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latest news in employment law

Labour's expected changes

Published 20 Nov 2020

The election result, with its significant Labour majority, puts the Government in the position of being able to deliver on its promises.  With many of the employment policy pledges being consistent with those expressed by the Green Party it may be prudent to expect a large number to be put into law. The following is a short summary of some of those pledges.

Minimum Wage – we can expect the minimum to increase to $20 per hour on 1 April 2021 because that is consistent with the rollout of increases over the last few years. The Labour Party has pledged to increase the minimum wage beyond this level.  It could be that the “living wage” is the new target, and this currently sits at $22.10 per hour.

Dependant Contractors – the pledge is to provide such contractors with access to employment rights such as paid annual leave, sick leave, grievance rights and the like and to extend collective bargaining rights to these classes of worker.  The Employment Court judgement on 7 May 2020 (M Leota v Parcel Express Limited [2020] NZEmpC61) added significant weight to the argument that some contractors are to be considered employees at law, depending on the nature of the relationship with the Principal.

Fair Pay Agreements – this is a return to unionised bargaining for wages and conditions potentially across industries or sectors and covering multiple employers, the old industry collective agreement regime. The pledge is to strengthen the law to “encourage” this type of bargaining and to put in place barriers to prevent such agreements being undermined. Considering that collective bargaining is the strongest desire of the Labour Party’s biggest support group, the Unions, we should expect to see a rise in claims to start bargaining for a collective agreement.  There is a process for this already in the Act so if you receive a claim please contact us for assistance.

Pay Equity – this is a continuation of gender and ethnicity pay equity strategies that have been debated for decades.  The issue is very wide ranging covering not just the divide between male and female pay rates but also between occupational classes. Various initiatives have been implemented over many years to address these imbalances including anti- discrimination laws and negotiated pay changes to realign some occupational classes with others i.e. the changes to aged care worker pay rates and most recently the rates paid to teacher’s aides. While we can expect this activity to continue and maybe increase in some sectors the new pledge is to require employers to report on pay equity initiatives. 

No real details are available on how onerous this will be other than it looks to add another level of bureaucracy to the web of red tape that currently binds SME’s.

Paid leave – the pledges are to introduce a new public holiday (Matariki), double the entitlement to paid sick leave and to review the current Holidays Act.  The possibility of doubling the sick leave entitlement to 10 days per year is highly likely based on the Prime Ministers statements to business leaders in Auckland on 5 November. Employers should be proactive with leave management, especially sick leave, and any increase in this entitlement makes extra vigilance imperative.

The pledge to review the Holidays Act continues. The complexity over pay rates for the different leave types continues to cause significant problems resulting in large arrears payments for many employers and on-going arguments over entitlements. The simple concept of ensuring that an employee should be no worse off financially when taking any form of paid leave is proving to be legislatively difficult in today’s increasingly flexible work arrangements.

Other stuff – we could see an increase in the protection offered to some classes of worker such as further restrictions on the type of work a person 16 or under may perform and including security guards as vulnerable workers.

We will keep you informed as the new Government settles into its role and the Parliamentary calendar is announced.