Employment Law – What business owners can expect from the Labour Government
The last (Labour/NZ First/Greens) coalition government was relatively conservative in terms of changes to New Zealand employment law. The changes revolved around tweaks to 90 Day trial periods (limited to businesses with less than 20 employees), collective bargaining arrangements, protection for vulnerable employees and changes to meal/rest breaks as well as a change in parental leave entitlements.
The nature of coalition politics meant that more radical and ideological changes to employment law were never on the table.
Following Labour’s historic landslide victory in October of this year it has the numbers to force through much more significant change, but no doubt due to Covid and a declared centrist and incremental approach to policy, there is unlikely to be any moves towards game changing approaches to employment law.
The Government won’t want to be seen to increase costs and complexity to business owners in very demanding times.
So, what can we expect from them in the next three years and what should you do to prepare for the expected changes?
Prior to the election Labour committed to increasing sick leave entitlements from 5 to 10 days so we can expect this to happen when the legislation passes through select committee stage, final readings and Royal Assent. The law is expected to come into force in the second half of 2021.
The new entitlement will apply to all employees whether they are full time, part time or casual as long they have been employed for six months as is the case currently. The Government is not planning to make any changes to the 20 Day ceiling, so employees cannot maintain a balance of sick leave in excess of 20 days.
Only a small tweak will be needed to the sick leave clause in employment contracts, and you will need to make sure your payroll/admin person or provider has taken into account the changes when they come into effect.
Labour is also committed to increasing the minimum wage rate by increments and another increase to $20 per hour in 2021 has been talked about. There has been some whispering that this change could be delayed so we need to stay posted on that one.
Other than that, the Government has mentioned possible changes to the status of “contractors” and whether they should be classified as employees and eligible for the entitlements that ensue from that status.
Fears have arisen that there is a “vulnerable” class of worker who is in effect a dependent contractor and fulfilling the criteria established (regular hours worked, same work location etc) to ascertain permanent employee status.
Any changes in this area are likely to occur later in the term of this Government.
The Labour Government is therefore treading a line between the expectations of their core voters to readdress the power imbalance between employers and employees as they see it, and the practical and political considerations of minimising disruption to businesses in a volatile environment.
For help in preparing your business for the changes ahead call me on 027 201 6395 or email me at david@gnarlysolutions.co.nz
Every week I sit down with staff from various businesses and provide them with reassurance about their concerns. I always start the session by providing reassurance where immediately possible, discuss their possible options, and then set about making a plan that we're both comfortable with. Then we walk away and take the time to think over our conversation and plan before taking any first steps.
Do you have a question or concern about your employer or something in your workplace?
The first step is to have a sit down with David. David has seen it all, is on your side, and will give you honest advice and answers to your questions. No obligations, first meeting is entirely free.
