Source: Christie McGregor, Partner, & Shi Sheng Cai (Shoosh), Senior Associate, Copeland Ashcroft
Following the 14 October election, we explore the likely impact of a National led/National-Act-NZF coalition government on New Zealand’s Employment, Health & Safety and Immigration Law setting.
National-ACT-NZF Coalition Government
National and ACT agree on the following proposed workplace law changes:
- To repeal the Fair Pay Agreements Act 2022 and reverse the Fair Pay Agreements currently underway. There are currently 6 industries engaged at the bargaining stage of the process:
- Interurban, rural and urban bus transport-bus drivers, coach drivers and cleaners.
- Security guards and officers.
- Commercial cleaners.
- Early childhood education.
- Grocery supermarket industry.
- Reinstate 90-day trial periods for all businesses (meaning those with 20 or more employees would be able to use 90 day trial provisions with unjustified dismissal protections).
- Remove the requirement for employers to pay employees the median wage to meet Accredited Employer Work Visa (AEWV) requirements.
- Amend the Parental Leave and Employment Protection Act 1987 to allow parents to divide their paid leave between them in the way that they think is best, taking this at the same time, one after the other or in overlapping instalments.
- Create a new visa category that will allow parents and grandparents sponsored by their children or grandchildren to apply for a multiple entry visa, allowing for travel over a period of 5 years. The finer details are to be agreed.
New Zealand First supports the reinstatement of 90 day trial periods for all businesses and did not directly comment on the other points above in their full manifesto. It is likely that many of the changes set out above will be implemented.
National Workplace Policy
Relevant Workplace Law changes proposed by National are set out below:
Income Tax Reduction from 1 July 2024:
- Shifting income tax brackets to compensate for inflation.
- Expanding tax credits to reach more modest income earners.
- Introducing the ‘FamilyBoost’ childcare tax credit.
- Remove the Reserve Bank of New Zealand’s maximum sustainable employment mandate.
- Allow KiwiSaver to be split between multiple providers rather than into a single fund.
- Introducing a Job Seeker Benefit Traffic Light System
- Green (compliant) – Meeting obligations to prepare for or find work. No change to benefit.
- Orange (some risk) – First or second breach of obligations to prepare for or find work will see additional requirements and targeted support applied (e.g. more regular check-ins and/or attendance at job workshops.)
- Red (high risk) – A third breach of obligations will result in sanctions including benefit reductions, benefit suspension, money management and mandatory community work experience.
- Contract not for profit job coaching providers for Job Seekers aged under 25.
- Introducing $1,000 payments for Jobseeker beneficiaries aged under 25 and who get into work and stay off the benefit for at least 12 months.
- Creation of a six-month temporary visa category for qualified overseas nurses and midwives and their family without needing a job in advance.
- Doubling the Regional Seasonal Worker (RSE) Scheme cap over five years, and exploring the idea of other countries entering the RSE scheme. Currently unless employers can show they have pre-established relationships with workers from other countries prior to the commencement of RSE in 2007, they can only recruit workers from Fiji, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.
- Changing the Working Holiday Visa Scheme, including:
- Lifting the upper age limit from 30 to 35 years for all eligible countries;
- Allowing people from eligible countries to apply for a second and third Working Holiday Visa (WHV) if requirements are met;
- Stopping proposed changes that require employers of WHV holders to hold accreditation.
- Amending the Employer Accreditation Scheme wage requirements to be in line with an industry average, possibly reflective of a visa holder’s skills and experience.
- Introduce three new visas:
- International Graduates Visa (500 visa cap) – a three-year open work visa for people who have graduated with a Bachelor’s or higher qualification with highly specialised skills and within the past five years, from one of the top 100 universities in the world.
- Global Growth Tech Visa (250 visa cap) – a residence visa for people with highly specialised skills who have worked at a top global tech company earning at least NZ$400,000 a year.
- Digital Nomad Visa (250 visa cap) – a 12-month visa to attract skilled people to come to New Zealand (NZ) while working remotely for an overseas-based company, with the option to apply for a work or residence visa later if they choose to stay.
ACT Workplace Policy
Relevant Workplace Law changes proposed by ACT are set out below:
- Introduce a new Low- and Middle-Income Tax Offset.
- A maximum cap on Government KiwiSaver contribution at 5% of a participant’s taxable income. The maximum Government contribution would reduce to 3% per dollar of income above $48,000 and reduce to zero by around $65,000.
