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Labour wants to lift minimum wage, soften 90-day trial rules

Thursday 29th June 2017

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If elected in September, a Labour government would lift the minimum wage to $16.50 an hour and pay core public service workers a 'living wage', Labour leader Andrew Little said when presenting the party's employment relations policy.

"For too many Kiwis, the current employment relations system is failing. Low wages, little say on rosters or hours of work, and an erosion of conditions have been the norm for many workers in New Zealand workplaces, especially for female and young workers," according to Little. 

New Zealand's minimum wage increased by 50 cents to $15.75 an hour on 1 April 2017. In 2016, when the minimum was $15.25 an hour, Treasury estimated that increasing it to $16.50 would cost the government and extra $87 million a year and it would have an inflationary impact of 0.1 percent. According to Treasury in 2016, around 2.9 percent of the working population was on minimum wage. Labour would work toward lifting the minimum wage to two-thirds of the average wage "as economic conditions allow," Little said. 

He also said Labour would also introduce so-called Fair Pay Agreements across different industries, similar to what happened with the Kristine Bartlett equal pay settlement, and would promote a living wage by paying it to all workers in the core public service at a cost of $15 million. The living wage would be extended to contractors over time. If elected, Labour would also double the number of labour inspectors to 110, something that would cost $9 million. 

His party would also replace the current 90-day trial periods for what it termed "fair trial periods" that would give employees recourse against unfair treatment and unjustified dismissal. He noted that employers have legitimate concerns that employment disputes can be time-consuming and expensive. As a result, it will establish a new "referee service" for claims of unjustified dismissal during trial periods, something he said would cost the government $4 million.  

Under the new trial periods, people will be given reasons for dismissal and disputes will be heard within three weeks of being lodged. Both parties will be allowed representation but no lawyers will be allowed. The referee will seek agreement between the parties but where this is not possible, they will make a final and binding decision that cannot be appealed. There will be a cap on the value of penalties that can be awarded.

Among other things, Little said they will also introduce 26 weeks paid parental leave and ensure that New Zealand employment law applies to everyone working in New Zealand, including foreign workers working for foreign companies.



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