Part of Labour’s big pay off to the unions will be unveiled later this week —  but there may be less to the proposed changes to workplace law than some have feared. It is yet another sign that this Labour Government is more conservative than it pretends. 

Richard Rudman is the author of the New Zealand Employment Law Guide.  He is underwhelmed by what are likely to be the proposed changes.

There may be less than some have feared to the Government’s promised employment law reforms set down for introduction this Thursday.

Based on Labour’s election manifesto and the Labour–New Zealand First coalition agreement, predictions of “significant changes” to employment law and “dramatic” and “fundamental” changes across the country’s workplaces may be rather over-blown.

In some ways, that’s a pity.

Because key parts of our employment law — as both the Court of Appeal and the Employment Court have been saying for years — were written when the 40-hour, five-day week was standard. That’s no longer true and, as a result, the laws are outmoded.

During 2017, Labour sought to make political capital from its Future of Work Commission.

Regrettably, the commission’s report was less adventurous and forward-looking than might have been hoped or expected. Few of the issues it identified came through in Labour’s election policies.

The big issues

There are big issues. Perhaps the biggest is the question of what is work in the 21st century.

Since the saga of the Idea Services sleepover cases began almost a decade ago, Parliament has largely left the question to the courts — to make rulings in an out-of-date legislative context.

A second big question involves defining employment and the status of employees at a time when the traditional employer-employee relationship is being supplanted by contracting arrangements more suited to the gig economy.  

Other countries are concerned with the employment status of Uber drivers, for example, and the employment rights of unpaid interns. Not so New Zealand’s politicians.

Labour has promised to fiddle with the issue — by repealing John Key’s so-called Hobbit law, which made film workers into independent contractors unless they chose not to be. But that was hardly revolutionary, because real estate agents had been treated that way for years.

What’s needed is a full consideration of employment status. So far, politicians have succeeded only in muddying the waters.

The prime example is the Health and Safety at Work Act 2015, which is based not on the employer–employee relationship as its predecessor was, but on the mutual obligations of people who control a business and of workers — a term much wider than employees.

Labour has promised to introduce “statutory support and legal rights for ‘dependent contractors’ who are effectively workers under the control of an employer”.

This could clarify some of the confusion around employees, independent contractors, triangular employment and associated issues. But it is still just fiddling with the central question of the identity, definition, rights and responsibilities of those who perform work for others.

In the meantime, a promise to “investigate options for ensuring that people who work over 40 hours a week receive adequate remuneration” suggests that Labour, like our employment law, is stuck in the traditional world of work.

Further fiddling

There’s fiddling promised in other areas as well, where bolder and more basic action might produce better results.

For example, the coalition government will progressively increase the minimum wage to $20 an hour in April 2021.

At the same time, Labour promises to pay core public sector employees at least the Living Wage — whatever that might be — and extend it over time to contractors in the public sector.

Wouldn’t it be better to ask whether the role of the statutory minimum wage should be re-examined, or set at a level which makes the so-called living wage unnecessary? And why should only core public sector workers be entitled to a living wage?

Some of the government’s promises are clear. For example, it has already fulfilled its undertaking to extend government-funded parental leave payments. And there’s nothing very controversial about a promise to let workers in all workplaces have a health and safety representative.

But some of the pledges are less clear. There’s a promise to replace 90-day trial periods with “a fast, fair and simple system” where a referee will hear disputes within three weeks, make a final and binding decision, and cap any penalties.

Frankly, a progressive government would go further and do away with 90-day trial periods — which have in any case been significantly neutered by the Employment Court — and leave real disputes to the Employment Relations Authority (perhaps providing it with more resources).

Labour was adamantly opposed to 90-day trial periods when National introduced them. Now it seems willing to accept the concept.

Back to the future

There’s one possibility of real change further out into the future.

Labour promised, within 12 months of becoming government, to introduce legislation so unions and employers, with help from the Employment Relations Authority, could create fair pay agreements setting minimum conditions (eg, wages, allowances, hours of work. and leave) for workers (employees?) across an industry.

For those who’ve been around as long as this writer, these fair pay agreements look like a throwback to the awards of the old Arbitration Court. That prospect led one over-excited observer to predict a return to compulsory unionism. Back to the future, indeed.

However, the prime minister says fair pay agreements will not be included in the first round of employment law changes. She needs to consult more with unions and the business community.

The new government was also quick to abandon the National Party’s proposed legislation on pay equity — and promises a better Bill during 2018.

The prime minister might also find that this legislation needs more consideration.

Its details will, inevitably, be controversial — as politicians, pundits, employers and workers get their heads around the differences between equal pay and pay equity.

And as they grapple with the technical difficulties of comparing jobs — and setting wages — across sectors, industries, and organisations.

Labour will also have to deal with a likely backlash from employers over the stricter enforcement and higher penalties of the 2015 health and safety legislation.

Already, employers are complaining that fines are crippling their businesses — and sentencing directors to home detention is unlikely to be popular.

Unmentioned in all of this is an announcement that the Parliamentary Counsel Office proposes to draw up an Employment Law Revision Bill — covering many, but not all, of the key employment law statutes. More fiddling. More confusion.

 

Richard Rudman is the author of the New Zealand Employment Law Guide. The 2018 edition is published this month. Get it at https://books.wolterskluwer.co.nz.