Reduction of Employee Hours of Work
What you need to know as employers before reducing an employees hours of work
Can an employer reduce work hours unilaterally?
When times are hard the first thing an employer may look at is reducing the cost of labour, that reduces an employee’s hours of work.
However, under our Employment legislation, an employer is required to always act in good faith and if you are intending to reduce an employee’s normal hours of work, proper process needs to be followed.
Simply advising an employee that their hours of work will be reduced with no further information is not acceptable. Full consultation must occur prior the implementation of the reduction.
Failure to follow proper process could result in the employee raising a personal grievance claim seeking compensation.
The Employment Court recently released the revised bands for awards of compensation under s123(1)(c)I of the Employment Act 2000:
• Band 1: low level loss/damage = $0 – $12,000
• Band 2: mid level loss/damage = $12,000 – $50,000
• Band 3: high level loss/damage = over $50,000
We would recommend all employers to take legal advice before making any decisions as the current compensation awarded by the Employment Relations Authority is relatively high.
Please feel free to contact us if you have any further questions or enquiries