New Zealand

13 október 2021

Working life in New Zealand

About

  • Szerző: Jane Parker, Jim Arrowsmith, Andrew Barney, Fatima Junaid
  • Institution: MPOWER, Massey University, Auckland, New Zealand/Aotearoa
  • Published on: szerda, október 13, 2021

This profile describes the key characteristics of working life in New Zealand/Aotearoa. It aims to complement other EurWORK research by providing the relevant background information on the structures, institutions and relevant regulations regarding working life. This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work.

Key figures

Key figures

Comparative figures on working life in New Zealand/Aotearoa

 

2017

2020

% (point) change
2017–2020

NZ

EU27

NZ

EU27

NZ

EU27

Real GDP per capita

*, **

36,463

27,110

 

35,254

 

26,290

-3.3%

-3.0%

Unemployment rate – total

***, ****

4.5

8.1

4.9

7.0

-0.9%

-1.4%

Unemployment rate – women

5.0

8.4

5.4

7.3

0.1%

-13.1%

Unemployment rate – men

4.0

7.8

4.5

6.8

12.5%

12.8%

Unemployment rate – youth

15–19 years

20–24 years

 

19.4

8.4

17.9

 

20.5

10.0

16.8

 

4.6%

19.1%

-6.1%

Employment rate – total

67.8

71.3

66.8

72.4

-1.5%

1.5%

Employment rate – women

62.4

65.5

61.7

66.8

-1.1%

2.0%

Employment rate – men

73.4

77.2

72.1

78.1

-1.8%

1.2%

Employment rate – youth

15–19 years

20–24 years

 

40.7

73.3

32.1

 

38.6

72.0

31.5

 

-5.2%

-1.8%

-1.9%

Sources: *Real GDP per capita – EU (EU27 from 2020): Eurostat (2021a) (chain linked volumes [2010], in EUR) and percentage change 2017–2020 (both based on tsdec100), **Real GDP per capita – New Zealand/Aotearoa: World Bank (2021) (current USD – 2017: 43,225 and 2020: 41,792; currency exchange to EUR on 5.7.21), ***Unemployment rate by sex (% of active population) and age (youth 15–24 years) – EU: Eurostat (2021b) annual average, % [une_rt_a], ****Employment rate by sex (% of active population) and age (youth 20–24 years) – annual average, % [lfsi_emp_a]. Unemployment rate total, by sex, youth –New Zealand/Aotearoa: Stats NZ (2020a, 2017), December quarters (youth defined in 15–19 and 20–24 year categories).

New Zealand/Aotearoa is one of the most ethnically diverse countries in the world, and 2018 census results reveal that its cultural make-up is becoming more diverse after high population growth (Stats NZ, 2019a), with implications for managing and accommodating diverse labour force characteristics and circumstances. By ethnic group, Asians have the highest employment rate, while Europeans have the lowest unemployment rate.

Figures on working life in New Zealand/Aotearoa, by main ethnic group, December 2020 quarter

Ethnic group

Employment rate (%)

Unemployment rate (%)

Total labour force (000s)

Employed (000s)

European

68.0

3.7

1,997.0

1,922.2

Māori

62.7

9.0

406.2

369.5

Pacific peoples

59.9

9.6

181.1

164.4

Asian

71.0

5.2

470.5

445.8

Source: Stats NZ (2020a).

Background

Background

Economic and labour market context

In recent decades, New Zealand/Aotearoa’s economy has transformed from being one of the most regulated of the Organisation for Economic Co-operation and Development (OECD) members to one of the least. The economy has shifted from one based on agriculture and dependent on concessionary British market access to a mixed economy that operates on free market principles and can compete globally (NZ Treasury, 2020). According to the Central Intelligence Agency (CIA) (2021), New Zealand/Aotearoa’s dynamic growth has ‘boosted real incomes, but left behind some at the bottom of the ladder and broadened and deepened the technological capabilities of the industrial sector’.

The country’s sizeable service sector makes up a large portion of the GDP, with exported goods and services (dominated by agricultural outputs) representing about 28%. New Zealand/Aotearoa has one of the most globalised economies, depending greatly on international trade, particularly with Australia, China, Canada, the EU, Japan, Singapore, South Korea and the US. According to the CIA (2021), expanding New Zealand/Aotearoa’s network of free trade agreements remains a top foreign policy priority.

New Zealand/Aotearoa recorded its first case of COVID-19 on 28 February 2020. Its response to the pandemic was to close its borders to all but NZ citizens and residents on 19 March 2020 and to enter a full (Level 4) lockdown from 26 March to 27 April, as well as subsequent partial lockdowns. Border closure, together with lockdowns, translated into workplace responses that saw retail, accommodation, hospitality and transport sectors in particular experience major declines. The bulk of the resultant job shedding and increasing under-utilisation of labour has been disproportionately borne by women (Parker et al., 2021).

While the country entered a period of economic expansion of 26.9% (Stats NZ, 2018a) between 2012 and 2017, its economic growth rate slowed from 2017 on. Following the outbreak of the pandemic, COVID, New Zealand/Aotearoa officially entered a recession on 17 September 2020, after its worst-ever quarterly GDP fall (Roy, 2020). However, after successfully containing the virus, the economy made a ‘V-shaped’ recovery, ending 2020 with a better-than-predicted economic expansion of 0.4% (Withers and Bloomberg, 2020). Unemployment also fell from a peak COVID-influenced rate of 5.3% in September 2020 to 4.7% by the March 2021 quarter (Pullar-Strecker, 2021; Stats NZ, 2021a).

However, as Blumenfeld, Ryall and Kiely note (2021: 110–111), ‘NZ’s economy is more vulnerable to exogenous shocks than most. It may be premature to celebrate the country’s success in withstanding the potentially devastating economic impacts of the COVID-19 pandemic just yet.’ The government’s COVID recovery package has included wage subsidies for affected businesses, a welfare payment for those who lost their jobs due to the pandemic, and a package of infrastructure investments aimed at creating jobs. Whether such initiatives help to cushion or kick-start the economy and labour market or ‘delay the inevitable (as suggested by Vergara, 2020) remains to be seen.

More information:

  • OECD 2021a: Economic Outlook: NZ
  • OECD 2021b: NZ: Economic Snapshot

Legal context

Until 1840, New Zealand/Aotearoa adhered to Māori customary law, which is still recognised if it meets certain criteria. The country’s current legal system was founded on British law, but it has evolved into an independent system. Te Tiriti o Waitangi (the Treaty of Waitangi), signed by the British Crown and Māori chiefs in 1840, is widely seen as a constitutional document, but can only be enforced in a court of law when an act of parliament explicitly refers to it (Ministry of Justice/Tahu o te Ture, 2019). Criminal and civil law constitute the two broad parts of the country’s law, with common law derived from judicial decisions. International law and treaties have influenced New Zealand/Aotearoa law, particularly since the 1960s. Laws are drafted by the government. The public and social partners can lobby members of parliament, and at specified stages make submissions on bills.

Working conditions are mainly covered by both statute – particularly the Employment Relations Act (ERA) 2000 – and common law. The ERA 2000 reframes employment contracts as employment relationships, indicative of an ideological shift from a unitarist orientation to a more relational approach based on social exchange. Most workers have individual employment agreements (IEAs), though collective employment agreements (CEAs) are more common in the public sector (e.g. Blumenfeld et al., 2021). The Employment Relations Amendment Act 2018 amends the ERA 2000 and introduces changes that effectively reverse the law to how it was in 2015.

Following the re-election of the Ardern government, a range of other significant employment law changes have come into force. The Equal Pay Amendment Act 2020 supports the settling of gender pay equity claims within existing collective bargaining arrangements. Bargaining outcomes may be passed on to non-union members, and individual employees can raise claims for roles not previously covered by a pay equity claim. This complaints-triggered law has generated debate, particularly around its facility for retrospective wage payments, and whether it provides for equal pay as opposed to pay equity (Parker and Donnelly, 2020). It amends the ERA 2000, Public Service Act 2020 (see below) and Equal Pay Act 1972, and repeals the Government Services Equal Pay Act 1960.

The Public Service Act 2020 provides an updated framework for employment and more options for configuring fit-for-purpose public service organisations, and includes provisions for effective leadership and the improvement of agencies’ organisation in the regions. It seeks to strengthen ‘the shared identity of public servants’ to enable a cultural shift that builds a unified, agile and collaborative public service that improves New Zealanders’ well-being. It also aims to strengthen the relationship between Māori and the Crown under the Treaty of Waitangi (Parker et al., 2021). There have also been changes to workplace relations aiming to improve sick leave entitlements and the minimum wage (Bell, 2020). Like the ERA 2000 and Health and Safety at Work Act 2015 (HSWA), the Public Service Act 2020 comprises good faith provisions, with the latter specifying the obligations of a ‘good employer’.

Other key statutes applying to the labour market and employment relations are:

  • Holidays Act 2003
  • Holidays (Bereavement Leave for Miscarriage) Amendment Act 2021
  • Wages Protection Act 1983
  • Minimum Wage Act 1983
  • Parental Leave and Employment Protection Act 1987
  • Employment Relations (Triangular Employment) Amendment Act 2019

Although statutes establish the minimum entitlements of employees in New Zealand/Aotearoa, they do not amount to a ‘labour code’ in its true sense. There is scope for courts to apply and develop common law principles, which mostly derive from British common law.

Industrial relations context

In law, the formalisation of industrial relations in New Zealand/Aotearoa began with the Trade Union Act 1878 and the Industrial Conciliation and Arbitration Act of 1894 (IC&A). In return for compulsory conciliation and voluntary arbitration of industrial disputes, unions agreed to curb their rights and powers ‘within a context of preferential status for unions and their members’ (Rudman, 2013). The state supported a system that stayed largely intact until union membership and dispute arbitration were made voluntary in 1984, and the Labour Relations Act 1987 removed union monopolies. For nearly a century, statutes have provided limited details on the individual employment relationship. This meant that its legal base was defined by common law as a master-servant relationship.

The Employment Contracts Act 1991 (ECA) marked a dramatic shift from a system of collective representation and bargaining to one based largely on individual contracts, in a context of labour market and economic deregulation as well as employer-driven workplace flexibility. This Act removed the distinct legal status of unions and precipitated a significant decline in union activity and scale, as well as tripartite arrangements relating to employment (Parker, 2013). Its replacement, the ERA 2000, has aimed to recalibrate the balance of power between employers and employees and unions. It emphasises collective and individual bargaining and employment agreements, recognising unions as the only representatives of worker collectives and introducing the ‘good faith’ notion into employment relationships. According to the International Labour Organisation (ILO) (2019), the predominant view of the ERA 2000 is that it ‘introduces a considerably more orthodox and moderate approach to labour market regulation’. However, certain principles from the ECA are still present, including an emphasis on local or enterprise-level bargaining, and trying first to resolve a dispute within the workplace.

Another cornerstone statute is the HSWA, which has introduced new responsibilities for managing risks that could cause serious injury, illness or death in the workplace. Furthermore, between 2017 and 2020, the government made a series of changes to employment law, including the Employment Relations Amendment Act 2018, which brought in changes including restricting 90-day trial periods to businesses with 19 or fewer employees (protecting the employee from unfair dismissal), a duty to reach a collective bargaining agreement, and removal of the opt-out for employers bargaining for a multi-employer collective agreement (MECA) (Employment NZ, 2019a). The government has increased the statutory minimum wage progressively such that it is converging with the voluntary living wage in New Zealand/Aotearoa.

