Workplace Relations Minister Brooke Van Velden says new requirements will give clarity to workers and businesses. Photo: RNZ / REECE BAKER
A major union and a big business group are at odds over whether planned changes to employment law will simplify or complicate matters.
The government is introducing new tests to define whether workers are employees or contractors. It comes after a Court of Appeal case ruled four Uber drivers were employees and should receive benefits like holiday pay.
Union and business leaders on new test for contractors
Workplace Relations Minister Brooke Van Velden says new requirements will give clarity to workers and businesses.
She declined to be interviewed by Morning Report on the matter, but on Sunday said if four criteria were met, then a worker would be classified as a contractor - and without the benefits being an employee brings.
The criteria are:
- a written agreement with the worker, specifying they are an independent contractor
- the business does not restrict the worker from working for another business (including competitors)
- the business does not require the worker to be available to work on specific times of day or days, or for a minimum number of hours OR the worker can sub-contract the work
- the business does not terminate the contract if the worker does not accept an additional task or engagement.
The Court of Appeal concluded the real nature of the relationship between the Uber drivers and the company was that the drivers were employees while signed into the Uber app and "not carrying on their own independent transport service businesses".
Council of Trade Unions President Richard Wagstaff said the courts - Appeal and Employment - "really tested the relationship, and they said, 'What is the true nature of this relationship? Are these workers genuinely in business for themselves? Or are they really working for somebody else?"
Van Velden's changes, he told Morning Report, would "create more confusion".
"Just the idea that you can make something simpler by removing rights for people is a poor justification."
Business New Zealand advocacy director Catherine Beard disagreed, saying if workers did not want to be contractors, they should find full-time employment instead.
"This court case impacts potentially on any platform, work, and that's a really valuable part of a modern society and economy.
"Contracting has been around since Greek and Roman times. It's a well-known way of working. This simply clarifies for both the contractor and the business exactly what they're getting themselves into."
Wagstaff said the years covered by the ancient Greek and Roman civilizations "weren't very good times for working people.
"They had no rights, and that's not what we want here."
In addition to contracting, both the ancient Greek and Roman economies utilised slavery, with some estimates putting the number working without any rights at all as high as 20 percent.
"Of course there's a place for contracting, as there always has been, and nobody is denying it," Wagstaff said. What we're complaining about here is that we've got a situation where the goalposts have changed. The rules have changed because the Employment Court and the Court of Appeal applied our existing legislation, which has been satisfactory for a very long time.
"And they didn't like the outcome and they they've got deep pockets and they've got a minister they can simply lobby, and that's what they've done and this is the result."
Beard said it was the proposed changes that would preserve the pre-Uber court ruling status quo, however. She said employers would not try to make more of their staff contractors, rather than full-time employees.
"For employers that have a full-time workforce, they want that stability and predictability. They know the workforce is going to turn up. They know that they're exclusively committed to their employer. There's a lot of benefits for employers, for full-time workers, so absolutely not."
Van Velden in June admitted meeting with Uber, at the company's request.
On Sunday she said the changes would provide greater certainty for contractors and businesses, which could use the test when responding to claims that workers were employees.
"The current process for workers challenging their employment status through the courts can be costly for businesses, and can increase business uncertainty in general.
"Although employment status cases are treated on a case-by-case basis, if a worker is found to be a contractor in one sector or for one occupation, this can rapidly increase uncertainty for similar businesses who hire these types of workers.
"There are a range of workers and businesses across the country who are involved in contracting relationships, and who will benefit from increased clarity of worker status, which this government will deliver."