Clauses in the Employment Legislation Standards Bill which are intended to prohibit "zero hours" contracts are unclear and appear to enable zero hours contracts, subject to a requirement to pay compensation to the employee, the New Zealand Law Society says.

In a submission on the bill to the Transport and Industrial Relations Committee on the bill, the Law Society says the Explanatory Note and public statements suggest that zero hours contacts are to be prohibited.

However, in none of the proposed sections is there a prohibition on 'zero hours' contracts. In fact, such contracts are enabled because, as there may be no minimum hours of work agreed, the hours of work may be zero," it says.

Further, a proposed section says all work performed under the employment agreement may be performed under an "availability provision" - including where there are no agreed minimum hours of work at all.

The Law Society says it rests on a "questionable interpretation" of section 65(2)(a)(iv) of the Act that "an indication of the arrangements relating to the times the employee is to work" can include the position where there are no arrangements at all relating to the times the employee is to work other than employer discretion.

The Law Society recommends that the bill includes a preliminary purpose section to explain the intention behind the "agreed hours of work" provisions and to clarify whether zero hours contracts are prohibited or enabled subject to minimum requirements to protect employees.

Considering another aspect of the bill, the Law Society submission says it is concerned that the application of the civil standard of proof for pecuniary penalties and banning orders is inappropriate.

"In principle, while it may be appropriate that declarations of breaches of employment standards and compensation orders may be made on the balance of probabilities standard, a civil penalty such as a pecuniary penalty, or banning order should not be imposed on a balance of probabilities, and the protections available to criminal defendants ought to be available."

The Law Society recommends that pecuniary penalties and banning orders should only be available on proof beyond reasonable doubt of the breach of employment standards.

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