MP Helen Whites Private Members Bill provides that restraints of trade should have no effect wherever an employee earns less than 3 times the minimum wage.
Why? Do you agree or disagree with this proposed law change?
The Bill is available here
Helen White Employment Relations (Restraint of Trade) Amendment Bill Member's Bill 1721 The Parliament of New Zealand enacts as follows: 7I Interpretation In sections 67J and 67K - average weekly earnings, in relation to an employee, means the employee's average weekly earnings as calculated under subsection (2) gross earnings has the meaning given to it by section 14 of the Holidays Act 2003 reasonable compensation, in relation to an employee who is subject to a restraint of trade provision, means compensation that- (a) is paid separately from any salary, wages, or other benefit provided to the employee in connection with their period of employment; and (b) amounts to not less than half of the average weekly earnings of the employee for each week (or part week) that the restraint of trade provision applies restraint of trade provision means a provision in an employee's employment agreement that- (a) operates after the employment ends; and (b) prohibits or restricts the former employee from 1 or more of the following: (i) performing work in a similar field to their former employer's business: (ii) contacting or dealing with employees or clients of their former employer's business: (iii) offering employment to employees of their former employer's business threshold weekly rate means an amount that is 3 times the minimum weekly adult rate prescribed under section 4 of the Minimum Wage Act 1983. For the purposes of subsection (1), average weekly earnings must be calculated as follows: a=b/(cd) a is the employee's average weekly earnings b is the employee's gross earnings received from the employer in the 52 week period preceding the end of the employment c is the lesser of the following: (i) the number of weeks (to the nearest week) that the employee has been employed under the employment agreement; and (ii) 52 d is the number of weeks (to the nearest week) in the 52 week period (or, if the employee has been employed under the employment agreement for less than 52 weeks, in that shorter period) in which the employee was- (i) being paid weekly compensation under the Accident Compensation Act 2001: (ii) exercising their entitlement to leave under the Parental Leave and Employment Protection Act 1987: (i) being paid weekly compensation under the Accident Compensation Act 2001: (ii) exercising their entitlement to leave under the Parental Leave and Employment Protection Act 1987: (iii) on leave without pay with their employer's agreement. 67J Restriction on restraints of trade (1) A restraint of trade provision is of no effect unless- (a) the employee's average weekly earnings exceed the threshold weekly rate; and (b) the employer has a proprietary interest and- (i) the provision protects the interest; and (ii) the interest is described in the agreement; and (iii) the restrictions imposed on the employee by the provision are no greater than necessary having regard to the interest; and (c) the provision requires the employer, at the time that the employment ends, to pay reasonable compensation to the employee for the restrictions imposed by the provision. (2) A restraint of trade provision is of no effect unless the reasonable compensation referred to in subsection (1)(c) has been paid to the employee. (3) A restraint of trade provision ceases to have effect on the day that is 6 months after the date on which the employmen ends (or on any earlier date agreed by the parties). (4) An employment agreement that contains a restraint of trade provision that is of no effect under this section is not, as a consequence, an illegal contract under subpart 5 of Part 2 of the Contract and Commercial Law Act 2017. 67K Effect on law of restraint of trade, confidentiality, and fidelity (1) Nothing in sections 671 or 67J limits or affects any rule of law relating to restraint of trade, except to the extent that the rule is inconsistent with those sections. (2) Nothing in sections 671 or 67J limits or affects the common law duties of confidentiality and fidelity. 5 Section 103 amended In section 103(1)(h), replace "or 67H " with "67H, or 67J ". 6 Schedule 1AA amended In Schedule 1AA - (a) insert the Part set out in the Schedule of this Act as the last Part; and (b) make all necessary consequential amendments. Schedule New Part 4 inserted into Schedule 1AA Part 4 Provisions relating to Employment Relations (Restraint of Trade Terms) Amendment Act 2022 Interpretation In this Part, 2022 Act means the Employment Relations (Restraint of Trade) Amendment Act 2022. Application, savings, and transitional provisions arising from 2022 Act The amendments made by the 2022 Act do not apply to conduct that occurred before the commencement of that Act. If a collective agreement (the previous agreement) is in force immediately before the commencement of the 2022 Act sections 671 to 67K (as inserted by section 4 of that Act) apply to- (a) any collective agreement that replaces the previous agreement, on the commencement of the replacement agreement; and (b) an individual employment agreement that comes into force under section 61(2)(a), based on the previous agreement and any additional terms and conditions agreed under section 61(1), on the commencement of the individual employment agreement. If an individual employment agreement has been entered into, or has come into force under section 61(2)(a), before th commencement of the 2022 Act, sections 67 I to 67K (as inserted by section 4 of that Act) apply to the agreement from the day that is 6 months after the date on which the 2022 Act came into force
