Smokos, bargaining safe under new Government

With Labour’s industrial relations history, both employers and workers will be watching closely as the Government makes its first employment law changes. Shane Cowlishaw looks at what its initial announcement could bring.

The Government will announce its first tweaks to employment law on Thursday as it continues the roll-out of its 100-day plan.

Exactly what those initial changes are remains to be seen, but they will likely be relatively minor as it looks to ease itself into a body of work that will be scrutinised by many.

Coalition leader Labour has long been associated with the working class and union movement, with the latter wielding a powerful voice in the shaping of new policies.

But the business community will also be paying close attention, ready to spring on anything they see as damaging to employers.

A recent business confidence survey recorded a drop in wider confidence after the election of the Jacinda-Ardern-led Government.

While it won’t be worrying too much in these early days, the Government will be conscious that business and the economy is a sensitive area that National will be looking to exploit from the other side of the house. The last Labour government faced a 'winter of discontent' in its first year in office where employers staged an investment strike over fears about big changes in employment laws. Eventually, less dramatic changes were enacted.

Taking the risks of a business backlash into account, we can expect baby steps around employment law.

Starting off easy

Most of the changes announced this week will likely be rollbacks of National initiatives.

Workers' rights to meal and rest breaks will be strengthened after 2015 amendments loosened the rules allowing employers to specify when breaks were taken or get rid of them for a good reason — or if compensation was agreed to.

Other changes will revolve around restoring workers’ rights regarding bargaining.

The previous government removed the ability of employees to initiate collective bargaining and gave employers an avenue out of following through with bargaining, which was previously mandatory.

Expect the changes in this area to be reversed.

90-day trial will stay

When National first announced the introduction of the 90-day trial initiative Labour was vehemently opposed.

This changed last year when then-Labour leader Andrew Little said he was no longer opposed to it as long as there were some changes.

“We’re not going to scaremonger here. I’m urging caution. I don’t think it’s helpful to have a dispute if there’s no dispute."

The policy allows employers to dismiss a new employee for any reason as long as it is not discriminatory and is designed to encourage businesses to hire new workers. The trials are popular with employers, but a Motu study in 2016 found "no evidence that the policy affected the number of hires by firms on average, either overall or into employment that lasted beyond the trial period. It also found no effect on hiring of disadvantaged jobseekers.

While there may be some surprises in Labour’s 90-day announcement due to coalition agreement concessions, it will likely include the creation of a new referee service that will give workers an avenue to pursue a case of unjustifiable dismissal if fired during a trial period.

Any such referee service would likely have a modest reparation limit for any damages awarded.

This doesn’t go far enough for Council of Trade Unions president Richard Wagstaff, who said he wanted the trials scrapped completely.

“Our view is the 90-day trial is no good, certainly the Government’s plans to amend it don’t meet with our approval.”

Probation periods were acceptable, but workers should always be entitled to natural justice.

Curiously, a more conciliatory tone was struck by the Employers and Manufacturers Association chief executive Kim Campbell.

While he was unsure that there was the need for more bureaucracy to tangle up the 90-day trial and it was important employers were not turned off from hiring workers, he was willing to give the new Government time.

The business community had been “given assurances” there would be in-depth consultation before any changes were made, he said.

“We’re not going to scaremonger here. I’m urging caution. I don’t think it’s helpful to have a dispute if there’s no dispute."

Fair Pay Agreements contentious

After Thursday’s initial announcement work will continue on more complicated, and potentially more controversial, law changes.

This work, which will include new pay equity legislation, will take much longer and require careful negotiation between parties.

A linchpin of this work will be the possible introduction of Fair Pay Agreements (FPAs). Prime Minister Jacinda Ardern reiterated on Monday that the agreements were not part of the 100 day plan and would be introduced after extensive consultation with both employers and unions. There had been some debate during the election about whether the agreements could be done sooner.

These FPAs would see wage negotiations triggered in a specific industry once a certain percentage of employers or employees called for one.

When this was floated by Labour pre-election there were outcries about the risk of strikes and a return to the bad old days of crippling industrial action.

New Zealand ditched the national awards system — where central agents set industry pay rates — in 1990 following a string of major strikes and concern New Zealand businesses could not compete internationally due to high wages.

Wagstaff said there had been some “mischievous” comments leading up to the election about FPAs warning of large-scale industrial action.

This was nonsense, he said, and New Zealand was an outlier compared to other OECD countries when it came to this area.

“I think it’s lazy to go ‘Oh, this is a return to the 1970s’.”

He believed there were plenty of employers who would be happy to see the introduction of such legislation as they were sick of bad employers dragging wages down and undercutting them.

Wagstaff said a profession that would likely be the first to benefit from such legislation would be bus drivers, whose wages seemed stuck to the minimum wage.

On behalf of employers, Campbell was again diplomatic and would wait to see what shape the final policy took.

“The landscape for unions will be better but [the Government] is not going to turn the clock back, the approach is just breathe through the nose, let them do their job and give them the benefit of the doubt.”

That optimism was not shared by National leader Bill English, who criticised the Government for leading different parties in different directions.

Regarding Fair Pay Agreements, the Government was telling workers it would be a tool to lift household incomes and wages while business audiences were hearing there were still no details and they would be consulted.

“I think there’s going to be a bit of a scrap over industrial relations in the next wee while.”

Newsroom is powered by the generosity of readers like you, who support our mission to produce fearless, independent and provocative journalism.

Become a Supporter


Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.