Employment law set to change

Wednesday 25 Oct 2017

Winston Peters and New Zealand First have announced their decision to form a new government with Labour and the Greens. The announcement can be found here.

New Zealand’s employment law landscape is now set to change and employers need to be ready to adapt. At this stage it is unclear exactly what policy changes will be implemented over the next three years, although some guidance can be gleaned from the policies proposed by each of the coalition parties leading up to the election. Some of the major employment policy changes announced during the campaigns are set out below.

The Labour Party’s campaign manifesto set out that in the first 100 days it would:
  • Replace the 90-day trial period framework with a new trial period system;
  • Pay all workers in core public sector services at least the Living Wage;
  • Increase the minimum wage to $16.50 an hour and base future increases on the real cost of living for people on low incomes;
  • Extend paid parental leave to 26 weeks;
  • Restore reinstatement as the primary remedy for employees who have been unjustifiably dismissed; and
  • Reform collective bargaining in New Zealand.

The Labour Party’s campaign manifesto also proposed that within the first 12 months it would:
  • Begin consultation on improving minimum redundancy protections for workers affected by restructuring;
  • Introduce statutory support and legal rights for ‘dependent contractors’;
  • Investigate options for ensuring that people who work over 40 hours a week receive adequate remuneration;
  • Increase the number of and resourcing for Labour Inspectors;
  • Introduce Fair Pay Agreements that set “fair and basic” employment conditions across an industry; and
  • 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 Green Party proposed to:
  • Implement annual adjustments in the minimum wage to ensure that it equates to no less than 66% of the average wage;
  • Increase protection for casual, seasonal, fixed term, temporary and event-based workers;
  • Introduce statutory protections for independent and dependent contractors;
  • Establish a minimum statutory entitlement to redundancy compensation;
  • Establish a task force to investigate the economic and social effects of a 35-hour working week; and
  • Extend entitlements to paid sick leave and bereavement leave, and establishing a separate domestic leave entitlement.

The New Zealand First Party proposed to:
  • Increase the minimum wage to $20 per hour;
  • Review the practice of ‘short-term’ employment contracts;
  • Ensure that hiring New Zealanders is a priority; and
  • Ensure enough workers are being trained in the area of aged care to cope with New Zealand’s ageing population.

It is likely we will see a mixture of the above proposals (or variations thereof) implemented in the coming years. Importantly, there are some common ideas that each of the coalition parties share. These include raising the minimum wage, increasing protections for casual, fixed term, seasonal and other short term workers, and introducing statutory protections for contractors. Employers will need to be alert to these proposed policies and be ready for change. Rest assured, we will be keep you updated with any changes as they develop.

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