In May 2021, parliament passed the Holidays (Increasing Sick Leave) Amendment Act to increase the minimum employee sick leave entitlement from five to 10 days per year. Other recent statutes include the Equal Pay Amendment Act 2020 and the Public Service Act 2020. The government also recently announced the design of the Fair Pay Agreements (FPA) system, which will set out minimum wages and conditions for workers across an industry or occupation (see Pay).

Actors and institutions

Actors and institutions

Public authorities involved in regulating working life

In New Zealand/Aotearoa, a multi-level system involving unions, employers’ organisations and public institutions is key to the regulation of employment relationships, working conditions and industrial relations institutions.

The former Department of Labour was responsible for improving the performance of the labour market, contributing to strengthening the economy and increasing living standards. In 2012, the department became part of the Ministry of Business, Innovation and Employment (MBIE) and was rebranded as Employment NZ. The MBIE conducts most administrative functions surrounding labour rights and their practical application, provides free mediation and information on employment matters, and can clarify employment rights and obligations. For its part, Employment NZ seeks to support positive relationships between employers and employees, and to promote safe, fair and harmonious workplaces.

The Court of Arbitration, a specialist industrial relations court, dealt with industrial relations disputes from 1894 to 1973. The ECA established the Employment Court (regarded as equal to the High Court in legal standing). The Employment Relations Authority was established under the ERA 2000 as an independent body and sits below the Employment Court.

WorkSafe New Zealand (WorkSafe NZ), established in 2013, is New Zealand/Aotearoa’s primary regulator of workplace health and safety. Its key roles concern regulatory confidence, harm prevention and system leadership, and collaboration with businesses, undertakings, workers and their representatives to promote good practice. WorkSafe NZ has implemented significant reforms to workplace health and safety. Notably, the regulator’s goal included a government target to reduce workplace fatalities and serious injuries by 25% by 2020. Data published in December 2020 suggest that the goal was achieved for workplace fatalities (a 30% reduction on baseline). However, rates for serious non-fatal acute workplace injuries remained near baseline (a 4% reduction), while rates for acute workplace injuries requiring more than one week away from work increased 16% over baseline (Worksafe NZ, 2020).

The Public Service Commission (PSC) is the central public service department charged with overseeing, managing and improving the performance of the state sector and its organisations.

Representativeness

The Council of Trade Unions (CTU) was formed in 1987 by the merger of the NZ Federation of Labour and the Combined State Unions. It represents 320,000 members across 29 affiliates (CTU, 2021a). This peak body is closely associated with the Labour Party and affiliated to the International Trade Union Confederation. Around 90,000 union members belong to unions that are not CTU affiliates (Carroll, 2020a).

Business New Zealand (BusinessNZ) was founded by four large regional organisations of member businesses. Like the CTU, BusinessNZ does not have the authority to conclude collective agreements. As a consequence of the decentralised character of employment relations in New Zealand/Aotearoa, employer organisations do not have a particularly prominent role. Most union-management agreements are collectively bargained for through negotiations at local or enterprise level.

Trade unions

About union representation

The ECA adopted a traditional contractual approach to the employment relationship, which assumed that employers and employees had equal bargaining power. In 2000, this was superseded by the ERA, which became the primary legislation governing union membership and union-management workplace disputes in New Zealand/Aotearoa. The Act enables core provisions on:

  • freedom of association
  • recognition and operation of unions
  • collective bargaining, CEAs and IEAs
  • employment relations
  • education leave
  • strikes and lockouts
  • personal grievances and disputes
  • enforcement of employment agreements
  • the Mediation Service, the Employment Court and the Employment Relations Authority
  • labour inspectors

In New Zealand/Aotearoa, any employee may choose to join a union, with each union setting its own fees. In 1936, the Labour government introduced a system of state-enforced compulsory union membership. In 1961, the National Party replaced the compulsory system with one of unqualified preference, a post-entry closed shop, negotiated and enforced by unions and employers.

Under the ERA 2000, a registered union must contain at least 15 members. In 2020, there were 133 registered unions compared with 133 in 2017 (NZ Companies Office, 2020). An employer and union should deal with union visits and conduct bargaining for collective agreements in ‘good faith’. The Act also provides for facilitated bargaining. The Employment Relations Amendment Act 2018 extends the purposes for which a union representative may enter a workplace (Employment NZ, 2019a). Some union members may be entitled to paid leave to attend approved employment relations education courses. However, these receive comparatively little state funding.

Employers cannot undermine collective bargaining or agreements by automatically passing on the terms and conditions of a CEA to employees who are not covered by it. However, an employer may offer employees on an IEA terms and conditions that are the same as or similar to those covered by the collective agreement, and must bargain with individual employees in good faith (Employment NZ, 2021a; 2021b). The Amendment Act requires parties to conclude collective bargaining, unless there are reasonable grounds not to.

For the last three decades, until very recently, both union density and union membership were in decline, contributing to increasing wage and wealth inequality in New Zealand/Aotearoa. Factors driving this trend include the ECA’s introduction in 1991 and the deregulation of a centralised wage bargaining system to one focused on enterprise bargaining. Indeed, the rate of decline in union membership and density in New Zealand/Aotearoa has exceeded that of many other OECD countries. The ERA 2000 was an attempt to support union organisation and the role of unions in collective bargaining. However, the damaging impact to these institutions under the ECA in the 1990s and the move away from a centralised bargaining system has proved difficult to reverse.

From 2010 to 2018, union membership and density continued to decline, despite the employment growth following the end of the global financial crisis (GFC). Even in key industries, union membership didn’t grow, though it was maintained (Ryall and Blumenfeld, 2016). However, since 2019, both total membership numbers and densities have grown slightly, halting this historic decline.

Union membership and density

Union membership and density, 2015–2020

 

2015

2016

2017

2018

2019

2020

% of employed labour force who are union members

15.5

15.2

14.0

13.29

14.01

16.41

Union membership

359,782

357,120

355,511

351,769

372,551

380,659

Source: NZ Companies Office (2020)

Some commentators have interpreted this increase in membership as a consequence of COVID-19. In particular, they have suggested that non-unionised workers’ concern for their jobs and their health and safety has encouraged them to seek union protection (Carroll, 2020a). However, figures from unions representing workers in industries strongly affected by the pandemic (e.g. aviation, hospitality and tourism) suggest that it led to a decline in membership rather than an increase, as large numbers of members lost their jobs (Carroll, 2020a). Again, the union membership statistics cited above suggest a significant increase in membership numbers between 2018 and 2019, before the COVID outbreak, and some researchers noted an upswing in numbers as early as 2017 (Blumenfeld, Ryall and Kiely, 2019). Thus, while COVID-19 may have affected union membership, there have been other, earlier influences, possibly including changes flowing from the Employment Relations Amendment Act 2018.

While it remains to be seen whether New Zealand/Aotearoa’s long decline in union density has halted overall, ongoing imbalances in sectoral representation remain. This is a comparatively recent phenomenon. As late as 2008, union membership was split relatively evenly between public and private sectors, with 52% of members working in the public sector and 48% working in the private sector. Ten years later, the ratio had grown to 60:40 in favour of the public sector (Blumenfeld et al., 2019). Union densities make this distinction even clearer, with 60% density in the public sector compared with just 10% in the private sector (Ryall and Blumenfeld, 2017). Public sector jobs such as those in public and community services are most likely to be unionised. In the private sector, the transport, postal and warehousing group is the only industry group where union density approaches that in the public sector (Blumenfeld et al., 2021).

Main union confederations and federations

By far the largest union confederation in New Zealand/Aotearoa is the CTU. The proportion of union members who belong to affiliates of the CTU has changed little since 2000 (87% at the end of 2018 and about 84% in 2020). The following table summarises the main union confederation, in terms of its members and bargaining role.

Main trade union confederations

Long name

Abbreviation

Members

(2020)

Involved in collective bargaining?

New Zealand Council of Trade Unions

(NZ)CTU

320,000

No

Source: CTU (2021a).

In 2021, 29 unions are affiliated to the CTU (CTU, 2021b). While this represents just 20% of the 133 unions registered in 2020 (NZ Companies Office, 2020), affiliated unions tend to be significant in size. Conversely, with only one exception, all unions with over 10,000 members affiliate with the CTU (Blumenfeld et al., 2019). One factor that has contributed to union decline has been amalgamation, primarily amongst affiliates.

Employers’ organisations

About employers’ representation

Business owners in New Zealand/Aotearoa may choose to join various organisations that act to represent their interests collectively. The most important of these employer organisations have traditionally been four regional employers’ associations: Employers and Manufacturers’ Association (EMA) Northern, Business Central, Canterbury Employers’ Chambers of Commerce and Otago Southland Employers’ Association. Collectively, the associations advocate for and provide a range of employment, advisory and training services to local members who pay an annual subscription.

At national level, these four regional associations, combined with several other industry interest groups, collectively form BusinessNZ (see figure) – the employer counterpart to the CTUBusinessNZ advocates for business interests across a range of issues, such as export and the environment, as well as industrial relations. Typically, BusinessNZ lobbies the government for business-friendly legislation and provides input where relevant to the work of international organisations, including the OECD, ILO and International Organisation of Employers.

Employer Associations and BusinessNZ network

Source: BusinessNZ (2019a)

While the BusinessNZ network provides high-level coordination on matters of business policy and business advocacy, its coordination of employer and collective activity in day-to-day industrial relations is far less – a reflection of New Zealand/Aotearoa’s history. For nearly 100 years, the country’s industrial relations system fostered a highly centralised, collective approach. Compulsory unionism led to high levels of union density and strong sector-based unions. Terms and conditions of employment for workers were fixed through national awards, typically covering thousands of workers and large numbers of employers operating within the same sector. Awards were renegotiated annually by senior union officials and ‘advocates’ who represented one of the four regional employment associations.

Individual employers were usually unable to negotiate ‘first tier’ or core terms and conditions directly with their own staff, and independent enterprise-level bargaining was rare. Unlike workers, employers were not compelled by law to join employment associations, but they did need to belong to one of the regional associations to gain access to the award negotiations.

This highly collectivised system was overturned by the ECA 1991, which permitted employers to negotiate terms and conditions of employment directly with individual members of their staff, or with their ‘representative’ (who no longer needed to be a union official). This enterprise-based approach to industrial relations contributed to a decline in union density, with most workers and employers choosing to represent themselves in employment relations activities. The decline in centralised and coordinated worker representation has been mirrored in the level of employer coordination on daily industrial matters. Industrial relations in New Zealand/Aotearoa, particularly in the private sector, is mostly enterprise based and individually focused, though this profile may be altered by a proposed FPA system (see Pay). Specialist representation can be contracted in to assist, when required, by either party, while most formal industrial relations is still union based.

While the changes introduced in 1991 contributed to union decline, the four regional employment associations survived this period and maintained, or attracted, enough members to stay economically viable. However, with the shift away from centralised award negotiations, the need for regular centralised collective representation of employers evaporated. To maintain their membership, employer associations adopted two main strategies: firstly, the diversification of services offered, and secondly, merging with compatible business service providers, such as regional chambers of commerce, ExportNZ and Business Mentors NZ. Therefore, while many employers continue to belong to centralised employer organisations, their reasons for doing so are now less easy to discern.

Employers’ organisations – membership and density

The number of registered enterprises with one or more employees in New Zealand/Aotearoa is currently 153,000 (Stats NZ, 2020b), while membership of the four regional associations numbers approximately 14,500 (EMA, 2021). This suggests an association coverage of around 9.5% of employers, a figure that appears to have declined slightly in recent years, possibly due to the economic downturn triggered by the pandemic.

