Boxseat Newsflash: Employment Update – New Government: First 100 days

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With Jacinda Ardern now formally sworn in as New Zealand’s 40th Prime Minister, and the new Government officially in place, what will that mean for workplace relations law in New Zealand.  Clearly, there will be changes ahead.

Here is a summary of what to expect over the next 100 days, and beyond.

Minimum Wages – This new Government will look to increase the minimum wage to $16.50 gross per hour for the next financial year (currently it is $15.75 gross per hour), and ensure that employees in the core public service will be paid the living wage.  New Zealand First campaigned to increase minimum wages to $17.50 per hour, and the Greens to $20.  Youth and starting out rates will also be abolished. 

90 Day Trial Periods – Labour has signalled introducing a new trial period regime, with the main change requiring “reasons” to be given by employers for their dismissal, and allowing ‘disputes’ about the dismissal to be challenged before a referee within three weeks of being lodged.  Similar to a disputes tribunal process.  Referees will be able to award damages to a capped amount, and/or reinstatement.

Reinstatement – The reinstatement remedy will be returned to its previous status as the ‘primary remedy’ meaning that, if reinstatement is claimed, the Authority and Court will be required to order reinstatement unless there are good reasons not to. 

Rest and Meal Breaks – This is another area where the previous Government’s policy will be reversed.  The statutory requirement for set rest and meal breaks will be re-introduced.

Collective Bargaining, and Union Rights – Expect to see legislative changes that support the unions and collective bargaining, including the reintroduction of the duty of Parties to collective negotiations to reach an agreement (unless there is a good reason not to).  The right of unions to initiate bargaining ahead of the employer will be also be reintroduced, along with the 30 day rule requiring new employees to be employed on the same terms and conditions as the relevant collective covering the workplace for the first 30 days.

Paid Parental Leave – Paid parental leave will be increased to 26 weeks.

What will be on the horizon?

Labour will consult on introducing a statutory requirement for redundancy compensation for employees made redundant.  This might look like a minimum compensatory entitlement pegged to years of service.  The introduction of Fair Pay Agreements  where basic minimum standards (such as shift times, minimum pay rates, and leave entitlements) will be set across specific industry types will also be reviewed.  Finally, in the Immigration space, Labour, Greens, and New Zealand First all campaigned on tightening migration to New Zealand, so expect a tightening of immigration policy.  It remains to be seen what specific changes there might be.  It has been indicated that: the ‘labour market test’ will be reviewed and tightened; the skills shortages lists will be ‘regionalised’ and a requirement for migrant workers to work only in a defined regional area will be introduced; and a new exceptional skills visa category for ‘highly skilled’ migrants will be created.

The Greens are also an influential on this new Government.  They campaigned on increased leave entitlements including increasing sick leave to 10 days per year, and introducing an extra public holiday.  So there may be changes ahead for leave entitlements also.

If you have any question, please contact Philip McCarthy.

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Philip McCarthy