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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 18771
Experience:  32 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Hi, my workplace has just been through a restructure and we

Customer Question

Hi, my workplace has just been through a restructure and we have all been given new contracts. My job was re-established and has not changed. In the new contract they are proposing a cap to the maximum sick leave you can accrue from currently 50 days to 20 days. I don't actually mind this but they are planning to remove the leave we have currently accrued, are they legally allowed to do this? I feel that I shouldn't be disadvantaged given that my job hasn't changed, am I obliged to sign my new contract?
Also in my current contract (dated 10/08/09) the employer contribution for Kiwisaver formed part of my total remuneration package, so I was paying the employer contribution as part of my total package. "The employee agrees that the compulsory employer contribution forms part of their total remuneration". In the new contract they are proposing to pay their employer contribution on top of my base salary "the council will pay the compulsory employer contribution to a kiwisaver scheme $.... (if any) as required under the kiwisaver act 2006 from time to time (currently 3%)". If I sign my new contract does that mean I will be 3% worse off?
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

christhelawyer : HiWelcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear
christhelawyer : If you are still in the same job, and there are no changes otherwise, you do not have to sign the new contract. This would mean you are covered by the existing contract and keep the sick leave accumulated.
christhelawyer : On the Kiwisaver issue, if the package is the same overall you are not disadvantaged but I was not sure if the old arrangement was a greater figure than what you are getting in the new offer, plus the employers contribution.
christhelawyer : In any event this is also something you can decline to accept.
Customer :

Sorry that didn't quite answer my question, legally are they obligated to pay their 3% employer contribution on top of my base salary as part of the act?

christhelawyer : Yes, on my interpretation of the way they have done this.
Customer :

Sorry but you are still not answering my question. In NZ law and in any workplace in NZ are employers obliged to pay 3% Kiwisaver on top of base salaries.

christhelawyer : The answer is that the employer is obliged to pay a compulsory contribution at 3% of your gross salary. This is prescribed in section 64 of the Kiwisaver Act
Expert:  Chris The Lawyer replied 1 year ago.
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Customer: replied 1 year ago.

I ended up getting advice from my Kiwisaver provider which differs from your advice.
Question: Our council currently counts the kiwi saver contributions in our total remuneration package so in effect their 3% contribution comes off our pay. Is this correct and legal??


Answer: Yes this is correct. Some Councils pay employer KiwiSaver contributions on top of salary & some Councils include these payments as part of total remuneration. Either way is legal; it is up to the individual employer how they choose to do it. As I understand it QLDC currently includes these payments as part of total remuneration.


My current contract is total remuneration and my new (unsigned) contract is the opposite, my question to you is that if I stay on my current contract do they legally have to pay Kiwisaver on top of my base salary or would I have to stay on total remuneration as this is what the current terms state?

Expert:  Chris The Lawyer replied 1 year ago.
It comes down to the difference between what they call the package, and the gross salary. The package they say includes the 3% but your gross salary in fact should be less the 3%. The wording of the act is clear, and your true gross salary is without the Kiwisaver contribution. So I suspect they are playing with the numbers to make your package look better. But the gross salary should be without their contribution.

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