Running A Gym? Navigating The National Fitness Industry Code Of Practice

ExerciseNZ (New Zealand’s leading exercise association) released a National Exercise Industry Code of Practice. While it is not legally binding, it provides guidance on how fitness businesses can meet the legislative requirements of running a fitness business in New Zealand, which is particularly relevant to gyms.

Are You A Fitness Business? 

The Code provides definitions of the kinds of businesses that qualify as a fitness business.

You will be classified as a business providing fitness services if you provide: 

• Pre-exercise evaluations
• Exercise consultations
• Exercise programmes – group or individual
• Access to exercise equipment

If you provide one of these services, you are counted as a supplier of fitness under the code. You will be referred to in this article as a supplier.

You will not be classified as a fitness business if you are:

• A medical professional 
• A physiotherapist 
• A sport club 
• An educational institution 
• A business teaching martial arts
• A medical rehabilitation facility 
• A business providing court hire or other sport facility hire

Standard Fitness Business Practice

This section of the code deals with the minimum standards of business practice that ExerciseNZ and the relevant New Zealand legislation imposes on health and fitness businesses.

As a health and fitness business in New Zealand, you are encouraged to maintain a professional affiliation with ExerciseNZ. Benefits of affiliation include access to business resources, inclusion in ExerciseNZ’s directory, and various discounts and offers.

The Pre-Exercise Questionnaire! (And Other Prerequisites)

If you have used a fitness facility before, you have probably (or should have) been asked to complete a pre-exercise questionnaire before using it. This questionnaire is crucial for a business looking to minimise risk. 

Accordingly, the code specifies that as a supplier you should ensure all employees and clientele complete and sign a pre-exercise questionnaire. If they have any pre-existing conditions/areas of concern, you cannot supply a service that will put them at risk, given their condition. Exceptions may apply if the person provides medical evidence that they are not at risk, allowing you to provide the service.

Other prerequisites to providing services to a customer include: 

• Ensuring the customer understands all disclaimers and exclusion notices provided in accordance with applicable fair trading laws. 
• Offering induction and onboarding to a customer, including an explanation of safety policies. 

Employees And Contractors

The extent to which you must engage and monitor your employees as a health and fitness ‘supplier’ is also explained. 

Under the code, you have an obligation to: 

• Engage personnel via written agreement which includes a clear role description and services they are expected to provide. 
• Not hire anyone who is not registered to provide health and fitness services. 
• Not hire someone to provide a health and fitness service for which they are not registered.
• Ensure all vulnerable people and working with children checks have been done when hiring someone to work with vulnerable groups. 
• Monitor independent contractors and ensure they have insurance. 
• If allowing independent contractors to use your facility, you must clearly inform the customer that the individuals providing the service are contractors and not employees of the business. 

Equipment 

Health and fitness businesses typically have equipment for client use. The code provides guidance on how to minimise risk and adhere to legal requirements. 

Guidance includes directions to: 

• Regularly conduct risk assessments in your area 
• If you are running an unsupervised area where people can use equipment, such as 24-hour gyms, you must have ‘risk mitigation strategies’. Suggestions include: 
  • Electronic monitoring of the fitness facility
  • Making fixed and portable panic alarms (which notify your business to call emergency services) available
  • Make your safety and emergency procedures available and visible to your clientele. 
  • Provide communication methods, such as a telephone
  • Provide access to a single-use bathroom/change facility if offered. 
• If you are not operating an unsupervised fitness area, you must have a qualified professional supervising the provision of your services at all times. 
• Regularly clean and check any bathroom or shower areas
• Provide first aid equipment 
• Ensure any equipment you make available for use is installed properly, maintained regularly, and used correctly. This equipment should also comply with industry standards. 
  • The code also stipulates that a supplier of fitness services is entitled to withhold these services for two weeks each year for maintenance and repairs. 

