Last week public servants walked off the job at the Department of Internal Affairs for two hours in protest over pay and proposed changes to working conditions. The union, the Public Service Association, said that the largest group affected were Life and Identity Services Officers, most of whom earn about $65,000 a year.
In bargaining for a new collective agreement it is understood that DIA had offered a $700 pay increase to each midpoint of each pay band. The PSA says this equated to an average pay rise of about 0.8% (well below the current inflation rate which effectively means a pay cut given the current cost of living and inflation). The PSA acknowledged that the DIA had offered a one-off lump sum of $1,500 but said this did not increase the workers base salaries. The PSA said it was seeking a $2,000 increase to the mid-point of each pay band which equated to a pay increase of about 2.3%.
Strikes used to be associated with workers walking off the job for days at a time. However, that meant that workers were not entitled to pay for those days. Increasingly the most effective industrial action is not a complete withdrawal of labour, it is employees continuing to do their jobs while refusing to perform parts of them - partial strikes.
Last year, the government amended the law allowing employers to deduct pay from employees engaged in partial strikes without having to suspend or lock them out. Employers may now deduct either 10 per cent of an employee's pay or make a proportionate deduction. The changes were promoted as restoring balance to collective bargaining by ensuring that employees who deliberately withhold part of their labour can no longer expect to receive full pay while doing so.
The first significant case to test the change has now reached the Employment Court. It arose during collective bargaining between NZEI Te Riu Roa and the Secretary for Education. Union members employed as psychologists, speech language therapists, physiotherapists, learning support advisers and kaitakawaenga undertook partial strike action by refusing to work unpaid overtime, refusing to work more than 38 hours per week and refusing to accept new cases, while otherwise continuing to perform their ordinary duties. The Ministry of Education responded by deducting 10 per cent of their pay.
The main legal issue being tested in the Court was deceptively simple: who must be notified before those deductions can lawfully be made? The majority of the Employment Court concluded that the Ministry had complied with its statutory obligations by giving notice through the union. However, Judge Helen Doyle strongly disagreed. In a strong and carefully reasoned dissenting judgment, she concluded that the legislation requires notice to be given individually to each affected employee before deductions are made. In her view, Parliament had deliberately chosen language that contemplated personal notice and employees should not have their wages reduced without being directly informed.
It is difficult to argue that an employee should necessarily receive 100 per cent of their wages while deliberately refusing to perform aspects of their role as part of industrial action. Equally, it would be disproportionate for an employer to deduct all of an employee's pay where the employee continues to perform most of their duties. The difficulty lies in deciding where the balance should be struck.
The government's solution of allowing employers to deduct a flat 10 per cent of wages may appear administratively attractive. However, it inevitably produces arbitrary outcomes. In some cases, employees may be withholding work worth considerably more than 10 per cent of their duties. In others, the deduction may exceed the actual value of the work being withheld. The legislation permits proportionate deductions, but calculating those deductions is often likely to involve difficult assessments of an employee's duties and the value of particular work tasks.
As with many of the government’s recent changes to employment law, what sounds straightforward in theory has proved rather more complicated in practice. What the Secretary of Education found is that what should have been a straightforward deduction of 10% of pay has become a major litigation battle. The union, NZEI Te Riu, has said it is appealing the Employment Court’s split decision to the Court of Appeal.
It is early days since the partial strike was taken last week at the DIA. It is unclear if the Department has given notice that it intends to withhold pay for the workers taking part in that partial strike. If it does so, it might come with a hefty lawyers bill. Read more...
Artificial Intelligence has become surrounded by competing narratives. One side often predicts the wholesale replacement of workers, while the other side dismisses AI as an overhyped technology that will never live up to expectations.
The International Monetary Fund recently delivered what appears to be encouraging news for New Zealand. It concluded that New Zealand is among the countries best placed to benefit from artificial intelligence because of its skilled workforce and capacity to adopt new technology.
