New coalition government charts pro-employer course with policy reforms

'The changes will likely be viewed as being more 'employer-friendly' than the previous government's employment policies,' says employment lawyer

New coalition government charts pro-employer course with policy reforms

In the wake of National securing its coalition and taking the reins of governance, the three-way coalition is forging ahead with an ambitious 100-day plan comprising 49 actions.

Promising developments on the employment front have emerged within this plan.

“The changes will likely be viewed as being more ‘employer-friendly’ than the previous government’s employment policies, therefore well-received by businesses,” Sarah Townsend, partner at Duncan Cotterill, told HRD.

Fair Pay Agreements (FPAs) have been long opposed by the business community since their introduction by the previous Labour government. Business NZ, in a press release at the time, vehemently criticised FPAs, with CEO Kirk Hope deeming them “completely unfair.”

National shares this sentiment, quickly announcing their repeal, though this will have little effect on anyone because no FPAs have yet been agreed.

“We expect Fair Pay Agreements to be repealed in the first 100 days,” said Townsend. “National, NZ First, and ACT have a majority and will be able to pass these laws.”

90-day trial period reinstated

Another notable change expected in the initial 100 days is the reinstatement of the 90-day trial period. Employers, regardless of size, will regain the discretion to introduce 90-day trial periods into employment agreements for new hires. However, caution is advised, with HR managers urged to ensure legal compliance, she said.

“HR managers and organisations wanting to introduce a 90-day trial period will need to be careful around the strict legal requirements that apply to be able to rely on trial periods to dismiss an employee. Trial period clauses must be legally compliant and employment agreements must always be signed before an employee starts any work.”

Townsend notes that other proposed policies are "more complex and will need some time to be worked through." But one aspect that will remain unchanged is the status of contractors. The new government has already said that it will “maintain the status quo that contractors who have explicitly signed up for a contracting arrangement can’t challenge their employment status in the Employment Court.”

Other policies cover grievances, minimum wage

Other policies tabled include simplifying personal grievances, moderating minimum wage increases, and reforming health and safety laws.

Speaking to the personal grievance process, Townsend said, “There are unlikely to be any immediate law changes. The legal requirement to treat employees reasonably and fairly remains firmly in place.”

“HR managers will continue to play a key role in ensuring a thorough and fair process is followed before dismissing and disciplining employees to mitigate the risk of a personal grievance,” she said, adding that she thought awards made by the Employment Relations Authority and Employment Court in personal grievances cases will continue to increase.

While coalition agreements have been set, this doesn’t rule out the possibility of NZ First and ACT revisiting promises made during the campaign that didn't initially make the cut. Enforcing strict KPIs for Members of the Employment Relations Authority, removing reinstatement as a potential remedy for personal grievances, restoring the Targeted Trade and Apprentice Fund, and implementing a Seniors Employment Plan could all resurface in the legislative agenda in the future, Duncan Cotterill said in an article on lexicology.

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