Government Modifies Gig Economy Bill, Leaving Past Liabilities Intact

The New Zealand Government is set to amend the Employment Relations Amendment Bill to ensure it applies to companies like Uber. The changes aim to prevent gig economy workers from claiming employment rights in the future. However, according to Workplace Relations and Safety Minister Brooke van Velden, the bill will not have retrospective effects, leaving open the possibility for tens of thousands of gig workers to seek past employment benefits, including minimum wage and holiday pay.

This amendment is a response to a recent Supreme Court ruling that classified four Uber drivers as employees. The Employment Relations Amendment Bill seeks to reverse the implications of that decision, while still allowing claims for work performed in the past. A newly introduced “gateway test” will help determine whether workers can claim employment status, which may impact the nature of gig work in the future.

Uber had expressed concerns that the original wording of the bill would not adequately address its business model, particularly regarding the definition of gig workers. The Government’s adjustments will align the legislation with its original intent. In addition to these changes, the Government has agreed to a recommendation from the Education and Workforce Committee, which alters the parameters for high-earning individuals who can bring personal grievances. The threshold will increase from $180,000 to $200,000, inclusive of bonuses and incentives.

Minister van Velden emphasized that these changes strengthen the bill while retaining its core objectives. She noted that defining a gig economy worker as someone who works full-time hours does not restrict their ability to work for multiple organizations, which could benefit firms relying on contracting arrangements.

Despite Uber’s push for the law to be applied retrospectively to avoid liabilities related to the Supreme Court ruling, the Government has consistently refused this request. Speculation remains about whether the Government might reconsider as the implications of the ruling extend to other gig workers, such as those employed by NZ Post. In a Cabinet paper released recently, van Velden firmly rejected suggestions for retrospective application of the gateway test.

The Employment Relations Amendment Bill is expected to progress to its second reading in Parliament early in 2024. Minister van Velden reaffirmed the Government’s commitment to enhancing labor market flexibility while supporting business growth and innovation.

Critics, including Sandra Grey, president of the Council of Trade Unions, have condemned the bill, calling it “one of the most anti-worker bills in New Zealand history.” Grey argues that the changes proposed by the Government will further disadvantage workers, stating, “The personal grievance changes are also trying to tie the courts’ hands and prevent them from establishing justice for workers.”

The removal of the “30-day rule,” which currently protects workers under collective agreements during their first month of employment, has raised concerns that it may encourage employers to exploit vulnerable workers. Labour members of the committee also voiced their apprehensions, asserting that the bill undermines the principles of the Employment Relations Act, shifting power away from employees and eroding the protections that have historically benefited workers and businesses alike.

The Green Party has added its voice to the criticism, suggesting the bill would enable companies to increase profits at the expense of the most vulnerable workers in the gig economy. As the legislative process unfolds, the debate surrounding worker rights and employer responsibilities continues to intensify, with advocates on both sides urging for a more balanced approach.