Unfortunately, it is not possible to establish the total number of active employees represented collectively by the regional associations. They do not require members to report their employee numbers when joining (beyond indicating broad bands of employee numbers), and there is no statutory requirement to gather, keep or release such membership information to government agencies. The following information is thus indicative only. An older figure for 2009 from the OECD and AIAS (2021) puts New Zealand/Aotearoa employer organisation density at 83.1%.

Main employers’ organisations and confederations

Long name

Abbreviation

Members (2021)

Involved in collective bargaining?

Employers’ and Manufacturers’ Association

EMA

Not available

Yes

Business Central

BC

Not available

Yes

Canterbury Employers’ Chambers of Commerce

CECC

Not available

Yes

Otago Southland Employers’ Association

EOC

Not available

Yes

Total membership

 

14,500 *

 

Business New Zealand

BusinessNZ

No direct membership **

No

Sources: *EMA (2021), **BusinessNZ (2019a).

Tripartite and bipartite bodies and concertation

New Zealand/Aotearoa has seen far less formal bipartite and tripartite cooperation between employment relations actors than is typical in Europe. For many years, there have been no significant cooperative agencies working permanently at tripartite level. However, in 2018, the government announced the establishment of a new Tripartite Future of Work forum, involving representatives from the CTU, BusinessNZ and the government. This forum has met several times since 2018, producing reports and discussion documents (MBIE, 2021a).

There is also a handful of smaller bipartite organisations operating at sector or industry level. A good example is the National Bipartite Action Group (NBAG) in the health sector. The NBAG meets monthly to allow representatives of district health boards (government employers) and various health sector unions to come together to resolve important employment opportunities and issues (Technical Advisory Services, 2021).

Main tripartite and bipartite bodies

Name

Type

Level

Issues covered

Tripartite Future of Work forum

Tripartite

National

  • Just Transitions
  • Learning for Life
  • Technology
  • Productivity

National Bipartite Action Group (NBAG)

Bipartite

District health boards and health sector unions

  • Employment
  • Health and Safety
  • Redundancy

Workplace-level employee representation

Many workplaces have some form of representative mechanism for workers, including consultative arrangements between employees and management. There is no legal regulation in place, except for the health and safety committees mandated under the HSWA. These systems of representation usually discuss matters related, or similar, to those covered by collective bargaining, albeit in a less formal manner. Around half of CEAs contain specific details of employee participation systems relating to occupational health and safety.

Regulation, composition and competences of the representative body

 

Regulation:

Is the regulation of these bodies codified by law or in collective agreements?

Composition

 

Competences: Involved in company level collective bargaining?

Thresholds/rules: When do they need to be or can be set up?

Union

Yes – ERA 2000, parts 3 and 4.

Voluntary membership for relevant workers (generally sector-specific).

Yes.

Need at least 15 members to become an incorporated society and to register as a registered union.

Health and safety representatives (HSRs) for work groups

Yes – HSWA, part 3.

HSR number is in line with a legislated minimum ratio of representatives to workers.

No, but can issue a provisional improvement notice if a HSR reasonably believes that a person is contravening, or is likely to contravene, a provision of the Act.

Employer must seek to resolve the unsafe matter raised in the notice, or face legal penalty.

Employer must determine the number of HSRs for a work group in line with prescribed minimum ratio.

Health and safety committee (HSC)

Yes – HSWA, part 3

Workers and management.

One member must be appointed by the employer and have health and safety decision-making authority.

At least half of committee members must be workers and not nominated by the employer. HSRs are eligible for committee membership.

No, but can raise concerns and give recommendations.

Employer must establish a committee if a request is made by five or more workers, or an HSR, but can decline if it has fewer than 20 workers and is not in a high-risk industry (as prescribed under by the regulations/law).

Can be set up by the employer voluntarily.

Collective bargaining

Collective bargaining

Bargaining system

Wage bargaining coverage

Collective bargaining in New Zealand/Aotearoa predominantly takes place at the local or company level (OECD and AIAS, 2021), with no co-ordination and no (or very limited) influence by the government. There are no legal provisions for mandatory extension of collective agreements to non-organised employers, nor is there a functional equivalent.

Collective bargaining is not entirely voluntary. First, a union or employer can initiate bargaining by giving the other parties a bargaining notice. If a party receives a notice meeting the requirements, they have to enter into bargaining. Second, the ERA 2000 (part 1, subsection 1(a)) requires the parties to negotiate in ‘good faith’. This means being active, constructive and not deceptive or misleading in their relations with each other. Collective agreements can be no longer than three years, and strikes cannot occur while a collective agreement is in place.

The Code of Good Faith for collective bargaining notes that the bargaining process should take account of tikanga Māori (Māori customary values and practices) and that bargaining should observe any cultural differences or protocols in the bargaining environment. If bargaining is not going well and a party wants help from the employment mediation service, they can seek that consideration of tikanga Māori or other cultural practices to be included (Employment NZ, 2021c).

Collective bargaining coverage of employees

According to the OECD and AIAS (2021), collective bargaining density in New Zealand/Aotearoa was 17.7% in 2018 (up from 15.9% in 2016), placing the country towards the bottom of the OECD. Indeed, New Zealand/Aotearoa has one of industrialised countries’ greatest levels of decline in collective bargaining coverage since the 1970s, with the ECA 1991 and the country’s emphasis on enterprise-level collective bargaining often seen as key influences, while the ERA 2000 and ERA amendments have not produced a significant positive turnaround. However, many terms and conditions in CEAs are extended to non-union employees ‘in the form of what are properly IEAs’ (Blumenfeld et al., 2021).

Several years after the ECA’s passage in 1991, collective bargaining in New Zealand/Aotearoa became a primarily public sector phenomenon, and it remains as such. Blumenfeld et al. (2021) observe that, while the overall number of jobs decreased by 1.1% in the last year, collective agreement coverage declined by only 0.7% due to a steady increase in public service coverage that kept pace with job growth. In the year to June 2021, collective bargaining coverage in the public sector, which accounts for around 20% of employees on CEAs, rose by 0.4% against a 4.5% decline in public service jobs. This followed an increase in jobs filled in the public sector between 2019 and 2020, which, the authors suggest, could reflect the use of temporary staff (particularly in health and social assistance) amid the pandemic. However, in the private sector, collective bargaining coverage fell by 2.5% (from an already-low level), while the number of private sector jobs fell only marginally (0.1%) over the last year.

As noted, since the ERA 2000, only union members can be covered by a CEA. However, around one in 10 of those who believe they are covered by a collective agreement are not union members. This might be because many collective agreements in New Zealand/Aotearoa permit employers to ‘pass on’ the same terms to all or part of the non-union workforce.

Collective bargaining coverage of employees, public and private sectors

Year

2017

2020

2021

Private sector

9.2

10.0

7.5*

Public sector

58.2

60.0

56.0

Total

18.2

18.6

19.0

Sources: 2017 figures c alculated from Blumenfeld et al. (2017); 2020 sector figures calculated from Blumenfeld et al. (2020); 2020 overall coverage figure calculated from OECE and AIAS (2021); all 2021 figures calculated from Blumenfeld et al. (2021)

*Note: Blumenfeld et al. (2021) do not provide the private sector collective bargaining coverage figure for 2021. However, they note a 2.5% decrease in that year, and Blumenfeld et al. (2020) noted coverage of 10% for 2020.

Bargaining levels

Levels of collective bargaining

 

National level (intersectoral)

Sectoral level

Company level

 

Wages

Working time

Wages

Working time

Wages

Working time

Principal or dominant level

-

-

X (public)

X (public)

X (private)

X (private)

Important but not dominant level

-

-

-

-

X (public)

X (public)

From 2013 to 2019, the proportion of employees covered by MECAs was just over one-third. In 2020, the figure climbed to 42%, where it remains – its highest level since 1995. Over the last 20 years, most MECAs are with single unions. They form 54% of agreements in the public sector but just 7% of private sector agreements. Conversely, single employer collective agreements (SECAs) with a single union form 75% of private sector agreements and 34% of public sector agreements (Blumenfeld et al., 2021).

Union membership and collective bargaining decline has contributed to low wage and productivity growth and rising inequality, the premise for the government’s proposed Fair Pay Agreements (FPA) system (see pay below).

Articulation

Articulation allows firm-level agreements to negotiate wages and working conditions with a general framework negotiated at a higher level. However, in New Zealand/Aotearoa, there are no formal mechanisms that link different levels of bargaining.

Coordination

No formal mechanisms exist for the coordination of bargaining, though informal benchmarking may be deployed by any party. However, the government wants the proposed FPA system to create sector-wide coordination (MBIE, 2021b).

Extension mechanisms

The only legal extension mechanism applies at individual level. Any new employee that is appointed, where a CEA is in place, must be employed under the agreement’s terms and conditions for the first 30 days of employment, even if they are not a union member. The parties may also agree that their CEA extends to non-union employees (a process of ‘passing on’). The OECD and AIAS (2021) note that there are no legal provisions for mandatory extension of collective agreements to non-organised employers, nor is there a functional equivalent.

Derogation mechanisms

No data are available, but such mechanisms are likely to be rare.

Expiry of collective agreements

The ERA 2000 requires CEAs to exist for a specific term of up to three years, with some exceptions. An expiry date may be entered, or termination may be linked to a specific event (such as the completion of a project). However, if bargaining for a replacement agreement is initiated prior to termination, then the agreement will remain in force for up to 12 months to allow a new agreement to be negotiated. Uncertainty during the pandemic seems to have halted a trend toward longer CEAs since the GFC (2008–10). According to Blumenfeld et al. (2021), longer-term agreements of at least 24 months cover nearly 80% of employees on CEAs. The most common term is 36 months, the maximum allowable under the ERA. However, the temporary extension of collective bargaining timeframes, mandated as part of the government’s COVID response, remains in effect.

Peace clauses

Peace clauses are effectively automatic during the life of an agreement. Employees cannot legally go on strike, or be locked out, if there is a current CEA or if fewer than 40 days have passed since bargaining was initiated.

Other aspects of working life addressed in collective agreements

The main issues that are covered by CEAs are wages, hours, overtime and other penal rates, as well as leave. In terms of pay, a growing proportion of agreements in New Zealand/Aotearoa link pay increases to performance or productivity. This is particularly the case for employees on (larger) collective agreements in the public sector. However, around one-third of all employees and two-thirds in the private sector currently have no performance or productivity payments stipulated in their CEAs (Blumenfeld et al., 2021). Since the introduction in 2007 of ‘KiwiSaver’, the state-sponsored workplace pension scheme, pensions are commonly included in CEAs.

Apart from pay and hours of work, CEAs also commonly cover training, occupational health and safety, and redundancy. In 2021, 91% of employees on CEAs have some provision for training and skill development – external, internal or a combination (Blumenfeld et al., 2021). Health and safety is normally included in CEAs, traditionally covering the basics, such as wearing protective clothing.

New Zealand/Aotearoa is unusual for having no statutory provisions for redundancy notice or pay, so CEAs will tend to stipulate this. The usual agreement for compensation is six weeks’ pay for the first year of service, which covers two in five employees entitled to redundancy, and more than 60% are entitled to at least two weeks’ compensation for each additional year. Other provisions relate to employer outplacement and other support in redundancy situations. Significantly, in many industries that have experienced job losses during the COVID crisis, redundancy entitlements are relatively small.

