Recently in France, more than one million people joined a day of protests and strikes against plans to push back the age of retirement from 62 to 64. President Macron called the reforms "just and responsible" and said that France was facing a make-or-break moment.

The government says the system is heading for disaster because the ratio between those working and those in retirement is diminishing rapidly. From 50 years ago there were four workers per retiree; the ratio has fallen to around 1.7 per retiree today and is likely to sink further in the years ahead.

Nearly all other European countries have taken steps to raise the official retirement age. In Italy and Germany the age is 67, Spain 65 and in the UK it is currently 66.

In opposition to the planned reforms, some 80,000 protesters took to the streets of Paris, with demonstrations in 200 more French cities. Strikes severely disrupted public transport and many schools were closed. Buoyed by their success, unions are calling for another day of action on 31 January.

As recently as November last year, National's leader, Christopher Luxon, committed to raising the age of superannuation from 65 to 67 should the party get into power despite a recent report from the Retirement Commission recommending the age stays the same. The report said the Commission had concerns that raising the age might disadvantage manual workers and groups with lower life expectancies, including Māori and Pasifika.

Mr Luxon said increasing the age would be done gradually and the party was giving people 15 to 20 years' notice. When asked, Mr Luxon was unable to say how much money a person living alone on superannuation was paid a week. But he said the amount and how they survived off it was a different issue.

Last year the Organisation of Economic Cooperation and Development's (OECD) survey of New Zealand suggested raising the age of superannuation as a long term measure to control government spending. In response the Minister of Finance, Grant Robertson, rejected the OECD's suggestion stating that the Labour Party would never increase the superannuation age "There's a commitment that we've made, a social contract if you will, with New Zealanders to make sure they have dignity in their retirement and support in their retirement”.

Mr Robertson said “I recognise there is a cost associated with that, but that is the priority decision that we make. As an economy I believe we can afford that." He said making it to 65 years can be tough for many New Zealanders, especially those in physically-demanding jobs. However, he said that he could not speak for future Labour governments.

The recent report from the Retirement Commission highlighted that Māori are currently negatively impacted by the current system. Māori on average die seven years younger than Pākehā, suffer higher rates of disease often at an earlier age. Income disparities lead to lower rates of home ownership, fewer savings or a lower KiwiSaver balance.

Age discrimination at work is also a very real fact. Even with laws to protect against discrimination it is still a very real problem for many. Around 72 per cent of women and 57 per cent of men between the ages of 45 and 74 report that they believe they have been discriminated against due to their age.

But where are we currently placed? The Retirement Commission reports that already, one third of New Zealand’s workforce is aged 55+. New Zealand has one of the highest rates of people aged 65+ still working at 24%. This compares to the UK rate of 10%, Australia 12%, USA 19%, Japan 20% and Iceland 35%.

It is estimated that the number of people aged 65+ still working will increase as our population ages. It should be remembered that they will continue to contribute to the economy through taxes and buying power.

New Zealand has a new Prime Minister. There is an election this year. Will the National Party continue to commit to raising the age of superannuation? It seems a safe bet that the Labour Party will commit to retaining the current superannuation age (at least for now). Read more...

HR professionals are used to assisting managers to raise issues with employees. The conventional approach is to follow a number of steps set out in the Employment Relations Act; sufficiently investigate the issue, raise the issue with the employee, give the employee a reasonable opportunity to respond, genuinely consider the employee’s response, make a decision that a fair and reasonable could have made. In the case of poor performance, these steps often have to be repeated a number of times before dismissal is justified. We all know how long this usually takes!

Some leaders cut straight to the chase. They initiate a frank discussion with an employee (often termed a “fireside chat” or an “off the record discussion”). They identify the problem, are honest about whether the employee has a likely future with the business, and offer a solution (usually an exit with dignity, usually on terms which the employee is likely to accept). Such a discussion can be very useful when the parties are likely to be able to agree on an acceptable outcome.

If the parties are unable to agree on an acceptable outcome, that discussion is very difficult to overcome. The discussion usually smacks of pre-determination by expressing a genuine desire on behalf of the employer to terminate the employment relationship; the classic constructive dismissal scenario of resign or you will be fired!

This is what happened in the case of Blakeley v ACM New Zealand. Ms Blakeley was a branch manager with ACM. Ms Blakeley met with her Regional Manager in June to discuss the perceived poor financial performance of her branch. In July Ms Blakeley travelled to Auckland to participate in a Managers’ meeting. Her participation in the meeting was perceived as limited and disinterested. Her Manager ended Ms Blakely’s participation (or lack thereof) at the meeting early by calling a taxi and sending her home.

