19 February 2019
While we have been focusing recently on the implementation of the changes to the Employment Relations Act 2000 these changes are only the beginning, with a number of other proposals at the Working Group Stage, or in front of Parliament for consideration and possible amendments.
The change in government at the last election has resulted in a move toward greater union involvement, and potential judicial involvement in industrial relations.
On 31 January 2019 a report was released by the Working Group charged with making independent recommendations to the government on the scope and design of a system of bargaining to set minimum terms and conditions of employment across industries or occupations.
In the letter to the Minister from the Chair of the Group, the Rt Hon Jim Bolger commented that “we believe we have designed a Fair Pay Agreement System which will be most useful in sectors or occupations where competition is driving a ‘race to the bottom’ in terms of wages and conditions. Fair Pay Agreements could also be useful where workers or employers identify scope to improve outcomes across a sector or occupation. In particular, I consider that the workers and employers will need to work together to find innovative ways to lift productivity”.
Much analysis of the recommendations will be undertaken over the coming weeks by all interested groups, and there will be ample opportunity for everyone impacted to participate in this process. There are a number of features proposed in this report that employers will be most concerned about were they to be ultimately implemented.
If you would like to, you can read the report here.
The Equal Pay Amendment Bill has not yet been passed into legislation, but it is currently in front of Parliament and may be subject to amendments. In its current form, it provides a detailed process for employees or groups of employees to make claims if they believe they are being underpaid due to their roles being undervalued. Many claims have already been lodged with the Authority but can not be progressed until the proposed legislation is passed into law.
The Bill provides for a bargaining process to settle claims and provides for litigation if claims are not settled. It also gives the Courts the power to award ‘back pay’ on claims, to a maximum limitation period of six years. This comes following an important 2014 Court of Appeal decision in Terranova Homes & Care Ltd. This case resulted in 55,000 female workers in the residential and care home sector receiving a settlement totaling in excess of NZD 2 billion after their claim that they were paid less than if their work had been considered “male work”, (essentially a claim that their work was undervalued) was accepted by the Court of Appeal.
A Privacy Bill is currently in front of Parliament.
There are four key changes in the Bill. Overall, these changes strengthen the standard of protection for personal information and increase the enforcement powers of the Privacy Commissioner.
Firstly, the Bill contains a breach reporting requirement. If a person’s privacy rights are breached and there is a possibility of serious harm or serious harm results from this breach, the agency holding the information will be required to notify both the Privacy Commissioner and the individual or individuals whose privacy has been breached as soon as practicable. There will be a fine of up to NZD 10,000 associated with failure to report under this requirement.
Secondly, the Privacy Commissioner’s power to enforce privacy standards will be enhanced. The Commissioner will have two important new abilities; the ability to issue compliance notices requiring agencies to take specific steps to comply with privacy law, as well as the ability to issue binding decisions on requests for access to personal information.
Thirdly, the Bill places obligations on agencies to ensure the protection of information sent overseas. Personal information will only be allowed to be sent overseas if the jurisdiction to which the information is being sent has comparable privacy laws to New Zealand, or if the person authorises the disclosure of their personal information overseas.
Finally, the Bill makes it an offence for a person to falsely represent that he or she has authority under the Privacy Act. It will also be an offence to knowingly destroy documents that are subject to a personal information request. A maximum fine of NZD 10,000 has been proposed for these offences.
The key impacts of the Bill are the introduction of mandatory breach reporting (for ‘notifiable’ breaches), increasing the enforcement powers of the Privacy Commissioner and affording greater protection to information sent overseas.
A much-awaited review has commenced of the Holidays Act 2003.
A Working Group has been established and has met four times. It has formulated some recommendations which will be put out for targeted testing- extra time has been allowed for this process and the expected timeline for a report back to government is now July 2019.
This review will not deal with the historical issues around incorrect calculation of leave payments.
The government is proposing to restructure the immigration system focusing on temporary work visas, so as to place more of the initial part of the process and the cost on employers.
Currently the proposals are open for consultation.
The consultation closes on 18 March 2019. The Minister proposes to report back to Cabinet in June 2019, with agreed changes coming into effect in August 2019. Regional Skill Shortage Lists we be recast by region and published. These will be renamed Regional Skills Shortage (RSS) lists.
What is being proposed is that any employer wanting to support a migrant’s temporary work visa application (including a renewal) would need to be accredited.
Different levels of accreditation are proposed:
Standard accreditation would be required for employers recruiting five or less migrant employees. Labour hire accreditation, similar to the current scheme, would be compulsory for labour hire employers. Premium accreditation would be needed for employers wanting to provide work-to-residence visas to their employees and would also be compulsory for employers wanting to support more than five migrant employees with visas.
The new accreditation regime could include additional requirements for employers. For example, standard accreditation may require an induction process specifically for migrants. Labour hire and premium accreditation may require a transparent pastoral care policy and a workforce development strategy or partnership with an industry body or apprenticeship program.
The Minister is also proposing to introduce regionalised labour market testing. Also, to support an employee with a work-to-residence visa, in addition to premium accreditation an eligible employee would need to be paid at least $78,000 per annum. If an employer offers an annual salary of more than $101,046 then no labour market testing may be required. Finally, the Minister is also proposing industry sector agreements, initially with the aged care and hospitality sectors.
There is a lot happening in the industrial relations space for at least the next 12 - 18 months. We have not mentioned triangular relationships, dependent contractor rights and mandatory redundancy payments, as there is still work to happen in these spaces before we see some firm proposals.
We will keep you all advised of these changes as opportunities to comment, participate in consultation and to make submissions arise, if you have any specific concerns or comments please contact the legal team on 0508 656 757 or send us an email.
Diana Hudson | Managing Solicitor
Diana Hudson | Managing Solicitor | 03 456 1804 | 021 816 469 | firstname.lastname@example.org
David Browne | Solicitor | 03 456 1812 | 021 225 6938 | email@example.com