With the new Labour led coalition officially sworn into government, there are likely to be a number of changes to the current employment law landscape.
The first major change under the new government has already been implemented. A bill proposing to extend paid parental leave to 18 weeks from 1 July 2018 with a further increase to 26 weeks from 1 July 2020 was passed into law on 5 December 2017. It remains to be seen whether the Labour coalition will accept National's suggestion to allow parents to take shared paid parental leave.
Other key changes we expect to see include:
- Replacement of the 90 day trial period provision. Labour plans to replace the existing law with a trial period provision which provides relief to employees in the event of an unjustified dismissal. The plan includes establishing a new "referee service" for claims of unjustified dismissal during trial periods. The referee service would operate without lawyers (although "representatives" who are not lawyers will be permitted) and referees will have the power to make a final and binding decision that cannot be appealed. So far, there has been no clarity from Labour on who the referees would be or more particularly, what level of qualification/experience they would be required to have.
- Increased minimum wage. All three coalition parties have pledged to increase minimum wage. It is expected that the government will increase minimum wage to $16.50 per hour from April 2018 and increase gradually thereafter to $20 per hour by 2021.
- Rest and meal breaks back to prescriptive framework. Under the previous Labour government, employees were entitled to two paid 10 minute rest breaks per shift and one half hour unpaid break. It is likely the new coalition government will reinstate a similar framework.
- Increased statutory support and legal rights for 'dependant contractors'. Labour and the Greens proposed similar policies in relation to dependant contractors in their election campaigns. Labour described dependant contractors as "workers who are effectively under the control of an employer, but who do not receive the legal protections that are currently provided to employees under the law". Neither party has elaborated on what the statutory support or legal rights would be but it is possible that a 'middle class' will be created between employees and independent contractors – where dependant contractors will have at least some of the same rights as employees.
- Minimum redundancy compensation. Both Labour and NZ First have pledged to introduce minimum redundancy protections for workers affected by restructuring. This may include introducing a requirement to pay at least minimum redundancy compensation of twice the contractual notice period. Early indications are that this is likely to be capped up to a maximum of 13 weeks.
- Dissolution of MBIE. Although this has not been officially announced, Labour has previously alluded to MBIE being dismantled. Notably, there is no 'Minister for MBIE' in the current government.
- Increased collective bargaining/union focus. A significant aspect of Labour's work relations campaign focused on improving collective bargaining power and influence. It is likely that this will involve increased union access and creating tighter restrictions for employers.
The reality of a coalition government is that it is unclear exactly what policies will be implemented. However, what is clear is that all coalition parties favour a major policy shift towards greater employee rights and employers should be prepared for what could be, the dawn of a new employment era.
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