That optimism came with a warning though. While AI has the potential to improve productivity and economic growth, a significant proportion of New Zealand jobs may be affected by artificial intelligence, with many workers needing to adapt as technology changes the way work is performed. The IMF estimates that around one third of workers may be effected and it is likely to be particularly acute amongst women and younger workers.
AI is already transforming workplaces. It can analyse vast quantities of information in seconds, review documents, draft reports, automate repetitive administrative work and assist decision-makers in ways that would have seemed impossible only a few years ago. For a country like New Zealand plagued by low productivity AI does offer genuine opportunities to do more with the resources we have. But increased productivity should not be confused with simply reducing head counts in the workplace.
Some of the world's largest employers are discovering that replacing experienced workers with artificial intelligence is proving considerably more difficult than they planned for.
The Ford Motor Company invested heavily in AI-assisted engineering and manufacturing systems but it found that automation lacked something its most experienced engineers possessed in abundance - decades of accumulated practical knowledge, intuition and judgment. Recently Charles Poon, Ford's Vice-President of Vehicle Hardware Engineering, candidly explained "Mistakenly, we thought that by just introducing artificial intelligence ... that would produce a high-quality product." Ford has since brought back more than 300 experienced engineers (internally known as "greybeards") to mentor younger employees and to improve AI systems. Since doing so, Ford has reportedly reduced warranty costs, improved vehicle quality and achieved its highest industry quality ranking for more than a decade.
IBM has reached similar conclusions. While artificial intelligence has successfully automated routine human resources and administrative functions, it has confirmed that it continues to hire software engineers, sales professionals and client-facing staff because automation created demand for different human skills rather than eliminating the need for workers altogether. It has so far concluded that AI proves effective at routine tasks but it has proved much less effective where creativity, judgment and human relationships remain essential.
For 2026 IBM has planned to triple its entry-level hires in the United States. It’s Chief Human Resources Officer, Nickle LaMoreaux, said that investing in entry-level talent is essential to IBM’s long-term agility “if we don’t continue to invest in entry-level hires, what happens in 3-5 years”, and commenting further “there’s no pipeline, the well simply dries up”.
Closer to home, the Commonwealth Bank of Australia has also found that customer service could not simply be handed over to AI. While chatbots dealt efficiently with straightforward enquiries, many interactions ultimately required escalation to experienced employees. Last year CBA laid off 45 customer service staff and replaced them with an AI "voicebot” but it soon found that the AI system was unable to cope, which led to an increase in calls and it led to CBA to reversing the job cuts.
It is hard to object if AI removes repetitive administration, reduces waiting times and allows public servants to concentrate on work requiring higher levels of skill and judgment. But work is seldom a collection of tasks. It often requires exercising judgment, discretion, initiative and accountability. It often is assisted by “institutional knowledge”, either gained by experience or recognising whom to turn to. Those qualities are often impossible to reduce to a written process, let alone an algorithm. Responsibility still rests with a human decision-maker that can be held to account – not with an algorithm.
In this year's Budget, the Government signalled that AI would play an increasing role in cost saving and improving efficiency across the public service while continuing to reduce staffing numbers. It plans to further slash public service jobs by about 14 per cent (around 8,700 jobs) over the next three years, with a planned cost saving of about $2.4 billion.
Unfortunately, this government takes a pretty blunt approach to major ticket items; tiny tax cuts in 2024 which cost billions, tax cuts for landlords, again with billions in costs. We were told to tighten our belts, the government had nothing to meaningfully assist those hardest hit in the continuing cost of living crisis. Cost savings have taken similar blunt approaches; stripping pay equity from thousands and thousands of largely underpaid female workers. Other large investments in the future of New Zealanders faced similar approaches; slashing the quality of school lunches and scrapping large electric ferries for second hand Toyota type fuel guzzling ferries spring to mind.
If huge companies such as Ford, IBM and the Commonwealth Bank have rediscovered the value of experienced employees after attempting greater automation, the government and its agencies should be careful not to repeat the same experiment at the public expense. Read more...
The budget announcement that the government has set aside $18 million over the next fours years to counter migrant exploitation and immigration non-compliance is good news for migrants and those in New Zealand on working visas.
