Employers need to plan for change
Employers need to plan for change
The Labour-led coalition Government has already moved quickly to bring change to some of those areas it campaigned on and employment law is no exception.
Unsurprisingly, the first moves that have been made and signalled have been where both Labour and NZ First had policies that synchronised – which included 26 weeks parental leave and an increase in the minimum wage. Those announced changes are just the beginning of a wave of employment law changes – some tweaks of the National Government’s previous laws while others are more wholesale changes.
A number of changes have been announced which may affect SMEs and private employers. These include:
- 90-day trial periods will now be limited to employers with fewer than 20 employees.
- Reinstatement will be restored as the primary remedy to unfair dismissal.
- Reversing a relatively recent change by the last Government, statutory rest and meal breaks will once again be a requirement.
- The removal of the SME exemption from Part 6A of the Employment Relations Act 2000, which provides that ‘vulnerable’ employees have the right to transfer to a new employer if the work they were doing is, as a result of restructuring, to be done by another person.
This last change is likely to be significant for SMEs. If, for example, a small cleaning company has a contract with a local school, and it is sold to another small cleaning company, all the cleaning employees of the vendor company will have the right to transfer to the purchasing company. It is very unlikely that there will be any way to avoid this, and it could have a sizeable impact on a business’s future plans.
Fair Pay Agreements
While we don’t know how it will work in practice, the Government is looking towards a standardisation of pay, hours and conditions by industry or sector. They intend to do this through consultation with appropriate stakeholders and the outcomes would set minimum standards for each sector or industry. As well as standard hours and pay, these would cover allowances, overtime, weekend and night rates.
In a nutshell, the Government would look to remedy what they see as an imbalance in favour of employers in the current structure of workplace negotiations. To do this, they have flagged intentions to strengthen union access to entering workplace, extend collective rights to contractors, require workers to pay a union bargaining fee, restore the requirements for the employer and union to reach agreement and for unions to be able to initiate bargaining and get rid of penalties to workers for ‘low level’ protest action.
There are other changes mooted in the area of employment law including the extension of the powers of the law to cover anyone working in New Zealand, compulsory redundancy and the abolition of youth rates to name a few.
For employers, the key is to keep yourself informed and up-to-date with what is being discussed at Cabinet level and what the timings and impacts could be on your business. None of the changes mentioned should be a surprise as the Government has been transparent around what they intend to progress. So far, the proposed changes fit within the policies campaigned on. Once you’ve armed yourself with knowledge, it’s a good strategy to plan for change and be proactive rather than wait or procrastinate and be reactive.
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Disclaimer: This article should not be used as a substitute for employment/ legal advice tailored for your specific circumstances.