Employment law changes next year

29 Nov 2018


The Government’s Employment Relations Amendment Bill had its second reading in Parliament on Tuesday. Some key changes from its original form were identified in response to issues raised by businesses.  It’s likely that this law will come into force from May next year.  Some of the changes that were made include permitting employers to opt out of multi-employer collective agreements (MECAs), where there are reasonable grounds for them to opt out; and restricting union access to be by agreement with the employer and only where there are union members in a collective agreement covering their work, or where there is bargaining for a collective agreement at that work place.  These are both important concessions.

Many of our farms, orchards and commercial gardens are family run, intergenerational business that employ both permanent and seasonal workers, as well as family members.  In many respects, these businesses are no different from urban small business operations. Collectively, they are the engine room for New Zealand’s continued financial vitality and greatly contribute to the social and cultural sustainability of our country. So the test will become: what are the reasonable grounds for the business to opt out? In horticulture, for example, there are about 4,000 small businesses. There are some larger operations, but the vast majority are small businesses employing a few permanent workers, including family members. There are also different work conditions and wage and salary payments, dependent on the type of crop, the size of the operation and whether there are employees who are not family members. To have one MECA covering all 4,000 businesses without allowance for these multiple variations would stifle productivity. 

I note that there can be different schedules in a MECA with application to different size and type of business. But few small businesses have human resources specialist staff members and so making compliance straight forward is the best option, as it results in compliance being achieved.  It is also true of small business operations that staff are one of their most important assets and so staff are looked after. Therefore, we hope that we can make a compelling case for many of our small businesses to be exempt from MECAs so that they can concentrate on the business of growing healthy food. They simply do not have the time, expertise or  resources to be involved in negotiating agreements, especially where there are difficult negotiations. The Bill requires that an agreement be reached and for 4,000 small businesses in horticulture, that may be just about impossible to achieve. That involves getting 4,000 business owners to agree on one set of conditions, even though their businesses may be very different.

For small businesses, keeping the 90 day trail period is a good thing. The issue here is that small is a relative term. Although a rural business may have a few permanent employees only, it may, for harvest and other labour intensive operations, be a large employer of seasonal workers.  Some flexibility around how the actual number of employees is counted will greatly assist our rural sector in continuing to employ as many New Zealanders as possible.

For a lot of small businesses, their home is their office and that is particularly true for the rural sector.  So making sensible provisions around access to their home / work place is welcomed. In addition there are health and safety and biosecurity risks that any visitor to a rural (or indeed an urban property) needs to be aware of.

In the coming days, we will further analyse what has been reported back to Parliament. As necessary, we will make further submissions, seek exclusion for horticulture’s small employers from MECAs for the reasons outlined above, and provide comprehensive guidance to our grower members.  In doing this, we welcome the opportunity to engage with the Government on these measures.

- Mike Chapman, CEO