Simpson Grierson - Election 2023: Employment Relations Policies

10/10/2023·5 mins to read

Election 2023: Employment Relations Policies

With the general election taking place this Saturday, we have analysed some of the key workplace relations policies released by political parties.

Labour

Labour has promised to progressively extend the living wage (currently $26 per hour) to education and health workers, reduce the gap between minimum and living wage, abandon starting out and training wages and protect collective bargaining and fair pay agreements (FPAs).

Based on Simpson Grierson’s survey of employers last year, 74% of respondents were against FPAs. Three FPAs are now in bargaining for bus drivers, hospitality and security guards. A further three have been approved for bargaining (supermarket workers, early childhood and commercial cleaners). MBIE is currently assessing an application for FPA bargaining for waterside workers. The fact that no FPAs have been concluded since the Act was introduced last December seems to highlight the clunky and lengthy process.

There is no chance of a repeal if Labour is re-elected but, at the very least, the framework should be refined to better reflect the policy objective of preventing the ‘race to the bottom’ for low paid workers.

National

National’s most significant promise to employers is to repeal the FPA scheme with Workplace Relations and Safety spokesperson, Paul Goldsmith saying that “Flexible labour markets are one of the foundations of our relative economic success in the past few decades” and that the fair pay agreements scheme “undermines that foundation and will harm our economy and our national competitiveness.”

National would reinstate 90-day trial periods to cover all businesses. However, this does not seem to be a priority for large employers, anecdotal feedback suggests that a number of employer’s would not use them even if they were reintroduced.

Unsurprisingly National has also promised to cut Labour’s red tape around farming. This includes their promise to increase the number of workers that can be employed under the Recognised Seasonal Employer scheme that allows horticulture and viticulture industries to recruit workers from overseas for seasonal work. The current cap in place is 19,000. National proposes to double the worker cap over five years to 38,000 per year.

National also proposes removing the median wage requirement of $30 per hour for agriculture workers on Accredited Employer Work Visas replacing it with an industry average that reflects skill and experience.

Parental Leave - enhanced benefits on offer from both Labour and National

Labour proposes that partners of primary caregivers will receive four weeks of paid leave which could be taken either concurrently or consecutively with their partner. Labour says it would start as two weeks of paid partner leave on 1 July 2024, increasing to three weeks by July 2025 and four weeks by July 2026.

Labour also proposes that government will pay a matching KiwiSaver ‘employer’ contribution to paid parental leave recipients, provided they continue to make their own KiwiSaver payments.

National has indicated that it will modernise parental leave entitlements by allowing parents to choose how they divide their paid leave: by taking it at the same time, one after the other or in overlapping instalments.

We believe the above policies would be a welcome change. Allowing more families the flexibility to decide what is best for them can only be a positive.

Green Party

The Green Party has announced that union membership would be the default when a person starts a new job. While they could then opt out, employees may not feel comfortable in practice to do so. There are already prescriptive requirements as to what an employer must do to inform new employees about the union and the application of a collective agreement in the first 30 days of employment so that they can voluntarily join if they wish to.

Green has proposed to strengthen the collective bargaining framework for employees and implement stronger protections for contractors, such as ensuring they can be covered by FPAs and join other industry-specific collective bargaining.

Green intends to increase the minimum wage, provide all working people with a right to redundancy compensation and increase resources across the Labour Inspectorate, WorkSafe, and the Employment Relations Authority (ERA) to ensure all working people can uphold their workplace rights.

The party also intend to phase in five weeks of annual leave, implement the Holidays Act Taskforce recommendations, and ensure bereavement leave entitlements are culturally appropriate for all New Zealanders, in particular acknowledging the significance of tangihanga for Māori.

Act Party

Act intends to require the ERA to deliver determinations within a month or ERA members will be fired. We believe that this would not facilitate good outcomes for employers or employees. The current expectation of up to three months for a determination is more realistic given the resourcing and workload of the ERA and the complexity of some of the issues that they may be dealing with. Act would remove the eligibility for remedies for an employee who raises a personal grievance and whose behaviour is at fault to “rebalance the playing field so both employer and employee behaviour are treated equally.”

Under Act, the ERA would no longer be able to ‘unilaterally’ reinstate an employee. When matters reach this stage, no employer is ever going to agree to reinstate a dismissed employee and so this would effectively abolish the remedy of reinstatement. A report published by the ERA indicates that, despite reinstatement being the primary remedy, out of 31 permanent reinstatement applications between 2020-2022, only five were successful. This seems to show that considerations of practicability and reasonableness of reinstatement are being weighed up.

ACT proposes amending the Employment Relations Act so that contractors won’t be able to challenge their status in the employment court if certain minimum standards are met.

Our take is that greater flexibility and freedom of contract for workers in the gig economy should be explored, but this policy goes too far. As an alternative, parties should be free to negotiate their own status as a contractor or employee and/or a fixed term period of employment if they earn above a pay threshold that is well above the minimum wage.

ACT also intend to introduce a three-year freeze on minimum wage increases and has previously indicated that it will reduce sick leave entitlements from 10 days back to five and remove a public holiday, but it is not clear if this is still part of ACT’s policies.

Te Pāti Māori

Te Pāti Māori proposes the minimum wage is immediately increased to $25 per hour and to legislate an annual increase to reflect cost of living increases. It also proposes the ‘starting out’ and ‘training’ wages are abandoned. While aspirational and desirable, many small businesses would struggle to afford this.

Te Pāti Māori also intend to legislate to ensure contractors can participate in multi-employer collective bargaining and collective bargaining.

New Zealand First

NZ First proposes that anyone who was dismissed because they chose not to be vaccinated in accordance with the Covid-19 vaccine mandates be reinstated to the position they were dismissed from and compensated. Details on the quantum of compensation or considerations of the suitability of reinstatement have not yet been provided.

This is an unnecessary policy where there are existing rights for employees to pursue an unjustified dismissal claim and to be awarded appropriate remedies if they are successful, including reinstatement where that is practicable and reasonable. Vaccination related dismissals were nuanced and require careful consideration on their own facts.