Fast Facts

Employers urged to submit on proposed changes to employment relations

The EMA is urging business to submit on the Employment Relations Amendment Bill before the close off date of March 30 2018.

New Zealand business wants a vibrant, connected and flexible economy which enables it to meet the needs of its customers, both in New Zealand and offshore. Therefore, business needs to provide the government with input and feedback on the proposed amendments to the employment relations framework.

“Businesses have to be able to meet the growing demands of their particular operation and be agile enough to remain competitive now and into the future,” says Kim Campbell, CEO, EMA.

“We already have many of the elements which enable us to participate in a modern economy and we want to ensure we do not lose these, nor create outcomes which do not deliver to the Government’s call for a high wage, high performing economy.

“Our concern is that there are proposed changes in the Bill which appear to deliver less flexibility and more compulsion without improving productivity,” says Mr Campbell.

Responding to member feedback, the EMA is particularly concerned around six key areas of the Bill. These are:

  • Restriction of the 90-day trial period to businesses with fewer than 20 employees
  • Restoration of statutory rest and meal breaks
  • Reinstatement of an employee as the primary remedy to an unfair dismissal
  • Restoration of duty to conclude bargaining
  • Restoration of 30 day rule whereby new employees are employed under terms consistent with the collective agreement
  • Restoration of union access without prior employer consent and requirements to include pay rates in collective agreements

In relation to productivity, Mr Campbell, also commented on the minimum wage which will increase to $16.50 on April 1 2018.

“This increase was heralded by the previous Government and most businesses will have prepared for this.

“However, it’s important to note that New Zealand does have the highest minimum wage, as a proportion of the average wage, in the world. We are keen to understand how businesses will increase productivity to cover further proposed increases in coming years,” says Mr Campbell.

For example, a café employing five staff on the minimum wage, will need to sell six more cups of coffee a day to cover the increase from April 1. If the minimum wage increases to $20 per hour, all other factors remaining equal, the café would need to sell 36 more cups of coffee per day.

“This raises important questions for business. Do they sell more units, do they raise the cost of their products and services or do they look for ways to automate processes? Decisions around the minimum wage can’t be made in isolation of other dynamics, such as the proposed employment relations changes,” says Mr Campbell.

Calculation based on five full time staff. Minimum wage at $16.50/hour will see a wage increase of $7,900 per annum, at $20/hour the wage bill will increase by $44, 800 per annum. The number of cups sold to cover the increase is based on a business unit price of $4.50, with a 75% profit margin.

Source: EMA

Most Popular

Newsletter Signup

To Top