What to expect post-election

The results are in! … or almost in! While the new Government has not yet been formed, we know there will be a change in leadership, so what does that mean for you? Below, we comment on the employment-related policies proposed by the National / ACT (/ New Zealand First?) government, and the policies that may be put in the bin without Labour in power.

National and ACT have been starkly opposed to the fair pay agreements introduced by Labour. Fair pay agreements apply a framework for employees’ minimum entitlements across a particular industry or occupation. They propose to afford employees greater bargaining rights, and even the power imbalance between employees and employers. While we are yet to see any fair pay agreements ratified to date, National has committed to repealing the fair pay legislation within their first 100 days in office.

The public sector can expect some changes to their current workforce, with National instructing public service organisations to reduce their expenditure by 6.5% (on average). Chief Executives in the public service will also be required to reduce their consultant and contractor expenditure, and report on their current spending within 100 days.

Both National and ACT agree that 90-day trial periods for all businesses should return and so we can expect to see this change implemented relatively soon. ACT has also put forward the suggestion that employees should only be reinstated following a personal grievance process, where an employer consents. Although National has not indicated where they sit on this issue, previous National governments have also preferred a higher threshold for an employee to prove that reinstatement is both reasonable and practicable.

In August this year, the House considered a Members Bill from National’s Deputy Leader Nicola Willis, the Parental Leave and Employment Protection (Shared Leave) Amendment Bill. The Amendment sought to provide parents with added flexibility and the opportunity to take their parental leave concurrently, or separately. Although the Bill didn’t make it past its first reading, it had the support of both ACT and National, which may now, be all it needs to pass.

There are a number of policies that Labour had in the works prior to the election. Whether these policies will make it through the House and become law is up in the air.

For example, former employment lawyer and Labour MP Helen White introduced the Employment Relations (Restraint of Trade) Amendment Bill into the House this year. If passed, the Bill would provide greater protections for low to medium-income earners, and prevent them from being subject to unduly harsh restraints of trade. While the Bill made it through its first reading, National and ACT did not support the Bill.

The Crimes (Theft by Employer) Amendment Bill was introduced by Labour’s Ibrahim Omer. The Bill sought to amend the Crimes Act to clarify that an employer is liable for theft, where they intentionally fail to pay employees. Neither National or ACT supported this Bill.

Labour also announced a mandatory gender pay gap reporting scheme for employers with over 250 employees. However, we don’t expect National to make this a priority.

Pact Group v Robinson [2023] NZEmpC 173

The Employment Court has recently found that an employer’s failure to follow a mana-enhancing process in the course of carrying out a disciplinary process can constitute an unjustifiable action.

In Pact Group v Robinson [2023] NZEmpC 173, Pact Group commenced a disciplinary process, alleging the employee had failed to complete the stipulated hours of work, and subsequently made fraudulent claims for payment. In coming to its conclusions, Pact Group relied on assumptions formed as to the work the employee was undertaking, and reviewed the GPS monitoring record for the employee’s work vehicle. The employee was later dismissed.

The Employment Court found that Pact Group’s process was unfair due to its failure to:

• engage with the employee in face-to-face meetings – they opted for a three hour-long Zoom meeting; and
• consider the cultural concerns raised by the affected employee – despite Pact Group having incorporated tikanga principles into its workplace policies.

Pact Group also failed to take into account other relevant considerations, including the disruption the COVID-19 lockdowns had on the employee’s ability to work, the employee’s family circumstances, and the employee’s own health conditions.

Although in this case, the employee expressly raised cultural concerns with their employer, it is important to note that even in the absence of an employee expressing their desire to be dealt with in a mana-enhancing / tikanga consistent manner, the onus is on the employer to follow processes that are mana-enhancing, if tikanga principles are incorporated into their policies. The Court also regarded the process undertaken by Pact Group as ‘hurried’, ‘distanced’ and ‘impersonal’, ultimately undermining the mana of their employee. The process was found to fall well short of what could be expected of a fair and reasonable employer.

The Court also made a brief comment on GPS monitoring and the use of those records. Pact Group’s policy provided that they may collect data to inform a disciplinary process involving a legislative breach, such as speeding. While the Court did not have to decide on the matter, the Judge commented that it may be “problematic” for an employer to collect information about its employees using GPS records, where their company policies only allow that information to be used in relation to speeding incidents.

The unjustified actions of Pact Group, including damage to the employee’s mana, and feelings of whakamā (shame or embarrassment), were relevant in determining it appropriate to award NZ$31,000 in compensation under section 123(1)(c)(i).

The Employment Court is cracking down on employers that fail to uphold the mana of their employees through procedurally unfair disciplinary processes. The Court has indicated that an employer has a duty to consider cultural concerns of their employees, and favour meetings in-person, with the appropriate support people present. This expectation is heightened for public sector organisations, and for private sector employers that incorporate tikanga principles into their workplace policies. In this case, it was accepted that Pact Group had incorporated tikanga into the workplace however the Court does not highlight whether this was an express requirement when reaching its decision.

Extension of Accredited Employer Requirements expected in 2024

The protection of vulnerable workers (particularly migrant workers) was a focus of the Labour government. Initially forecasted for 2021, the Government has now announced it will be mandatory for all employers of migrant workers to have accredited status by 2024. However, the exact date for implementing this requirement was not confirmed, and whether the new Minister for Immigration will push this change remains to be seen. If the change is made, it would extend the requirement to become accredited to employers of those on working holiday scheme visas, student visas and open work visas.

The Accreditation process

Currently, to gain accreditation, employers must demonstrate their ‘trustworthiness’ across several areas, including employment law compliance, human resources, and worker training, benefits, and pay. By having this requirement, it helps ensure the visa and immigration process does not allow for migrant exploitation.

To gain accreditation, the employer must be deemed by Immigration New Zealand to:

• have a sound financial position to determine if the employment is sustainable;
• have human resource policies and processes which are of a high standard; and
• have good workplace practices, including a history of compliance with all immigration and employment New Zealand laws.

Additionally, accredited employers are required to provide settlement support for work visa holders and ensure that both themselves and the employees complete employment law learning modules. A standard accreditation process costs an employer NZ$740 – and even more for those seeking to hire more than six migrant workers a year. 

Implications for businesses and migrant workers alike

Though becoming an accredited employer is relatively straightforward through the current declaration system. Ensuring compliance will prove to be difficult for small business without accessible legal or HR support. If all employers are required to be accredited to employ migrant workers, many may elect to not hire migrant workers at all.

As the new year approaches, employers who currently do or may wish to employ migrant workers (and are not already accredited) should watch for developments in this space. Processing the required information and ensuring compliance will likely be an arduous process.

This newsletter contains contributions from: Luke Ji and Bella Cronin-Stone.

For further information on employment related matters, please visit our Global Employment hub, where you can find updates from many jurisdictions, including New Zealand, or reach out to one of our partners – Charlotte Parkhill, Greg Cain, James Warren or Renee Butler.