NZ's Employment Law Shakeup

With Labour, NZ First & Greens coalition government, New Zealand's employment law is about to receive a shakeup!

Its never easy to balance to rights and obligations of employers and employees (& contractors) but eventually, it all ends up on the cost of the product or service the end-user buys. Gone indeed are the days when the end-user is forced to pay the said price. With opening of trade, too high a cost of production and distribution, makes the product or service uncompetitive relative to imports and too low a price, makes it uneconomical to produce relative to other investment opportunities.

It is likely we will see a mixture of the below proposals implemented in the coming years. Employers will need to be alert to these proposed policies and be ready for change and we will be there to assist as needed.
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To give you a flavour of what may transpire, we list below the campaign promises made by the above three parties. The information has been collated from individual party websites and articles written by employment law specialists.

The Labour Party’s campaign manifesto states it would:

1. Increase the minimum wage to $16.50 an hour and base future increases on the real cost of living for people on low incomes;
2. Replace the 90-day trial period framework with a fair trial period system to "provide both protection against unjustified dismissal and a simple, fair, and fast referee service"
3. Pay all workers in the public sector at least the Living Wage;
4. Extend paid parental leave to 26 weeks;
5. Reforming the Equal Pay Act on Pay Equity Principles to give all women in female-dominated workforces access to collective bargaining and court processes to settle their claims.
6. Restore reinstatement as the primary remedy for employees who have been unjustifiably dismissed; and
7. Reform collective bargaining in New Zealand.

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The Labour Party’s campaign manifesto also proposed that within the first 12 months it would:

1. Begin consultation on improving minimum redundancy protections for workers affected by restructuring;
2. Introduce statutory support and legal rights for ‘dependent contractors’;
3. Investigate options for ensuring that people who work over 40 hours a week receive adequate remuneration;
4. Doubling the number of and resourcing for Labour Inspectors;
5. Introduce Fair Pay Agreements that set “fair and basic” employment conditions across an industry; and
6. Investigate measures that improve job security for people in precarious forms of employment (e.g. labour hire, casual, seasonal, contracted or sub-contracted workers).

The New Zealand First Party proposed to:

1. Ensure that hiring New Zealanders is a priority over importing labour;
2. Increase the minimum wage to $20 per hour;
3. Review the practice of ‘short-term’ employment contracts; and
4. Ensure enough workers are being trained in the area of aged care to cope with New Zealand’s ageing population.

The Green Party proposed to:

1.  Expand the apprenticeship programme
2. Implement annual adjustments in the minimum wage to ensure that it equates to no less than 66% of the average wage;
3. Increase protection for casual, seasonal, fixed term, temporary and event-based workers;
4. Introduce statutory protections for independent and dependent contractors;
5. Establish a minimum statutory entitlement to redundancy compensation;
6. Establish a task force to investigate the economic and social effects of a 35-hour working week; and
7. Extend entitlements to paid sick leave and bereavement leave, and establishing a separate domestic leave entitlement.

Key message
The key message here is that employment law is about to get a shakeup. We expect consultations with stakeholders but its likely the full import of these policies will only be truly understood when the wordings of the proposed law changes are available. We're not sure how much of this will be implemented the 3 years to next election but chances are that the changes will start to come through in year 2. We do recommend you connecting with employment law specialists and consider impact on your business. We at Core Business services are able help you with modelling the changes to work out the impact on your bottom line.

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Disclaimer
​The above publication discusses business issues generally and is not intended to be specific advice. Whilst every effort has been made to provide valuable, useful information, Core Business Services Ltd, any related suppliers, associated companies & practices accept no responsibility or any form of liability from reliance upon or the use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only. Please do consult with your advisor or call this firm for information / advise specific to your circumstances before finalising any particular course of action.