The future of employment relations

Significant changes are on the horizon for employment relations in New Zealand. Some of these changes are readily  observable; the recent passing of the Employment Relations Amendment Bill is an obvious example...

With a change in government, comes change in law and, often, in employment law. However, with the changes in the way that people view employment and how they perform their work-related duties, as well as advances in technology and innovation, more fundamental changes may be in the wings. There is a shift in individuals’  sentiment towards work and employment. The rise of the gig economy and the proliferation of flexible, shortterm working engagements is a good illustration of this
shifting sentiment. The bi-lateral employment relationship is no longer a given.
The ever-present challenge for those involved in employment relations is to be responsive to change and to continue to adapt to developments which are reflective
of emerging social attitudes.
Here are a few of the developments that are expected to play a part in shaping tomorrow’s workplace.

The gig economy and dependent contractors
The gig economy is considered to lead the way in trade and enterprise, but it may well lead to a change to employment structures. It is generally understood that the gig economy refers to trade and enterprise which is structured around the emergence of networks, rather than traditional employment institutions.
In this area, workers tend to independently contract with businesses for short-term engagements on an on-demand basis. In return, these businesses pay workers a fee or commission in return for services rendered. Many will be familiar with Uber which is a classic example of this arrangement. 
The main attraction of this arrangement to businesses and workers is flexibility. However, flexibility comes at a cost – one which has typically been borne by the worker. Usually, these gig economy arrangements are entered into as independent contractor relationships. However, it can be finely balanced as to whether these workers are independent contractors or employees. The courts can look behind the label given to the relationship to look at its true nature. There are some aspects of these arrangements that may swing the relationship towards an employment one.
For many businesses, it is desirable to treat workers as independent contractors, as it avoids the minimum employment standards, such as minimum wage, annual
leave and sick leave entitlements that come with employee relationships. In markets where competitive advantage is primarily based on ever-decreasing labour costs,
businesses are keen to avoid shifting these costs onto their price-sensitive consumers.
This issue is not exclusive to participants in the gig economy. Ordinary contractors also face similar issues with regard to their status as a worker. For example, First Union
has taken action in the Employment Court on behalf of courier drivers who claim that they are employees rather than independent contractors. These issues are not new to that industry either.
This all leads to the possibility of a third category of “dependent contractors”. The Government has signalled that it intends to consider ways to address ambiguity around
the status of these so-called “dependent contractors”. In particular, the Government may consider whether a distinction between dependent contractors and employees
should be introduced, and, if so, what form that should take.
It is difficult to define the exact realms of a dependent contractor. However, broadly speaking, they are likely to be workers who are defined as being self-employed, but
in reality, do not have the autonomy that you would expect from an independent contractor. Good illustrations of these types of workers include those who drive for Uber,
or more recently, the “juicers” that work for Lime charging scooters. Essentially, these contractors are reliant on one source for their income.
There are no indications yet around what this kind of regime may look like. However, the Government may look to other countries for guidance, such as the United Kingdom where a third category of “worker” does exist in addition to independent contractors and employees. These workers are afforded a bundle of rights greater than a contractor, but less extensive than those afforded to employees.
Given the current Government’s stated focus on restoring key minimum standards and protections for workers, we can likely expect to see further development on this
issue in the near future. The Government has also moved forward with proposed legislation to recognise triangular employment relationships. Labour hire arrangements, where a labour company contracts out a worker to a business, are an obvious example of this. 
The proposed legislation would allow a finding that such a worker would be an employee of the business for whom they perform the work, and enable that worker
to bring a personal grievance against that business. Under the current law, that worker is employed by the labour hire company and therefore only has remedies against
that labour hire company. So, this could represent a significant shift in the way that these relationships operate.

Flexible working
Flexible work arrangements are being increasingly sought by employers and employees alike. With advances in technology and the increasing rejection of
traditional models of work, flexible working opportunities are becoming more available within the modern work environment. Employees are entitled to make requests
for changes to their hours of work, days of work, or place of work at any time. But flexible working encompasses more than this. It also concerns how work is performed
by an employee and how the employee’s work is supervised or managed.
Employers have a duty to consider flexible working requests made by employees. There are limited reasons for which an employer is entitled to refuse such a request. These relate to operational matters such as the burden of additional costs, and detrimental effect on quality and on the ability to meet customer demand. It is best practice for employers to introduce a flexible working policy which deals with both how requests are to be considered as well as how a flexible working arrangement should be  implemented.
The policy should set out the employer’s obligations, including those under the Health and Safety at Work Act in respect of remote workers, where appropriate. It is anticipated that flexible working will only continue to grow in popularity with time. Having a robust policy dealing with this will assist both employers and employees navigate the process of requesting and implementing a flexible working arrangement.

