Recent announcements by New Zealand's Minister for Workplace Relations and Safety, Hon Brooke van Velden, signal significant potential shifts in employment law. These proposed reforms focus on personal grievances, employee remedies, exit discussions, and the reinstatement of pay deductions for partial strikes. While the changes aim to enhance flexibility and choice in the workplace, they also raise questions about the balance between employer prerogatives and employee rights.
Here’s a breakdown of the key proposals and their potential impact, offering HR professionals insights into what lies ahead.
1. High-Income Threshold for Personal Grievances
One major proposal will prevent employees earning over $180,000 annually from bringing unjustified dismissal claims. This high-income threshold, set to exclude additional benefits and incentives, introduces quite a shift from New Zealand's long-standing principle of universal employment protections.
Employees within this bracket may still bring other personal grievance claims (e.g., for unjustified disadvantage), as well as statutory or contractual claims. Employers and employees could potentially negotiate custom dismissal procedures or revert to existing frameworks.
The approach mirrors Australian legislation, where high-income thresholds have created a more complex claims landscape. HR professionals in New Zealand should anticipate a potential shift toward bespoke contractual terms for high earners.
2. Adjusting Employee Remedies
The reforms also propose amendments to the Employment Relations Act that will affect remedies in personal grievance cases:
- Remedies may be denied if the employee’s behaviour constitutes serious misconduct. An important remedy targeted in this policy is reinstatement; the Minister has emphasised that if an employee has engaged in specific conduct (specifically poor performance or poor behaviour) that reinstatement should not be an option.
- Employees found to have contributed to the dispute would face reduced compensation, potentially up to 100%.
- The threshold for procedural fairness errors would be raised, provided the employer's actions are reasonable in the circumstances.
These changes were reasoned by the Minister as a way to hold employees accountable for their behaviour, potentially encouraging HR professionals to adopt more robust documentation and fair disciplinary processes if these proposals are enacted.
3. Protected Exit Discussions
A Member’s Bill introduced by ACT MP Laura Trask proposes protecting exit discussions to allow employers and employees to negotiate terminations without fear of constructive dismissal claims. Based on similar UK laws, the communicated intention behind this proposal is to reduce risk associated with settlement offers and foster open communication.
HR teams should monitor this Bill’s progression and prepare for its potential adoption by reviewing current practices around exit discussions.
4. Pay Deductions for Partial Strikes
The government plans to reintroduce employer powers to deduct pay during partial strikes, repealing a ban imposed in 2018. Deductions could be proportional to the work not performed or capped at 10%, with unions able to dispute calculations.
This proposal has sparked significant debate, with critics arguing it undermines workers’ rights to collective bargaining. HR professionals should keep an eye on industrial relations dynamics as this progresses through Parliament.
What Can HR Professionals Do Now?
While these proposals have not been implemented at this stage, it is crucial for HR professionals to take proactive steps to prepare for possible changes:
- Stay Informed: Keep up to date with announcements and timelines for legislative progress. Regularly review updates from government sources and trusted legal advisors.
- Assess Current Practices: Consider how your organisation’s policies and procedures align with the proposed changes. For instance, identify areas where high-income employees’ contracts could benefit from additional clarity.
- Engage Leadership: Ensure senior leaders are aware of the potential impacts of these proposals and involve them in strategic discussions about preparation.
- Consult Legal Experts: Seek advice from employment law specialists to understand the possible implications for your organisation.
- Scenario Planning: Develop contingency plans for different outcomes, including how to adapt if the proposals are enacted in full or in part.
- Communicate Internally: Keep your HR team and key stakeholders informed about these developments to ensure a unified approach to future challenges.
Looking Ahead
By staying informed and prepared, HR teams can position their organisations to navigate these potential changes confidently while maintaining their commitment to fair and equitable employment practices.