietary interests for periods in excess of six months.

The Education and Workforce Committee is calling for submissions until 18 September 2023.

Human Rights (Prohibition of Discrimination on Grounds of Gender Identity or Expression, and Variations of Sex Characteristics) Amendment Bill

Elizabeth Kerekere's Bill, which would make gender identity and variation of sex characteristics a prohibited ground of discrimination under the Human Rights Act 1993, has been pulled from the parliamentary ballot.

The Bill proposes to add two new grounds to the list of prohibited grounds of discrimination in section 21 of the Human Rights Act. These are gender identity or expression and variations of sex characteristics. The same additions would also be made to section 105 the Employment Relations Act 2000 which mirrors the grounds of discrimination in the Human Rights Act 1993.

The Bill defines the new grounds broadly. 'Gender identity and expression' may include any gender-related characteristic but highlights self-identified gender, pronouns, name, and appearance whereas 'sex characteristics' relate to a person’s physical, hormonal, or genetic features.

Kerekere has expressed that the Bill's purpose is two-fold: to work towards ending discrimination against LGBTQ+ people and to partially address the impact of colonisation, as Te Ao Māori have historically accepted those with diverse genders and sexualities.

Although questions about the Bill's drafting are inevitable, this Bill is unlikely to face significant opposition and will, most probably, be brought into law – potentially by the end of 2023.