'Remove the shackles': EMA seeks employment changes as new government steps in

Changes include scrapping FPAs, reviving 90-day trials, among others

'Remove the shackles': EMA seeks employment changes as new government steps in

The Employers and Manufacturers Association (EMA) is calling on the incoming New Zealand government to make various employment-related changes that would help businesses succeed.

EMA CEO Brett O’Riley said it’s time for the new government to “remove the shackles” and let businesses thrive amid hardships on operating a business in the country.

This includes improving the flexibility of the employment market and ensuring that businesses can source and secure the right talent, according to O’Riley.

“That means scrapping Fair Pay Agreements (FPAs), which seek to reduce flexibility in workplaces,” the EMA CEO said in an opinion piece this month.

The FPAs Bill allowed for the collective bargaining between employers and employees for industry- or occupation-wide employment terms. The legislation, however, saw the opposition of businesses until it was passed late last year.

Reviving the 90-day trials

O’Riley also pushed for the revival of the 90-day trials that was scrapped in 2018 by former Prime Minister Jacinda Ardern.

“Such trials allow employers to take a risk on employing someone who might not have the right skills or experience but who has the right attitude,” the CEO said.

“They can help those on the edge of the employment market, such as long-term beneficiaries and those with a troubled past, into a job because they are given an opportunity they might not otherwise have received.”

The 90-day trials scheme was scrapped following Ardern’s legislative overhaul of employment laws. It previously allowed employers to hire a new employee on a trial period for up to the first 90 calendar days of their employment.

Rethink minimum wage hikes

O’Riley also called on the government to link future minimum wage hikes to an index as part of a re-evaluation of how the increases are calculated.

“Increases to superannuation and other benefits are linked to an index, so there is no reason why the same shouldn’t apply to the minimum wage,” the EMA CEO said. “This will provide businesses with greater certainty about future increases and will help remove the politics of setting the minimum wage.”

He made the remarks as he called out the 45% increase in the minimum wage in the past five years, while also pointing out the short time frame between the announcement of the hike and its implementation.

“In recent years, employers have found out about significant minimum wage increases from the Government as late as February, for implementation in April,” he said. “That makes it impossible for them to plan and budget appropriately.”

‘Broken’ Holidays Act, Immigration change

Meanwhile, O’Riley also told the new government to look into the Holidays Act, which he said is “too complex and leads to miscalculations and compliance errors.”

“The other area of employment law that needs work is the Holidays Act, which is broken,” he said. “For example, the 10 days of sick leave should be calculated the same as other leave entitlements for part-time workers.”

“If you work one day a week, you should not have the same sick leave entitlement as someone who works five days a week. That is just not fair.”

He also said the country’s immigration agency should stop acting like a “gatekeeper” as businesses seek more skilled workers.

“We need our immigration agency to act more like a national recruitment agency than a gatekeeper,” O’Riley said. “We must keep workers, businesses and their customers safe – so many of our members have been affected by crimes of opportunity that have reached epidemic proportions.”

The EMA CEO made the remarks early this month as New Zealand transitions to a new government under the National Party.

On Thursday, Reuters reported that the National Party reached an agreement with ACT New Zealand and New Zealand First to form a majority government.

Incoming Prime Minister Christopher Luxon said this new coalition government will be “stable, effective, and will deliver” change that will make New Zealand “even better.”

“On Monday I look forward to being sworn in as New Zealand’s 42nd Prime Minister alongside ministers from National, ACT, and New Zealand First who are ready to get to work to make this great country even better,” Luxon said on X.

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