Workplaces will fundamentally change in 2018: Employers

Author
Matthew Theunissen, NZ Herald ,
Section
Business,
Publish Date
Monday, 8 January 2018, 6:36AM
There will be dramatic changes across the country's workplaces in 2018, with employees set to get better pay and entitlements (Stockxchng)
There will be dramatic changes across the country's workplaces in 2018, with employees set to get better pay and entitlements (Stockxchng)

There will be dramatic changes across the country's workplaces in 2018, with employees set to get better pay and entitlements.

Christie Hall and William Fussey of EY said in a joint article that employment law amendments planned by the new Labour-led Government would create "fundamental changes" to the country's workplaces.

In particular, the rise of the minimum wage by 75c to $16.50 an hour from April 1 would be at the forefront of many employers' minds, the authors said.

Along with this, the Labour Party has committed to implementing changes to the Equal Pay Act to give women in female-dominated industries better access to collective bargaining and court processes for settling claims.

Paid parental leave is also set to be extended from 18 to 22 weeks from July 1, while there are growing calls for employers to address pay equity and family benefits outside of the legislative space.

"Employers ... 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," Hall and Fussey said.

The proposed changes come with the rise of the "gig economy" -- characterised by short-term contracts and freelance work -- easier global mobility and the increasing focus on a diverse and inclusive workforce.

Under Labour, contract workers, too, look set receive further statutory protections to bring them more in line with employees, while employees' collective bargaining rights are also to be strengthened.

The EY authors said the Government's plans to modify trial periods -- adding a provision that they must provide reasons for dismissing new employees -- could create complications.

"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."

On their own, the proposed changes were "piecemeal" rather than representing a sea change. However, "together they will create fundamental changes in the way we are responding to significant global trends in workplace management".

Employment law specialist Max Whitehead said there would be "dramatic changes to employment in 2018", which, in the simplest terms, would be good for employees and not so for employers.

"The changes will be particularly hard on small employers and are likely to force employers to find alternative ways to get work undertaken."

"The new equal pay and new pro-union bargaining laws will cause an earning-envy culture where the employment judiciary work load will increase dramatically."

As a result, significantly more resources would be needed for employment dispute resolution bodies such as the Employment Relations Authority and Employment Court.

"We understand that law firms are already planning to increase their employment law departments," Whitehead said.

He estimated the changes would only start to impact the country's economy and productivity in 2019.

Council of Trade Unions president Richard Wagstaff countered these apprehensions, stating the pro-worker changes would, in fact, improve productivity and ultimately deliver economic benefits to New Zealand.

"These are things that will be good for working people and I don't subscribe to the idea that what's good for working people is bad for business. In fact, what's good for working people can generate better employment relations and higher productivity," he said.

"The current employment standards we have in New Zealand have us performing very badly in the workplace. By any measure, our productivity is not only very low it's actually falling, which is of great concern to working people and the businesses they work for."

There was an outcry from business interests when the Employment Relations Act was introduced under Helen Clark's Government in 2000, with concerns that greater collective bargaining and greater worker entitlements would be bad for business, Wagstaff said.

"Yet what happened? We had the lowest unemployment for a generation. That sort of scaremongering is totally misplaced and is totally discredited by our recent history."

Wagstaff added that working people would spend any extra income they made in New Zealand thus benefiting the economy, unlike surpluses accumulated by the most wealthy, which was generally spent overseas.

In its November Economic Overview, Westpac said it expected unemployment to rise in 2018, mainly due to the "sluggish economy", but to fall again from late 2019 as a result of the Government's plan to borrow more and spend more, thus stimulating the economy over time.

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