Em­ploy­ment land­scape in for change

The Southland Times - - BUSINESS - PETER CULLEN

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?

Two sig­nif­i­cant pieces of leg­is­la­tion have changed em­ploy­ment law in re­cent years. The Em­ploy­ment Con­tracts Act com­pletely lib­er­alised em­ploy­ment law in 1990 and then the Em­ploy­ment Re­la­tions Act in 2000, in­tro­duced by Mar­garet Wilson, tipped the bal­ance back to­wards work­ers, but only so far.

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.

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 and the risk of some busi­nesses strug­gling to sur­vive.

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 sys­tem that seeks to do rough jus­tice may ac­tu­ally cre­ate in­jus­tice. The idea is well in­ten­tioned but may have un­in­tended con­se­quences which are un­fair.

It would surely be eas­ier to have trial-pe­riod claims heard like other per­sonal griev­ances. This would main­tain one sys­tem of jus­tice for all in the em­ploy­ment ju­ris­dic­tion, whether they have been em­ployed for 90 days or 20 years. One way or an­other, the changes made to trial pe­ri­ods will af­fect all em­ploy­ers.

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 fe­male­dom­i­nated in­dus­try could be com­pared with a male-dom­i­nated 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 other in­dus­tries, peo­ple re­ally are con­trac­tors with the abil­ity to work re­motely and man­age their own time. In the IT in­dus­try, many in­di­vid­u­als con­sider them­selves small busi­ness own­ers, want­ing to man­age op­er­a­tions with­out out­side in­ter­fer­ence, even if they work for only one prin­ci­pal con­trac­tor.

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

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