Client Update – October 2023

Client Update – October 2023

Election 2023

This is an Election 2023 update that contains a summary of employment related policies that, to date, have been promoted or otherwise raised by the main political parties.

Polling Day – 14 October 2023

All employees that will be working on election day are entitled to leave work at 3pm for the remainder of  the day, without any deduction from their wages, for the purposes of voting, if they have not otherwise had a reasonable opportunity to vote, on the day, before starting work.  However, if an employee is required for essential work or services after 3pm, they are allowed to have no more than 2 hours off work, on pay,  to cast their vote (and noting that polling closes at 7pm on October 14^th).

Advance voting is open from now until Friday 13 October, so employees will have had a reasonable opportunity to do so, but voting “on the day” can still remain preference for some.

EMPLOYMENT POLICIES (Sorted alphabetically)

Please note that this is not an exhaustive list of policies, but is a summary of what the parties have stated publicly as a policy, or have intimated as being one:

ACT PARTY

• Restore 90-day trial periods for all employees.
• Freeze Minimum Wage for 3 years.
• Abolish Fair Pay Agreements.
• Remove January 2^nd as a public holiday.
• Remove the recently added extra 5 days’ sick leave.
• “Speed up” the Personal Grievance process by requiring Authority decisions to be delivered within a month of the investigation meeting concluding, and potentially removing the Authority Member if this is not achieved.
• Remove reinstatement as a remedy the Authority or Employment Court can award.
• Prevent contractors challenging their employment status.
• Introduce an “hours based” annual leave accrual system.

We note that the policy for the Authority to deliver decisions within one month of the investigation meeting appears to ignore that reasons for delay may be explicable and/or multi-faceted.  Such a policy would otherwise not appear to achieve the stated aim of resolving personal grievances quickly.

GREEN PARTY

• Extend paid parental leave to 15 months.
• Provide 1-month minimum entitlements to redundancy compensation.
• Introduce default union membership.
• Strengthen laws against bullying and harassment in the workplace.
• Adjust bereavement leave entitlements so they are culturally appropriate.
• Ensure employment laws enable flexible working arrangements including working from home or a four-day working week.
• Extend the living wage beyond the core public sector, including to contractors.
• Minimum wages to increase in line with inflation.

We note that minimum entitlements to redundancy are currently subject to agreement between employers and employees.  It is not yet clear whether the Green’s proposal for a 1-month minimum payment for redundancy is in addition to a notice period (where such notice period is 4 weeks), but it may be.  We note that the proposals around flexible working arrangements are otherwise already allowed for in Part 6AA of the Employment Relations Act.

LABOUR PARTY

• 4 weeks of paid partner’s parental leave, starting with 2 weeks from 1 July 2024.
• “Transform” the construction industry.
• Increase recruitment from overseas for senior medical workers.
• Increase minimum wage toward Living Wage rate.
• Better define in legislation who is a contractor and who is an employee.
• Remove starting out and training rate wages.
• Government to match KiwiSaver Contributions, for employees on parental leave, to a maximum of 3% where the employee also makes KiwiSaver contributions.
• Explore menopause leave.

Any proposal to better define “contractor” from employee could have merit, also noting the recent Uber case (currently awaiting a Court of Appeal hearing).  There was a tripartite working group established in 2019, involving business, unions and government sectors that delivered recommendations in December 2021 on this proposal.  Unfortunately, their recommendations have languished as a function of the stated focus on “bread and butter” issues.

NATIONAL PARTY

• Restore 90-day trial periods for all employees.
• Abolish Fair Pay Agreements.
• Double the number of seasonal workers.
• Stop funding workforce development and regional employment initiatives.
• Remove median wage requirements for work visas.
• Allow parents to share the 26 weeks’ paid parental leave allowance (with no provision for more)
• Explore menopause leave.

While National and ACT agree on repealing the Fair Pay Agreements Act, we note that while National were previously opposed to increasing sick leave, it has recently indicated to the contrary.  However, that stance may change in relation to individual or collective agreements, should National form a coalition government.  Any changes to sick leave will also not be of automatic application to all employees, as sick leave entitlements in employment agreements may be different to that specified in the Holidays Act.

NZ FIRST

• Potential compensation for people who lost their jobs due to COVID-19 vaccination requirements.
• Examine raising the Minimum Wage to $25 per hour and allow businesses a tax concession to do so.
• Redefine small to medium enterprise from 19 employees to 50 full-time equivalent staff.
• Negotiate for the full reinstatement of the 90 day trial programme and expand its reach to more small businesses.
• Remove the Accredited Employer Worker Visa and replace it with a Skills Shortage Visa and Labour Shortage Visa.
• Reinstate the Targeted Trade & Apprenticeship Fund to assist employers to take on more Apprenticeships and Trade workers.
• Establish an ‘Essential Worker’ workforce planning mechanism to better plan for skill or labour shortages in the long term.

We note that potential compensation for those who were unvaccinated against COVID-19 and who lost their jobs as a result is, according to NZ First, likely to be in the ‘hundreds of millions’, paid for by taxpayers, and the level of compensation would be determined following a new 12-month inquiry, replacing the current Royal Commission of Inquiry into Covid.  The expansion of the 90 day trial period to more small businesses may be linked to the policy of redefining a small business as those with no more than 50 full-time equivalent staff.

TE PĀTI MĀORI

• Increase minimum wage to $25 per hour with annual increases to cost of living.
• Remove starting out / youth rate wages.

We note that removing starting out / youth rate wages could have the unintended consequence of increasing youth unemployment, which many employer submissions to MBIE on previous minimum wage increases have highlighted as a possibility as, in light of this change, the preference would be to hire workers with experience, thus limiting job opportunities for those starting out their working careers.

Final comments

Overall, there is a real mix of policy on offer.  No matter the outcome of this election, it is clear that there will be change.  The extent of any change will be predicated on the final make up of Parliament which may not be confirmed before 3 November 2023, being the date results are officially confirmed.  That of course, also depends on whether a coalition can be formed following the election.

For any advice from our employment law specialists, please contact us via email or by mobile:

Paul McBride (Partner) – paul@mdjlaw.co.nz or 021 614 215

Guido Ballara (Partner) – guido@mdjlaw.co.nz or 021 782 891

Frances Lear (Partner) – frances@mdjlaw.co.nz or 021 237 7811

Saadi Radcliffe (Senior Solicitor) – saadi@mdjlaw.co.nz or 021 557 236

Alec Nash (Solicitor) – alec@mdjlaw.co.nz or 021 352 288

Disclaimer – this newsletter is necessarily brief and general in nature.  You should therefore seek professional legal advice before taking any action in relation to any matter addressed above.  © McBride Davenport James