Some of the most significant changes planned by the coalition and outlined in the coalition agreement focus on the workplace.

With an ambition to 'reset the balance', the new government is keen to alleviate the burdens on employers. However, it's important to acknowledge that managing these changes can be costly in itself, and there are a range of complications to consider.

Repeal the fair pay agreement regime by Christmas 2023

The aim of the scheme was to facilitate minimum employment terms across an industry or an occupation so as to ensure a minimum standard (wider than just minimum wage) which secured better outcomes for workers.

It is the coalition’s belief that this scheme places undue financial burden on businesses and is too blunt a tool to address sectors which may have issues with employee oppression/vulnerability.

Instead, the government suggests it will encourage employers and employees to negotiate individual arrangements, although any specific policy to support such a new direction is yet to be proposed.

Trade unions have already expressed objections to a repeal before Christmas under urgency, thereby denying any opportunity for further consultation or analysis, but the Government is keen to get it off the books before any agreements might be finalised (making the repeal much simpler and minimising  its potential impact.)

In practical terms, the repeal of this regime is unlikely to significantly alter the landscape of any industry, as no fair pay agreements have been implemented to date. However, this decision will be a disappointment to sectors like hospitality and cleaning services, whose workers may have had hopes pinned on the minimum protections promised by the scheme.

Expand 90-day trials to apply to all businesses

A straight reversal of the Labour Government’s reform. Limited for the last few years to employers with less than 20 staff – the change will allow all employers with a compliant trial period provision in their employment agreement to dismiss an employee without risk of a personal grievance.

National has previously supported this change by stating this will encourage employers to take more chances when it comes to employment as they have the safety of a trial period. This, in turn, is expected to help reduce unemployment rates. However, this approach raises questions about the government's expressed commitment to evidence-based policy, given that previous Treasury analyses have indicated the impact of the 90-day trial on employment levels and turnover is minimal.

Nonetheless, the expansion of the 90-day trial will undoubtedly reduce costs and risks for employers who find themselves in situations where an employee is not working out.

Reform health and safety law and regulations

There is some uncertainty as to what this will entail, but will likely come in the form of amendments to the Health and Safety at Work Act 2015.

A suggested focus area is to increase the liability and responsibility of employees for their own health and safety in the workplace (but noting that existing legislation already imposes such a duty).

This shift might result in employers having lighter or more restricted obligations in terms of health and safety. However, it's noteworthy that the existing health and safety legislation in our country deliberately aligns with the Australian model. Therefore, any changes we make will create a divergence in the approach to workplace safety between the two jurisdictions.

Considering our relatively poor safety record in comparison to countries like Australia and the UK, any proposal that appears to reduce business responsibility for health and safety is likely to spark controversy. This is especially so since ensuring workplace safety has traditionally been viewed as a core responsibility of employers.

Simplifying personal grievances and setting an income threshold

The new Coalition is considering simplifying personal grievances and in particular removing the eligibility for remedies if the employee is at fault, and setting an income threshold above which a personal grievance could not be pursued.

Undoubtedly, the aim to simplify the process of addressing personal grievances is worthwhile. The reality, though, is that achieving fairness often involves complexities and requires careful process. Any attempt to overly abridge or simplify these procedures runs the risk of resulting in rough justice, where the nuances of each case may not be adequately considered, potentially leading to unfair outcomes.

The existing system already acknowledges that remedies should be scaled back if the employee shares some responsibility for the situation leading to their grievance. However, implementing a complete bar is challenging. For instance, should an employee's occasional tardiness or a minor oversight like forgetting to launder their uniform warrant dismissal without any recourse? Determining where to draw the line is difficult, and any such rule could increase, rather than decrease, complexity and potentially lead to injustice.

An income threshold for personal grievance is akin to the position in Australian employment law where the threshold is $167,500 AUD (~$180,000 NZD). Would any NZ bar be similar? It could potentially make the positions of senior executives more precarious. This change might pressure companies to offer longer notice periods and higher compensation to their key staff, as a way to balance the increased risk associated with transitioning from a secure position to a new opportunity.

Maintaining the status quo for contractors who explicitly sign up for a contracting arrangement

The new Government wants to maintain the status quo for contractors who have explicitly signed up for a contracting arrangement and remove their ability to challenge their employment status in the Employment court.

‘Maintaining the status quo’ suggests the proposal aims to confirm the present law. But this is at odds with the actual position. The law currently recognises that the label given to the relationship in a contract may be misleading and wrong. A number of successful cases have been brought challenging companies which compelled individuals to sign ‘independent contracting’ contracts if they wanted work, even if they actually worked as employees. The recent Gloriavale case is another example of vulnerable workers being able to seek protection by claiming employment status which would not otherwise be recognised. Removal of the right to challenge this type of behaviour appears problematic.

If it is aimed at less clear cut cases involving the gig economy — for example  Uber drivers — it may help provide certainty. But how will this be defined? Again, in attempting to draw any line there is likely to be uncertainty and further dispute.

To achieve this goal likely requires new legislation (or at least changes), rather than maintaining the current laws – similar to the legislation which deems screenworkers to be contractors if that is what their contract says.  However, this could potentially provide an easy way for businesses to circumvent employment protections, especially if individuals have limited employment options.

Closing thoughts

New workplace laws inevitably mean uncertainty and a need for business (and employees) to adjust. Even if the aim is simplification, there will be costs and risks attached to managing the change. 

The challenge for the government lies in ensuring that the tangible benefits of any new laws significantly outweigh the inevitable disruption and friction that come with their introduction.

Unless the proposed changes demonstrate a clear advantage, many businesses might actually prefer to maintain the relatively well-understood status quo. They are often prepared to handle the risks and costs associated with the current legal environment. A key lesson from past attempts to 'simplify' the law is that such efforts can inadvertently lead to unwelcome uncertainty. Unless there is a collective willingness to embrace this uncertainty, the reality is that rules will eventually be refined and detailed by tribunals and courts over time, potentially leading back to a level of complexity similar to what was originally intended to be simplified.