Election Results 2020: What Employment Law Changes can we Expect to see in the Upcoming Term?

On 17 October 2020 the election results were announced for New Zealand, presenting a landslide victory for the Labour Government.

Today the Prime Minister announced her new Cabinet, reflecting the governing agreement signed with the Green Party. We should now anticipate that a number of Labour policies will come to fruition over the next three year term.

The Labour led government has already made a number of changes to employment legislation in the past three years, this has included updates to meal and rest break entitlements, introducing the Employment Relations (Triangular Employment) Act, removing trial period provisions, increasing paid parental leave, restoring reinstatement as the primary remedy, and yearly increases to the minimum wage.

This article sets out some of the key employment law policies which Labour campaigned on for the 2020 election, and as a result of their win, what changes we can expect to see rolled out across New Zealand workplaces.

The Living Wage

The Labour Party is a supporter and advocate of the living wage. Although there is no policy to suggest that all privately held business will be required to pay the living wage, we can expect to see gradual extensions of those working for the public sector being required to be paid the living wage.

The living wage in New Zealand is currently $22.10 per hour and is regarded as the level of income necessary, to provide workers and their families with basic necessities of life. Labour Party policy suggests that they will require contractors to the public sector, such as cleaners, caterers and security guards to be paid the living wage.

Increases to Minimum Wage

The Labour Government has raised the minimum wage in New Zealand each year that they have been in office. This is set to continue, with the minimum wage looking to increase from the current $18.90 per hour, to $20 an hour. It is expected that this change will occur in 2021.

Increases to Sick Leave

We can also expect to see an increase in the sick leave entitlements available for employees, Labour plan to increase the minimum sick leave entitlements from five to ten days. This change will impact on all employees in your workplace, whether they are part-time or casual, so long as they have worked for 6 continuous months.

Labour expressed during their campaign that this policy will be one in which they will seek to pass legislation within the first 100 days. We can therefore, expect this change to come into force relatively soon.

Changes to Contractor Arrangements

It is also likely that we will see new legislation come into force to put in place greater protections for “independent” contractor arrangements. This is the result of a number of recent cases which looked at the real nature of independent contractor arrangements, to find that in fact the worker should be treated as an employee and as such subject to minimum employment entitlements.

A new category of workers has been identified as vulnerable, which the Labour Party seek to protect, this being “dependent” contractors. These workers are effectively employees under the control of an employer but who do not receive the legal protections currently provided to regular employees under the law.

Pay Equity and Fair Pay Agreements

We can also expect to see some further progress being made around Pay Equity and Fair Pay Agreements. This year, we have seen the Equal Pay Amendment Act be introduced and implemented which seeks to improve the process for raising pay equity claims, and to eliminate and prevent discrimination on the basis of sex.

Labour have also committed to introducing Fair Pay Agreements to set fair, basic employment conditions across industries. These agreements will be decided through bargaining between affected workers and employees, and will then become a legal requirement in that sector.

 

1As at 19 October 2020, noting that special votes have not been counted.