Workplace Relations and Safety Minister Brooke van Velden last month pledged to restore business confidence by cutting the red tape and regulations stopping businesses and employees from realising their potential. Photo / Mark Mitchell
Workplace Relations and Safety Minister Brooke van Velden last month pledged to restore business confidence by cutting the red tape and regulations stopping businesses and employees from realising their potential. Photo / Mark Mitchell
OPINION
The end of the financial year brings hope, delusion and defeat for contractors like me hoping to have overpaid in provisional taxes only to realise most projected expenses - like food during a work trip - aren’t tax deductible.
You must feel for the accountants and accountancyproviders who will spend the next three months cleaning up the mess.
In a sole-trader survey released last month, online accountancy services company Hnry found there are more than 400,000 sole traders in New Zealand, making them 19.7 per cent of the working population. They comprise freelancers, contractors, gig workers and wellness professionals, with 35 per cent having more than one job.
While 70 per cent of respondents valued the freedom of running their own business, the financial health of many was dire. Forty-three per cent said they would struggle to cope if they had a major, unexpected business expense, and 34 per cent said they would need financial assistance to survive an economic downturn.
Talking to the Auckland Business Chamber last month, Workplace Relations and Safety Minister Brooke van Velden pledged to restore business confidence by cutting the red tape and regulations stopping businesses and employees from realising their potential.
On top of abolishing the “poorly thought out so-called Fair Pay Agreements” and expanding the availability of 90-day trials, van Velden proposed removing contractors’ ability to challenge their employment status.
Uber case law
Cue a recent Court of Appeal hearing in which Uber has challenged a landmark Employment Court case in 2022. To recap, the court ruled in favour of a group of four Uber drivers who claimed they were employees and not contractors.
At the time, Chief Judge Christina Inglis considered the nature and operation of the Uber business, the impact of the business model on the drivers, who benefited from the work and exercised control over it, and the nature of the contract, for example.
Treating Uber drivers as employees could be seen as a big win for the underdog. Photo / AFP
The court found the level of control of the drivers and the interest the company gained meant the drivers deserved employment status. In other words, employee status meant the drivers could be entitled to annual leave, sick leave, maternity and bereavement leave, KiwiSaver contributions, a minimum wage, and personal grievance options.
In my view, it was a huge employment protection win for the underdog. As we wait with bated breath for the Court of Appeal to clarify the employee/contractor distinction, if van Velden’s sentiments are anything to go by, changes to the legislation could override such a precedent.
Contracting great bang for buck
Van Velden told the Auckland Business Chamber contracting “increases productivity” through allocating resources more effectively. By effectively, she means you can hire a contractor for a project, and once it’s completed, that’s that. It’s great bang for your buck.
It’s effective for businesses because it’s results-driven. Businesses don’t need to dilly-dally with paying for lunch breaks, overtime rates, holidays, KiwiSaver, leave entitlements, or unnecessary meetings unless the contractor has the gall to include those in their rates.
The elephant in the room is the lack of job security and the imbalance of power between those who have opportunities for work and those who need it.
“The gig economy, for example, has created jobs that offer autonomy and flexibility that workers would not be able to enjoy in conventional work,” van Velden said.
If only this were so simple. For contractors, the autonomy buck stops at the client’s needs. And with budgets tightening and redundancies on the horizon for the entire New Zealand workforce, contractors tend to be the first on the chopping block.
Do I loathe working in an office? Yes. Do I shudder at the thought of business-jargon-heavy pointless planning meetings? Absolutely, but I’d argue my disdain for being told what to do is insignificant compared to having little bargaining power or legal protection.
Employee protections, who needs ’em?!
For employees, the Employment Relations Act’s requirement that both parties act in good faith and on equal footing means that autonomy and flexibility should be part of the job, in theory. In fact, Part 6AA of the Act specifically addresses the right for employees to work flexibly.
Whether employees decide to exercise these rights - given fears it would cause a fuss, or undermine job security - is another matter altogether. Even so, an employee’s last port of call, lodging a personal grievance, may shortly be off the cards.
Van Velden said she’s asked for advice on setting a high-income threshold for personal grievance claims and removing the eligibility for remedies if the employee is at fault.
The thing is, the Employment Relations Act already allows for remedies to be reduced if an employee is at fault.
Either way, the workplace relations and safety minister - yes, the irony is not lost on me - has sent a clear message: Profit is to be prioritised, workers being treated fairly is an inconvenience, and the imbalance of power between business owners and workers is redundant.
Sasha Borissenko is a freelance journalist who has reported extensively on the legal industry.
