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How the new government could impact your business.

Our new Labour led coalition government has plans for our current employment laws. Labour has always had a strong focus on employee protection, and this is reflected in their proposed changes.

We will update you when any proposed changes are passed by Parliament.

Remuneration - Wages

Labour intends to increase the adult minimum wage from $15.75 p/h to $16.50 p/h, to take effect from 1 April 2018. Under the Labour and New Zealand First coalition agreement, the Government’s mid-term goal is to increase the minimum wage to $20 p/h by 2021. New Zealand First’s policy is to abolish the “starting out wage” for the younger employees, which is currently $12.60. If these proposed changes are implemented, they could have drastic effects on small and medium sized businesses in New Zealand, and on businesses which pay their employees the minimum wage but who incentivise their employees through commission and bonus schemes.

Parental Leave

Labour intends to increase Paid Parental Leave within their first 100 days, from the current 18 weeks to 22 weeks from July 1 2018, and then to 26 weeks from July 1 2020. New Zealand First supports this change. An employee currently on maternity leave may be entitled to also extend their maternity leave, if this change is implemented. This may affect any fixed term employment agreements which a business currently has in place (where that fixed term employee is covering an employee on maternity leave). Although as an employer, you may be without an employee for a longer period of time, it may be that when your employee returns to work they will return refreshed and happy to be there (click here to read more on paid parental leave).

Trial Periods

Since the introduction of trial periods in March 2009, Labour has been consistently vocal about their opposition to trial periods. Since coming into power Labour has clarified their intentions in this regard: the current plan is that the law will be amended to provide more protection for employees on a trial period in order to minimise any unjustified dismissal that may arise in the employment relationship. The changes will give an employee whose employment has been terminated within their trial period the ability to resolve their grievances in a short hearing, without lawyers. This will mean that employers must have more prudent recruitment processes in place and ensure that proper processes are followed when looking to dismiss an employee under a trial period [Click here to read our article on hiring].

Fair Pay Agreements

If you work for, or run a business within an industry that has a union representing the workers, then you may be introduced to fair pay agreements. These will be collective agreements negotiated between the business and the union, in order to set basic standards across the industry, for example, wage, working conditions, etc.

If the proposed changes are passed by Parliament then your employment agreements and policies will need to be updated. You will also need to bring your executive team and managers up to speed with how to implement the new laws in the workplace.


If you would like more information about the impacts these proposed changes might have on your business as an employer, or your rights as an employee, get in touch with the Commercial Law Team today

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