Privacy and personal information
Substantial changes are also afoot about the
way in which employers handle personal and private information. Amendments to the Privacy Act have been introduced to Parliament which seek to update and further
strengthen the protection of personal information.
Of relevance to employers are proposed changes in relation to requests for evaluative and opinion material. Evaluative material consists of assessments made about a person’s skill set or character during an evaluative process, such as recruitment or during a selection process for promotion or removal from office. Employees may
endeavour to request such information where the outcome of such a process is not favourable to them.
These changes clarify that an employer will not be permitted to refuse to provide evaluative or opinion material that is prepared on whether a person should be
accepted for a role.
In addition to those changes proposed by the Privacy Bill, the European Union’s General Data Protection Regulation (GDPR) also impact those businesses providing
services (or supplying goods) to persons residing in the EU. For instance, businesses offering recruitment services to EU residents, or businesses with EU based
employees, may be subject to the stringent requirements of the GDPR.
The GDPR requirements include notification of a data breach, the right to be forgotten (erasing of data), the right to access data and data portability (ability
to receive personal data about yourself). Businesses will need to review their internal data policies and procedures around privacy and data protection to ensure compliance. 
These changes come at a time when businesses are collecting more information than ever before. Within the workplace, it is common in many industries to have GPS tracking on company vehicles, electronic clock-in, use of biometric data, and surveillance (such as in-cab surveillance for driver fatigue). Whilst these advances in technology are great for business, and often assist with safety, they raise complex privacy issues.
A prudent first step to navigating these obligations is for employers to address these privacy issues through the inclusion of appropriate clauses in employment agreements and the development of appropriate employment policies. It is important that employees are aware of the steps that employers have in place, and that employers are able to fully utilise the tools that technology has made available.

Fair Pay Agreements
The concepts of the “living wage” and fair pay agreements are topical issues that have attracted attention over recent times, and they may also form a part of the future
working environment. The Fair Pay Agreement working group has recently reported back with its recommendations on the scope and design of a system of bargaining to set minimum terms and conditions of employment across industries and occupations.
The working group has recommended a system whereby workers can initiate sector-wide or occupation-wide collective bargaining if they meet:

• A representativeness threshold (being 1,000 employees collectively); or
• A public interest threshold (in relation to sectors or occupations with harmful labour market conditions and for which it is in the public interest for these to be  addressed).

Once activated, bargaining would take place in accordance with the prescribed requirements. Once the parties reach agreement, the conclusion of the agreement
would require ratification by simple majority of both workers and employers.
The proposed system is intended to complement, not replace, the existing minimum standards and protections contained in the current employment relations framework in New Zealand. Businesses and workers would then still be able to negotiate enterprise level agreements such as multi-employer.
Whilst advances in technology are great for business, and often assist with safety, they raise complex privacy issues collective agreements, collective agreements
and individual employment agreements which further improve on the terms and conditions in any fair pay agreement. The proposed compulsory requirement
for employer participation in the system is likely to be a sticking point with employers.
Indeed, employer representatives have opposed the compulsory nature of the system, preferring a voluntary participation approach from the start with the ability to
opt-out on a reasonable grounds basis. The recommendations proposed by the working group are substantial. This bespoke system, if introduced in its current form,
would have considerable consequences for the way in which workers and businesses negotiate the terms and conditions of employment in New Zealand. However, it is
a case of ‘watch and see’ as to whether the government adopts the recommendations of the working group and looks to legislate around these concepts.

Conclusion
The way in which work is carried out in New Zealand is changing quickly. As businesses engage with technology and new ways of working, they will also need to grapple with the employment law consequences of those new steps. This will mean adapting practices to meet changing legal obligations.
If you would like assistance with any of these issues, please feel free to get in touch.