If an employer told an employee one thing, encouraged them to rely on it, and then suddenly changed its position when it suited the employer, surely that would cause outrage. In the employment context the parties would be discussing some important underlying values such as “good faith”, “trust and confidence” and “misleading conduct”.
Governments are entitled to change their minds. Election campaigns are entitled to produce new policies. Circumstances change. Politics may be “politics” but perhaps employment law may provide a useful lesson.
The National Party’s announcement that, if re-elected, there will be “no new taxes” has created another problem for the Prime Minister. Only weeks ago, a bed tax was being actively considered. Now, Mr Luxon is being emphatic - “This is about no new taxes, and I can’t be clearer.”
Yet consideration of “bed taxes” have been part of regional deals with Auckland and Queenstown. Now National says it is off the table. The Auckland Regional Deal provides the most obvious difficulty. As recently as April this year Mr Luxon and Auckland Mayor, Wayne Brown, signed New Zealand’s first City Deal. The agreement describes a long-term partnership between central Government and Auckland Council and includes a commitment to “consider” an accommodation levy in 2027.
Mr Brown is understandably unhappy - “the deal is meaningless if the government cannot honour even a relatively modest commitment to explore an agreed proposal,” he said.
The position of Queenstown is interesting because the regional deal has not yet been signed. It is understood that, like Auckland, consideration of a bed tax was to have been part of that agreement. The proposed agreement was due to have been signed in August, but the signing was postponed amid National’s internal leadership crisis.
Queenstown Lakes Mayor, John Glover, described National’s decision as a “complete U-turn” and said it felt like “policy making in a state of panic”. Destination Queenstown said the reversal was a “massive blow”.
The New Zealand First leader has taken a more principled view to National. “A deal is a deal,” Mr Peters said. He says the signed Auckland agreement states that the levy will be considered in 2027 and that “nothing has changed”.
Politics being politics, Mr Peters went further, saying that when Mr Luxon made the commitment he was speaking on behalf of the Government, not merely the National Party. The Labour Party Leader, Chris Hipkins, made the political point more sharply: “If the mayors across the country can’t trust Christopher Luxon’s signature, why should any New Zealanders?”
Why does it matter? It is about setting expectations and letting New Zealanders rely on them. Back in 2017 the then National-led government passed a forerunner to the pay equity legislation for the health sector. In 2018 when it was in opposition, National supported the Labour government’s new Equal Pay Act, as well as the Equal Pay Amendment Act in 2020. Those changes were designed to extend a pay equity process to all occupations and create a clearer pathway for making pay equity claims. Both major parties were seemingly aligned.
Last year the National lead government made changes to the legislation that meant that existing pay equity claims would be blocked. Those claims were in some of our most valued occupations - Plunket nurses, community midwives, hospice nurses and health care assistants, primary care nurses, nurses in residential care. In making the changes the government also raised the bar for future claims to be successful.
The Employment Relations Act requires employers and employees to deal with each other in good faith. It goes further than simply requiring honesty. The parties must not directly or indirectly do anything to mislead or deceive each other, or anything likely to mislead or deceive. The Act says the obligation is wider than the implied obligations of trust and confidence and requires the parties to be active and constructive, responsive and communicative.
That is a pretty high standard, but it is something New Zealand values and it has enshrined those values in our laws.
Governments, like employers, depend on relationships. An employer may change its mind. But if it has made a commitment, the process of changing course matters. It cannot simply pretend the earlier commitments never happened. It is about maintaining relationships through honesty, communication and consistency. Trust and confidence are damaged when commitments are made and then discarded. Read more.....