Industrial action and disputes

Industrial action and disputes

Legal aspects

In New Zealand/Aotearoa, the law governing the regulation of industrial action is the ERA 2000. Strikes and lockouts are legitimate forms of industrial action parties use to advance their bargaining aims. They are also deemed lawful where those striking or locking out have reasonable grounds for believing health or safety is being compromised. Under Section 82 of the Act, before a strike may proceed a union must hold a secret ballot of its members. The conditions when employees cannot strike or be locked out include when a collective agreement is in place, when the right notice has not been given in an essential service, in relation to a personal grievance or dispute, and when it is against a court order. When a strike or lockout is not legal, a party can apply to the Employment Court for an injunction to stop it, or to sue for any losses caused. The duty of ‘good faith’ continues with a strike or lockout, meaning that communication between the parties should be accurate and the parties should be trying to resolve their issues (Employment NZ, 2021d).

A significant change was brought in by the Employment Relations Amendment Act 2018 – reversing an earlier amendment to the ERA 2000 – whereby employers can no longer deduct pay in response to partial strikes (Employment NZ, 2019a).

Industrial action developments 2016–2020

Industrial action developments

 

2016

2017

2018

2019

2020

Working days lost per 1,000 employees

-

-

-

-

-

Person-days of work lost *

195

370

192

142,670

613

Work stoppages *

3

6

143

159

112

Source: *Employment NZ (2021e)

Stats NZ no longer collects strike-specific data, but work stoppages, submitted to the MBIE under the ERA 2000, combine strike and lockout figures. Stats NZ also records total working days lost each year and estimated loss in wages and salaries.

Between 2014 and 2016, stoppages and other measures declined to near-historic lows. However, there was a strong upsurge of strike action following the election of the Labour-led government in late 2017. At least 70,000 people walked out in 2018, including nurses, teachers, bus drivers, port workers, fast-food workers, retail workers, steel workers and public servants (Boraman, 2019). In 2019, the situation grew worse, with 50,000 teachers repeatedly striking, and doctors, nurses and allied health staff also taking significant industrial action that year. Indeed, as the above table shows, in 2019, total stoppages rose to 159 and involved an estimated 142,670 person-days of work lost. In 2020, the stoppage number reduced but was still relatively high at 112 – however it involved just 595 employees at an estimated NZD 120,000 in lost wages and salaries (Employment NZ, 2021e). The outbreak of the COVID-19 pandemic in 2020 with ensuing lockdowns and concerns for ongoing employment led to this marked reduction in the scale of activity (Employment NZ, 2021e).

Dispute resolution mechanisms

The current model of workplace dispute resolution in New Zealand/Aotearoa may be characterised as statute-based, comparatively formal, and (despite the best efforts of all concerned) ‘inherently confrontational’ (Jülich and Cox, 2013).

The ERA 2000 groups employment conflict, disputes and grievances under the term ‘employment relationship problems’, in an attempt to merge rights and interest disputes. This is to address collective and individual concerns. There is a focus on self-determination, whereby employment relations parties collaborate to resolve their employment disputes among themselves and in ‘good faith’, encouraging productive relationships. However, although mediation has been the consistent dispute resolution process provided by the state for over 100 years, resorting to legal causes of action rather than dialogue has remained the preferred option (Greenwood, 2016).

Individual dispute resolution mechanisms

If a dispute cannot be settled internally, individuals can take it to the MBIE’s Employment Mediation Services or to independent mediators, regardless of whether it involves a personal grievance. A mediator from MBIE’s mediation service can implement a range of different procedures, ‘structured or unstructured, or do such things as he or she considers appropriate to resolve the problem or dispute promptly and effectively’ (ERA 2000, Section 147(2)(a)). The aim is to move the parties and employment relations institutions from positional bargaining to an integrative, problem-solving approach. However, international conflict management literature has challenged the fairness and effectiveness of these processes, claiming they are symptomatic of the rise of individualism (Greenwood, 2016).

Where mediation is rejected, the dispute may be escalated to the courts. The Employment Court hears and determines employment dispute cases, including challenges to the Employment Relations Authority, questions of interpretation of law and disputes over strikes and lockouts. The authority helps to resolve employment relationship problems by examining the facts and making a decision based on the merits of the case, not on technicalities.

Collective dispute resolution mechanisms

Unions and employers must bargain in good faith, but if negotiations break down or the parties deadlock, there are a number of processes before litigation should be considered. Parties, similarly to individuals, can access MBIE services including negotiation advice from its call centre, free mediation services, early assistance mediation, settlement mediation, and sign-off for recorded settlement.

For collective disputes, union and employer parties may agree that collective bargaining has ended and stop negotiating. A strike or lockout may re-start negotiations. One or more of the bargaining employers and unions can ask the Authority for a neutral, adjudicated determination or facilitated bargaining. If there is a serious and sustained breach of good faith and other reasonable alternatives have been exhausted, the parties can apply to the Authority to fix the terms of a binding and enforceable CEA (Employment NZ, 2019f).

Under the ERA 2000, the Employment Court has full and exclusive jurisdiction in relation to torts and injunctions concerning strike or lockout activity.

Use of alternative dispute resolution mechanisms

In New Zealand/Aotearoa, alternative dispute resolution processes are commonly seen to include negotiation, mediation, conciliation and arbitration, although these are increasingly provided for in legislation. Restorative justice has also emerged, influenced by a growing acknowledgement of the limitations of the western criminal justice system and a rethinking of the role of justice in the community, extending the stakeholders involved, aiming to meet the needs of ‘victims’ and addressing a dispute’s underlying causes (Zehr, 2002).

Restorative practices at work, or workplace conferencing, can be used to address many conflicts relating to the workplace that may or may not break the law (for example, with regards to interpersonal relationships). One organisation, Workplace Conferencing – although still in its early development – has provided restorative conferencing for the last decade, successfully addressing conflict around issues such as customer complaints and workplace bullying. Restorative practices can be used to address individual and group conflicts, including those concerning external parties. Jülich and Cox (2013) argue that they could ‘provide an opportunity for unions to demonstrate their commitment to co-operative and good faith bargaining’ but are not a ‘cheap fix’ or a ‘one-off’ approach.

A tradition-based approach to mediation reflects the indigenous Māori consensual decision-making process, with community participation and a restorative justice orientation. This community model is less likely to be confidential and may have elements of kōrero tahi – participatory talking together in a circle (Metge, 2001). Good faith negotiation in this process incorporates respect for cultural differences, drawing inspiration from the partnership principle embedded in the Treaty of Waitangi (Greenwood, 2016).

Use of dispute resolution mechanism

  2016 2017 2018 2019 2020
Mediation (completed requests) – MBIE * 12,100 Not available Not available Not available Not available
Employment Relations Authority cases ** 798 751 729 731 538
Employment Court cases filed *** 179 164 194 202 141

Sources: *MBIE (2016, cited in Huang, 2016); **Employment NZ (2021g); ***Employment Court of NZ (2021).

Mediation is one of the most common ways to resolve employment disputes in New Zealand/Aotearoa, and almost all employment cases go to mediation first. Completed mediation requests include all ways that mediation services can be provided. Only some involve direct meetings (approximately 4,000 per year).

Individual employment relations

Individual employment relations

Start and termination of the employment relationship

In New Zealand/Aotearoa, an employee is characterised as ‘a person who has agreed to be employed to work for some form of payment under a contract of service’, including for wages, salary, commission or piece rates (Employment NZ, 2021h). Employees can be permanent, fixed term, casual, homeworkers, seasonal workers, or on probation or trial periods in a full or part-time capacity. The characterisation of an ‘employee’ excludes contractors and volunteer workers.

Requirements regarding an employment contract

By law, every employee must be provided with a copy of their IEA or CEA. In New Zealand/Aotearoa, an IEA must include:

  • names of the employer and the employee
  • description of the work to be performed
  • location
  • hours to be worked
  • wage or salary
  • statement that the employee will receive (at least) time-and-a-half payment for working on a public holiday
  • public holiday increased payment rate
  • procedures for dealing with employment relationship problems, including personal grievances
  • nature of employment (permanent or fixed term)
  • any other agreed matters such as trial periods, availability provisions, etc.

Minimum rights, such as minimum wage and annual holidays, are legal requirements, and apply even when they are not articulated in the employment agreement.

For the first 30 days, the IEA must contain terms consistent with a CEA if this is in place. An IEA can be changed by agreement by the employee and employer (Employment NZ, 2021i).

There is no minimum age for employment in New Zealand/Aotearoa. However, people under the age of 16 cannot work during school hours, after 10pm, or before 6am on school days. In addition, employment should not prevent or interfere with attending school (Employment NZ, 2019b).

Dismissal and termination procedures

Employment relationships may end in several ways, including resignation, retirement, dismissal or redundancy. Notice must be given by one party (the employee or employer) to the other. If the employment agreement does not have a notice period, then fair and reasonable notice must be given, which is usually between two to four weeks in duration. An employer can choose to agree with an employee to waive all or some of their notice period if the employee asks or agrees (the employee will not be paid for the portion of notice period that they did not work) or put the employee on ‘garden leave’ (a period when an employee retains their employment, receives full pay but does not report to work) (Employment NZ, 2021j).

Employers who want to dismiss an employee must:

  • act in good faith
  • have a good reason
  • follow a fair and reasonable process
  • have an open mind when dealing with problems, to ensure outcomes are not pre-determined

Good faith requires the parties not to act in a misleading or deceptive way, and to be responsive and communicative. Before making a decision that may result in employees losing their jobs, the employer must give the affected employees sufficient information to be able to understand the proposal, and then give them a proper opportunity to comment. If any of the above conditions are not met, an employee could make a personal grievance claim against the employer (Employment NZ, 2021k).

Entitlements and obligations

Under employment law in New Zealand/Aotearoa, both employers and employees have certain rights and obligations, and an employer is required to ensure that the workplace is safe for employees. An employer may ask a new employee to undertake a 90-day trial in a new job, but an employee does not have to accept a trial period. If a trial period is accepted, a written agreement must be provided before the employee starts work. Only employers with fewer than 20 employees can use trial periods. A probationary period can be used for an employee who already works for an employer but wants to try a new role, and it is not limited to 90 days. An employee cannot bring a personal grievance for unjustified dismissal at the end of a trial period but can do so in relation to a probationary period (Employment NZ, 2021l).

Employees receive a minimum of four weeks of annual leave and can ask to exchange one week of leave for renumeration. If an employee has been working for less than one year, they are not entitled to annual holidays, but their employer may permit them to take some annual holidays in advance. In addition, there are 11 public holidays in New Zealand/Aotearoa. If an employee works on a public holiday, they receive extra pay and may be able to take the holiday on another day (take a day in lieu). Employees are also entitled to a certain amount of paid leave for other reasons. For example, an employee can take leave if they are experiencing, or have experienced, family violence (Employment NZ, 2021m).

In the pandemic context, Employment NZ (2021n) observes that it can be ‘difficult to navigate a complex and rapidly changing situation such as the COVID-19 pandemic. One of the key challenges is working out employee entitlements to leave when the worker cannot go to the workplace or work from home.’ Employers should not require or knowingly allow workers to come to a workplace if they are sick with COVID-19 or required to self-isolate under public health guidelines. If they do, they are likely to be in breach of their duties under the Health and Safety at Work Act 2015 (HSWA). The employer and employee should seek to reach agreement in good faith on what approach will be taken to their leave entitlement (Employment NZ, 2021n).