In announcing the funding the Immigration Minister, Erica Stanford, said that the funding would be used for three new front-line teams to respond to serious offending, protect people from harm and exploitation, and increase the number of cases investigated.
A recent Employment Tribunal decision in the United Kingdom illustrates the effect that non-compliance by so-called employers on migrants can have on migrant employees that accept work in good faith and move to a new country with limited support for migrants.
Shabin Shaji, a 33 year old Indian citizen, came to the UK to work as a care worker through a post-Brexit visa scheme for an “employer”, Swan Care Solutions Ltd, that failed to provide him with a single days work.
Mr Shaji paid agents £17,000 before he was interviewed for a role at Swan Care Solutions on WhatsApp. He was “successful”, and was then given a certificate of sponsorship, entitling him to live and work in the UK with Swan Care Solutions as his Home Office-approved sponsoring employer. The computer science graduate emigrated from Kerala to Stafford, England, bought a car for the job and undertook online training in 2023 believing there was a major shortage of healthcare workers in the UK.
His sponsored visa prevented him from working for anyone else for more than 20 hours a week. The Tribunal heard that Swan Care Solutions’ staff suggested Shaji take cash-in-hand jobs and use a food bank when he said he was struggling, telling him they would be in touch when it was his turn.
Mr Shaji described being broke and having to rely on charity. He drank tap water and bought bread close to its expiration date to survive. He looked around local shops in Stafford for free bananas and bread for those who were struggling. He said he attended church and after worship the good people shared snacks with tea with him, for which he was very grateful.”
He described being in a terrible situation, feeling like no one in authority cared “if I lived or died.” A year after his arrival in the UK, Mr Shaji eventually managed to secure sponsorship with another employer in April 2024, but he later returned to India in ill health.
The Employment Tribunal ordered Swan Care Solutions to pay Mr Shaji nearly £30,000 wages for the work he was “ready, able and willing to do”. The judge, Kate Edmonds said “the claimant had done what needed to be done to start work. He was now in the country, with the right permissions, and living in the right location. However, the respondent did not provide him with work, nor did they pay him.”
In New Zealand, Immigration NZ statistics show for the financial year 1 July to 30 June 25 there were:
- Complaints received – 2,798
- Investigation actions taken – 413
- Warnings issued – 45
- Prosecutions – 4
Perhaps the most significant prosecution that financial year was of Mr Ratha Ny, the owner and director of R.S.X Ltd (trading as the Bakehouse Café in Murupara) who pleaded guilty and was convicted in March 2025 for 4 charges under the Immigration Act for providing false or misleading information to Immigration NZ. His company, R.S.X Ltd, also pleaded guilty and was convicted of 6 exploitation charges for serious breaches of employment law, including knowingly underpaying employees below the minimum wage and failing to correctly pay holiday and related entitlements. The Court fined R.S.X Ltd $150,000 for the 6 exploitation charges and ordered the company to pay $25,000 in emotional harm reparations — $10,000 each to 2 victims and $5,000 to a third. These reparations were paid by Mr Ny in anticipation of sentencing and were not court-imposed. This brought the total court-imposed penalty to $175,000. These penalties were in addition to $160,000 in minimum wage arrears that R.S.X Ltd had already repaid to the affected workers prior to sentencing.
Minister Stanford explained that the need for the extra funding was due to “delays in responding to migrant exploitation, bad behaviour by employers” and to justify more stringent changes in relation to the ability to deport migrants facing more minor criminal offences.
Speaking for the Labour Party, Phil Twyford said “Labour welcomes the increased resources for combating migrant worker exploitation”, “increased staffing for compliance in this area was a condition of Labour’s support for the India free trade agreement”.
Migrants legally entitled to work in New Zealand often leave family, careers and support networks behind them, and arrive with little support in New Zealand. At the least, they should be provided the protection that the criminal laws, immigration laws and employment laws afford. The problem is ensuring that those migrants know their rights, the protections that are provided and channels for reporting breaches – and of course adequate resourcing to ensure compliance with those laws. Read more...
