What the new Government will mean for employers


Now that we have a new Labour/NZ First/Green's government in place we can expect to see a change in focus to employment legislation. The new Government will seize on their opportunity to put some changes in place to address what it sees as factors that are holding back pay increases for the average worker, however don't expect wholesale changes to our employment law.

Fundamentally, the principle intent of our employment law is sound. One of Labour's mantras, during the election campaign, was about lifting our low-wage economy; so we can expect there to be some urgency given to addressing this factor. We have already seen a signal to lift the minimum wage to $20 by 2020, with an immediate lift from $15.75 to $16.50 from next year.

Fair Pay Agreements

One area where employers may be concerned is the proposal to introduce Fair Pay Agreements. Labour's election policy says "Fair Pay Agreements (FPAs) will be agreed by businesses within an industry and the unions representing workers within that industry. FPAs will set basic standards for pay and other employment conditions within an industry, according to factors including job type and experience."

Just how these will play out is yet to be clarified. Labour indicated that they would sit down with businesses and unions in their first 12 months in office to work through the details. The NZCTU have indicated that they don't see industrial action in support of FPA's being a necessary part of the process. So, while we currently lack detail on how and what a FPA might look like, we can expect these to not be introduced until mid to late 2018. It is possible, that an FPA may end us setting a minimum wage increase for an industry, but still leave employers open to additional wage increase claims when it comes to renegotiating collective agreements between employers and unions. If FPA's play out this way, this would give unions and employees two bites at a wage increase.

Initiation of Bargaining

Another change that employers can expect to see is the return to giving unions the right to initiate collective bargaining ahead of employers. If this change comes in, it will undo the recent changes to the Employment Relations Act 2000 that put the employer and union on the same footing when it comes to when initiation for bargaining could occur.

Ending Collective Bargaining

The other expected change in the Employment Relations Act 2000 will be to restore the duty on parties who are in collective bargaining to reach an agreement (unless there is genuine reason not to). The unions in particular have not liked the recent changes to the Act that allowed either party to request the Employment Relations Authority to determine that bargaining had come to an end.

Industrial Action

We can also expect this government to remove the ability of employers to not pay employees when they take part in partial strike action.

90 Day Trials

We can expect the new Government to take steps to level the playing field over 90 day trials. The Government have not indicated that they will remove 90 day trials, however they have indicated an intention to make dismissal under a 90 day trial open to challenge. This challenge looks to be through a refereed service for disputes at which lawyers will not be able to participate, though the parties can be represented by an non-lawyer advocate. The matter will be heard within three weeks of being lodged and the referee can make decisions to reinstate the employee or award damages up to a capped amount. This change may put some employers off using the 90 day trial, however, subject to the details of any change being made public, we suspect that if you are treating your employee in good faith and giving them constructive feedback during the trial, and it still doesn't work out, provided you've been reasonable and fair in your dealings with the employee, and you can justify why the trial came to an end, then a referee would be expected to take that into consideration.

Until the full details of any of these, or other changes, come out, all we can do is keep a watching brief on what happens in this space. That being said, McKone Consultancy would encourage all employers to ensure that all their dealings with their employees continue to be conducted in good faith, complete with open, constructive and responsive communication.

If you need any assistance with any of these matters, contact Tony today for a free, no-obligation consultation.

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