Parental, maternity and paternity leave

In New Zealand/Aotearoa, parental leave is not divided into maternity and paternity leave divisions. Leave is based on identifying the primary caregiver, and entitlements depend on either six- or 12-month eligibility criteria. Employees can calculate their parental leave entitlement by using the parental leave eligibility tool. Primary carer leave is available to the following:

  • female employees who are having a baby, or their spouse or partner. The spouse or partner can have all or part of the birth mother’s parental leave payments transferred to them;
  • employees who will have primary responsibility for the care, development and upbringing of a child under the age of six on a permanent basis, through adoption, 'home for life' or whāngai (a customary Māori practice whereby a child is raised by someone other than their birth parents, usually a relative);
  • an employee who has a spouse or partner and so will need to choose to be the primary carer.

Paid parental leave has been rising incrementally in New Zealand/Aotearoa since parliament passed a bill in 2017. From June 2020, primary carer leave can be taken for up to 26 weeks and must be taken in one continuous period. It cannot be taken if an employee has already taken any period of parental, or similar, leave in relation to that child. A spouse or partner meeting the six-month time criteria may take one week’s unpaid partner’s leave; those meeting the 12-month time criteria may take two weeks’ unpaid partner’s leave.

It is important to determine who will be considered the primary carer, as their entitlements and those of their partner are different, regardless of gender. If employment agreements or workplace policies include parental leave provisions, these will apply only if they are better than or the same as those provided by law (Employment NZ, 2020).

Sick leave

All employees, including part-time workers, are entitled to 10 days’ sick leave per annum. Conditions for sick leave entitlement come into place when an employee has worked six months of continuous employment with the same employer or has worked for the employer for six months for an average of 10 hours per week, with at least one hour in every week or 40 hours in every month. Minimum sick leave entitlements increased from five to 10 days per year from 24 July 2021. Employees receive the extra five days per year when they reach their next entitlement date, either after reaching six months’ employment or on their sick leave entitlement anniversary (Employment NZ, 2021o).

For each 12-month period after meeting the conditions, each employee receives at least 10 days’ sick leave. If, in any year, the employee does not meet the criteria, then they are not entitled to any new sick leave but can use any outstanding leave balance that may have carried over. An employee may re-qualify for sick leave as soon as the criteria are met. Employees can accumulate up to 20 sick days a year. If an employee has no sick leave left, they and their employer can agree for the employee to use sick leave in advance, use some of their annual holidays or take unpaid leave (Employment NZ, 2021o).

Employers, including self-employed people, and employees need to meet certain criteria to apply for NZ’s COVID-19 Leave Support Scheme. An employee or self-employed person is eligible if they are sick with COVID-19 and self-isolating; have been identified as someone who has been in close contact with someone with COVID-19 and told to self-isolate by a health official; are the parent or caregiver of a dependant who has been told to self-isolate and who needs support to do so safely; or are considered ‘higher’ risk if they contract COVID-19. The Short-Term Absence Payment from Work and Income/Te Hiranga Tangata (Ministry of Social Development (MSD)/Te Manatū Wahakahiato Ora, 2021) is available to employers, but they cannot receive more than one COVID-19 payment for the same employee at the same time.

Retirement age

There is no official retirement age in New Zealand/Aotearoa, but most people stop working and receive NZ Superannuation and other pension entitlements when they turn 65. An employee can also withdraw all their savings from the KiwiSaver when they turn 65. If an employee joined KiwiSaver before 1 July 2019 and was aged 60–64, they were locked into KiwiSaver for five years (i.e. they could not withdraw their funds when they were 65). As of 1 April 2020, an employee can either opt out any time after turning 65 (and withdraw savings) or keep their funds in KiwiSaver for the full five-year term (and withdraw them after that) (Inland Revenue/Te Tari Taake, 2021).

Pay

Pay

Minimum wages

Through the IC&A in 1894, New Zealand/Aotearoa was the first country to introduce general minimum wage laws, although the lower rate for women was not abolished until 1977. Minimum wage rates are now set through an Order in Council under Section 4 of the Minimum Wage Act 1983. The Act requires the Minister for Workplace Relations and Safety to review the minimum wage rates by 31 December each year.

The ILO recommends that minimum wage rates are reviewed regularly to preserve their purchasing power, and to provide certainty and predictability for employers. New Zealand/Aotearoa is a signatory to the ILO’s Minimum Wage-Fixing Machinery Convention 1928 (No. 26), which includes a requirement to ensure an adequate minimum wage rate. The minister takes advice from ministry officials, who draw on research and submissions before providing their review and recommendations. Any changes to minimum wage rates traditionally come into effect on 1 April.

By international standards, the minimum wage for adults in New Zealand/Aotearoa is relatively high, whether measured in purchasing power parity terms or relative to median hourly wages (74% in 2021). Annual growth has exceeded general wages and inflation for nearly 20 years. However, the Labour-led coalition government promised to increase the adult rate to NZD 20 by 2021 (see table). This was in the context of rising living costs, especially housing, which impacted groups most affected by the minimum wage (such as young people, Māori and Pacific peoples), as well as unemployment. After the Labour party was re-elected in 2017 with an absolute majority, the government announced that it would pay its direct employees at least the living wage rate from 2018 (the living wage is NZD 22.75 an hour in 2021, as calculated by the NZ Family Centre Social Policy Unit).

Historically, the adult minimum wage applied to all workers aged 20 or over. In 1994, a lower ‘youth rate’ minimum wage of NZD 3.68 per hour was introduced for workers aged 16 and 17 (compared with the full rate of NZD 6.125). The adult age was changed to 18 in 2001 and to 16 in 2008, when the youth rate was replaced by a ‘new entrant’ rate. Employers could apply this to workers aged 16–19 in the first six months of their employment or engaged in an industry training programme.

Minimum wage levels, 2009–2021 (NZD/hour)

 

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Adult rate

12.50

12.75

13.00

13.50

13.75

14.25

14.75

15.25

15.75

16.50

17.70

18.90

20.00

% change

4.2

2.0

2.0

3.8

1.9

3.6

3.5

3.4

3.2

4.8

7.3

6.8

5.8

Lower rate

10.00

10.20

10.40

10.80

11.00

11.40

11.80

12.20

12.60

13.20

14.16

15.12

16.00

Source: MBIE (2018)

The training rate, introduced in 2013, currently applies to those aged 20 or over engaged in an accredited industry training programme (see table). The new entrant (now ‘starting out’) and training rates are both mandated to be no less than 80% of the full minimum wage rate. These lower rates are not commonly used, however. According to the National Survey of Employers 2018–19, the training rate is used by only 3% of eligible employers and fewer than one in five (16%) applied the starting out wage (or a wage between this and the adult rate) for any of their eligible employees (MBIE, 2019). In contrast, 27% of employers paid the adult minimum wage to one or more of their employees, rising to 43% for those in retail and hospitality.

Current minimum wage rates for adults, new entrants and trainees (NZD)

Type of minimum wage

Per hour

8-hour day

40-hour week

80-hour fortnight

Adult

20

160

800

1,600

Starting out

16

128

640

1,280

Training

16

128

640

1,280

Source: Employment NZ (2021p)

Workers paid the minimum wage are disproportionately young people (61%) and part-time workers (62%). Women (60%), Māori (17%) and Pacific (5%) workers, people without formal qualifications, workers with disabilities and refugees or migrants are more likely to be paid the minimum wage than other groups of workers. Workers paid the minimum wage are more likely to work in hospitality and retail industries (18.6% and 9.1% respectively), compared with an overall average of 3.5% of workers (71,500 workers). It is worth noting that a higher proportion of workers are on minimum wage outside the main cities of Auckland and Wellington.

Income (Pay As You Earn) tax is deducted from wages before an employee is paid. Another, much smaller, deduction is for the Accident Compensation Corporation (ACC), which runs the insurance system in New Zealand/Aotearoa, covering costs from injury. ACC will compensate for a large portion of lost wages if a worker is injured.

In May 2021, the government announced the design of an FPA system. This system, informed by the FPA Working Group, public consultation, the CTU and BusinessNZ, would enable employees and employers in a given industry or occupation to negotiate new minimum standards. Unions will initiate the FPA process by meeting a representation threshold of support from 1,000 workers in an industry or 10% of the total number of workers in that industry, or a public interest test. If the coverage substantially expands during bargaining, the public interest or representation test will need to be retested. The initiating union(s) can decide which work they want covered. Contractors are not currently included, and penalties will be applied to employers who try to avoid FPA coverage by misclassifying employees as contractors (MBIE, 2021b).

The bargaining parties will be supported with training and a government-provided bargaining support person. Government will also contribute up to NZD 50,000 per bargaining side, with additional funds if the side has low rates of membership of a union or industry group. Funding for this support is based on four FPAs per year (if more are initiated, support may be rationed and prioritised). The CTU and BusinessNZ will each be funded NZD 250,000 per year to support their coordination roles in the FPA system. If bargaining parties encounter difficulties, mediation will help to resolve them, and the Employment Relations Authority can also make recommendations. If the parties reach an impasse, the ERA will set the FPA’s terms by determination (MBIE, 2021b).

In the short term, the government wants FPAs to increase bargaining power for employees; ensure that minimum pay and employment terms reflect the needs of sectors covered by an FPA; create an environment where businesses compete to deliver better products and services; incentivise businesses to invest in training and innovation; and create sector-wide coordination. Long term, it intends for FPAs to boost living standards for employees and their families; spread the benefits of increased productivity more widely; improve economic productivity; and establish better dialogue between employers and workers (MBIE, 2021c). While some suggest that such a system has the potential to reinvigorate collectivism in employment relationships (e.g. Kent, 2021) and recalibrate the level and scope of the bargaining landscape, arguably it could be a challenge for employers to overcome differences in their scale, modus operandi and location to reach an FPA.

Working time

Working time

Working time regulation

Standard working time in New Zealand/Aotearoa is between 7am and 7pm, Monday to Friday. Any agreed hours of work, or indication of the arrangements relating to the time that the employee is to work, must be in the employment agreement. Employment agreements must fix the maximum number of work hours at not more than 40 hours per week (excluding overtime), unless the employer and employee agree otherwise. If the maximum number of hours (excluding overtime) is less than 40 hours, the parties must try to fix them to ensure that they are worked on no more than five days of the week (Employment NZ, 2019b).

The employer and employee must be clear about, and agree upon, what is considered work. Activities such as on-the-job training, opening and closing of business, meeting attendance and tidying up at work are all considered part of such, and employers must ensure that employees are paid for the work activities that they perform.

Reflecting a culture of relatively long working in New Zealand/Aotearoa, 15% of employees work very long hours, more than the OECD average of 11% (OECD, 2017). In terms of average annual hours actually worked in 2020, for New Zealand/Aotearoa, this was 1,739 hours per worker, above the OECD figure of 1,687 hours per worker (OECD, 2021c), though a decline in such was apparent for both NZ and the OECD in recent years, reflecting the pandemic context.

Average annual hours actually worked per worker, New Zealand/Aotearoa and OECD, 2010–2020

Source: OECD (2021c)

Moreover, longer working hours have not translated into higher productivity. In the year to March 2020, New Zealanders worked 34.2 hours per week, as compared with 31.9 hours on average in other OECD countries, and produced NZD 68 of output per hour – less than the NZD 85 per hour in other OECD countries (NZ Productivity Commission, 2021). Correlating with this, NZ full-time workers devoted 62.5% of their day (an average of 14.9 hours) to personal care and leisure, slightly less than the OECD average of 15 hours (OECD, 2021d). The Employment Standards Legislation Act 2016 addresses zero-hour contracts, requiring the employer and employee to agree to, and set, the number of hours in the employment agreement, and have clarity on their mutual commitments (Community Law, 2021a). Employers cannot have an availability clause for employees (choosing when to provide work and obliging employees to accept this) unless there are exceptional circumstances. If an employer does not have such a clause but asks the employee to work at a time that is outside of the agreed time of work, then the employee can refuse.

