As the outcome of the election is being confirmed, we thought it would be timely to provide a post-election update. What will our new (likely) three-party government set out to change in the employment space?

Time will tell what the long-term impact on New Zealanders will be, but National has already articulated its immediate priorities, in the form of a 100-day plan. This aims to reduce the cost of living, restore law and order to make our communities safer, improve our healthcare and schools, and deliver better housing and infrastructure.

The plan includes two actions that directly impact businesses:

  • Introducing legislation to restore 90-day trial periods for all businesses.
  • Repealing Labour’s “Fair Pay” legislation

Restoring 90-day trial periods for all businesses

This law change will see the reintroduction of the right to use the 90-day trial period for all employers. This law was originally passed by the National government back in 2009 and was restricted to businesses with 19 or fewer employees at first, until it was extended to all employers in 2011. In 2018, the Labour Government reverted it back to its original status of applying only to ‘small to medium sized’ employers.

As covered in our previous Employment Bytes, the driving force behind this proposed change is ACT MP James McDowall who, pre-election, stated:

“Businesses have taken a hammering over the past few years. Running a business and employing people has never been tougher. Whether it was the lockdowns, an additional public holiday, continuous increases to the minimum wage, more sick leave entitlements or the so-called ‘Fair Pay Agreements.’

“ACT believes we should empower business owners to be successful so that they can employ more people.

“Good, hardworking, productive employees will be the winners with this policy, as business owners take a chance on people they might not have otherwise.”

Whether or not the restoration of the right to use the 90-day trial period for all employers will include any other changes to the law is not yet known, but we shall find out in the next 100 days.

Revoking the Fair Pay Agreement legislation

The Fair Pay Agreement (FPA) legislative framework came into effect just under a year ago, and it has been wildly debated by the previous government, unions, employers, and Business NZ since. FPAs are sector-wide agreements that contain minimum employment terms for all employees covered in an industry or occupation.

Ministry of Business, Innovation and Employment (MBIE) reports that there are currently seven applications involved in the FPA process, thought to be covering 200,000 workers in New Zealand . These applications include:

  • Waterside workers
  • Interurban, rural and urban bus transport—Bus drivers, coach drivers, and cleaners
  • Hospitality industry
  • Security officers and guards
  • Commercial cleaners
  • Early childhood education industry
  • Grocery supermarket industry

These are all at the ‘Bargaining’ stage except for the waterside workers one which hasn’t made it as far yet. No FPAs have to date been finalised and the new Government is now expected to repeal this legislative framework altogether. It’s unclear exactly how they will do this, and what this will mean for the six FPAs that are currently at the ‘bargaining’ stage, but this should be unveiled in the next 100 days.

There will likely be further changes in the employment space following this 100-day plan and as this new government properly gets into things in the new year, so watch this space.

Our team can answer any questions you have, particularly around action required by small to mid-sized  Kiwi businesses, in relation to some of these updates. We stay connected with what’s going on in employment law, so you can check back here for the latest, but to ensure you don’t miss any emerging updates, we recommend that you subscribe to our Editions newsletter.