Publications
Employment Law Electioneering
The stage is set.
We have an election date – and, with the exception of the Government, we have some idea of what the political parties will do in the employment law area should they get into power.
In view of the current environment – and the prospect of some change – here is the "Election Special" overview of what the future may hold.
At the outset, it is probably helpful to reflect upon New Zealand's position in the employment law world.
Most western countries tend to fit along a continuum of employment law regulation.
At one end of the continuum there are those countries which prefer comparatively little regulation – leaving employment to the free market. Probably the best example of a country at this end of the scale would be the United States. Amongst other things, employers in that country can, in general, hire and fire at will. The academics will tell you that this type of environment is usually preferred by employers because it is perceived as conducive to free market commerce.
At the other end of the continuum, certain countries prefer a highly regulated employment regime. These countries generally build employment legislation on a philosophy that an individual's security in employment should be paramount (or at least highly prioritised).
In contrast to the free market approach, such countries have legislation which makes it more difficult for employers to treat their workers as commodities. Examples of countries built on such philosophies would include France and Germany. In France, for example, if an employer wishes to close down a factory, it must consult not only with its employees (and any relevant union) but also with the local businesses and utilities which will be affected by the shutdown. It is only after a significant period of consultation – and having satisfied a number of difficult legal burdens – that workers in the factory would lose their jobs.
Traditionally, New Zealand's employment legislation has placed it somewhere in the middle of this continuum. The employment contracts legislation took New Zealand towards the free market end of the spectrum (though not to the extreme of the United States model). In contrast, the Employment Relations Act moved New Zealand along the continuum to the more regulated end. Broadly, this legislation saw greater priority being given to the security of an individual's employment relationship (though perhaps not quite to the extreme of western European countries).
Against that background, each political party's manifesto represents something of a proposed shift.
The National Party would seek to overhaul the Employment Relations Act – replacing it instead with what it describes as "Employment Agreements" legislation. In general, this legislation would limit some of the powers given to unions – particularly including a repeal of the union monopoly on collective bargaining, a limitation on a union's right to access workplaces and the abolition of such things as compulsory union education leave.
In addition, the National Party would introduce a 90-day "free look" period for all employment relationships – being a period of time during which an employer may, if it wishes, dismiss a new employee at will. While details are not necessarily as clear, a National Government would also overhaul the holidays legislation, and seek to make amendment to health and safety legislation.
Significantly, however, the National Party would not seek to make radical change to the employment institutions – such as the Mediation Service and Employment Relations Authority. This is perhaps something of an acknowledgement of the success of mediation as a problem-solving mechanism in New Zealand's employment environment.
The Labour Party had not, at the time of writing this article, published its employment portfolio. It is significant, however, to reflect on the fact that the Labour Government has given its support to the Green Party's proposal to introduce flexible work legislation. This legislation would place an obligation upon employers to accede to employees' reasonable requests for flexible work arrangements to take account of childrearing obligations.
In addition, the Green Party has also proposed an increase in the minimum wage from $9.50 to $12.00 an hour.
The Maori Party generally supports the thrust of the Employment Relations Act. It has, however, indicated a preference to explore cultural issues in employment.
The ACT Party would prefer a free market in employment law. It would introduce a repeal of much of the existing employment law legislation, including the abolition of specialist employment law tribunals.
And last - but certainly not least – New Zealand First's stated intention is to reduce employers' compliance costs, and to raise the minimum and youth wages to introduce a new fairness in employment in New Zealand. It is not currently apparent, however, what additional change New Zealand First would seek to introduce should it form part of a new Government.
So there it is. Depending upon the result in the election – and the composition of any new Government – employment law may see some change. Alternatively, in certain areas irrespective of the change of Government, one might expect that some aspects of the current regime may remain unaltered.
For further information, please contact your usual Bell Gully adviser or:
Auckland
Rob Towner
Partner
Wellington
Andrew Scott-Howman
Partner
Disclaimer
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