Non-standard working time includes evening, night, early morning and weekend work. Overall, 25- to 34-year-olds form the largest group of those who work non-standard hours, and men tend to work more such hours than women (Stats NZ, 2019b).

During all COVID-19 alert levels, workers must be paid (at least the minimum wage or more if the rate in their employment agreement is higher) for any work they do, regardless of whether they are working from home or at their workplace. An employer can propose reduced hours as an alternative to redundancy but must discuss it in good faith and have the employee’s agreement. The COVID-19 Leave Support Scheme is available for employers to help pay employees who cannot come into work as per Ministry of Health guidelines or are not able to work from home because of the nature of their work (see also Individual employment relations – Sick leave).

Overtime regulation

In New Zealand/Aotearoa, overtime is productive work outside standard paid hours and is paid at a higher rate. This might include additional time at work, work performed at home or work undertaken in transit. Most employees are entitled to a premium for overtime work, although this is not required by law.

The hours agreed to in an employment agreement are generally only those when an employee needs to be present at work. Many employees receive payment if their employer asks them to work more than their normal hours. Whether this overtime is factored into the employee’s salary or paid at their normal or a higher rate of pay, the arrangement needs to be agreed by the employer and employee and included in the employment agreement. When an employee works more hours than those for which they are paid, they should take the matter up with their employer (Employment NZ, 2019b). Furthermore, employers must take steps to ensure that employees’ work hours do not jeopardise their health or well-being.

Part-time work

A part-time worker in New Zealand/Aotearoa usually works for less than 30 hours per week in all jobs. Women tend to do more part-time jobs than men, and men tend to do more full-time jobs than women. In 2019, there were 60% more female part-time workers than men, and 30% more male full-time workers than women, in the country. In 2020, the full-time gender ratios stayed nearly the same, but there was a 2% increase in male part-time workers (StatsNZ, 2021b).

Hours worked by sex in 2017 and 2020, December quarters

Hours worked per week (2017)

Male

(000s)

Female

(000s)

Hours worked per week (2020)

Male

(000)

Female

(000)

0

123.0

137.1

0

66.5

86.4

1–9

42.6

88.4

0–19

40.8

91.1

10–19

62.0

123.1

10–19

67.3

115.8

20–29

86.1

178.7

20–29

96.5

175.2

30–34

35.1

123.8

30–34

97.5

148.2

35–39

70.6

98.5

35–39

80.2

118.1

40

385.7

281.9

40

443.4

311.9

41–44

55.5

37.1

41–44

61.4

35.2

45–49

152.8

65.5

45–49

166.5

78.4

50 or more

326.4

103.1

50–59

339.7

126.6

Total

1,399.9

1,237.1

Total

1,459.7

1,287.0

Source: Stats NZ (2021b)

Workers employed on a part-time basis (0–19 hours) tend to be more satisfied with their jobs than those who work full-time (40–44 hours. Overall, as work hours increase, work–life balance decreases (Stats NZ, 2019b).

Involuntary part-time

Involuntary part-time workers can be defined as those working part-time because they are unable to find a full-time job. The table shows that, in New Zealand/Aotearoa, the involuntary part-time employment rates for men, women and all those aged 15–24 have been increasing since XXXX, except in 2019, with the rate for women higher than for men. New Zealand/Aotearoa largely follows other OECD country patterns, although younger workers (15–24 years) work far more than their counterparts in other OECD countries.

Working hours by age and sex in New Zealand/Aotearoa, 2017–2020

 

2017

2018

2019

2020

Men (25–54 years)

37.7

36.6

35.1

39.4

Women (25–54 years)

26.1

26.0

23.3

28.0

All persons (25–54 years)

28.0

27.8

25.4

30.2

Men (15–24 years)

31.9

35.5

30.8

33.8

Women (15–24 years)

33.7

32.3

29.7

33.4

All persons (15–24 years)

32.9

33.6

30.1

33.6

Source: OECD (2021e)

Night work

Night work is a form of non-standard work that concerns hours worked outside 7am to 7pm, Monday to Friday (Stats NZ, 2019b). The table below (night work performed between 7 and 11pm) indicates that workers in retail and food services, professional, administrative and support services, and the education and healthcare sectors have the highest frequency of night work, whereas the financial and rental sectors have the lowest frequency.

Frequency of night work (7–11pm) in the last four weeks, by sector

Source: Stats NZ (2019b)

In contrast, the sector with the highest incidence of night work performed between 11pm and 5am is healthcare, followed by retail and professional services.

By occupation, total evening and night hours are highest for professionals – the largest occupation grouping. Occupations that involve technology are more likely to work during the evening and night hours, compared with those in other occupational groups.

Total working evenings and night hours in the last four weeks, by occupation

Source: Stats NZ (2019b)

Shift work

The ERA 2000 defines shift work as ‘a period of work performed in a system of work in which periods of work are continuous or effectively continuous, and may occur at different times on different days of the week’.

The Survey of Working Life (SoWL) 2018 found that the least common non-standard time was night work (between 11pm and 5am), with only 12% of people having worked at least one night shift in the previous four weeks. Individuals who worked night shifts were the most likely to want different hours, with 35% indicating they would prefer to work at a different time, compared with 12% of workers who worked during the day. One-fifth of people working during non-standard times experienced difficulties because of their work times, including disruption to sleep, health problems and reduced time with family members (Stats NZ, 2019b).

Weekend work

According to the SoWL 2018, workers aged 15–24 are the largest group working on the weekend, with more males than females doing so (see table).

Weekend working, 2018, by age group and sex

 

Age group (years)

Male

Female

Total employed

 

15–24

25–34

35–44

45–54

55–64

65+

 

 

 

 

(000s)

Worked 1–4 Saturdays/Sundays in all jobs in last four weeks

14.9

13.4

12.2

12.2

8.8

5.3

20.1

19.0

30.7

Worked 5–8 Saturdays/Sundays in all jobs in last four weeks

11.7

11.3

8.5

10.2

8.1

5.1

15.7

16.0

23.6

Worked Saturdays/Sundays in all jobs in last four weeks (total)

26.6

24.7

20.7

22.4

16.9

10.4

35.8

35

54.3

Source: Stats NZ (2019b)

For employees on CEAs, the latest figures show that fewer than half are entitled to extra payment for working weekend hours as part of their ordinary working hours. This is especially the case in food retailing. Meanwhile, public sector employees are more likely to receive penal rates (Blumenfeld et al., 2021).

Rest and breaks

Recent changes to the regulation on rest and meal breaks in the workplace, under section 69ZD of the Employment Relations Amendment Act 2018, mean that employers must provide their employees with breaks according to the number of hours worked. For example, if a work period is 2–4 hours, an employee is entitled to one 10-minute paid rest break. For a work period of 4–6 hours, an employee is entitled to one 10-minute paid rest break and one 30-minute unpaid meal break. Where the work period is 6–8 hours, an employee is entitled to two 10-minute paid rest breaks and one 30-minute unpaid meal break. The employer and employee should mutually agree on the breaks, with the minimum time for rest and meal breaks being 10 and 30 minutes respectively.

For employers, meals and unpaid breaks should involve the minimum unpaid time. However, if employees choose to take extra time off as a break, then they should be entitled to do so, on the condition that they also add the time taken to the end of their working day. If an employee would rather take compensation over a break, this can be negotiated based on their time and regular pay rate. Different mechanisms exist for rest and meal breaks for employees engaged in essential and national security services. Employers and employees should agree when the breaks are to be taken, and employers should accommodate their employees as much as is reasonably possible. If an agreement cannot be reached, an employer must provide breaks at specified times that are reasonable and practical (Employment NZ, 2021q). Mothers who are breastfeeding can ask for a break to feed or to express milk. In such cases, the employer and employees need to decide on the timings and the practical arrangements of the breaks. However, these breaks are unpaid (Employment NZ, 2019r).

Rests and breaks at work

Length of shift

Break entitlement

Timing of breaks

(so far as is reasonable and practicable, and unless agreed otherwise with the employer)

2–4 hours

10-minute paid rest break

Middle of work period

4–6 hours

10-minute paid rest break

One-third through work period

30-minute meal break

Two-thirds through work period

6–8 hours

10-minute paid rest break

Halfway between start of work and meal break

 

30-minute meal break

Middle of work period

 

10-minute paid rest break

Halfway between meal break and finish of work

More than 8 hours

10-minute paid rest break

Halfway between start of work and meal break

 

30-minute meal break

Middle of work period

 

10-minute paid rest break

Halfway between meal break and finish of work

 

Additional breaks for any time worked over 8 hours as shown above

Timing according to the length of the additional work period (see above)

Source: Community Law (2021a)

Working time flexibility

In New Zealand/Aotearoa, flexible work is defined as the ‘hours that allow an employed person to vary the time they start and finish work […]. This is often referred to as flexi-time or glide-time, and excludes one-off arrangements to vary a start or finish time; for example, because of an emergency at home’ (Stats NZ, 2019b).

Employees can seek flexible work schedules, locations and timings. An employer must consider an employee’s request and respond in writing within a month. The employer can decline the request, but is required to give a reason for their decision (Employment NZ, 2019s). Under Part 6AA of the Employment Relations (Flexible Working Arrangements (FWA)) Amendment Act 2007, certain employees can request a variation of their working arrangements if they are the carer of an individual. This arrangement can relate to the hours, days and place of work. Employers and employees can also seek flexibility around public holidays. Under the Holidays Act 1993, if an employee wants or expects to work on a public holiday, then they must be compensated in money and time. Requests to transfer can be made by either party and must be considered in good faith, and any agreement must meet the minimum set out in the law (Employment NZ, 2021t).

In the last decade, considerably more employees have gained access to flexible working hours. For employees on a CEA, the figure rose from 17% in 2010 to 40% in 2021 (Blumenfeld et al., 2021). With regard to working from home, the SoWL found that 33% of men were likely to do so compared with 35% of women (StatsNZ, 2019b). The highest number of people opting for this form of flexibility were 35–39 years old (47%). Working from home was least common for employees aged 15–19 and for community and personal service workers, and most common for parents and managers. For employees on a CEA, just 4% in 2021 have a clause pertaining to working from home, but this represents a big increase following the outbreak of COVID-19, particularly in the private sector (Blumenfeld et al., 2021).

The pandemic has reinforced or extended FWAs. During 2020, NZ Inland Revenue released ‘determinations’ to provide guidance to employers about working-from-home costs. These determinations are temporary (until 30 September 2021) while Inland Revenue considers a public statement on ‘new ways of working’. They allow an employer to provide a tax-free NZD 400 one-off payment to employees to purchase equipment to set up a home office unless employers can provide staff with office equipment for use at home. Determinations could simply be applied when employees needed to work from home 100% of the time, but as they return to the office, many employers have implemented hybrid policies whereby employees are able to choose where they work on any given day (PricewaterhouseCoopers NZ, 2021). According to Stats NZ, in 2020, more than 40% of people employed in New Zealand/Aotearoa did at least some of their work from home during the COVID-19 level 4 and level 3 lockdown (Carroll, 2020b).

From 4 to 21 March 2021, Work and Income’s Wage Subsidy was made available to help employers and self-employed people keep paying staff and protect jobs impacted by the COVID-19 alert level changes on 28 February 2021. Other supports for employers and the self-employed include the Leave Support Scheme and the Short-Term Absence Payment (Work and Income, 2021; see also Individual employment relations – Sick leave).

