Moving the (business) goal posts

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Further changes to business law are in the pipeline, with Gaze Burt director Michael Bright heavily involved in efforts to help ensure any new regulation is appropriate and supports responsible businesses in the franchise sector.

The Government and the Ministry of Business, Innovation and Employment (MBIE) are considering further changes to business law, to match recent changes in Australia.  The key issue, as ever, is to ensure that any regulatory change produces meaningful benefits while putting as little burden as possible on responsible businesses.  The Franchise Association of New Zealand takes a keen interest in any regulation that could impact upon the franchise sector in NZ – a sector worth $27.6 billion to the NZ economy in 2017 ($46.1 billion if fuel retail and motor vehicle sales are included).  As the Association’s solicitor and member of the Association’s Legislation Advisory Committee, Michael plays a key role in helping the Association respond to proposed regulation.

Recent developments by the Government and/or MBIE include:

  1. Introducing a ban on unconscionable conduct in business dealings (whether business-to-business or business-to-consumer) and extending the current prohibition against unfair contract terms in standard form consumer contracts, to standard form business-to-business contracts under $250,000.  The Government intends to introduce a Bill into Parliament in the first half of 2020.
  2. MBIE is considering whether to recommend changes to protect vulnerable migrant workers.  Amongst other things, MBIE raises the possibility of joint employer liability not limited to migrant workers.  This would make any entity that has significant control over an employer liable for any breach by the employer of employment law, unless the first entity had taken reasonable steps to ensure the employer complied with their obligations.  MBIE’s primary focus is on franchising and sub-contracting arrangements.
  3. MBIE is considering whether to allow industry-wide Fair Pay Agreements.  Once agreed by a representative number of workers and interested employers, an FPA would apply to all workers (employees and contractors) and all employers in a defined sector of employment.
  4. MBIE is also considering ways to better protect independent contractors who are vulnerable to their ‘employer’ in much the same way employees are, but who do not currently have the legal protections given to employees.

There is a distinct possibility that some of these proposals will eventually become law, bearing in mind the precedent set in Australia and the close connections between NZ and Australian regulators.  But how long it takes, may depend upon the results of the next election.

Michael Bright
Michael Bright

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