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March 2005

Further changes to Employment Law

As most readers will be aware already, 2004 saw the introduction of the Holidays Act 2003, which brought about significant changes to employees’ entitlements to annual leave and other holidays and the way in which payment for such holidays is calculated. It is fair to say that whilst the Act was intended to simplify arrangements regarding employees’ holidays, there was wide spread confusion amongst employers as to the implementation of these changes and their effect on holiday entitlements, particularly in relation to the issue of public holidays.

Amendments to the Employment Relations Act

Although the changes brought about by the Holidays Act received wide attention, considerably less attention was given to amendments to the Employment Relations Act 2000, which took effect on 1 December 2004. Whilst the more significant changes will affect those employers involved in collective bargaining, other changes will affect all employers.

All Employers who are contemplating selling their business need to contact us regarding the “Employee Protection” issues BEFORE signing any agreement to sell their business.

“Employee Protection”

For most employers, the change of most immediate significance requires all employment agreements entered into after 1 December 2004 to include an “Employee Protection provision”. Such a provision must set out procedures that are intended to protect the employment of employees whose positions are likely to be affected by the sale or restructure of their employer’s business. Furthermore, all existing employment agreements need to be varied to incorporate such provisions by 1 December 2005.

Review of Employment Agreements

Given the need to vary all existing employment agreements to ensure that the changes brought about by the Holidays Act 2003 and the amendments to the Employment Relations Act are incorporated into employees’ conditions of employment before the end of this year (and before 1 April 2005 in the case of the requirement to pay time and a half for work on statutory holidays) it is important that all employers review their existing employment agreements to ensure that they comply with the current legislation. Furthermore, all new employment agreements entered into after 1 December 2004 must now comply with the requirements of the amended legislation.

The Amendment Act has not been widely publicised but is of some significance with its terms needing to be implemented by employers before the 1st December 2005. Do not procrastinate!