Health and well-being

Health and well-being

Health and safety at work

The Health and Safety in Employment Act 1992 (HSE) replaced several acts in New Zealand/Aotearoa with one overarching statute. Based on Alfred Robens’ model, it adopted a self-regulatory approach, placing duties on employers and workers along with designers, manufacturers and suppliers through additional regulations. Amendments to the HSE in 2002 incorporated participative processes, and the Act was broadened to include psychological hazards.

The Independent Taskforce on Workplace Health and Safety (2013) reported that the workplace health and safety system was failing. Consequently, the country underwent significant workplace health and safety reforms, and in 2015, the Act was repealed and replaced by the HSWA. The scope of the HSWA was extended to place obligations on directors and company owners to ensure health and safety standards are met. This was in response to the high incidence of fatalities in the workplace, as well as a mining incident in 2010 for which culpability could not be established due to the limitations of the HSE. The incident resulted in two independent reports (Royal Commission on the Pike River Coal Mine Tragedy, 2012; Independent Taskforce on Workplace Health and Safety Report, 2013) and the establishment of a government department – WorkSafe NZ – dedicated to workplace health and safety.

Since 1974, the ACC has administered a universal no-fault personal injury scheme, covering all work and personal injuries. The scheme is funded through levies and government contributions and removes the right to sue. It is targeted towards physical injury, and the extent of the cover provided is dependent on any existing health conditions. Whether the scheme is suitable in its current guise is now openly debated, particularly as most health hazards and diseases are not covered.

In 2003, the National Occupational Health and Safety Advisory Council (NOHSAC) was established to provide independent advice to the government on these issues. Data indicated that, in addition to the lack of a suitable surveillance system, work-related disease represented a 10-fold burden when compared with work-related injury (NOHSAC, 2004). Further reports elaborated on this core finding. However, the council was dissolved in 2008 during the global financial crisis.

The COVID-19 pandemic context has meant that all organisations need to review how they work to minimise the risk of transmission of the virus. The COVID-19 Public Health Response (Alert Levels 3 and 2) Order 2020 sets out public health requirements, identifying the controls businesses need to use to minimise the risk for workers, volunteers and other people affected by the work, such as customers. The controls required will depend on the alert level in the geographical area a workplace is subject to. There are also specific requirements for particular types of work. WorkSafe NZ has also developed guidance about operating safely at alert levels 2 and 3. Moreover, the HWSA 2015 requires businesses to ask their workers and health and safety representatives about health and safety issues rather than assume that they will speak up. If an employer knowingly allows a worker to come to the workplace when they are sick with COVID-19 or required to self-isolate, they are likely to be in breach of their duties under the Act. Specific guidance also exists on how to manage the risks of COVID-19 at work (Employment NZ, 2021u).

Health and safety-related absences from work

WorkSafe NZ’s system for work-related injury forecasting and targeting includes ACC data on injury claims that resulted in more than a week away from work. The data indicate a relatively consistent level of injuries when accounting for increases in workload and overall population until early 2020, coinciding with the outbreak of COVID-19, resultant organisational restructuring and New Zealand/Aotearoa’s first level 4 alert and national self-isolation from late March 2020 (see graph).

Injuries resulting in more than a week off work, September 2015–September 2020

 

Source: WorkSafe NZ (2021a)

Furthermore, the HSWA requires that WorkSafe NZ be notified if someone becomes seriously ill, or is seriously injured, as a result of work. The graph below shows the impact of COVID-19 organisational responses from early 2020. Similarly, it shows a drop in the incidence rate of work-related claims in 2020.

Non-fatal injuries and illnesses for all industries, September 2018–September 2020

 

Source: WorkSafe NZ (2021b)

Incidence rates for work-related claims, by year of injury and claim type, 2012–2020 (per 1,000 full-time equivalents (FTEs))

Year All claims (claims/1,000 FTEs) Claims involving entitlement payments (claims/1,000 FTEs)
2012 108 13
2013 108 14
2014 109 15
2015 108 15
2016 105 15
2017 101 14
2018 102 38
2019 99 39.6
2020 P 89 36

Source: Stats NZ (2021c)

By sector, health and safety reports highlight that agriculture and forestry, manufacturing and construction have higher rates of injuries than mining. The lowest rates of injuries are in the service sector, which reflects global patterns (Hennecke et al. 2021a).

A biennial survey on workplace wellness is conducted by BusinessNZ and a national private health insurer. While all four reports to date recognise the limitations of the small dataset, it is one of the few surveys to note the importance of considering well-being.

Number of staff responding to the BusinessNZ survey

Year

Public and private organisations

Permanent staff

Total respondents

2013

119

89,955

97,116

2015

113

97,837

116,218

2017

109

83,994

93,125

2019

99

106,234

121,252

Source: BusinessNZ (2019b)

The first report emphasised the importance of workplace well-being and the need to consider differences between private and public sector organisations, organisational size and the ageing workforce when managing it. The next three reports highlighted that absence from work was most likely to be due to illness or injury unrelated to the workplace, with caring for a family member or being dependent on relatives the second most common cause of absence. Stress has risen 23.5 % across businesses in the past two years, and the need for better stress management strategies was another key finding (BusinessNZ, 2019b). With COVID-19 exacerbating health and safety challenges at work and beyond, notable statistical changes in the incidence and nature of health and safety issues for employees are anticipated.

In the 2013 survey, 49% of staff reported that they are more likely to turn up to work when they are sick, whereas in 2019, this figure had reduced to 35%, despite advice to stay home (BusinessNZ, 2019b). Diversity Works NZ (2021) reports that 70% of employees in New Zealand/Aotearoa feel that the focus on well-being has increased within their organisation. Since the advent of COVID-19, the government has provided more assistance with workplace absences. All those who have had to self-isolate, have been severely sick, have been at risk of COVID-19 and/or have been taking care of sick children have been allowed sick leave (Community Law, 2021b).

Psychosocial risks

Psychosocial risks have only recently been considered at national level. Work stress came under the HSE in 2002, and the ACC is under increasing pressure to accept mental health claims. However, data on psychosocial risks are still relatively scarce. The SoWL 2018 measures workplace autonomy in relation to workers’ control over tasks, the organisation of work and their influence on decision-making. Only one in four workers reported having high levels of control across all three areas. These employees were more likely to be satisfied with their jobs (41%) than those who perceived a lower autonomy (27%). Workplace bullying has received more attention than the broader concept of psychosocial risk. According to the SoWL 2018, around 11% of workers had experienced discrimination, harassment or bullying in the past 12 months (Stats NZ, 2019b).

In 2018, the government produced the Health and Safety at Work Strategy 2018–2028, with an emphasis on ensuring mental health risks are addressed and included in the assessment of key health indicators. This commitment is promising, although similar initiatives in 2002 and 2003 were relatively short-lived. A 2018 government enquiry into mental health and addiction revealed the annual cost of serious mental illness is around NZD 12 billion annually, that greater assistance in the community is required to supplement the support provided by the government and the health system, and that current mental health resources are stretched to the point where continuation of care is inadequate, leading to an escalation of distress. The enquiry also found that unmet mental health needs resulted in worse outcomes for Māori and other minority populations than for the overall population (NZ Government, 2018). A health-oriented approach to the harmful use of alcohol and drugs is recommended.

Furthermore, employers and employees alike have found recent months the most stressful since the pandemic began to affect New Zealand/Aotearoa. A survey by Employment Hero of 1,000 employers and employees found most from each group were worried about their mental and physical health as well as their financial well-being. It found that working long hours, ongoing uncertainty about lockdowns and the inability to plan were taking a toll on workers’ mental health, with implications for support needed from the government (Nadkarni, 2021).

A recent study (Hennecke et al., 2021a) highlights that within New Zealand/Aotearoa, an aging population, women, migrants and indigenous peoples are under greater psychosocial risks than others. Māori and Pacific peoples and ethnicities who form less than 3% of the population are at the highest risk levels. While the pandemic context has further encouraged flexible work arrangements, often involving technology in work solutions to the benefit of organisations and employees, there are related and increased psychosocial risks (e.g., Hennecke et al., 2021b), emphasising a need for more psychosocial risks-focused education and training for organisations (Hennecke et al., 2021b) and their health and safety representatives (Junaid and Parker, 2021).

Skills, learning and employability

Skills, learning and employability

National system for ensuring skills and employability

As noted earlier, by international standards, New Zealand/Aotearoa has low productivity rates (NZ Productivity Commission, 2021), highlighting the need for relevant and effective skills development in the country.

In New Zealand/Aotearoa, formal training provisions are shared between further education institutions and sector-based industry training organisations (ITOs). Vocational education involves around 240,000 learners each year. The government provides NZD 632 million towards tuition costs and industry training, and NZD 243 million in funding for non-vocational education tuition at institutes of technology and polytechnics. Formal training has been supported by an Industry Training Fund (ITF), which subsidises formal, structured employment-based training linked to qualifications. The ITF has been the government’s contribution to the cost of training, with the balance met by contributions from employers, trainees and apprentices.

Following the passage of the Education (Vocational Education and Training) Amendment Act 2020, a new system is being introduced. Eleven ITOs will relinquish their role of arranging workplace training and apprenticeships to vocational education providers. A new national institute ( Te Pūkenga ) – the country’s largest tertiary education provider – will be formed from 16 separate institutes of technology and further education. Industry input and oversight will be exercised through Regional Skills Leadership Groups and six Workforce Development Councils (Tertiary Education Commission (TEC), 2021a).

In addition, the government will spend NZD 334 million on additional tertiary education enrolments, NZD 320 million on free trade training for critical industries and NZD 412 million to help employers retain their apprentices (Gerritsen, 2020). It has also devised the Hardship Fund for Learners – NZD 19.5 million allocated to 121 tertiary education organisations (TEOs). The Technology Access Fund for Learners allocated NZD 12.6 million to TEOs, and the Targeted Training and Apprenticeship Fund (TTAF) provided NZD 54 million to 62 organisations in May and June 2020 (TEC, 2020). In the COVID-19 context, the government announced that a TTAF will be offered between 1 July 2020 and 31 December 2022 for apprenticeships, training and learning at tertiary education providers, wherein learners will save between NZD 2,500 and NZD 6,500 per year (Beehive, 2020). This TTAF is directed towards industry skills needs, where demand from employers for these skills will continue to be strong, or is expected to grow, during New Zealand/Aotearoa’s recovery period. These key sectors include primary industries, conservation, construction, community work, manufacturing and engineering, road transport and information technology.

The government is also giving the MSD a NZD 400 million boost and investing NZD 1.6 billion in trades and apprenticeships (Devlin, 2020). Also, over 800 jobseekers will be supported on pathways into employment, education and training through funding into the Māori Trades and Training Fund and He Poutama Rangatahi projects. This will support over 500 Māori jobseekers into employment and training opportunities, with NZD 18.6 million committed to a range of new and existing projects. Another NZD 5.6 million has been invested to help over 300 rangatahi (young people) overcome barriers to employment, education and training through further funding into He Poutama Rangatahi (Beehive, 2021). The government is also planning to continually invest in upskilling and reducing unemployment, especially in marginalised communities, and with its 2021 budget announced a 13.4% increase in VET spending by 2024 (TEC, 2021b).