The following week Ms Blakeley’s Regional Manager asked HR to write a script for him for a meeting he intended to hold with Ms Blakeley. There was general agreement about the course of the meeting that was held. Ms Blakeley accepted that the meeting would proceed on a “without prejudice” basis. Her Manager told her that her performance and the behaviours she had been demonstrating were unacceptable. She was told that the company wanted to terminate her employment and that if she did not accept the company’s exit offer, her employment would most likely be terminated through a formal disciplinary process.

The company and Ms Blakeley were unable to agree on a financial settlement. Efforts were also made at mediation to agree on an exit for Ms Blakeley. When this was not successful, Ms Blakeley resigned two days later and raised a personal grievance on the basis that she was constructively dismissed.

The Employment Relations Authority concluded that it was almost a textbook illustration of one of the leading decisions on constructive dismissal. In the Woolworths case the Court of Appeal held constructive dismissal includes, but is not limited to, cases where:

• An employer gives an employee a choice of resigning or being dismissed;
• An employer has followed a course of conduct with the deliberate and dominant purpose of coercing an employee to resign;
• A breach of a duty by the employer causes an employee to resign.

The Authority Member said “I have no qualms concluding Ms Blakely was constructively dismissed.

The Authority also considered whether the so-called “without prejudice” meeting should be excluded from consideration. Again, the Authority had no difficulty in concluding that it should be considered in evidence. Ms Blakely had been informed that following the failure of the parties to agree on an exit that it was back to work as normal, pending a formal disciplinary process. She had already been told that the relationship was untenable and she had no reason to believe that the process would be conducted fairly or with an open mind. The employer’s intention had already been signaled.

The Courts only deal with situations where the parties have been unable to agree on an outcome. There are likely to be many cases that we do not see where bold discussions have been successful. However, before an employer embarks on a bold discussion, the employer should realise that agreement may not be reached; a Plan B and even a Plan C should be prepared in case the bold discussion does not go well.

 Published in HR Magazine Summer 2022

The old adage that “justice moves slowly” is particularly true at present in New Zealand.

Court staff have been taking a form of industrial action by working to rule for over a month as they bargain for a new collective agreement. The industrial action is reported to be slowing down proceedings by up to 50 per cent - affecting victims, witnesses, jurors, defendants, family members, lawyers and judges in a system already battling huge backlogs. Our justice system is still dealing with a massive backlog of thousands of cases delayed by the pandemic.

The United Kingdom is facing a winter of discontent as many essential services go on strike or threaten strikes over the Christmas period. These include rail, buses, mail, nurses, ambulance services, teachers in Scotland and border workers.‘Tis the season for strikes

Prime Minister Rishi Sunak has said he is working on "new tough laws" to protect people from strike disruption. He told MPs if "union leaders continue to be unreasonable, then it is my duty to take action to protect the lives and livelihoods of the British public".

A bill has been introduced into the UK Parliament which would ensure minimum service levels on transport networks during strikes, but it is yet to be debated. Downing Street has said the legislation would be extended to other services but would not specify what these would be and no timescale was given.

In Australia, official data shows that it has had its most days lost to disputes since 2004 in the June quarter, as a tight labour market and cost-of-living pressures fuels demands for improved wages and conditions. 

Yet against those statistics the Australian government has just passed a substantial set of changes to industrial laws. The most controversial aspect of the changes relate to multi-employer bargaining, which has had union and business leaders at loggerheads for the past few months.

The laws will make it easier for unions to negotiate pay deals that cover multiple similar businesses. The most common examples are sectors like childcare and aged care, where there are many employers with lots of employees doing similar work.

Business groups have firmly opposed the changes, citing two primary concerns. They are worried about the possible cost to business of negotiating these deals and they are concerned about the potential for businesses to be roped into deals against their wishes.

Sounds familiar? Our Fair Pay Agreement legislation was recently passed into law as well; with similar arguments posed by business groups. It also has similarities to our existing laws in relation to multi-employer collective agreements (commonly called MECAs). MECA’s have been commonplace in some for our public services, such as those relating to doctors, nurses and teachers.

Multi-party agreements provide the potential for whole industries to be brought to their knees by strike action. While our public services have traditionally been very responsible with their strike action, we do not have to think very hard as to how that collective strength creates problems for the public. Strikes by our doctors, nurses and teachers have been very effective.

Other essential industries also have collective strength for bargaining. The protracted Fire and Emergency (FENZ) industrial dispute has finally been resolved, but only after a series of strikes.

