Act leader David Seymour wouldn’t concede to the coalition agreement being wrong, but said it shouldn’t be interpreted as the governing parties agreeing to stop people going to court.
Because the coalition agreement doesn’t say anything else on the matter, it’s unclear exactly what will or won’t be done to provide more clarity around what constitutes being a contractor versus an employee.
Looking into the issue isn’t in the Government’s 100-day plan; Seymour noted, “The Government is awaiting the final outcome of the Uber case, which is currently before the Court of Appeal.”
The previous government deferred a long-awaited public consultation on the distinction between employees and contractors pending the conclusion of the Uber case.
In October last year, the Employment Court ruled in favour of the Uber drivers who want to be considered employees to get annual leave, sick leave, maternity and bereavement leave, KiwiSaver contributions, a minimum wage and options for recourse for unjustified dismissal.
Uber will challenge the decision in the Court of Appeal in March.
While the final ruling – which could take some time to be made if the matter ends up in the Supreme Court – will technically only relate to the four drivers who made the case, it could set a precedent for contractors more broadly.
Seymour said the Government wanted to “ensure businesses and workers who explicitly agree to a contracting arrangement have certainty about the nature of that relationship”.
Ahead of the election, Act campaigned on amending the Employment Relations Act “so that contractors who have explicitly signed up for a contracting arrangement can’t challenge their employment status in the Employment Court”.
It suggested contractors should specially sign agreements that make it clear they won’t have access to full employee rights.
Act said the agreements should also spell out the benefits afforded to contractors – including that they can do work for other businesses (including competitors), which can’t terminate their contract if they don’t accept a certain task.
Act suggested contractors who believed the terms and conditions of their contracts were unfair could seek recourse under the Fair Trading Act, which deals with unfair contract terms.
“If the engager has not satisfied the above terms, the worker may challenge their employment status under the Employment Relations Act.”
Seymour acknowledged that whatever the Government ended up doing in this space would need the approval of Cabinet (which includes National and NZ First MPs).
Buddle Findlay law firm partner Sherridan Cook said moves to prevent people from taking their qualms to court would expose them to exploitation.
He said businesses would be incentivised to treat employees as contractors, knowing they couldn’t do much about it.
Cook said more judicial guidance on the matter was required to provide more certainty around the tests applied to distinguish between employees and contractors.
He didn’t support the creation of a third “halfway house” category between employee and contractor. This is something Uber is pushing for.
He feared this could see people get the worst of both.
The debate around what constitutes being an employee or contractor is happening in other parts of the world too, as technology and the proliferation of the gig economy change the way people work.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
