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Wide-reaching employment law changes promised by Labour

September 06, 2017


Partners Phillipa Muir, John Rooney, Samantha Turner, Shan Wilson

Employment (inc Employment Relations Amendment Bill) Government reform and public policy

With the election contest running hot, we wanted to provide an update on some of the key features of the employment law campaign policies for the two major parties. 

In broad terms, Labour is proposing some fundamental changes to employment law that could lead to significant implications and increased compliance costs for businesses, whereas National is campaigning on maintaining the status quo.

Observers may be surprised at how little attention is being given to the policy proposals in the employment area - particularly as they could have significant ramifications for both large and small businesses. For example, Labour is proposing the removal of trial periods and the introduction of industry-wide terms and conditions of employment (under 'Fair Pay Agreements'), which could see a return to a form of national 'award' structures.

Both parties will:

  • Extend Paid Parental leave: National to 22 weeks, Labour to 26 weeks.
  • Increase the minimum wage: National "at a sustainable rate" up from the current rate of $15.75; Labour immediately up to $16.50.

National will:

  • Add further flexibility to Paid Parental Leave by allowing parents to take some of it together.
  • Pass pay equity legislation focused on faster resolution of claims.

Labour will, within the first 12 months:

  • Introduce industry-wide collective bargaining to create "Fair Pay Agreements" that set minimum conditions such as wages, allowances, weekend and night rates, hours of work and leave arrangements.
  • Double the number of Labour Inspectors from 55 to 110.
  • Consult on introducing minimum redundancy entitlements.

Within the first 100 days Labour will:

  • Abolish 90 day trial periods and replace them with a new system which involves a new low-level referee who will hear disputes (over dismissals in the first 90 days) within three weeks of them being lodged. Parties will be entitled to representation but no lawyers will be allowed. The referee will make a binding decision that cannot be appealed and there will be a cap on what can be awarded.
  • Restore reinstatement as the primary remedy for unjustified dismissal.
  • Reintroduce the right to rest and meal breaks.
  • Strengthen the protections for vulnerable workers in the sale or transfer of businesses.
  • Legislate to make NZ employment law apply to foreign workers of foreign companies working in NZ.
  • Restore union rights to initiate collective bargaining in advance of employers.
  • Require parties to conclude bargaining for collective agreements unless there is a genuine reason not to.
  • Remove the ability for employers to deduct pay in the case of partial strikes.

Additional Note:

Andrew Little MP, has contacted Simpson Grierson to clarify the Labour Party's workplace relations package in relation to trial periods. Labour's policy says it has always supported trial periods for new employees.  Labour would replace the existing law with trial periods that include recourse for employees in the event of unjustified dismissal.