Business welcomes amendments aimed at boosting 'labour market flexibility'
Reforms to the country's Employment Relations Act are en route to becoming a law after a new amendment bill was introduced to Parliament on Tuesday.
Workplace Relations and Safety Minister Brooke van Velden introduced the amendment bill, saying it will help businesses employ or contract workers "with confidence".
Among the reforms included in the bill are the new gateway test to distinguish contractors, changes to simplify the personal grievance process, the new income threshold for unjustified dismissal grievances, and the elimination of the 30-day rule.
"[This marks] a key milestone in this Government's efforts to help New Zealand businesses employ or contract with confidence and create more and better opportunities for workers," van Velden said in a statement.
BusinessNZ said the introduction of the amendment bill will have a positive impact on the country's economy.
"The BusinessNZ Network has been advocating for these changes for some time, and it's encouraging to see that Minister van Velden is listening to business owners' concerns during what remains a difficult time to be operating," said Catherine Beard, Director of Advocacy at BusinessNZ, in a statement.
"BusinessNZ looks forward to working further with the Minister on workplace issues to improve our economy and make New Zealand an even better place to be."
Under the bill, the proposed gateway test aims to provide greater clarity for businesses and workers over the distinction between employment and contracting arrangements, according to the minister.
The test outlines four criteria that, if satisfied, classify an individual as a contractor.
The proposal comes after Uber's previous employment dispute with four drivers, who were classified as employees by the courts last year.
"This will provide greater certainty for all parties and will allow more innovative business models," van Velden said.
Beard agreed that the test would provide more certainty around contract-based work.
"In clarifying the employee-contractor distinction through the previously announced gateway test, the Amendment Bill will simplify chosen working arrangements for all parties involved," she said.
The Employment Relations Amendment Bill also seeks to introduce changes to the personal grievance process.
"The amendment to personal grievances will reduce rewards for bad behaviour and reduce costs for businesses in the process," van Velden said.
New Zealand's current law permits the Employment Relations Authority or the Employment Court to award remedies, including reinstatement and compensation for hurt and humiliation, if a personal grievance is established.
"The changes make clear that an employee whose behaviour amounts to serious misconduct will be ineligible for remedies," van Velden said. "This change will ensure that hardworking New Zealanders don't see bad behaviour rewarded."
The bill also prevents employees earning more than $180,000 per annum from raising an unjustified dismissal claim in courts.
According to van Velden, this allows for "greater labour market flexibility" where businesses can ensure they have the best talent for their organisations.
"It allows employers to give workers a go in high-impact positions, without having to risk a costly and disruptive dismissal process if things don't work out, benefiting those seeking to move up the career ladder," she said.
Meanwhile, the bill also pushes for the elimination of the 30-day employment agreement rule.
The rule previously ensured that a new hire's contract would reflect a collective agreement within their first 30 days at work, regardless of whether they choose to join a union.
Van Velden, who previously referred to the rule as "convoluted and confusing," said its removal will give employers and employees freedom to negotiate mutually beneficial terms at the start of their employment.
Beard also welcomed this proposal and said it "makes sense to tidy up" the rule.
"In reality, the 30-day rule is a compliance headache for employers and employees alike, and is something that BusinessNZ has argued should be removed," she said.
The New Zealand Council of Trade Unions (NZCTU) said the bill undermines workers' rights in the country.
"The Bill heightens worker vulnerability to unjustifiable dismissal, shields employers from the consequences of mistreating workers, and drives people into insecure work," said NZCTU president Richard Wagstaff in a statement.
"Parties across Parliament should vote down this radically unjust law and instead support working people and their families."
The government said the public and interested parties will have a chance to submit on the bill when it reaches the Select Committee.
