Overview of Government ER Policy
The new Government campaigned on some significant changes for employment relations.
Collective Bargaining
- The requirement to conclude a collective agreement would be removed. There would still be an obligation to bargain in good faith but for the many employers with low numbers of union members they would at last have the power to end time consuming and expensive bargaining processes that only benefit a small number of employees.
- Where there is a collective agreement in place an employer would be able to employ new employees on a different basis (ie they would not be required to be employed on the terms of the collective for the first 30 days). This would return to employers a key method to achieve change where there has been a refusal to agree to more modern conditions. It also arguably gives more bargaining power to employees in an environment of skill shortages.
- Employers would also be able to opt out of multi-employer collective bargaining, instead of having to go through the charade of not agreeing terms in an expensive and protracted bargaining process.
- Where employees engage in partial strikes the employer would be able to reduce pay to the level that reflects the work still being performed. While this no doubt would cause disputes about the pay reduction applied in such circumstances, in principle it re-balances the right to strike.
Personal Grievances
- National would seek input from the Department of Labour and the employment law community on the best way to prevent constructive dismissal being used inappropriately in employment disputes, while maintaining access to justice for those who bring legitimate claims.
KiwiSaver
- All new employees would automatically be enrolled in KiwiSaver but the ability to opt out would remain.
Minimum Wage
- The minimum wage would be increased each year, as has occurred for each of the last three years, but it is highly unlikely to reach $15 any time soon.
- There would be a new Starting Out minimum rate for young workers. This rate would be set at 80% of the minimum wage. The existing training rates for the first 3 months or 200 hours would be scrapped. There would be three levels of eligibility for the new system:
- 16 and 17 year olds in their first six months of work with a new employer.
- 18 and 19 year olds entering the workforce after more than six months on a designated benefit.
- 16 to 19 year olds training in a recognised industry course involving at least 40 credits a year.
With the unemployment rate for 15-19 year olds being 27.6% (or more than 4 times the overall rate of 6.5%) creation of jobs for young workers is a hot topic.
Trial Periods
- The existing arrangements for trial periods would continue and it’s fair to say there haven’t been many examples of employers rorting the system. By international standards the existing policy is quite conservative. For example, in Australia an employee of a small employer (under 15 employees) may not claim unfair dismissal for the first 12 months of employment (or during the first 6 months for a large employer). In the UK at present no employee may claim unfair dismissal in the first 12 months of employment, but this will be extended to 2 years from 1 April next year. However, a leaked independent report to the British Government suggests that unfair dismissal be scrapped altogether, and replaced by a “compensated no-fault dismissal” where employers would pay a fixed amount of compensation and notice pay when dismissing an employee, but the employee would then have no right of redress. This is an approach we have advocated for a number of years.
Superannuation
- The Government’s policy is not to increase the age of entitlement.
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