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The Labour Coalition – What it means for work
October 20, 2017
We finally have an election result. The victors are celebrating and the others are licking wounds, and in the real world, ordinary people are trying to work out what that means for them. It is pretty hard to determine how things might unfold at this stage, but here are a couple of thoughts.
Minimum Wage
Both Labour and NZ First campaigned on lifting the minimum wage. Labour announced an intention to raise it to $16.50 by 1 April 2018, and NZ First to $20 in the next three years. Undoubtedly we will see minimum wage increases, and undoubtedly some businesses will feel such increases are too high. However, you should bear in mind that the minimum wage is always increased on 1 April, and historically that increase is $0.50 to $1.00. So, business as usual really.
Trial Periods
Labour has always opposed the 90-day trial period, and a key part of its pre-election policy was to abolish it. My pick is that there will be a re-writing of trial provisions which allow employees to take personal grievances if fired within the first 90 days. Whatever your view on the use of a trial period, mine thought is that the trial periods have been so severely limited by the Court that they do not offer employers the liberating freedom to disregard all employment law, and in fact 90-day dismissals can feel as tricky as ‘ordinary’ ones. Despite that, expect changes here.
Minimum Standards
Both coalition partners did not address in detail other workplace standards (focussing on broad concepts like “fairness”). NZ First had a policy of setting a minimum standard for redundancy compensation (currently there is no legal requirement to redundancy compensation). It will be interesting to see if this policy survives – in principle it seems aligned with Labour’s values. What I do think will occur is that Labour’s policy of increasing the number of Labour Inspectors will be implemented, and this is something employers should look out for. The Labour inspectorate has increased dramatically over the last five years, and with it, so have minimum standards prosecutions. I am aware that Labour Inspectors are visiting numerous small businesses (targets include hospitality and farming), and issuing fines for breaches of record keeping requirements, or holiday pay errors. My earlier blog detailed some of the things to be aware of, and I suspect this will be a growth area.
Dispute Resolution
Labour’s “fairness” policy included a “simple, fair and fast referee service”, at least for disputes over trial period dismissals. It is not clear whether it proposes a changed approach to employment disputes as a whole, or just in this area. In employment matters, the first stop is mediation with the assistance of a (government-paid) mediator. As systems go, I think it is a fairly good one, although wait times are currently a little long, so the service could do with greater funding. I am sceptical of dispute systems that exclude lawyers (because employment law can be complex and people should be entitled to advice when work is such a fundamental thing in life), but lawyers do tend to slow processes down a bit.
Fair Pay Agreements
Labour intended to introduce “Fair Pay Agreements” setting basic conditions across industries. These sound awfully like the old awards system - or at least a move to promote more multi-employer collective bargaining. Again, I’m sceptical that competing employers could work together to agree minimum standards, and I would be concerned to see government impose specific industry minimums.
Maternity Leave
Both parties have indicated an intention to promote or support an increase in paid maternity leave to 26 weeks. Under the current model, this cost is not paid by the employer, but employers might see an increase in the periods of leave taken by parenting employees.
Health and Safety
This might be an area where sparks will fly. NZ First pledged to remove the “bureaucratic excesses” of the current health and safety law. Labour’s policies do not specifically address health and safety at work, and my pick is that their approach would be to support the role of regulation in this area. I’m not expecting big changes.
Immigration
It is clear that there will be significant changes to immigration policy, with fewer immigrants. One of NZ First’s intentions is to amend the factors the Reserve Bank assesses to place greater weight on full employment, and I expect that immigration changes will make it even more difficult for employers to offer work to a person on a work visa. Expect delays if recruiting in this market, or a sinking lid if you have a large immigrant work force.
Good luck for the next three years – some think it will be a rollercoaster! I will blog on significant changes as they occur.