Instructions To Comply With The Law

The code outlines the areas of the law a fitness business must also comply with. These include: 

• Insurance: ensure you have adequate insurance 
• Privacy: any personal information collected must be handled in compliance with the Privacy Act 2020.
• Confidentiality: if a customer makes a disclosure whilst you are providing services, you must keep this confidential. 
• If you operate an area for the supervision of children, this must comply with the relevant laws surrounding care of children and provisions of child care services. 
• Any aquatic areas must be operated by qualified individuals with all necessary steps taken to ensure safety in compliance with the law

Consumer Agreements 

A consumer agreement is a term for the contract between the supplier and the consumer of a good or service. It sets out the obligations and expectations of each party in the provision of the agreement. Each agreement can be unique, but there are some minimum standards that the code advises you meet. 

Minimum Requirements For Consumer Agreements 

The code specifies what your contract should set out at a minimum, including:

• The contract must be unambiguous and clear
• The contract must be in writing and signed either in person or electronically
• Specify the names and addresses of the parties involved, including the address of the fitness facility
• Specify the rights and responsibilities of each party
• Ensure all costs and expenses to the consumer are set out and explained
• Highlight that your business is bound by the Exercise Industry Code and that the consumer can lodge a complaint with ExerciseNZ 
• Specify that the consumer is bound by their obligations set out by the contract, are bound to follow the rules and any reasonable directions of the business, and must be aware of the risks to their person by participating. 
• If the agreement is ongoing, the minimum term that the contract runs for must not be greater than 12 months. 
• If the contract is prepaid, the term the contract runs for must not be longer than 12 months. 

Ensuring Your Consumer Is Fully Informed

When signing an agreement with someone, you must ensure they are fully informed as to the service you are providing. This applies to the fitness industry as well. The code establishes that any advertising that your business provides must not make misleading or deceptive claims about your service. 

Aside from ensuring any promotional material does not create unrealistic expectations or makes false claims, you can ensure your customers have fully informed consent by:

• Representing your product and your competitors’ products honestly.
• Ensuring interested parties can inspect any facilities or equipment provided free of charge. 
• Ensure the consumer knows about and has access to the Code.
• Manage how your personnel advertise and talk about the business – again ensuring they are being honest. 

Discounts In Consumer Agreements 

If a consumer agreement contains a discount to the usual cost of the service, the following must be set out in the consumer agreement:

• The usual fee that is offered
• Any potential increases in the usual fee
• If the cheaper price incurs a decreased quality of service

Prepaid Fees 

If you are about to open your business and begin accepting prepaid fees, the Code specifies steps that you should follow. 

First, no payments must be accepted if you are more than three months out from opening the facility. 

Second, you must place all of the pre-paid fees into a trust account, and these funds cannot be accessed until your fitness facility is open and the consumer has accessed the facility and has had 48 hours to decide if they wish to terminate the contract.

Cooling Off Periods

A cooling off period is the timeframe in which a consumer, after signing a contract, can terminate the contract without legal ramifications. The Code sets out that a cooling off period for any fitness business will be 48 hours after it commences.

A cooling off period commences either on the day the contract is entered into or, if the business has not opened at the time of signing, the day the business is fully operational.

Terminating A Consumer Agreement

A consumer agreement can be terminated in a variety of circumstances. In these cases, the supplier of the service is likely to be required to provide a refund, which can be minus any outstanding fees or administration costs, but only if this is specified in the contract. If the contract is terminated by the consumer reasonably, then the supplier must respond promptly. 

Reasons For Termination By The Consumer Or Supplier

A consumer can terminate a contract during the cooling off period. 

• To terminate a contract in this way, the consumer must give the supplier written notice that they are terminating – this can be delivered by email or post. 
• If the consumer terminates in this way, the supplier must give the consumer a refund minus any costs incurred by the consumer during the cooling off period, including a reasonable administration fee.

A consumer can terminate a contract if they are permanently physically incapable of using the service due to sickness or injury or other incapacity. 

• A consumer, terminating for this reason, must provide written notice and medical proof of their injury or condition. 
• The supplier, if a contract is terminated in this way, must provide a refund to the consumer minus any outstanding fees and a reasonable administration fee.

A consumer or supplier may terminate a contract if, 30 days after the signing of the agreement, there is a failure to provide the fitness service. You might want to make things clear with your customers with Gym Terms & Conditions.

Still Unsure…

This fitness code touches on many areas of law, including a large amount of contract law. If you need help with reviewing your contract, get into contact with Sprintlaw for an obligation-free chat! You can reach out to us at [email protected] or contact us on 0800 002 184.

---