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It’s election year, and the Labour Party has just released its policy on workplace relations and its proposed amendments to the Employment Relations Act 2000.

Underpinning their workplace relations policy is Labour’s view that the present employment relations scheme (originally developed by Labour in the year 2000) is failing and will continue to fail in the face of a changing and uncertain work landscape.

Potentially the most far reaching change proposed by Labour is the introduction of Fair Pay Agreements (‘FPA’). FPAs would set basic employment standards in particular industries which all employers within that industry must comply with. From the limited information we have, this sounds similar to the Australian Awards-based system.

However, under a Labour government, businesses and unions in each industry would agree on these standards to set up the regime, which means that FPAs could only come into force in unionised industries, or industries in which a sufficient number of employees request an FPA. Andrew Little states that the FPAs would operate to prevent a ‘race to the bottom’ where ‘good’ employers are undercut by ‘bad’ employers driving down Labour costs.

Labour would also introduce a two-phase action plan. Phase one would be implemented in their first hundred days, with:

  1. Reinstatement being restored as a primary remedy;
  2. The restoration of the recently-repealed rest and meal break entitlements; and
  3. The minimum wage being increased from $15.75 to $16.50. A Labour government would also increase the wage of all core public-sector workers to at least the Living Wage at an estimated cost of $15 million. A Labour Government would extend this to cover contractors over time.

Phase two would be actioned in Labour’s first 12 months in office and would include doubling the number of Labour Inspectors from 55 to 110. This would result in greater involvement by Labour Inspectors in ensuring compliance with minimum employment standards.

Labour also proposes to repeal the 90-day trial period introduced by National. Labour considers the 90-day trial period has created a ‘fire at will’ scheme, which has stripped workers of their rights, while failing to support job creation or employment. Labour promises to introduce a new referee scheme, with employees being given reasons for dismissal by employers and any disputes arising from this being heard within 3 weeks of the dispute being lodged. Under the new referee scheme, both parties would be entitled to representation, but no lawyers would be permitted. A referee would seek to form an agreement between the parties, but where no agreement can be made the referee will be empowered to make a binding decision with no right to appeal by either party. A cap would be applied to penalties a referee can issue.

Labour leader Andrew Little says ‘after nine years of a Government that has put profit ahead of a fair deal for working people, it’s time for a fresh approach’. However, some commentators are critical of the policy changes proposed, claiming that it is a reversion back to antiquated industrial relations policy and a pre-Employment Contracts Act 1991 era where NZ’s industrial relations law was dominated by union-negotiated awards. Either way, the policies would certainly result in substantial changes to our current employment landscape if a Labour coalition comes into power.

If you have any questions regarding the opposition’s proposal and how this might affect your business please do not hesitate to contact Greg Cain, Partner, Wellington office or Charlotte Parkhill, Senior Associate, Auckland office.



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