I'm pleased to share some good news for business – delivering certainty in contracting, simplifying personal grievances, and cutting compliance.
Today I introduced a Bill to amend the Employment Relations Act in three major areas.
First, on contracting, we're delivering certainty for workers and businesses about the type of work being done from the moment they agree to a contracting arrangement.
A new gateway test will provide greater clarity for businesses and workers around the distinction between employment and contracting arrangements. This will provide greater certainty for all parties and will allow more innovative business models.
Second, we're simplifying the personal grievances process.
My legislation will reduce rewards for bad behaviour and reduce costs for businesses in the process. Under current law, if a personal grievance is established the Employment Relations Authority or Employment Court may award remedies including reinstatement into a role, and compensation for hurt and humiliation. The changes make clear an employee whose behaviour amounts to serious misconduct will be ineligible for remedies.
The Bill also introduces an income threshold of $180,000 above which a personal grievance for unjustified dismissal cannot be pursued.
High-income employees often have a major impact on organisational performance, getting the right fit is crucial. This change will enable businesses to ensure they have the best fit of skills and abilities for their organisation. It allows employers to give workers a go in high impact positions, without having to risk a costly and disruptive dismissal process if things don’t work out, benefitting those seeking to move up the career ladder.
Third, we're cutting compliance at the beginning of employment.
By removing the ‘30-day rule’, employers and employees will now be free to negotiate mutually beneficial terms and conditions from the start of employment.
You can find the full detail of all these changes here.
I am committed to building business confidence, ensuring a strong economy that will lift wages, create opportunities, and help Kiwi workers get ahead.
The Bill will soon have its first reading in Parliament, and you will have a chance to give feedback on any part of it at Select Committee.