Fair Pay Agreement legislation will be repealed by Christmas, while the use of 90-day trials will be extended beyond small businesses - the Government has confirmed.
Workplace Relations Minister Brooke van Velden confirmed via a statement that Labour’s Fair Pay Agreements legislation, which made it easier for workers to band together to negotiate wages and working conditions, would be gone before the House concluded for the year.
“Fair pay agreements undermine the flexible labour market which has been a pillar for New Zealand’s economic success for the past three decades,” van Velden said.
The use of 90-day trial periods, which allowed employers to dismiss workers without cause during the first 90 days of employment, would also be extended. Labour, while in coalition with NZ First, limited the trials to businesses with 19 or fewer employees.
“Whether a business has 2 or 200 employees, bringing on any new employee costs time, it costs money and it is in the best interests of any business to find the right fit,” van Velden said.
“The extension of 90-day trials also provides greater opportunities for employees. They allow employers to employ someone who might not tick all the boxes in terms of skills and experience but who has the right attitude, without the risk of a costly dismissal process.”
The change would be made through a Member’s Bill from new Act MP Todd Stephenson and passed under urgency before Christmas.
Workplace Relations Minister Brooke van Velden. Photo / Mark Mitchell
Prime Minister Christopher Luxon, speaking at his press conference, said success would come from working hard had been a “broken promise” in New Zealand and he looked to fix that.
He said he wanted to make it easier for people to get off the benefit and find their first job.
No agreements had been finalised yet, enabling the repeal process to occur more smoothly.
“What a load of rubbish,” Luxon said when asked about Green Party co-leader Marama Davidson’s claim his Government was scrapping Fair Pay Agreements because it “hated workers”.
A Treasury-commissioned report in 2016 found no evidence that 90-day trials had led to firms hiring more people, or more disadvantaged jobseekers.
The trial period, when introduced for firms with up to 20 employees, had seen an increase in hiring in the construction and wholesale trade industries by 6 to 10 per cent, the report said, but this reverted after the trial was widened to larger firms.
It found no significant economy-wide effect of the policy on the quantity of hiring, or the probability of a new hire being a disadvantaged job seeker - such as youth, young Māori or Pasifika, former or current beneficiaries, recent migrants, or school or tertiary education leavers. The policy had likely lowered dismissal costs for businesses, and increased uncertainty for workers who are hired with a trial period.But there had been no increase in the number of short-term employment relationships or worker turnover, the report said.
Today’s announcement comes as the 54th Parliament sits for a second week with the coalition Government expected to start actioning some of its 100-day plan, including repealing legislation.
First on the list would be reversing Labour’s 2018 move to make the Reserve Bank focus on reducing unemployment, leaving the country’s central bank to its sole mandate of controlling inflation.
In the New Year, advice would be taken whether the Reserve Bank should have a more specific deadline on when it was required to return inflation between the 1-3 per cent target band, Luxon said.
The House would be in urgency as the Government pursued legislative change with respect to the Reserve Bank’s dual mandate.
Second would be Labour’s Fair Pay Agreements legislation, which made it easier for workers to band together to negotiate wages and working conditions.
More new MPs would also be making their maiden statements to the House this week, including all newcomers from Te Pāti Māori and New Zealand First.
Four National MPs made their first speeches last week: Rangitata’s James Meager, Napier’s Katie Nimon, Banks Peninsula’s Vanessa Weenink and Hamilton East’s Ryan Hamilton.
Luxon said he would be in Australia tomorrow for his daughter’s graduation. He would return on Wednesday.
Meanwhile, Foreign Affairs Minister Winston Peters would be travelling to Fiji soon, Luxon said when talking about his drive to show New Zealand was “open for business”.
A representative would also be heading to India. During the campaign, National had promised to secure a free trade agreement with India within the first term.
Luxon said the main focus would be on trade, citing South-East Asia and India.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.
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