The new Labour-led government will wind back much of the deregulation that National has introduced over the last nine years, and will also put in some legislative props to further promote collective bargaining.
During the election campaign, we set out the key points of the alternative workforce policy on offer. This article looks more closely at the detail and timing of the changes that we can expect.
What is planned for the first 100 days?
Labour identified some immediate priorities to focus on in its first 100 days. Those priorities are a mixture of new policy and undoing changes made by the National-led government over the past nine years.
The minimum wage will increase to at least $16.50 an hour – it is now $15.75 an hour and all workers in the core public service will be paid at least the Living Wage. This is an area where there might be some movement as a result of coalition negotiations as the Greens campaigned on raising the minimum wage to $17.75 and New Zealand First to $20.
Paid parental leave will increase to 26 weeks per year.
Union protections will be strengthened and benefits increased, including increasing protections against discrimination and providing for increased worker participation rights.
The changes to the Equal Pay Act, as set out in the report from the Joint Working Group, will be implemented so as to provide all women in female-dominated workforces access to collective bargaining and court processes to settle their claims.
Measures will be taken to ensure that New Zealand employment law will apply to all who work in New Zealand, including foreign workers working for foreign companies.
State agencies will be required to only contract with organisations that display good employer practices and who have a history of adhering to employment requirements.
The new government will provide assistance and other measures to support the growth and implementation of high-performance worker engagement systems.
National's private member's bill that was working its way through the parliamentary process proposing to allow higher salary earners to contract out of the grievance procedures is unlikely to be passed. The bill was recommended by the Select Committee in August and looked likely to pass under the former government. Both Labour and New Zealand First were strongly opposed to the bill.
What will be unwound?
The existing 90-day trial periods that were introduced by the National government in March 2009 will be replaced.
The government will replace those trial periods with new trial periods that require reasons for dismissal and justification. Any unjustified dismissal disputes would be heard by a new referee service within three weeks of lodgement, which can make decisions to reinstate or award damages to a capped amount. The process is meant to be fast, fair and simple.
Reinstatement will once again be the primary remedy for employment grievances. Labour will restore the statutory preference for reinstatement for employees who have been unjustifiably dismissed (in 2011 the National government amended the Employment Relations Act to remove reinstatement as a primary remedy).
Various amendments that National had made to the collective bargaining process will be unwound, including:
- restoring the unions’ ability to initiate collective bargaining in advance of employers
- restoring the duty to conclude a collective agreement (including for those in multi-employer collective bargaining) unless there is a genuine reason not to
- restoring the requirement for new workers to be employed on the same terms and conditions as provided by an existing collective agreement covering their workplace for the first 30 days
- removing the ability for employers to deduct pay from workers taking partial strike action, and
- removing the restrictions that prevent film and television workers from bargaining collectively.
The regulated rest and meal break schedule that Labour had introduced in 2008 but that was removed by National in March 2015 will be restored, as will various protections for vulnerable workers where a sale of a business or outsourcing is proposed.
What is on the horizon?
Minimum redundancy protection
Labour will consult on minimum redundancy protection for employees affected by restructuring. This picks up on the 2008 Public Advisory Group recommendation that a statutory requirement for redundancy compensation be introduced – based on length of service and other entitlements. This process is likely to see the implementation of minimum redundancy compensation and notice requirements.
Labour promised to introduce statutory support and legal rights for “dependent contractors” who are effectively workers under the control of an employer, but who do not receive the legal protections that are currently provided to employees under the law.
Labour will also investigate options for ensuring that people working over 40 hours per week receive adequate remuneration.
Options to improve job security for people in labour hire, casual, seasonal or contracted work will be investigated. This area, in particular, is one where Labour, New Zealand First and the Greens had a high degree of alignment.
Pay equity claims will be addressed through the process established by the Joint Working Group on Pay Equity Principles.
Fair pay agreements
We considered that the introduction of Fair Pay Agreements (FPAs) was the most far-reaching of Labour’s policy, and we are yet to see whether this proposal survived coalition negotiations. FPAs would set “fair, basic employment conditions” (e.g. minimum wages, allowances, weekend/night rates and leave entitlements), which would apply to workers across an industry.
Much of the detail of how the new system would work has yet to be settled and Labour wants 12 months to “sit down with business and unions and look at how the process of bargaining for an FPA would be initiated”.
Features that have been confirmed:
- there would be no ability to take strike action in support of FPA negotiations but arbitration would be available
- either side could initiate a negotiation
- bargaining would be led by a union
- the union would need to be authorised by a majority of the workers potentially covered (this would require a certain level of union density within the catchment group and a history of a union presence), and
- once approached, the employer or peak organisation representing the employers would be obliged to participate.
Labour has indicated that it would expect only “one or two” agreements a year but each agreement, once entered into, would likely persist into future years, subject to regular renegotiation.
While the details remain unclear, FPAs on the information available could, if widely adopted, produce a variant of industry or occupation awards. The take-up rate will depend on the organisational capacity and commitment of the unions and whether workers feel that they are getting a fair deal under their existing employment arrangements.
Net immigration has been high by historic standards in the last few years – partly reflecting a large increase in the number of overseas students and an increasing reliance on migrant labour in some sectors of the economy.
Labour, New Zealand First and the Greens all campaigned to tighten immigration tests and limits. This is an area where we expect to see some more policy detail to come out of the coalition negotiations as New Zealand First’s policy was more stringent of that of Labour’s.
Labour proposed tightening the Labour Market Test carried out by Immigration New Zealand when granting work visas to ensure that a genuine attempt had first been made to recruit suitable New Zealanders. It also proposed clamping down on student work visas by:
- removing them for non-degree courses which have not been assessed by the Tertiary Education Commission and NZQA as of high quality
- denying foreign students the right to work while studying, unless approved as part of the coursework, and
- restricting access to work visas post-study to those who have a degree.
It estimated that these moves would cut migrant numbers by 20,000 to 30,000 a year. Labour would also:
- “regionalise” skills shortage lists and require skilled immigrants to work in the area for which their visa is issued
- introduce an Exceptional Skills Visa for highly skilled or talented people, and
- create a KiwiBuild Visa for residential construction firms which train a local when they hire a worker from overseas.
New Zealand First wants immigration reduced to 10,000 a year. The Greens had not set a numerical target but want the settings to be reviewed on a regular basis, taking into account net population change and sustainability.