Ten top employment law changes for 2018

There will be fundamental changes in the response to significant global trends in workplace management. Picture / Getty Images

Opinion

New Year is often a time for reflection and preparation, looking to the year ahead and what it will bring.

For employers, the pace of change in workplace relations is likely to ramp up, with Labour indicating a raft of changes to take effect in its first year in office.

These proposed changes are piecemeal, rather than representing a sea change in New Zealand employment law. But together they will create fundamental changes in the way we are responding to significant global trends in workplace management, including the increase in the "gig" economy, increased global mobility, and the increasing focus on a diverse and inclusive workforce.

Here are our top 10 picks for employment law change in 2018:

Minimum wage increase
The minimum wage is to rise by 75c to $16.50 an hour from April 1. Increases are set to continue with a targeted minimum wage of $20 by April 2021. With the government also indicating it will ensure all employees in the core public service are paid at least the living wage, issues of wage compression (where employees just above the minimum also want an equivalent pay rise) will be front of mind for many employers.

Closely connected is the issue of equal pay
The Labour Party is commitment to implementing the changes to the Equal Pay Act, as recommended by the Joint Working Group on Pay Equity Principles, to give women in female-dominated workforces access to collective bargaining and a court process for settling their claims. National's previous bill has lapsed and Labour intends to introduce new legislation making it easier for women to bring claims if they consider they have not been paid equally.

Paid parental leave will be extended
An increase from 18 to 22 weeks is already confirmed from July 1, with further increases to 26 weeks from July 1, 2020.

Outside the legislative space, pay equity and family benefits will continue to impact with employers who are increasingly under pressure to diversify their workforce, ensure their senior leadership roles attract sufficient female talent, and to publish information about their gender pay gap and diversity policies.

Contractors will get increased rights
Dependent contractors, who effectively work under the control of an "employer" but do not receive the legal protections employees are afforded under the law, are likely to get more statutory protection. Recent court decisions in the UK have seen similar individuals being classified as "workers" rather than contractors, giving them some minimum protections, but not full employee rights. In 2018 we are likely to be discussing whether a similar middle ground would work here.

The return of collective bargaining
A strengthening of employees' collective bargaining rights is on the cards, with plans to restore unions' rights to initiate collective bargaining in advance of employers, and the duty on parties in collective bargaining to reach an agreement. The government also plans to tighten the rules on the passing on of collectively negotiated terms to non-union employees.

Fair Pay Agreements
Still on the collective bargaining front, in the medium term the government aims to put a legislative framework in place to allow unions and employers to create Fair Pay Agreements. These would set minimum conditions such as wages, allowances, weekend and night rates, hours of work and leave arrangements for workers across an industry. The government will also review multi-employer and multi-union collective bargaining arrangements to encourage their use.

Trial periods
The government intends to modify trial periods to require those dismissed to be given reasons for their dismissal. Employees can also bring a form of unjustified dismissal claim to be heard by a "simple, fair, and fast referee service". Lawyers will be locked out of the dispute resolution process, compensation will be capped and referees' decisions will not be open to appeal. If instituted, this will mark a fundamental change to the current system and additional complications to the employment dispute resolution regime, particularly where employees have combined dismissal/disadvantage/discrimination claims.

Reinstatement
The reinstatement of reinstatement (as a primary remedy). In 2011, reinstatement was removed as a primary remedy for employees and was instead treated in the same way as other remedies sought. This is likely to be undone during 2018. While the change may not result in a significant increase in employee reinstatement, it is likely to be used by employees as a bargaining point when negotiating with their former employers.

Increased scope for minimum standards
Steps will be taken to ensure New Zealand minimum employment standards apply to all employees working in New Zealand, including foreign employees working for foreign companies. This is likely to result in changes to the extra-territorial application of our minimum employment standards and will impact on foreign secondees and employers with a globally mobile workforce.

Introduction of statutory redundancy compensation
The 2008 Ministerial Advisory Group report on redundancy and restructuring recommended a statutory entitlement for redundancy of at least four weeks' pay for the first year's service and two weeks' pay for each subsequent year of service, up to a maximum of 20 years. The government has indicated it wishes to begin consultation on improving minimum redundancy protection for workers affected by restructuring.

Christie Hall is EY Law Leader in New Zealand and William Fussey is a solicitor at EY Law