Labour's Workplace Relations & Safety policy

29 October 2020

Labour’s Workplace Relations & Safety policy promises more sick leave, increased wages, pay equity, and increased protections for vulnerable workers. Given the strong mandate Labour has received to govern, it’s likely changes to New Zealand’s employment law are imminent.In the short term (i.e., next 100 days), we think these changes are likely to involve:

  • Increase in minimum wage to $21 per hour in 2021 (this was earmarked before the election and will take effect from 1 April 2021).

  • Increases in minimum sick leave entitlements — from the current 5 days after six months to 10 days after sick months (repeating every 12 months thereafter).

  • Possible changes to the way entitlements are calculated (i.e., removing the six month qualifying criteria so that workers can take leave as required).

  • Possible changes to trial period provisions — although repealing trial periods altogether doesn’t form part of Labour’s policy, it does form part of the Green party’s “Workforce” policy

Longer term, more structural change is possible — and given Labour’s new parliamentary command, any delays expected through that process may not eventuate, giving more control to the Government around the timing of any changes.

We think these longer term changes are likely to involve:

  • Introducing sector-wide “Fair Pay Agreements” covering minimum wages, allowances, and terms of work for particular “competitive industries” or occupations. It will be interesting to see what industries lead the charge, although it’s likely to be those with already unionised workplaces.

  • Changes to the Employment Relations Act 2000, including removing the requirement that unions prove “intent” when making allegations that an employer has undermined a collective agreement.

  • Recognising a new category of vulnerable worker — the “dependent contractor” (e.g., courier drivers), and the move to introduce statutory protections including the right to collectively bargain, and also recognising security guards as vulnerable workers.

On paper, Jacinda Ardern is the most powerful Prime Minister the country has seen since 1996. Given a governing agreement with the Green Party is likely, the government will have a commanding majority in Parliament.

But Labour’s policy also promises to put small business at the centre of New Zealand’s economic recovery, which presumably means any changes will accommodate the need of small business to flex at these times of considerable change and uncertainty.

Time will tell, but for those with an interest in government and politics, the next three years will include plenty of food for thought.

Rob Davies is part of our Commercial Disputes & Employment team at Norris Ward McKinnon.

Commercial Disputes & Employment Team