Legal Updates

Employment Law and the 2020 Election - What's on offer?

NEW ZEALAND’S GENERAL ELECTION IS BEING HELD ON 17 OCTOBER 2020. THIS ARTICLE PROVIDES A SNAPSHOT OF SOME OF THE PARTIES’ PROPOSED POLICIES ON WAGES AND WORKING CONDITIONS.[1]

The Labour Party

The Labour Party says a productive workforce is vital for businesses and the economy and that the contribution of workers needs to be recognised by ensuring they are safe, healthy and valued. In light of this, the Labour Party has made the following campaign promises:

  • Continue to raise the minimum wage,with an aim of $20 per hour by 2021;
  • Extend sick leave from five to ten days per year allowing workers to stay home when needed, which will assist in the prevention of the spread of Covid-19;
  • Implement industry-wide fair pay agreements in competitive industries to ensure workers receive a fair wage and encourage businesses to compete on the quality of their products, customer service and innovation;
  • Extend the living wage to all contracted public sector workers because all workers deserve to earn a decent wage for a day’s work. Labour says this could mean almost an extra $100 a week for a contracted worker currently on minimum wage; and
  • Make Matariki a public holiday from 2022, as Matariki has become a time of celebration for many New Zealanders. Labour says that making Matariki a public holiday would break up the long run through winter, boost tourism and give Māori a chance to share unique traditions, history and stories with the rest of New Zealand. 

The National Party

The National Party says that getting the economy moving again is crucial and that the only sustainable way to create new jobs is to reduce barriers, costs and uncertainty for the private sector and in particular small businesses. The National Party has promised to repeal the current Labour-led Government’s changes to the Employment Relations Act 2000. In particular, the National Party is looking to:

  • Reinstate 90-day trial periods for all businesses because the current trial periods available for businesses with fewer than 20 employees discourage larger businesses from hiring new staff. National says that small businesses should be trusted to do the right thing by their staff without overly burdensome employment law holding them back. National therefore supports an approach where employees and employers are trusted to resolve employment matters in good faith;
  • Postpone the planned 2021 increase to the minimum wage because this will make it easier for employers to take on new employees; and
  • Allow parents to take paid parental leave simultaneously to help build strong families.

To further support businesses’ economic recovery, the National Party is also proposing to pay businesses $10,000 for each new full time employee to incentivise businesses to take on new staff and give business owners confidence to hire new people. The payments would be capped at 10 new employees per business, with the scheme capped at $500 million. The policy would be available until 31 March 2022.

The Green Party

The Green Party says good working conditions help support good lives, but for decades working people have not received their fair share of productivity gains. The Green Party has proposed these policies to improve working conditions:

  • Increase annual leave to five weeks to help people care for themselves and their families;
  • Increase the minimum wage annually in line with the median wage to ensure the benefits of wage growth are shared with lower income earners, promote a more inclusive and productive economy and give employers certainty to plan ahead;
  • Abolish the youth minimum wage;
  • Provide ten days of paid sick leave annually to ensure people can stay home when unwell without worrying about paying the bills;
  • Extend the living wage beyond the core public sector;
  • Ensure employment laws enable flexible working arrangements;
  • Require at least one month pay for people made redundant;
  • Implement industry-wide fair pay agreements to set minimum employment standards, such as wages, redundancy and overtime. Prioritise agreements for people doing essential work in the private sector, such as retail, cleaning, security and transport; and
  • Make Matariki a public holiday to recognise and respect the status of Māori as tangata whenua.

The Act Party

The Act Party says its priorities are to plan for economic recovery and getting the country back to surplus while keeping Kiwis in work. The following are Act’s campaign promises:

  • Freeze the minimum wage for three years to help businesses stay afloat and make it more affordable to hire new workers;
  • Reinstate 90-day trials for all businesses as they reduce risks for employers and allow businesses to take a chance on workers they would not otherwise employ;
  • Introduce a voluntary 12-month trial period for new employees to allow more workers to get back into jobs faster by offering employers the ability to terminate the employment relationship if conditions change. This policy would extend the 90-day trial system; and
  • Shorten the personal grievance process.

The Māori Party

The Māori Party says the economy is broken, has never worked for Māori and nobody should suffer the injustices of poverty, inequality and a lack of life opportunities. The Māori Party believes that adequate incomes are necessary to survive with an ever-increasing cost of living and has proposed these policies:

  • Increase minimum wage to $25 per hour to ensure workers are paid enough to provide for their whānau. The Māori Party would also legislate to ensure the wage increases annually match the cost of living; and
  • Ensure the ability to engage in multi-employer collective bargaining and collective bargaining for contractors because union membership and collective bargaining is an important way for workers to increase their wages.

New Zealand First

  • New Zealand First says that in post-Covid New Zealand, support for Kiwis to retain or regain employment will be vital. In particular, New Zealand First believes the government should support businesses to hire targeted job seekers. In light of this, New Zealand First promises to retain the 90-day trial period for small to medium enterprises but to create an accreditation system for businesses with over 50 employees to use the 90-day trial period for targeted job seekers, such as newly released prisoners and single parents returning to the workforce.

The Opportunities Party (TOP)

TOP says that New Zealand's tax and welfare system is complex and holds Kiwis back. It also says that jobs are becoming increasingly insecure. To address this, TOP campaigns on the basis of overhauling the tax and welfare system and introducing a Universal Basic Income (UBI). TOP says its UBI policy will involve:

  • Making payments of $25 per week for all adults and $40 per week for children, with no conditions; and
  • A flat tax rate of 33%, which will result in effectively no tax being paid on income $39,000 or below.

TOP says a UBI has been trialled overseas and it works. They say this is because it rewards all work and enables people to train or retrain, while giving low paid workers the pay rise they deserve without forcing businesses to foot the bill. 

Voting is open now until Election Day on 17 October 2020.

For any employment related queries, please contact Jaesen, Nina or Sharee.


[1] Some political parties are not mentioned in this article as we did not identify any policies relevant to wages and working conditions.