Post-Election Employment Landscape - What to expect

On Saturday 17 October 2020, Labour was given a clear mandate to govern arising from New Zealand’s general election. In its second term, the party’s policies are likely to result in changes to our employment laws. This article summarises what to expect from a Labour led Government.

Labour’s proposals for employment law

Labour has proposed the following changes:

• A support package to assist businesses in hiring at least 40,000 New Zealanders whose employment has been impacted by COVID-19, including extending the flexi-wage scheme to help employers hire people on a benefit at risk of long-term unemployment;
• Make apprenticeships and trades training in targeted areas free, giving primary sector employers a new stream of workers to up-skill and employ;
• Increase the minimum wage to $20 an hour by 2021;
• Extend the living wage to all contractors working in the public service, for example cleaners, caterers and security guards;
• Simplify the Holidays Act including:
• allowing employees to be allowed to take sick and annual leave when needed with their leave accruing over time instead of becoming available as a block when they reach 12 months employment; and
• increasing minimum sick leave entitlements from five days to ten days a year;
• introducing a new public holiday, making Matariki a public holiday from 2022;
• Improve pay equity information by improving transparency for women through better records of pay equity across the country;
• Implement Fair Pay Agreements by passing legislation to set the minimum content that must be included in Fair Pay Agreements, and implementing these laws within competitive industries;
• Improving the statutory regime to protect dependent contractors to ensure that they have fair wage and employment conditions;
• Reinstate the right for workers in small businesses to elect health and safety representatives.

Potential coalition partners

If Labour elects to govern with the Greens, it is worth considering the Green Party of Aotearoa’s policies. These targeted a number of changes to New Zealand’s employment law, focused on minimum entitlements. Notably, the Greens proposed to:

• Increase the minimum wage annually in line with the median wage;
• Increase annual leave to five weeks per year;
• Provide ten days of paid sick leave per year;
• Remove the youth minimum wage;
• Increase paid parental leave to 13 months, paid at 100% the average male wage;
• Introduce redundancy compensation at a minimum of four weeks’ wages for the first year of employment and two weeks’ wages for each subsequent year;
• Give fixed term labour hire employees the same wages and conditions as permanent employees;
• Create a new public holiday between Queen’s Birthday weekend and Labour weekend;
• Restore the right to solidarity and political strikes;
• Require employers to audit and report their gender pay gaps and increase support for pay transparency and pay equity claims;
• Require the state sector to pay a living wage.

In the event Labour looked to the Maori Party, it is worth noting that the Party proposed to increase the minimum wage to $25 an hour, increasing annually to match the cost of living, and provide independent contractors with the right to bargain for collective and multi-employer collective employment agreements.

What next?

With increases to minimum entitlements, improving accessibility for equal pay claims, and taking steps towards ensure that core public service employees will receive a living wage, the likely direction of a new government will be the continuation of Labour’s employee-centric approach. 

Our experienced employment law team will continue to ensure that businesses and individuals are aware of any changes, and can ensure that businesses have best practice policies in place to address any potential changes.