Update on Employment Legislation and Cases Affecting Schools

Andrea PazinAndrea Pazin, Senior Associate at Belly Gully, shares an update on the legal framework governing employment and cases, that would affect schools. She will be delving further into this topic at the upcoming  Education Conference 2021 in Wellington on Thursday 25 February 2021.


2020 saw a significant number of legislative changes and cases with employment law implications for schools, and 2021 will involve further employment law developments. This article summarises the most relevant changes from 2020, and signals changes to look out for in 2021 and beyond.


Education and Training Act 2020

The Education and Training Act 2020 came into effect on 1 August 2020. It repeals and replaces the Education Acts 1964 and 1989 (amongst other legislation).

Changes involving the Teaching Council include the ability to renew practising certificates for teachers without satisfactory recent teaching experience if they agree to a refresh process. The requirement for the Teaching Council to audit teacher performance appraisals has also been removed. Under the new Act the Minister has powers to set new eligibility criteria for the appointment of school principals in State and State-integrated schools following consultation, with the aim of improving consistency across schools.

Requirements to advertise vacancies and appoint on merit in the “education service” have been incorporated into the Act from the now repealed State Sector Act 1988. These provisions can lead to challenges, particularly where fixed term requirements are not met and staff may seek to be treated as permanent employees, and in restructuring situations when considering redeployment obligations.


Cases involving teachers in 2020

There were employment cases involving teachers in schools in 2020 relating to rest and meal breaks, fixed term arrangements, and restructuring, with one school being required to make significant payments totalling over $165,000 across three employees when they got the restructuring process wrong by failing to follow a proper consultation process and consider redeployment.[1]


Pay equity and equal pay legislation and cases

During 2020, substantial amendments were made to the Equal Pay Act 1972 to make the process for pay equity claims more practical and accessible. Pay equity claims can arise where there is systemic sex-based pay undervaluation in an occupation that is or has been predominantly performed by women. The new framework (introduced by the Equal Pay Amendment Act 2020) involves good faith negotiations and provides the ability to access mediation and resolutions services if needed (similar to the existing bargaining framework).

A number of pay equity claims were raised in the education sector late last year, including by school science technicians, school librarians and library assistants, psychologists, therapists and education advisors, as well as intermediate, composite and secondary school teachers and principals in state and state-integrated schools.

Under the new framework, when a claim is raised, the employer has 45 days to determine whether a claim is arguable. If it is, then an assessment follows to determine the nature and extent of any gender-based undervaluation, ahead of negotiating how any pay inequity may be resolved.

As an example (albeit under the legislation prior to the latest amendments), a claim by teacher aides was made in 2016 and settled in November 2020 following a joint process between the Secretary of Education and the relevant unions. The settlement included an increased remuneration rate, increases in the Tiaki allowance, improved access to professional learning and development, improved certainty in hours and an agreement to a longer-term review around funding (settlement outcomes will be different for each claim). These changes are currently being implemented in Collective Agreements and IEAs.

In 2021 we expect existing claims to progress, and we will likely see more claims being made and cases testing various aspects of the new legislation.

In addition to pay equity, the Equal Pay Act also deals with equal pay – that men and women should be paid the same for doing the same job. A significant equal pay case was heard by the Employment Court in 2020 involving the treatment of non-contact time for part-time teachers.[2] The claim is that part time teachers who are not provided with non-contact time, and who are predominantly women, are paid less, relatively, than their full-time counterparts who get non-contact time. The case was heard in 2020, with the judgment yet to be released.


Holidays and leave legislation and cases

The Government has announced some specific changes to current holidays and leave entitlements that will apply to all employees in New Zealand. This includes:

  • An increase to sick leave entitlements from five to 10 days’ paid sick leave per 12 month period. This is likely to apply whether staff are full time or part time. No change is anticipated to the current entitlement to accumulate leave up to a maximum of 20 days. This legislation will likely come into effect later this year, although in many cases staff within schools will already have access to similar or greater entitlements, including through applicable collective agreements.
  • The creation of a new public holiday to celebrate Ngā Mata o te Ariki (Matariki), which will be the subject of an amendment to the Holidays Act in 2021. The first Matariki public holiday will be on 24 June 2022 and the holiday will be on different dates in June or July each year.

