ACT proposes rules blocking contractors from claiming employee rights

The ACT Party is proposing to more clearly define who contractors are so they cannot challenge their employment status in court.

Leader David Seymour announced the policy in Auckland on Thursday, saying the Employment Relations Act should be amended to exclude independent contractors from the definition of employee.

"So contractors who have explicitly signed up for a contracting arrangement cannot challenge their employment status in the Employment Court," he said.

"Contracting offers autonomy and flexibility for people who can't commit to standard hours. The gig economy in particular has created jobs that wouldn't otherwise exist. People with work that needs doing can find the skills they're looking for without making a permanent hire. Customers get lower prices and more choice."

It followed a landmark decision in the Employment Court last year that Uber drivers were employees, not contractors, and should be subject to the same rights and protections - including minimum wage, sick leave and holiday pay.

Uber was this month granted leave to appeal that decision - but the drivers pledged to continue fighting back.

The ACT policy document stated that if the Employment Court decision was upheld, many businesses would be unable to continue.

Seymour said his party's policy would mean:

• contractors would have their status as a contractor - without employee rights - specified in a written agreement
• workers would be given sufficient information and an adequate opportunity to seek advice before entering a contract
• agreements must not restrict workers from performing services or work for other businesses, including competitors, except during the period of their contract
• businesses would be unable to terminate contractors for not accepting a specific task
• businesses must keep detailed records to show compliance with minimum entitlement provisions.

"About one in 20 New Zealanders are contractors and 90 percent say they're satisfied with their jobs," he said.

He said contractors could refer to the Fair Trading Act, which deals with contract term fairness, and could still challenge a business under the Employment Relations Act if they were in breach.

Labour in March abandoned plans to look into contractor and employee definitions as part of Prime Minister Chris Hipkins' 'policy bonfire' aimed at focusing the government on the cost of living. Hipkins at the time said it would be put on hold until all cases had been heard.