Training

Adult literacy and problem-solving skills in New Zealand/Aotearoa are, on average, among the highest in the OECD, with numeracy skills above the OECD average (MoE and MBIE, 2016). However, employers have reported higher levels of skills shortages than in other countries (around 45% of firms with 10 or more employees), with the Business Operations Survey suggesting pre-COVID-19 that a third of firms were increasing training and/or redefining jobs in response to this shortage (OECD, 2015). However, those in low-skilled jobs are less likely to receive learning and development opportunities. This partly reflects the predominance in the economy of small and medium-sized enterprises , which have less access to training resources and expertise, and may fear labour mobility if workers accumulate transferable skills. Furthermore, MBIE (2021d) noted that around half of the working-age population struggle with numeracy, while at least 40% of employees have literacy skill struggles.

In May 2019, the Prime Minister and her business advisory council launched a voluntary initiative to prepare organisations and their employees for rapid change in the future of work. The New Zealand/Aotearoa Skills Pledge – signed by some of the country’s largest employers – commits signatories to doubling investment in re-skilling and training hours by 2025, and to reporting annually on progress.

Learner numbers in vocational education and training decreased steadily from 2010 to 2019 (from 309,305 to 226,270), with the completion number in 2019 being 80,685 (Education Counts, 2020a). In 2020, trainee numbers decreased while apprentice numbers increased. Furthermore, the number of trainees and apprentices completing qualifications decreased, and the five-year completion rate for both groups decreased (Education Counts, 2020b). The government has announced a NZD 380.6 million initiative to help keep apprentices in work. Apprenticeship Boost will support up to 36,000 apprentices per year (including new apprentices) to around 18,000 employers via a subsidy.

Trainees in New Zealand/Aotearoa, 2015–2020

Year

Total

Learners

Proportion
female
(%)

Workforce participation (%)

Delivered
STMs

Male

Female

Male

Female

Total

2015

105,540

60,955

43,900

42

4.9

3.9

4.5

26,445

2016

105,630

60,210

44,670

43

4.6

3.8

4.3

26,740

2017

99,585

53,700

45,385

46

3.9

3.8

3.9

25,945

2018

88,055

45,755

41,990

48

3.3

3.4

3.3

23,450

2019

84,605

43,430

40,940

49

3.0

3.2

3.1

22,215

2020

76,740

39,770

36,785

48

2.7

2.9

2.8

19,025


Apprentices in New Zealand/Aotearoa, 2015–2020

Year

Total

Learners

Proportion
female
(%)

Workforce participation (%)

Delivered
STMs

Male

Female

Male

Female

Total

2015

42,005

37,245

4,650

11

3.0

0.4

1.8

20,060

2016

42,955

38,175

4,685

11

2.9

0.4

1.7

19,005

2017

46,110

40,345

5,670

12

2.9

0.5

1.8

19,810

2018

50,475

43,690

6,700

13

3.1

0.5

1.9

21,440

2019

53,555

46,160

7,295

14

3.2

0.6

2.0

22,805

2020

61,890

52,790

8,895

14

3.6

0.7

2.3

24,395

Note: STM = Standard training measure

Source: Education Counts (2020b)

On-the-job training

Data for on-the-job (OTJ) training are limited. However, the SoWL 2018 was run as a supplement to the Household Labour Force Survey in 2008 and 2012, and asked a number of questions relating to education or training funded by employers. The survey found that six out of 10 employees had taken work-related training in the 12 months prior. Of these, three-quarters had done OTJ training, making it the most common training type (including online training and apprenticeships).

Employment NZ (2021v) recognises that, while training and development requirements vary from workplace to workplace, the ‘70-20-10 development rule’ is helpful for development conversations between employers and employees and is ‘pretty consistent in providing good development outcomes’. It involves 70% of training from on-the-job related experiences; 20% from learning and developing through others from feedback, coaching, observing others, personal networks and other collaborative and cooperative actions; and 10% from structured development, which can be external or internal (e.g. training courses, programmes, further education, conferences or symposia).

In practice, just over half of employees completed a course paid for by their employer, while 7% did a course they had paid for themselves. Of those who had done training, seven out of 10 spent five days or less completing it. Just over one in 10 spent more than a month over the past year doing training relating to work. Professionals were the occupation group most likely to have taken part in any form of training in the past 12 months (71%). Machinery operators and drivers (48%) and labourers (43%) were the least likely. There was also variation by age, with those aged 25–34 (65%) and 45–54 (64%) most likely to have done work-related training. Young employees (under age 24) were more likely to have done OTJ training than any other age group, but less likely to have done a course paid for by their employer.

Work organisation

Work organisation

Work organisation underpins economic and business development, and has important consequences for productivity, innovation and working conditions.

A recent study of 2,560 working professionals in New Zealand/Aotearoa found that, prior to the outbreak of COVID-19, 38% of New Zealanders had never worked from home, while 36% had worked at home every now and again. This meant that 74% had no regular experience of the home working environment. Since the pandemic, 22% have suggested that, in future, they would like to work from home daily, while 67% indicated a preference for working remotely a few times a week or month. Significantly, 80% of the respondents were female; when asked about their productivity since the advent of COVID-19, 35% of all respondents found it was similar, while 38% thought they were more productive while working at home (O’Kane et al., 2020).

Workers’ views on working from home in future, %

Source: O'Kane et al. (2020)

In 2021, another survey found that 62% of 3,000 respondents were satisfied with their work-life balance, compared with nearly half (49%) prior to the pandemic. Just 12% intended to leave their job, compared with 24% pre-COVID-19 (Umbrella, 2021).

In terms of job autonomy, the SoWL 2018 found that 56% of employees felt they had a lot of control over how they did their tasks at work; 45% felt they had a lot of control on how their work was organised (see figure); and 36% reported having a lot of influence on decision-making that affected their tasks.

Employee control over how daily work is organised and job satisfaction (main job)

Source: Stats NZ (2019b)

Employees with high levels of autonomy were more likely to report a good relationship with their direct manager and colleagues than those who reported lower levels. High autonomy was more common among self-employed people (67% compared to 24% of employees). Men were more likely to have a high level of workplace autonomy (33%) than women (26%), and workplace autonomy was lower for employees working for shorter periods. With the advent of the pandemic, these figures are likely to have changed considerably.

Equality and non-discrimination at work

Equality and non-discrimination at work

In New Zealand/Aotearoa, the grounds for unlawful discrimination in employment are outlined in the ERA 2000 and the Human Rights Act 1993. These include discrimination on the basis of:

  • age
  • race or colour
  • ethnicity or national origin
  • sex (including pregnancy or childbirth)
  • sexual orientation
  • disability
  • religious or ethical belief
  • marital or family status
  • employment status
  • political opinion
  • being affected by domestic violence
  • involvement in union activities (ERA 2000 only)

The Human Rights Act 1993 legislates for discrimination in most aspects of employment and applies to unpaid workers and independent contractors. Employees who feel unlawfully discriminated against during their employment can seek to discuss the issue with their employer to resolve the problem, go to mediation and/or raise a personal grievance to the Employment Relations Authority (under the ERA 2000), or make a complaint to the Human Rights Commission (HRC).

Equal pay and gender pay gap

The Government Service Equal Pay Act 1960 abolished pay according to gender in the public service. This was later extended to the private sector with the Equal Pay Act 1972. Under the EPA, employers were required to pay men and women equally for work needing ‘the same, or substantially similar, skill, effort, responsibility and working conditions’. In 2014, the Court of Appeal (CA) decision in Terranova Homes & Care Limited vs Service and Food Workers Union Nga Ringa Tota Inc. and Bartlett interpreted the EPA as extending to pay equity (such as equal pay for work of equal value) (CA, 2014), emboldening parties in other female-concentrated professions to issue equal pay proceedings.

Following the conclusion of the case, renewed effort for legislative reform around pay equity saw the National Government establish a Joint Working Group in 2015, stressing the use of good faith bargaining arrangements under the ERA 2000 as the platform. Under the present government, a reconvened Joint Working Group, again involving tripartite partners, provides further recommendations and proposes new legislation (Parker and Donnelly, 2020).

In New Zealand/Aotearoa, there is a high concentration (>80%) of female workers in several occupations which are often lower paid. These occupations are healthcare and social assistance; professional, scientific, technical, administrative and support services; and education and training.

The national gender pay gap (using median salaries) has decreased since 1998 (16.3%) but plateaued in the last few years (9.4% in 2017, 9.2% in 2018, 9.3% in 2019 and 9.5% in 2020). It is still a relatively small gap in global terms. The public service gender pay gap was comparable to the national workforce gender pay gap in 2017, at 9.7%, and was 1.5% higher in 2018, at 10.7%, but then dropped substantially, to 6.2% in 2019 and a historical low of 5.8% in 2020 (PSC, 2020). However, a report by consultants StrategicPay estimates that the national gender pay gap is 17.7%, or nearly double the official statistic. While the latter is based on median hourly earnings or base pay, StrategicPay’s report also used KiwiSaver, bonuses and car payments to calculate the pay gap, and observed that the gap will not be fixed by short-term measures only (Sadler, 2020). Furthermore, Māori and Pacific women have lower rates of pay compared to both women and men of other ethnicities (Ministry for Women (MfW)/Minitatanga mō ngā Wāhine, 2020), while women with disabilities are paid less than men with disabilities, making them ‘the most marginalised in New Zealand’s labour market’ (HRC, 2018). The government’s launch of the new Ministry for Ethnic Communities on 1 July 2021 may help to enable better policies, including on barriers to employment and greater workplace diversity and inclusion (see Manch, 2021).

Furthermore, the government’s Gender Pay Principles and Gender Pay Gap Elimination Action Plan 2018 –2020 are intended to address gender inequities in public service through the ‘principles of partnership, protection and participation’ (MfW, 2019; 2018). Moreover, by seeking to remove inequities in the public service, the government aims to create a catalyst for change across the private sector (Leal, 2020). The Equal Pay Amendment Act 2020 provides a process for addressing discrimination in pay, based on gender, in female-concentrated industries, and enables employees to make pay equity claims within the current ‘good faith’ bargaining framework, with court action a last resort.

More information:

Quota regulations

Comparatively speaking, the use of formal quotas in New Zealand/Aotearoa to close gender- and ethnicity-based gaps in workplaces remains a highly contested field. In recent years, gender leadership gaps have significantly decreased in the public sector, with women now constituting half of the top three tiers of senior managers and nearly attaining the government’s aim of forming 50% of those on state sector boards. However, they remain significantly underrepresented on private sector boards and in senior leadership positions in New Zealand stock exchange-listed companies (NZ Government, 2019; Parker and Donnelly, 2020). In the private sector, female representation in senior leadership positions decreased from 31% in 2004 to 18% in 2018 (Grant Thornton International, 2018). Moreover, women of Māori, Pacific and Asian ethnicities remain underrepresented in the top management tiers and overrepresented in lower-paid occupations. In 2018, the United Nations CEDAW Committee’s (2018) concluding observations on New Zealand/Aotearoa set out 78 recommendations for improvement, with concerns including women’s access to justice and to health care services, the implementation of pay equity, the development of a gender budget, and the initiation of a national action plan for the advancement of women.In terms of disability issues, the New Zealand Disability Strategy 2016–2026 was launched on 29 November 2016 and is intended to guide the work of government agencies on disability issues without any quota regulations (Office for Disability Issues, 2016). Eight outcomes are defined in the strategy, with gender norming recognised for playing out in the disability community, as it does in wider society. The Disability Action Plan 2019–2023 presents priority work programmes and actions developed conjointly by government agencies, people with disabilities and their representative organisations. The work programmes and actions ‘will advance implementation of the United Nations Convention on the Rights of Persons with Disabilities and the NZ Disability Strategy 2016–2026’ (Office for Disability Issues, 2019).

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