Is The Grass Always Greener In Oz?

There are two reasons why I would not want to live in Australia.  Firstly we hold the Rugby World Cup and secondly, they are trapped in the 1970’s.  Air New Zealand and Gary Toomey (from his pacific hideaway) must be watching Qantas’ actions with great interest and a wry smile.  While Ansett did have many problems of its own (including being the only airline in the world to have to fly 767’s with a three person flight crew including an engineer to meet union requirements!), many successful New Zealand businesses have crossed the ditch and failed or struggled.  To a greater or lesser degree, the difficulties have not been due to poor products or business models, but the differences in labour law and the general work force psyche around job security becoming strong barriers to change and in some cases proving too much.

I was working for a New Zealand based company located in Australia when Individual Employment Agreements came in during the late 90’s.  The local Australian’s could not comprehend that I may be doing the same role as the person next to me without knowing that we were paid the same rate.  Imagine tomorrow bringing your team into one room and telling them that from Monday they will all be paid the same hourly rate?  Fortunately this is far from the employment environment that we operate in today in New Zealand.

Sometimes I think we take for granted some of the advantages that we have living and working in New Zealand.  We do face endless debates on employee protection whilst trying to balance this with providing a flexible enough environment to allow employers to shape and grow their businesses.  Have we got the balance right?  Possibly, however the laws are too complicated and the cost of compliance is too high.  Let’s hope some changes in November bring about some simplicity and that we continue to ride ahead of the wave in becoming a growth economy.

 ^DB

Election Year Shuffle – What are the true business impacts?

Election year generally brings a shuffling of the labour and employment laws within New Zealand and this year has been no different with National introducing changes to both the Holidays and Employment Relations acts during April and July.  The left see these as “eroding workers rights” and the right see these changes as “restoring more balance between the employer and employee”.  While these changes are both in their early days, there is no queue of employees wanting to cash in leave or employers held to task for enforcing this as a policy, nor do we see companies exiting employees into the street at a whim under the 90 day trial period.  The only employment stories to hit the media have been Sonny Bill Williams contract negations with the All Blacks and the handling of the non-disclosure by one of the contestants in NZ Next Top Model; so I guess the changes have been broadly accepted by all parties.

Like all changes in government legislations there is an onus on employers to update all existing documentation and ensure that new job descriptions are brought into line.  One thing that the Department of Labour does well on their website is provide easy access to any updates with associated cheat sheets for ease of understanding.  An overview of the latest changes can be found here:  http://dol.govt.nz/er/actchanges/index.asp.  Keys areas that have recently changed include:

• The ability for employees to cash in leave
• Transferring of public holidays 
• The extending of the 90 day trial period to larger organisations
• Changes to the personal grievance provisions
• Consent for union access to a workplace
• Retention of employment agreements

If you have any concerns around your compliance in any of these areas or have not updated your position descriptions or employment contracts to reflect the changes, give us a call at Sonata and we would be only too happy to help. 

^DB

Improving Labour Laws To Promote Growth

The term ‘business confidence’ has taken on a new meaning over the last couple of years, however for a lot of small and medium size businesses in New Zealand, there is still a big step between seeing an improving horizon and employing additional staff.  Even with encouraging signs there are still too many barriers for businesses and this is hurting job prospects.  The process needs to be freed up for the benefit of both employers and those in the job market.

Extending the 90 day trial period across the board has been a good start in giving both parties flexibility in ensuring compatibility.  Where the unions are coming from on this change I do not understand as any opportunity to open the market up should be welcomed, and I am also of the view that both parties should share some of the risk.

Nervousness coming from pressure on the minimum wage does not help.  There is not a New Zealander who would not like to see the minimum wage increased but it cannot be done to the detriment of general or youth unemployment; confidence has to rise first.

Lastly restructuring and performance management processes need to be clarified quickly.  An employer can have the best of intentions and run a thorough process; however they can still end up with costly claims for minor flaws in process.  Without the help (and additional cost) of external consultants most small to medium companies cannot carry out these procedures without high risk.  Personal grievance grounds need to be tightened, and either clearly documented procedures and consultation periods need to be defined so that they are easy for the average person with good intentions to follow successfully, or the process needs to be less specific.  Many companies have been burned in this area when they have worked to what they understand the requirements to be and this is a huge barrier in employing extra staff to meet projected future growth.

Let’s hope the reforms keep coming.

^DB