More generally, there is a reasonable prospect of the Government proposing either significant amendments to the Holidays Act this year, or introducing replacement legislation, to strengthen and simplify the Act. This is likely to build on the work and recommendations of the Holidays Act Tripartite Taskforce reported to the Minister in late 2019.

Any legislative changes are likely to be some time away, and in the meantime employers are obligated to comply with the current Act. The complexity of the schools’ payroll arrangements and issues with compliance have been identified, and the Ministry is working on remediation and compliance arrangements.

We will also continue to see developing case law on aspects of the Holidays Act, as was the case in 2020. This includes a decision from the Court of Appeal in early 2021[3] relating to whether commission payments were a “regular part of the employee’s pay” and therefore included in calculating ordinary weekly pay when determining pay for annual holidays. The Court held that a payment was a “regular part of the employee’s pay” if it was made systematically and according to rules, or if it was made uniformly in time and manner. In the school environment the case may have implications for assessing whether payments to staff for overtime are “regular” and should similarly be included in annual holiday calculations.


Privacy law changes

The Privacy Act 2020 came into force on 1 December 2020, replacing the Privacy Act 1993. The new Act includes (amongst other changes):

  • A requirement to notify the Privacy Commissioner and potentially affected individuals of certain privacy breaches that cause or are likely to cause serious harm.
  • New powers for the Privacy Commissioner to make binding decisions on requests to access personal information, to issue compliance notices, and increased investigatory powers.
  • Information Privacy Principle 4 now emphasises that the manner of collection must be fair and not intrude to an unreasonable extent on the personal affairs of the individual “particularly in circumstances where personal information is being collected from children or young persons”.
  • New grounds for refusing access to an individual’s personal information in certain circumstances relating to victims of crimes or where there is a significant likelihood of serious harassment.
  • Stronger protections relating to the transfer of personal information to an entity outside of New Zealand.

Finally, while all agencies, including schools, are required to have a Privacy Officer, the new Act makes it clear that the Privacy Officer can be from either within or outside the agency, providing an explicit ability to outsource this function.


Triangular employment relationships

A triangular employment arrangement is a situation where the employer arranges for an employee’s placement or assignment with a third party (the controlling third party). From 28 June 2020 changes to the Employment Relations Act 2000 mean that a “controlling third party” may be joined as a party to a personal grievance claim, and have remedies awarded against them in certain circumstances. This will be relevant for Schools, including where they have secondment arrangements and where they use labour hire arrangements (for example engaging a reliever through a labour hire company).


COVID-19 case law and issues

2020 saw the start of what will be a stream of case law on employment issues relating to COVID-19. Ongoing issues will continue to arise, including questions around the vaccination of employees and others that will be relevant in 2021.


Other likely legislative reform in 2021

Beyond the changes outlined above, other employment law changes are likely in 2021 based on bills already before Parliament and the Labour Party’s election manifesto. These include:

  • A minimum wage increase from NZ$18.90 to NZ$20.00 per hour, taking effect on 1 April 2021 (this may also have relativity flow-on impacts for other employees in bargaining etc).
  • The proposal of legislation to implement Fair Pay Agreements – we expect further public consultation to occur before legislation is drafted. This development may have implications for workers in schools providing services like cleaning and security.
  • Possible legislative recognition and protections for “dependent contractors” (i.e. contractors who are self-employed, but rely on and/or work exclusively for a single principal/employer).
  • Changes to the “passing on” provisions in the ERA, to make it harder for collective agreements to be undermined.

There are plenty of developments to watch out for in 2021 on the employment front that will have impacts for schools, so watch this space.

[1] Jackson v Southland Boys High School BOT [2020] NZERA 527.

[2] NZPPTA v Secretary for Education [2020] NZEmpC 74 is an interlocutory decision in this matter.

[3] A Labour Inspector of Ministry of Business, Innovation and Employment v Tourism Holdings Limited [2019] NZCA 569.

Andrea Pazin is an experienced litigation lawyer specialising in employment law, health and safety and education work. She is a senior associate in Bell Gully’s industry-leading employment team. She advises on a broad range of employment matters. In the education sector she has advised ECE Centres, Schools, Universities, Polytechs and the Ministry of Education. Connect with Andrea via email or LinkedIn