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Govt aims for fairer wages, higher bargaining power with new employment legislation

30 Jan 2018

Workplaces are set to be dramatically impacted following the Government’s employment law announcement on Thursday.

A new Bill to amend the Employment Relations Act 2000 has been announced, designed to provide greater protections to workers, especially vulnerable workers, and strengthen the role of collective bargaining in the workplace to ensure fair wages and conditions.

Workplace specialist firm Employsure managing director Jen Tweed says, “The changes announced are in line with expectations set during the campaign, but demonstrate some shifting of election policy. The proposed amendments are the first step in the Government’s fulfilment of its commitment to employment relations reform.”   

90-day trial periods

The Government announced it has moved from its election run platform to end 90-day trial periods at the request of New Zealand First over fears vulnerable workers were being exploited.

Tweed says there has been no evidence to suggest this was the case.

“We hear from SME and large business clients that the 90-day trial periods allow them to fill roles quicker and minimise the risk of unjustified dismissals as they assess cultural fit and if the employee has the right skills for their business growth.” 

Under the proposed amendment bill, 90-day trial periods for new workers will only be available to businesses with fewer than 20 employees.

“It’s a win for small business,” she says. 

“90-day trial periods allow small business employers to employ people without risk because they don’t have the infrastructure to get into complex employment situations that could make them reluctant to take risks when employing new staff.”

Wages

The Government also announced new collective bargaining powers towards guaranteeing pay and conditions for employees.

Tweed says, “Following from recent cases in this area, New Zealand’s employment framework is beginning to shift towards a system that will limit an employer’s ability to set their wages. With Fair Pay Agreements still on the card, this remains an area to watch.”

Workplace relations and safety minister Iain Lees-Galloway says too many working New Zealanders are missing out on the benefits of economic growth under the current employment relations system.

He adds that this legislation is the Government’s first step in creating a highly skilled and innovative economy that provides good jobs, decent work conditions, and fair wages.

Union Rights and collective bargaining

While not entirely unexpected, the proposed amendments to collective bargaining and union rights in the workplace signal a shift in the landscape for union involvement. 

“Balanced and constructive engagement between employers and unions can be positive for everyone,” says Tweed. 

“Maintaining this balance is key, the Government should focus on ensuring that confidence does not lapse with the broader business community.” The Bill is expected to have completed its first reading by February 1 but Tweed anticipates it will take many months to see how this unfolds for New Zealand’s SME businesses and economy.

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