Employers will face the prospect of personal grievance claims for offering lesser benefits to staff in KiwiSaver schemes under draft legislation tabled in the dying days of the current parliament.
But the Employment Relations (Protection for Kiwisaver Members) Amendment Bill, which passed its first reading late in August, still leaves open the prospect for mutually agreed ‘total remuneration’ packages.
According to the draft legislation, the employer must pay KiwiSaver compulsory contributions “on top of gross salary or wages except to extent that parties otherwise agree”.
The member’s bill, championed by Labour MP Tracey McLellan, does, however, reinstate like-for-like remuneration rights for employees unfairly penalised for contributing to KiwiSaver.
Technically, the draft law would amend the Employer Relations Act to include an ‘adverse affect test’, which weighs up total employee benefits such as “salary or wages, conditions of work, fringe benefits, or opportunities for training, promotion and transfer”, the preamble states.
Introducing the bill in parliament, Labour MP Rachel Boyack, said the ‘adverse affect test’ is “essentially a checklist to help figure out if an employee is being treated unfairly just because they have chosen to be part of the KiwiSaver scheme”.
“If any of these areas are lacking in comparison to employees without a KiwiSaver account, that’s a red flag and action needs to be taken,” Boyak said.
“… the bill makes it easier for those employees who are considered adversely affected by the aforementioned test to file a personal grievance. This provides the legal framework for those discriminated against due to their KiwiSaver membership to seek recourse.”
The draft bill is currently open for public submissions after passing its first reading and ahead of a possible committee stage perusal pending the makeup and inclination of the next government.
While the draft legislation would reinstate protections for employees with KiwiSaver removed by the-then National government in 2008, only the Act Party voted against it.
In supporting the bill at first reading, National MP Paul Goldsmith praised KiwiSaver architect Sir Michael Cullen for establishing the retirement savings regime.
“… when it came to the introduction of KiwiSaver as an institution in this country, I think [Cullen] is one of the relatively few members of Parliament who can point to a significant contribution, because there’s no question that many New Zealanders have been able to and encouraged to save more for their retirement because of this scheme,” Goldsmith told parliament.
He said National opposed KiwiSaver at the time but had since warmed to the system.
“In a perfect world, people should have every ability to choose how they want to save—whether they want to pay off their mortgage more or spend their money at particular times of their life—and so we were always a little hesitant around such a scheme,” Goldsmith said. “But, I think, time has indicated that it has worked well, and so that is why we have continued to—or we did, under the John Key Government, and we continue now to support the scheme.”
Submissions for the new bill close on October 30.
The 53rd NZ parliament dissolved on September 8 ahead of the October 14 election with the house required to sit within six weeks of the final results official sign-off.