Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill

Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill The Parliament of New Zealand enacts as follows: 1 Title This Act is the Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Act 2016 . 2 Commencement This Act comes into force on the day after the date on which it receives the Royal assent. 3 Principal Act This Act amends the Employment Relations Act 2000 (the principal Act ). 4 Section 102 amended (Employee may pursue personal grievance under this Act) In section 102, insert as subsection (2): 2 Subsection (1) does not apply to an employee who is a party to an individual employment agreement containing a term included under section 102A(2) and (3) . 5 New section 102A sections 67BA and 67BB inserted (Higher earners may contract out of this Part) After section 102 67B , insert: 102A 67BA Higher earners may contract out of this Part Employees earning at or above remuneration threshold may contract out of personal grievance provisions relating to dismissal 1 This section applies when— a a person ( employee ) is negotiating with another person ( employer ) to make an individual employment agreement; and b the individual employment agreement provides for an annual gross salary greater than $150,000. 2 The employee and the employer may agree to include a term in the agreement excluding the application of this Part. 1 An employment agreement between an employer and an employee who earns at or above the remuneration threshold may include a provision in the agreement that states, or is to the effect, that— a the employer may dismiss the employee; and b if the employer does so, the employee is not entitled to bring a personal grievance under section 103(1)(a) or other legal proceedings in respect of the dismissal. 2 The provision does not prevent an employee from bringing a personal grievance— a under section 103(1)(a) if section 17(1)(a) of the Protected Disclosures Act 2000 applies (which relates to retaliatory action in respect of protected disclosures of information); or b on any of the grounds specified in section 103(1)(b) to (j). 3 The term provision is void unless— a the agreement containing the term provision is in writing; and b the employee and the employer have signed the agreement; and c the employee had independent legal advice before signing the agreement; and d the lawyer who gave the advice explained the effect and implications of the term provision before the employee signed the agreement; and e the lawyer witnessed the employee's signature; and f the lawyer certified that the lawyer complied with paragraphs (d) and (e) ; and g the employee earned at or above the remuneration threshold— i at the time of signing the agreement; and ii at the time of dismissal. 4 Subsection (3) does not limit or affect any enactment or rule of law or of equity that makes an individual employment agreement void, voidable, or unenforceable on any other ground. 5 An employer is not required, in respect of an employee whose employment agreement contains the provision,— a to comply with section 4(1A)(c) in making a decision on whether to terminate the employment agreement; or b to comply with a request under section 120 that relates to terminating the employment agreement. 6 The employee is, in all other respects (including access to mediation services), to be treated no differently from an employee whose employment agreement does not contain the provision. 7 To avoid doubt, the provision may be included in an employment agreement under section 61(1)(a) but subject to section 61(1)(b) . 67BB Calculating remuneration threshold for purposes of section 67BA 1 An employee earns at or above the remuneration threshold for the purposes of section 67BA if the employee’s specified remuneration is $150,000 or more annually. 2 For the purposes of subsection (1) , specified remuneration — a includes— i gross salary or wages (or other payments to the employee) that are determined in advance and in writing under the employment agreement; and ii the agreed monetary value of any non-monetary benefit if the employee has an annual option under the employment agreement to exchange that benefit for a monetary payment; but b does not include— i any discretionary payments or other payments the amount of which cannot be determined in advance (such as bonus payments and commission payments); or ii any payments to reimburse the employee for costs incurred by the employee related to the employee’s employment; or iii any payment of an employer contribution to a superannuation scheme.