Recently, the nation’s toilet paper supply was impacted by industrial action at one manufacturing plant in Kawerau. The trouble with industrial action at one employer site is that other similar employers secretly rub their hands in glee as they see their sales balloon and their brand recognition increases. If there was a MECA for the “toilet paper” industry, the effects of any industrial action could be profound and we could certainly face the prospect of being “caught short”. Read more

The right to strike has become increasingly recognised as a fundamental right in international law. There remains a continuing debate over the limits to this right and to the degree that it should be limited by law.

The UK Prime Minister is considering ways in which to curb that right as industrial action ramps up in the United Kingdom. Conversely, in Australia industrial laws are being loosened even though Australia is currently facing its own difficulties with industrial action.

What the unions know, and the public certainly know, the Christmas holidays are a good time for industrial action to have a major impact. Read more

Power companies are more often in the media as a result of their profits and the high cost of electricity. A “shout out” to Contact Energy for recently introducing a parental leave policy that helps set a benchmark that big business can look to and show their support for parents and their families in their workforces.

Key features include having the primary caregiver having a salary top-up to full salary for the 26 weeks of Government paid parental leave period which is currently $661.12 a week; the primary caregiver will also receive KiwiSaver Employer contributions of 3% for the duration of parental leave; when returning to work the availability of 6 months of flexible work including the ability to choose to work 80% of their normal weekly hours and still receive 100% of their normal weekly pay; a Childcare Koha of $5,000 as a contribution towards childcare.

Contact says this is all part of its vision to build a better Aotearoa New Zealand and to attract and retain the best talent from New Zealand and abroad.

The Chief Executive of NZIER has said that Contact is a role model organisation and it supports all moves to improve gender equity in the workplace. He referred to NZIER’s latest quarterly survey of business opinion that indicates a minimum statutory baseline approach for many employers in New Zealand. Only 8.9% of businesses who employ over 20 people top up the salary of their staff on parental leave for 26 weeks and only 6.4% of those same sized businesses continue to contribute to Kiwisaver accounts while on parental leave.

How does New Zealand compare? A recent report into maternity leave in OECD countries show that on average mothers are entitled to just under 19 weeks of paid maternity leave around childbirth. Almost all OECD countries provide mothers with at least 14 weeks leave around childbirth; the main exception is the United States which is the only OECD country to offer no statutory entitlement to paid leave on a national basis. The majority of OECD countries provide payments that replace over 50% of previous earnings, with 13 OECD countries offering a mother on average earnings full compensation across maternity leave.

Women are far more likely to be the primary caregivers, particularly during a period of parental leave. Only 1% of paid parental leave is taken by men.

A recent report from Te Ara Ahunga Ora Retirement Commission revealed that the gender wage gap continues into retirement. It showed that women have 20% less in retirement savings than men. The organisation’s director of policy Dr Suzy Morrissey said the disparity was likely a reflection of the impact of the gender and ethnic pay gaps, time out of paid work, and more women than men working part-time.

Most working people in New Zealand contribute to a KiwiSaver scheme which is tied to their employment. Even a period of 6 months out of the workplace caring for a child can have a significant impact on retirement savings. The effect is exacerbated when the caregiver wants to or needs to return to work part-time, sometimes for a number of years. Multiply that by having more than one child, and the difference can significantly impact on a workers retirement savings.

New Zealand is also a nation of small businesses. The Ministry of Business Innovation and Employment defines small businesses as businesses with fewer than 20 employees. There are approximately 546,000 small businesses in New Zealand, representing 97% of all firms. They account for 30 per cent of employment, around 680,000 workers. As at 2020 the average wage of a worker in a small business was just over $55,500. New Zealand also has a higher percentage of small businesses than many other countries.

Contact with its new parental leave policy is leading what New Zealand can do to support parents through those important few months of caring for a new child. Their policy means that the primary caregiver, whether male or female, is not advantaged for the first six months. The caregiver receives their usual salary. Importantly, the caregiver also receives the employer contribution to KiwiSaver (and with the caregiver receiving their usual salary the employee is also likely to continue with their KiwiSaver contributions).

Will the “big end” of town follow suit? Some will, but more probably, many will not. At the other end of town, while some small businesses may be more flexible when it comes to parental leave, the statistics show that many small businesses simply cannot afford to provide the parental benefits Contact is going to provide its workers.

Giving our children the best start in life is important. It would be a good aspiration to see that their caregivers are not disadvantaged, both when caring for the newborn and when the caregiver leaves the workforce and has to rely on their savings and whatever pension the government may provide in the future. Read moreParental Leave – caring for our future?