Government urged to provide clearer definition of Employee.
Employment Law, Bill, General / 21 July 2022
The Government has long signaled its intent to provide better protection for contactors, and to this end a recent report from the Tripartite Working Group of New Zealand (report) urges the government to provide a clearer definition of an “employee” and to provide more clarity as to as to whether a worker is an employee or a contractor, both in legislation and by making practical changes to regulatory systems.
The report’s key recommendations included to:
- Revise the definition of employee to distinguish from a contractor who is genuinely in business on their own account, and to align this between employment and tax law;
- Legislate to clarify how a worker is classified, with the hiring entity then responsible for making this decision correctly;
- Provide guidance and support for business to classify correctly, to reduce reliance on the dispute resolution system for this;
- Allow judicial determinations on employment status to cover other workers performing similar work for the hiring entity under similar contractual terms, including possibly by allowing groups of workers to seek status determinations; and
- Allow regulator intervention without complaint by a worker.
Message for Employers
While the report recommendations are not yet proposed by a Bill, employment status is very much a live issue following a number of recent cases on point, and it is important for employers to ensure that they have the correct process from the beginning of the working relationship, to avoid contractor claims for minimum employment entitlements.
If you use contractor workers, we recommend reviewing these arrangements to ensure they are enforceable. Our team can help with this.
Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.