New Zealand: What is at stake on 23 September (NZ elections) for workplace law, immigration

Last Updated: 6 September 2017
Article by Andy Nicholls, Frank McLaughlin, Marie Wisker and Geoff Carter

Most Popular Article in New Zealand, September 2017

Workforce policy has always been a key area of difference between Labour and National and is again this election campaign, where it has bled across to immigration.

National is campaigning largely on its record in these areas so we have focused on the other options on offer – particularly Labour.

Workplace regulation

A Labour-led government would wind back much of the labour market deregulation that National has introduced over the last nine years, and put in some legislative props to further promote collective bargaining.

Fair pay agreements

Probably the most far-reaching Labour policy is the introduction of Fair Pay Agreements (FPAs). These would set "fair, basic employment conditions" (e.g. minimum wages, allowances, weekend/night rates and leave entitlements), which would apply to workers across an industry.

Much of the detail of how the new system would work has yet to be settled. Labour's workplace relations spokesperson, Iain Lees-Galloway, says they would give themselves 12 months after the election to "sit down with business and unions and look at how the process of bargaining for an FPA would be initiated".

Features which have been confirmed:

  • there would be no ability to take strike action in support of FPA negotiations but arbitration would be available
  • either side could initiate a negotiation
  • bargaining would be led by a union
  • the union would need to be authorised by a majority of the workers potentially covered (this would require a certain level of union density within the catchment group and a history of a union presence), and
  • once approached, the employer or peak organisation representing the employers would be obliged to participate.

The example Labour uses is the residential care and support workers' pay equity settlement negotiated by the Aged Care Association for the employers, E tu (formerly the Service and Food Workers' Union) and the government

Labour has indicated that it would expect only "one or two" agreements a year but each agreement, once entered into, would likely persist into future years, subject to regular renegotiation.

While the details remain unclear, FPAs on the information available could, if widely adopted, produce a variant of industry or occupation awards. The take-up rate will depend on the organisational capacity and commitment of the unions and whether workers feel that they are getting a fair deal under their existing employment arrangements.

Replacement of 90-day trial periods

Labour would replace 90-day trial periods with new trial periods that require reasons for dismissal and justification. Any unjustified dismissal disputes would be heard by a new referee service within three weeks of lodgement, which can make decisions to reinstate or award damages to a capped amount.

Minimum redundancy protection

Labour would consult on minimum redundancy protection for employees affected by restructuring.

This picks up on the 2008 Public Advisory Group recommendation that a statutory requirement for redundancy compensation be introduced - based on length of service and other entitlements.

Other commitments

Other Labour workplace relations commitments include:

  • Labour would restore a statutory preference for reinstatement for employees who have been unjustifiably dismissed (in 2011 the National government amended the Employment Relations Act to remove reinstatement as a primary remedy)
  • increasing the minimum wage to $16.50 an hour - it is now $15.75 an hour; the Greens would raise it to $17.75, New Zealand First to $20
  • ensuring all workers in the core public service are paid at least the Living Wage
  • increasing paid parental leave to 26 weeks a year (National would go to 22 weeks and allow both parents to take some of that time off together), and
  • doubling the number of Labour Inspectors over time.

Labour's workplace relations package would substantially increase worker protections although at some cost to employers both financially (e.g. if compulsory redundancy is introduced) and in terms of overall flexibility (e.g. FPAs, 90-day trial).

Immigration

Net immigration has been high by historic standards in the last few years – partly reflecting a large increase in the number of overseas students and an increasing reliance on migrant labour in some sectors of the economy.

This surge has raised questions in the public mind about the country's capacity to cope. Both Labour and National have responded to these, while also trying to recognise the benefits migrants can offer.

National is keen to maintain New Zealand's booming international education industry but has responded to concerns that migrant labour may be locking out low-skilled New Zealanders from the workforce by tightening the rules around temporary work visas.

The changes restrict low skilled migrants to a three year visa after which they will be subject to a stand down period, require their partners and children to meet visa conditions in their own right and limit seasonal work visas to the duration of the season.

Labour would tighten the Labour Market Test carried out by Immigration New Zealand when granting work visas to ensure that a genuine attempt had first been made to recruit suitable New Zealanders. It would also clamp down on student work visas by:

  • removing them for non-degree courses which have not been assessed by the Tertiary Education Commission and NZQA as of high quality
  • denying foreign students the right to work while studying, unless approved as part of the course work, and
  • restricting access to work visas post-study to those who have a degree.

It estimates that these moves would cut migrant numbers by 20,000 to 30,000 a year. Labour would also:

  • "regionalise" skills shortage lists and require skilled immigrants to work in the area for which their visa is issued
  • introduce an Exceptional Skills Visa for highly skilled or talented people, and
  • create a KiwiBuild Visa for residential construction firms which train a local when they hire a worker from overseas.

New Zealand First wants immigration reduced to 10,000 a year. The Greens have not set a numerical target but want the settings to be reviewed on a regular basis, taking into account net population change and sustainability.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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