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Employment Relations Act 2000

Continuity of employment if employees' work affected by restructuring - Specified categories of employees

69LA: Liability for costs of service-related entitlements of transferring employee

You could also call this:

“Who pays for the old benefits when an employee changes jobs during a company restructure”

When you choose to transfer to a new employer, there might be some benefits you haven’t used or been paid for yet. These are called service-related entitlements. They’re based on how long you’ve worked for your current employer.

Your current employer and your new employer need to figure out who will pay for these entitlements. If they can’t agree, they’ll split it like this:

Your current employer will pay for things you would have gotten if you had quit the day before you transfer. This might include unused holiday pay.

Your new employer will pay for things you’ve earned but wouldn’t have gotten if you had quit. This could include sick leave you haven’t used yet.

Your current employer needs to pay your new employer their share by the day you transfer, or by a later date if both employers agree. If they don’t pay, your new employer can take them to court to get the money.

If only part of your job is changing, they’ll only split the costs for that part. If your work will be done for more than one new employer, they’ll divide the costs fairly among them.

From the day you transfer, your new employer will be responsible for all your service-related entitlements, including the ones your old employer paid for.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6405924.

Topics:
Work and jobs > Worker rights
Business > Industry rules
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Part 6A Continuity of employment if employees' work affected by restructuring
Specified categories of employees

69LALiability for costs of service-related entitlements of transferring employee

  1. This section applies if—

  2. an employee elects to transfer to a new employer; and
    1. on the specified date, the employee has not taken, or been paid for, service-related entitlements (whether legislative or otherwise) that relate to the employee’s period of employment before the specified date.

      1. Liability for the costs of service-related entitlements (whether legislative or otherwise) of the employee must be apportioned between the employee’s employer and the new employer.

      2. If the employee’s employer and the new employer cannot agree before the specified date on how to apportion those costs, the costs must be apportioned as follows:

      3. the employee’s employer is liable for the costs that the employer would have been liable to pay to the employee if the employee had resigned and ceased employment with the employer on the day before the specified date (for example, costs related to annual holidays or alternative holidays not taken before the specified date); and
        1. the new employer is liable for the costs of any service-related entitlements that accrued before the specified date but would not have been paid to the employee if the employee had resigned and ceased employment with his or her previous employer on the day before the specified date (for example, costs relating to sick leave not taken before the specified date).

          1. The employee’s employer must pay to the new employer—

          2. the amount agreed before the specified date by the employee’s employer and the new employer; or
            1. if no amount is agreed, the costs described in subsection (3)(a).

              1. The employee’s employer must comply with subsection (4)—

              2. by the specified date; or
                1. if the employee’s employer and the new employer agree to a later date, by that agreed date.

                  1. If the new employer does not receive payment from the employee’s employer by the specified date or the agreed date (if any), the new employer may recover the payment, in any court of competent jurisdiction, as a debt due from the employee’s employer.

                  2. To avoid doubt,—

                  3. if only part of the employee’s work is affected by the restructuring, the apportionment of costs described in subsection (3) must relate only to the work that is affected by the restructuring:
                    1. if the work performed by the employee will be performed for, or on behalf of, more than 1 new employer, the apportionment of costs described in subsection (3) must be adjusted between the employee's employer and each new employer on a pro rata basis:
                      1. on and from the specified date, the new employer is liable to pay the employee for all service-related entitlements (whether legislative or otherwise), including those referred to in subsection (3)(a).

                        Notes
                        • Section 69LA: inserted, on , by section 40 of the Employment Relations Amendment Act 2014 (2014 No 61).