Signs of change in employment law
OPINION: The nation is watching the Beehive, waiting to see what changes will emerge.
It has been an exciting start for the new Government. Speaker of the House, Trevor Mallard, was shakily elected and Winston Peters served writs on National Party leadership before leaving for an overseas trip as foreign minister.
It seems that significant change is afoot in New Zealand. But what about employment law? What is going to change there?
National made a few changes to employment law during its three terms in office. Labour, however, has several significant reforms in the pipeline.
The minimum wage will go from $15.75 an hour to $16.50 shortly. The plan is to raise it to $20 an hour by 2020. Labour has also pledged to ensure all public sector employees will be paid the living wage, currently $20.20 an hour. PETER CULLEN
This change will be very welcome to workers on the minimum wage. The industry that will be most affected will probably be aged care, much of which is government-funded anyway.
Hospitality and farming will also be significantly affected. These industries are not funded by taxpayers and the effects are bound to include the loss of some jobs.
Ninety-day trial periods are being overhauled in an unusual way. New employees can still be placed on one, but they can challenge their dismissal. A new referee service will be established just to deal with these claims. A referee will hold a short hearing without lawyers and can decide to reinstate the employee to their position or award damages.
Back in the old days when the workforce was unionised, we had personal grievance hearings without lawyers. Parties were represented by unions and the Employers Association. However, that would not be the case today.
A very small percentage of the private sector is now unionised and employees who are not union members are unlikely to have anyone competent to assist them in disputes concerning 90-day trials.
Employers will often be represented by their human resources manager or chief executive, while a worker will not be able to have a lawyer present and may well struggle to compete with the professionals on the other side.
So a well-intended system may actually create injustice.
Changes to achieve pay equity will also have far-reaching effects.
Labour is doing away with the recent Pay Equity and Equal Pay Bill proposed by National.
Labour wants to promote a system of comparison that is more generous to workers. The pay in a female-dominated industry could be compared with a maledominated industry of a similar skill level.
Labour intends to implement a system of Fair Pay Agreements (FPAS) which will be agreed by businesses within an industry and the unions representing workers within that industry. These FPAS will set basic standards for pay and other employment conditions within an industry.
Labour’s plan for FPAS is to create a framework for fair wage increases where good employers are not commercially disadvantaged for paying their workers a higher wage.
Labour proposes to include statutory support and legal rights for ‘‘dependent contractors’’ who are effectively workers under the control of the employer but who do not receive the legal protections of employees. Presumably a new category of worker would need to be established. A worker would then be either an employee, a dependent contractor, or an independent contractor.
Clearly there is need for change, particularly in certain industries. In the cleaning industry some workers are called contractors when anybody would believe they are employees. Often these individuals are migrant workers and their basic protections are denied by their employer calling them ‘‘contractors’’. It makes sense to protect these people.
However, in areas such as IT, people really are contractors with the ability to work remotely and manage their own time. Writing legislation to protect workers such as migrant cleaners, but not the independently-minded IT experts and others who benefit from contracting, will prove a challenge.
With employment law legislation the devil is in the detail. Until we see the final product we simply won’t know the extent of the changes. One thing is for sure, this government is a change government.
❚ Peter Cullen is a partner at Cullen – the Employment Law Firm. He can be contacted at peter@cullenlaw.co.nz