News & Thinking

What employers can expect under a National-led government

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Anne Wilson

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Anne Wilson

Cate McArthur

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Cate McArthur

With the official results for this year’s election due tomorrow, New Zealanders have voted for change with a National-led government. While employment law policies have not been a significant feature of National’s campaign, we can expect some changes that will have an immediate impact.

Repealing Fair Pay Agreements law  

National has indicated that it will repeal the Fair Pay Agreement Act 2022.

A Fair Pay Agreement is a collective agreement that establishes specific industry minimum employment standards, which are binding upon all employers operating in that industry.

The Fair Pay Agreements system was introduced late last year under Labour and aims to establish a process for workers to bargain for minimum employment standards that would cover all employees in a specific industry or occupation.

Fair Pay Agreements would likely have overly complicated employment rights and increase the cost of doing business for New Zealand employers. The repeal of this regime is likely to be a welcome change for employers who are still struggling following the pandemic and as also absorbing significant employment cost increases including rises to minimum wage, increased sick leave entitlements and additional public holidays.

Restoring the 90-day trial periods for all businesses

Trial periods were first put in place after National was elected in 2008. They allow employers to ‘try before they buy’ and are intended to increase business confidence to give job opportunities to employees that they may not otherwise have employed.

Trial periods allow employers to terminate employment within the first 90 days without establishing good cause or working through a full process. An employee who is dismissed during a trial period cannot raise a personal grievance for unjustified dismissal.

In 2018 the Labour government limited the use of trial periods to employers with 19 or less employees. A member’s Bill by ACT MP James McDowall, proposing an amendment to the Employment Relations Act 2000 to enable businesses with 20 or more employees to include a 90-day trial period in new employment agreements, was pulled from the ballot on the last day of Parliament.

National and ACT have stated that they will remove the small-employer limitation and reinstate 90-day trial periods to cover all businesses. National has included it in their 100 Day Action Plan.

Flexible use of parental leave

National has indicated that they will modernise parental leave entitlements by providing greater flexibility surrounding how both parents choose to divide up their parental leave entitlements between them, such as allowing parents to take parental leave at the same time.

Classification of independent contractors

ACT expressed their intention to address the legal issues surrounding the classification of independent contractors. ACT has said they would amend the Employment Relations Act 2000 to state that independent contractors who have signed up for a contracting arrangement are unable to challenge their employment status (effectively reversing the Uber decision which held that Uber drivers were employees despite the contractual arrangements in place). This change would likely be welcome by industries that engage gig workers to provide certainty on worker status.

Removal of union-friendly laws

National has not specifically stated they will amend the Employment Relations Act to remove ‘union-friendly laws’, but we typically see these types of amendments under a right-leaning government. Changes we may see include:

  • Removal of bargaining fee arrangements
  • Removal of the requirement to conclude a collective employment agreement and the ability to require facilitation where an agreement cannot be reached
  • Tightening of provisions regarding union access to workplaces
  • Removal of the 30-day rules

Get in touch

If you have any questions about incoming employment legislation changes and the impact on your company, get in touch with our employment law specialists.