Why we need new protections for employees and contractors

There are a lot of people in New Zealand who are working as contractors - cleaners, security guards, courier drivers, IT workers and many others - who should be employees with all the important rights and benefits that employees get.

Of course, there are also plenty of other working people who genuinely are independent contractors. But we believe they should have a way to try to improve their working conditions - like employees do through their union.

The government is consulting on some plans for law changes to improve protections for contractors. In a discussion document called Better Protections for Contractors, published in November 2019, they propose options under four broad headings:

  1. Deterring misclassification of employees as contractors
  2. Making it easier for working people to get employment status determinations
  3. Changing who is an employee
  4. Enhancing protections for contractors without making them employees.

We think there are good ideas in all these areas. But we also think there are two key things that must be changed and one thing that the government is considering that it must not do:


Make sure working people who are employees are not wrongly engaged as contractors

Too many companies are making people work as contractors, when they clearly shouldn’t be, to the advantage of the company. The government needs to act to stop this happening. To help do that they could: 

Remove the cost for anyone who seeks an “employment status determination” to find out if they should be an employee - at present they legal costs are too much of a barrier.

  • Classify certain individual working people  - like in some of the occupations listed above - as always being employees.
  • Have law that says when contractors are deemed vulnerable they become employees.
  • Reverse the “burden of proof” so that companies have to prove why should not be an employee and why they should be a contractor.
  • Extend employment status determinations to others in the same occupation or industry.
  • Properly fund enough labour inspectors so they can proactively target areas where they believe “misclassification” of contractors is occurring.
  • Give labour inspectors the power to make employment status determinations.
  • Create penalties for companies that “misclassify” employees as contractors.
  • Provide free and anonymous advice to anyone who is concerned about their employment status.


Empower all contractors to improve their working conditions

For employees, unions have proved a great way to improve working conditions. Currently contractors cannot act together to push for improvement. A great way to make things better would be to allow that:

  • Make it possible for contractors to effectively join unions.
  • Allow contractors to collectively bargain through unions.
  • Include contractors in the coverage of Fair Pay Agreements.
  • Guarantee fair rates of pay for contractors - like the Minimum Wage.


Don’t Create a New Category of Working People

Lastly, we disagree that there is any need for a new category of working people with only some employment rights, somewhere between current contractors and employees. If it were created it could undermine current employees’ rights. Employers might use it in preference to hiring people as employees and then we’ll have the same problem we’re trying to solve now.


Based on this we hope you will USE OUR TOOL TO MAKE YOUR OWN SUBMISSION NOW

And you can download a PDF of our views here.