New Zealand heads to the polls amidst an unprecedented economic and health crisis. The next government faces a stern test in balancing the needs of workers and businesses.
Among the hot topics at this year’s election are:
Minimum Wage – should this be increased, decreased, or frozen? Should minimum wage be applicable to contractors, or at least dependent contractors?
Trial Periods – Do they cause too much harm workers’ job-security and provide lower access to justice, or are they necessary to encourage employers to take the risk of hiring potential workers in a COVID world?
Work-Life Balance – Is 4 weeks’ annual leave enough for New Zealanders in 2020? Is 5 days’ sick leave enough?
Pay Equity – in June 2019 the Gender Pay gap stood at 9.3%, according to Statistics New Zealand. Is enough being done to address this issue?
COVID-19 – From redundancies to safety at work, how should New Zealand deal with the challenges brought about by the unprecedented global pandemic?
Labour’s proposals bring New Zealand in line with at least two Australian minimum entitlements; They propose to double paid sick leave entitlements to ten days per year and increase the minimum wage to $20 per hour by 2021.
Wage subsidies for businesses who employ people who are at risk of long-term unemployment will continue. Labour has also promised to continue to provide tax relief for small and medium businesses.
Labour’s policy to introduce rights and extend the existing law to cover ‘dependent contractors’ has the largest potential to alter the workplace landscape. Dependent contractors currently exist in a lacuna in which they are under the control of an employer but are not employees and therefore do not have the rights of employees such as minimum wage, sick leave or the right to take personal grievances. For example, a ‘self-employed’ contractor may rely on one business for all of their work. This creates an asymmetrical relationship in which an employer effectively gains the benefits of an employee while the worker does not have the rights that would be enjoyed by an employee.
In a bid to support employers and combat rising unemployment, National intends to postpone the planned 2021 increase to the minimum wage. They also propose to pay businesses who take on new staff $10,000 for every new job created.
National would also reinstate 90-day trial periods for all businesses, reversing the current government’s move to make this tool available only to businesses with 20 or fewer employees. Such trial periods allow employers to dismiss employees within the first 90 days of employment without having to provide a reason. For the most part, such dismissals cannot be challenged.
Currently projected to be the third-largest party in parliament based on recent polls, ACT plans to reduce the minimum wage rate (currently $18.90 per hour) for the first time in New Zealand’s history, returning it to the 2019 rate of $17.70. It will freeze the minimum wage for at least three years. This will be compensated by lower taxes on income over $48,000.
ACT intends to introduce voluntary 12-month trial periods for new employees. This would change current employment law, as businesses would be able to terminate employment for new employees without reason for up to a year after employment commences. This would have a lengthy, adverse effect on workers’ job security and rights, particularly for low-skilled and low-income workers for whom this arrangement would not realistically be voluntary.
Perhaps most interesting is ACT’s new proposed “Employment Insurance” scheme. Similar to ACC, it proposes to create an employment levy of 0.55%. When a taxpayer loses employment, they may be able to claim 55% of their average weekly earnings over the past 52 weeks, capped at $60,000. This insurance would only be able to be claimed for one week for every five weeks worked, up to a maximum of 26 weeks. This would run in conjunction with the current jobseeker support system but would replace certain unemployment benefits.
A Labour-Green coalition would have joint goals of increasing paid sick leave entitlements to ten days per year and a sustained increase to the minimum wage. The Greens seek to progressively increase paid annual leave to five weeks.
The Greens have a focus on workplace flexibility and wellbeing; they have pledged to increase the number of Labour Inspectors to ensure that workplaces are meeting minimum obligations to staff. They also seek to strengthen employee rights to flexible working arrangements.
There is a strong focus on equity, increasing requirements for pay transparency, support for pay equity claims, prohibiting pay discrimination against disabled people, and setting employment and equity standards for government contracts.
The Greens also seek to introduce formal redundancy processes and provide a minimum of one month’s full pay as assistance for employees who are made redundant. Whether this would come from government subsidies or from employer’s pockets is currently unclear.
New Zealand First has not released a workplace policy (have contacted them for comment).
The Opportunities Party (TOP)
TOP’s immigration policy seeks to make immigration simpler for skilled workers. TOP proposes to allow skilled migrants to arrive in New Zealand on a trial basis without a job offer.
However, it is clear that Kiwis would be prioritised; TOP proposes to introduce a nation-wide register of vacancies and job-seekers to help the labour market function more effectively.
The Maori Party seeks to immediately raise the minimum wage to $25 per hour, to be supported by annual increases. This would be the largest single increase in the Minimum Wage in New Zealand’s history.
The party also seeks to guarantee pay equity for Maori employees.
New Conservative proposes to allow employers to release underperforming employees following a single “non-corrected performance review,” adding that such a review would have to be carried out in good faith. This would represent a significant weakening of employee’s job security.
New Conservative seeks to relax requirements for small and medium enterprises to reduce cost.
The party also intends to freeze the minimum wage to aid COVID-19 recovery, although it is not clear on how long this freeze will continue.