Opinion

Earlier in the year we alerted you to the up and coming changes to meal and rest breaks under the Employment Relations Act 2000 (the Act’). Essentially the changes remove some of the rigidity around breaks and allow employers the flexibility of negotiating breaks with their employees to suit the operational needs of their business.

These changes have now come into effect.  Major retailer, Cotton On, was the first company to try and take advantage of the new tea break law, which caused uproar from unions and the public, particularly via social media.  Cotton On decided to maintain paid breaks after the backlash; however if they had stuck to their guns, it would have meant that employees in the Auckland Distribution Centre would have had to individually negotiate their breaks with their employer.   The new law provides that if agreement cannot be reached then employers can unilaterally make the decision provided it is reasonable.  It is suggested that Cotton On’s initial position was not in line with the intention of the law.

The grounds on which an employer should provide breaks and make decisions about them are ambiguous and are currently untested.  So, how can the new law take effect in the work place without opening up avenues for employee dispute or backlash?

An employer must provide its employees with “reasonable opportunity” for rest, refreshment and attention to personal matters… and an employer may provide “reasonable compensatory measures” for the loss of a break.  It is still unclear what reasonable opportunity actually means - is it five minutes on site to have a quick coffee? Or 30 minutes to run a personal errand?  And what if the nature of your workplace means that it is actually impractical to offer a break at all - what is a reasonable compensatory measure?  It has been suggested that an employer could allow an employee to take a break at a different time later in the day, or offer time off on a different day.  Allowing an employer to make the call on whether or not they can reasonably offer a break at all could also be an area of contention.  Again, only time will tell how this plays out in reality.

The new law offers flexibility for employers to maintain productivity in their particular business.  It also serves to protect them in the instance that they cannot offer a break to an employee at what would ordinarily be break time.  However, it is also important to balance the needs of your business with the well being and interests of your employees.  Breaks are crucial to maintain a safe and healthy work environment, particularly in jobs involving physical or high risk work.  It is a fine balance between maximising efficiency in the workplace and maintaining productive and healthy employees. 

We suggest that in order to avoid the uncertainty created by the change in law, employers should consider clearly incorporating break provisions in their employment agreements.  There should be a clear and mutual understanding between parties, with the option of employer discretion.  It is always important to review and update your employment agreements.  If you think your employment contracts could do with a health check, then please get in touch with us.  We can tailor these new provisions to the needs of your business, taking in to account your operational environment and resources.  

Article by Alexa Mihailoff.  Alexa is a part of the Billings Employment Law Team and can assist employers and employees.  If you would like to know more about how the new tea break law could affect your business, or if you have any employment related queries, please contact Alexa on: AMihailoff@billings.co.nz or (06) 757 3944.