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Big changes ahead for the workplace

Election Survey 2023

Chapman Tripp's perspectives

By Marie Wisker, Chapman Tripp

Labour came into government in 2017 with a substantial workplace reform agenda but unless it wins a third term may leave having achieved very little of lasting value.

The jewel in the Crown is the Fair Pay Agreements (FPAs) reform, achieved after Labour was unshackled from New Zealand First and able to govern in its own right. Except that it didn’t manage to get the Bill passed until 1 November 2022, meaning that it is extremely unlikely that any FPA will be completed before the country goes to the polls on 14 October.

As at the end of July, five applications had been approved for collective bargaining - bus drivers, hospitality workers, security officers and guards, early childhood education workers, and commercial cleaners. But the process of setting up bargaining teams is complex and can take up to three months.

Had Labour put more urgency into getting the legislation through or were it to win three more years and FPAs became more widely established, a National-led Government would still scrap the Act but might have to provide for a transition. As it is, a simple repeal will be enough if National takes the Treasury benches in October.

Two other important Labour workstreams have been put on pause as Chris Hipkins’ policy bonfire:

  • the income insurance scheme, and
  • changing the definition of “employee” in the Employment Relations Act (ERA) to better distinguish employees from contractors.

This puts Labour in the awkward position, should it lose the election, of having achieved more enduring change for its worker and union base while in coalition with New Zealand First than during its historic super-majority – although a change of government would almost certaintly see some of the 2018 amendments to the ERA, unwound.

Labour wanted to remove the 90-day trial entirely but was forced by New Zealand First to allow the policy’s continuance for employers with fewer than 20 employees. A National-Act Government could restore the right to all businesses regardless of size.

Other parts of the Labour legacy will, however, survive even if in attenuated form. The Equal Pay Amendment Act 2020, which opens the door to claims of systemic sex-based pay undervaluation in female dominated occupations, won unanimous support in Parliament and has been relatively uncontroversial in practice (possibly because all of the claims taken so far have been in the public sector). We expect some progress to be maintained under a National-led Government.

Similarly, the reform of the Holidays Act will probably continue as the need for a fix is widely acknowledged and the taskforce recommendations have been largely agreed by business and union representatives. The Government’s explanation for the slow progress is that it is a significant and complex exercise and it is important to to get the changes right.

Labour has required that everyone employed in the core public service be paid the living wage and that it be extended progressively to contractors in the catering, cleaning and security sectors as contracts are signed and renewed after 1 December 2021. Many private sector employers have also taken it up voluntarily, but this may slacken off if the gap between the statutory minimum wage and the living wage widens. It rose from 95c an hour to $3.30 in September after the hourly living wage was increased to $26. Act is opposed to any minimum wage increases “for the time being” and National has only committed to “incremental increases”. So there will be further movement but expect it to be slower and, potentially, more erratic under a National-led administration.

The fate of Future of Work is harder to predict. It is a tripartite forum which has been meeting regularly for five years now and is backed by a significant amount of departmental resource. Although it is strongly identified with Finance Minister Grant Robertson, it may be saved by the fact that it has been tasked with a relatively apolitical agenda – to examine the risks and opportunities for New Zealand from the four “global megatrends” of technological change, demographic change, globalisation and climate change.


Deloitte's perspective

By Lauren Foster

While the election raises choice for voters in how the New Zealand workforce grows and evolves from a policy perspective, the largest shifts in the labour market are occurring regardless of the political landscape. Millennials, who drove many of the societal shifts that also impacted employers (think #MeToo, the Gig Economy and side hustles) are reaching early middle age, and Gen Z are already showing significant disruption in the workplace – not all negative.

Policy around 90-day trials and the Holiday’s Act tweaks pale in comparison to the tsunami of shifts that employers are navigating around hybrid work, quiet quitting, and generative AI, while trying to attract and retain a workforce in a tight labour market.

There is a role for government in helping businesses adapt to this future. It’s much easier for businesses to navigate these massive shifts in a strong economy, however 85% of respondents to the Election Survey felt that this Government doesn’t have a coordinated plan of action to raise New Zealand’s economic performance. So, in the words of political strategist James Carville, “It’s the economy, stupid.”

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