- Shorten performance management and personal grievance processes to make them easier for employers
- Require all Employment Relations Authority (ERA) decisions to be delivered within a month, or the ERA member will be fired.
- Changing the law on employee contribution to personal grievance claims by removing remedies for deemed “at-fault” employees.
- Removing the ERA’s ability to reinstate employees as a remedy.
- Prevent contractors from challenging their employment status in the courts. The proposed definition of a Contractor requires the following criteria to be met:
- a written agreement where the person is specified as an independent contractor;
- the person was given sufficient information and an adequate opportunity to seek advice before entering into a contract for services;
- the agreement does not restrict the person from performing services or work for other businesses or engaging in any other lawful occupation or work;
- the business or undertaking cannot terminate the contract of the person for not accepting a specific task; and
- the business or undertaking has kept records in sufficient detail to demonstrate that the employer has complied with minimum entitlement provisions.
- To remove the January 2 public holiday, in light of Matariki being added.
- Freeze the minimum wage for 3 years.
- Aim to halve MBIE workforce and cut programmes to make an instant saving of NZD$1 billion.
Health and Safety
- Amend the Health and Safety at Work Act 2015 so that employees (who are found to have acted in a wilfully irresponsible manner with respect to workplace health and safety) have personal responsibility and can be immediately dismissed.
- To establish an Occupations Tribunal to assess equivalent overseas qualifications and work histories.
- Implement a system whereby all significant immigration policy decisions are subject to a Regulatory Impact Analysis.
- Remove the Work to Residence categories.
- Remove the labour market, wage and movement restrictions on AEWVs to make it easier for migrant workers to move between accredited employers.
- Changing the Employer Accreditation Scheme to one that is based on demand-based pricing.
- Rework the Skilled Migrant Category to allow any migrant with a job offer or that is currently in NZ to be able to claim points.
- Remove the policy implemented by Labour which requires migrants to leave NZ after having spent a continuous period of time in NZ.
- Remove the 2,500 annual cap on Parent Resident Visa applications and introduce a bespoke public health insurance and contribution scheme.
- Launch an inquiry into visa processing, to review the way Immigration New Zealand uses its resources.
NZF Workplace Policy
Relevant Workplace Law changes proposed by NZ First are set out below:
- Introduce a tax exemption for the lowest income tax bracket (currently $14,000 pa) no later than 1 April 2027.
- Adjust tax brackets for inflation starting 1 April 2024.
- Explore the feasibility of introducing a lower business tax rate for small to medium enterprises.
- Hold an independent Inquiry into New Zealand’s Covid-19 Response.
- Explore lifting the adult minimum wage to at least $25 an hour.
- Reinstate Workbridge as the primary employment agency for Kiwis .
- Reinstate the Targeted Trade & Apprenticeship Fund.
- Make two-years the lifetime entitlement for the Jobseeker Work Ready benefit.
- Make significant changes to ACC policy including operational changes for swifter processing of ACC claims.
- Remove the AEWV scheme and replace it with a Skills Shortage Visa and a Labour Shortage Visa.
- Maintain the parent category visa cap at 1,000 and ensure that sponsors can adequately support their family during and after migration.
- Introduce a ‘rural visa scheme’ that will apply to communities of less than 100,000 residents.
What this means
Change to workplace law is inevitable. In our view with varied manifestos, some of the more controversial proposals by Act and NZ First are unlikely to progress e.g. around firing ERA members.
The easy win areas for change will be in revoking Fair Pay Agreements and processes, and in reinstating 90-day trial periods for all employers. Hopefully this may see increased confidence in hiring workers.
Immigration changes are inevitable and expected in the new year. We predict that the immigration changes will provide welcome opportunities for employers that are compliant with accreditation requirements and who wish to access overseas labour. Non-compliant employers are likely going to have difficulty when renewing their accreditation status in 2024. A new visa category for foreign national parents and grandparents is also likely to be implemented.
Our team at Copeland Ashcroft Law are ready to discuss what these proposed changes could mean for your business. Please feel free to reach out to our team if you have any questions.
About Copeland Ashcroft
Copeland Ashcroft is a boutique legal practice providing specialist advice, representation, and support across the full ambit of workplace law issues, including employment, health and safety and immigration, to businesses throughout New Zealand.