By Marisa Bidois, CEO, Restaurant Association of New Zealand
With the government being led by the Labour Party, and confirmation of the policies that have survived coalition negotiations we are now considering how the new policies are going to impact our industry. Below are some of the areas that have been indicated are going to be changed or implemented under the new government:
- Minimum wage increases
- Minimum redundancy protections;
- Fair pay agreements;
- Removing grievance free trial periods;
- Increased entitlement to paid parental leave, and
- Immigration changes
Labour campaigned on implementing many of its proposed changes within the first 100 days so I am sure it will not be long before we are seeing some of these changes start to be implemented or consultation processes be initiated. The new Minister of Workplace Relations and Safety and Immigration will be Iain Lees-Galloway. We have made contact with his office for a meeting to discuss our industry which will be in the New Year.
90 Day Trial Periods
Trial periods will definitely be under review and under Labour’s proposed amendments, employers will be required to provide a reason for any dismissal within the first 90 days, and employees will be allowed to raise a dispute if their employment is terminated during this time. If the matter does end up in parties will be allowed representation in the dispute, lawyers will not be permitted. If resolution cannot be reached between the employer and employee, the referee hearing the dispute will make a final, binding decision which cannot be appealed.
This will have a restrictive impact on employers who will need to ensure they have a justifiable reason for dismissing employees. Employers will need to factor this in when hiring new staff, and will no longer have the safety net of knowing they can dismiss them without cause within the first 90 days.
Paid Parental Leave
Under the current law, employees are entitled to 18 weeks of paid parental leave. This entitlement applies to the primary carer of a child, that is, their biological mother and in some cases their spouse or other person with primary responsibility for the child. This leave must be taken in one continuous period. Employers are obligated to keep the employee’s job open for them when they return and dismissal by reason of pregnancy is prohibited. Under the new government, the period of paid parental leave is going to increase to 26 weeks and employers will need to factor this increased period in when an employee notifies them of the intention to take parental leave.
Labour and New Zealand First have agreed to decrease the number of new migrants to New Zealand by approximately 20,000 to 30,000. While about a third of these cuts will be to student visas, two thirds will be to work related visas. Labour proposes to achieve these results by setting a higher skill threshold for migrants who are coming to New Zealand, and tightening the Labour Market Test, “which ensures that migrants are only doing jobs that New Zealanders can’t be employed to do”.
“As a result of these changes, employers will need to be sure that if they intend to employ a migrant to do a job, this job cannot be done by a New Zealander.” What this means for our industry we are unsure at this time. Our National President, Mike Egen, has spoken with the Prime Minster who has confirmed she understands our industries challenges and no changes have been confirmed to date so we remain optimistic about any planned changes. Immigration is also not in the 100 day plan.
Overall Impact on Employment Relations in New Zealand
Labour’s policies are reflective of a change from a National led government to a Labour led government. The new policies are largely employee centric, reflected in the recent announcement to raise the minimum wage to $20 by 2021.
Dealing with the rising minimum wage in your business
The new government will raise the minimum wage to $16.50 an hour next year and to $20 by April 2021. The Government has not told us how it plans to step its way to $20 an hour, but we can assume annual increases over the next four years.
We have spoken with the Restaurant and Catering Association in Australia where Australian hospitality businesses have a minimum wage of $18.29 per hour or $694.90 per 38 hour week (before tax). They also have awards which set out overtime and other entitlements to industry staff.
Restaurant and Catering of Australia surveyed their members twice, when wage rates were increased this year and last year. In both the 2016 and 2017 surveys, respondents were asked about the impact of a 2.5 percent minimum wage increase on their businesses and how they would respond. The 2017 survey found that 37.2 percent of businesses opted to absorb a minimum wage increase, compared to 27 percent of businesses in 2016. There was also a 4 percent increase in the number of businesses which indicated that they would reduce staff because of a 2.5 percent minimum wage increase (9.7 percent in 2017 compared to 5.7 percent in 2016).
There were slight decreases in the number of businesses which indicated that they would reduce the number or length of shifts (10.6 percent in 2016 and 7.1 percent in 2017), have the business owner work more hours (19.9 percent in 2016 and 16.8 percent in 2017), reduce hours of casual staff (21.3 in 2016 and 15 percent in 2017) or have family members work more hours (5 percent in 2016 and 3.5 percent in 2017).