Post-Election Edition
Welcome to our post-election edition of Crystal Ball.
National has released its Action Plan for its first 100 days. There are three elements that are relevant to employment legislation:
90 Day No-Fault Trial Periods
National says it will introduce legislation to restore 90 day no-fault trial periods for all businesses. No-fault trial periods are provisions in employment agreements that an employee can be dismissed within the first 90 days of new employment. They do not have to be formally warned in advance that their employment is at risk. These employees cannot raise personal grievances for unjustified dismissal if they are dismissed in those first 90 days of their employment. In 2018 the Labour Government restricted no-fault trial periods to employers with fewer than 20 employees. Note: no-fault trial periods are not the same as probationary periods. Briefly, an employee on a probationary period is entitled to be warned before their employment is terminated in reliance on the probationary period. An employee whose employment is terminated under a probationary period can bring a personal grievance claim for unjustified dismissal.
Fair Pay Agreements
National says it will repeal Labour’s fair pay legislation – the Fair Pay Agreements Act 2022. This Act creates a framework for bargaining for minimum employment terms based on an industry or an occupation. If bargaining between the parties does not result in a fair pay agreement, the Employment Relations Authority can set minimum employment terms. As at 16 October 2023 there was one fair pay agreement application being assessed (waterside workers), and six were being bargained for (interurban, rural and urban bus transport; hospitality industry; security officers and guards; commercial cleaner; earlier childhood education industry and grocery supermarket industry). To our knowledge, no fair pay agreements have been concluded. Fair pay agreements are different from equal pay/pay equity. The Equal Pay Amendment Act 2020 provides for a detailed step-by-step process for raising, assessing, bargaining and settling collective pay equity claims. Pay equity claims concern work that may be subject to systematic sex based discrimination in female-dominated occupations.
Income Insurance Scheme
National will stop all work on what it refers to as the “Job Tax” (the proposed Income Insurance Scheme). This scheme was intended to provide employees who were made redundant or who had to stop working because of a health condition or disability with 70% of their prior annual income (up to an annual salary cap), for seven months. It would have been funded by workers and employers paying an estimated 1.39% each of the employee’s income. In February 2023 the Labour Government announced it was indefinitely delaying the introduction of the scheme.
For more information about any matter in this newsletter, or any other workplace or employment law matter, please contact Penelope at prl@btlaw.co.nz or Carolyn at carolyn.heaton@btlaw.co.nz or phone our main office number (04) 472 5579.
Penelope, Carolyn, Andrea and Sarah
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