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Publications

Employment and workplace relations under National

13 November 2008

The incoming National administration isn’t promising wholesale changes to the Employment Relations Act 2000. This in itself indicates a shift from the policy “pendulum swings” which have characterised this area over the last two decades.

National’s proposed reforms are targeting five key areas:

Small business protection: 90-day trial period

Businesses that employ fewer than 20 staff look set to gain stronger protection from personal grievances, with the introduction of an optional 90-day trial period.

National’s policy says that good faith requirements, Human Rights legislation, leave laws, health and safety provisions, rules of “natural justice” and mediations will still apply during the trial period.

Personal grievances often succeed (or are settled at mediation) because the employer has failed to follow requirements of “natural justice”. It will therefore be interesting to see how the eventual legislation preserves these rights, while at the same time creating an effective and reliable “personal grievance free” period.

Union/collective bargaining

National’s policy looks set to pull back some of the advantages that unions have gained under Labour, although its initial changes are relatively restrained.

The new government will allow union access to workplaces, but this will be subject to the employer’s consent (not to be unreasonably withheld). Again, the detail (not yet released) will be important, but National’s policy suggests employers may be given a broader ability to deny union access.

National has also said it will restore workers' rights to bargain collectively without having to belong to a union.

In the longer (and perhaps not so longer) term, we suspect National will push their reforms further, possibly targeting some of the “union friendly” changes made in late 2004, such as the restrictions against passing on collective terms to non-union members.

Holidays Act

National has said that it will keep four weeks' leave, but allow employees to trade the fourth week for cash if they wish (this can only be at the employees request).

National is also promising to review the Holidays Act. That piece of legislation has been plagued by issues, and a review (with subsequent changes) is positive.

Dispute resolution

National’s promise to ensure the mediation service is “properly resourced” with “properly qualified” mediators is more than a hint of dissatisfaction with the current system.

Greater resourcing of the service will be useful. However, in our experience the mediation service generally functions well, and we hope that any changes do not result in an exodus of skilled and experienced mediators.

Similarly, National’s policy suggests it will make the Employment Relations Authority more like a court, and allow certain cases to go straight to the Employment Court. It also appears there will be a broader right of appeal to the Court of Appeal.

There are certainly some case types where the Authority does not always function well, and some of these changes are likely to be very helpful. However, despite initial scepticism (mainly from lawyers!) the Authority works very well in the vast majority of cases. Simple matters can be dealt with faster and far less expensively than would be the case if a full court hearing was needed.

KiwiSaver

National has announced a “slimmed down” version of KiwiSaver, and has said it will repeal the amendments made in September 2008, which prevent KiwiSaver members from being disadvantaged as against non-members.

However, National says that it will change the law to ensure that employer contributions are made on top of existing pay, when employees join the scheme.

Transitional relief package

National plans a time-limited relief package for people who have been made redundant from a job they have held for at least six months and who as a consequence will either have to go on a benefit or rely on the income of a relatively low paid spouse or partner.

They will be eligible for:

  • a Working for Families top-up equivalent to the in-work tax credit, and 
  • an increase of $100 in the maximum weekly accommodation supplement.

The assistance will be available for up to 16 weeks.

National has presented the policy as a response to the recession and says it will be available initially for two years at which time it will be monitored to determine whether it should be continued in whole or in part.

What we won’t be seeing

Under Labour, a number of changes had been introduced or announced which aimed to offer greater protection to casual and fixed term employees, dependent contractors and staff involved in a “triangular” employment relationship. Labour also intended to introduce compulsory redundancy compensation.

These proposed laws will not see the light of day under National.