Following the dramatic shift in New Zealand’s political landscape after the October 2023 election, the employment law landscape is on the brink of change.
While employment issues were not the central focus of the election, it would be wise for organisations to proactively prepare for anticipated changes in this area.
We are provided with valuable insights into what we can expect by examining the policy proposals put forth by the National Party, ACT Party and New Zealand First, who are the likely coalition to govern the country.
Several common themes emerge from the policy changes proposed by the three parties.
Restoration of 90-Day Trial Periods
All three political parties are in favour of reinstating the 90-day trial period. If this change comes to fruition, which is widely expected, it would mean all organisations are entitled to include 90-day trial period provisions within their employment agreements and rely on these if dismissing an employee within this timeframe.
As it stands currently, only employers with fewer than 20 employees can use trial periods.
t’s important to note that even if an employee is on a trial period, they can still bring a personal grievance on grounds other than their dismissal, for example, discrimination, or harassment.
We suggest employers proactively review their employment agreement templates to ensure they can swiftly adapt to this change, as it is likely the government will move quickly. Organisations should also ensure their processes are robust to avoid being held to account by the Employment Relations Authority and Employment Court.
Abolishing Fair Pay Agreements (FPAs)
Both National and ACT Parties have promised to abolish the Fair Pay Agreements system. If this pledge is carried out, employees will no longer have the right to bargain for such agreements.
The status of Fair Pay Agreements currently in negotiation at the time of repeal remains uncertain.
Accord Services recommends companies closely monitor developments in this area and be prepared for potential shifts in collective bargaining dynamics.
Policy proposals by each party
National Party
The National Party’s campaign manifesto states that in the first 100 days it will:
- Stop all work on Labour’s proposed income insurance scheme
- Re-introduce 90-day trial periods for all New Zealand employers
- Repeal Fair Pay Agreements
In addition, the National Party also propose to:
- Amend current parental leave laws to allow both parents to take government-paid parental leave concurrently (at the same time)
- Increase the cap on seasonal workers from 19,000 to 38,000
- Exempting businesses making less than $60,000 per annum from GST
- Allow additional working holiday visas for sectors with labour shortages
ACT New Zealand
The ACT Party’s campaign manifesto aligns with the National Party’s goal to reintroduce 90-day trial periods for all New Zealand employers in the first 100 days. They also seek to ‘get rid of so-called Fair Pay Agreements’.
In addition, the ACT Party also proposes to:
- Remove the public holiday on the 2nd of January
- Amend the Employment Relations Act 2000 to prevent contractors from challenging their employment status in the employment court
- Restricting the availability of reinstatement as a personal grievance remedy in the Employment Relations Act 2000
- Accelerate the personal grievance process by imposing stricter time limits on the Employment Relations Authority
New Zealand First Party
The New Zealand First Party proposes to:
- Reintroduce 90-day trial periods
- Restore the Targeted Trade and Apprenticeship Fund, to assist employers in taking on more Apprenticeships and Trade workers
- Establish support for seniors and their employers
- Replace the Accredited Employer Worker Visa with a Critical Skills and Labour Shortage Visa
- Explore the feasibility of raising the adult minimum wage to at least $25 per hour with a tax concession for businesses willing to do so
In conclusion, whilst the exact formation and makeup of the next New Zealand government remains uncertain, one certainty is there will be change. Employers must remain informed and be ready to embrace the evolving regulatory environment.
We can help keep you on the right side of the law.
Change can be difficult, but Kiwi businesses need to be ready for it to stay on the right side of the law. If you need support implementing or understanding what these changes may mean for your business, we can help. Our initial chat is always free, and if you decide you’d like some independent, impartial, and up-to-date support, you can make use of our qualified HR expertise for as little as an hour, or as long as you’d like. It’s up to you.