Vulnerable Workers in New Zealand: The Complete Guide

In New Zealand's diverse workforce, vulnerable workers often find themselves in the shadows of mainstream employment discussions. These individuals, encompassing part-time employees, gig economy participants, migrants, and those in low-skilled jobs, face challenges that are unique and critical to address.   

This article puts a spotlight on the situation of vulnerable workers, underpinned by key legislation, including New Zealand's Employment Relations Act 2000, the Health and Safety at Work Act 2015, the Employment Relations Amendment Act 2018 and the newly passed Worker Protection (Migrant and Other Employees) Act 2023 (WPMEA).   

Who are vulnerable workers? 

Several factors identify groups at higher risk of exploitation and unfair treatment. The Employment Relations Act 2000 specifies "vulnerable workers" in Schedule 1A. This includes employees in industries where restructuring situations are frequent, undermining their terms and conditions and leaving them with little bargaining power.   

Specific categories of vulnerable employees in encompass: 

• Cleaning staff and others engaged primarily in cleaning services. 

• Catering staff involved in food services or similar areas. 

• Laundry personnel serving the education, health, or residential care sectors. 

• Orderlies working within health or residential care environments.  

• Individuals providing caretaking services within the educational sector. 

In New Zealand, employees deemed vulnerable receive extra protections under employment law during restructuring or significant changes, as these situations disproportionately affect them, particularly through the likelihood of their roles being outsourced. Specifically, it grants them the right to transition to the incoming employer should their work be contracted out.  

Vulnerable workers: A broader understanding 

Beyond the legal definition, several characteristics commonly associated with vulnerable workers include: 

• Low wages and limited bargaining power.  

• Migrant workers with limited English language proficiency. 

• Short-term or precarious employment. 

• Young or inexperienced workers. 

• Discrimination and marginalisation based on race, ethnicity, gender, sexual orientation, age, or disability.  

• Certain industries, such as horticulture, cleaning, and construction due to a reliance on migrant labour, subcontracting practices and potentially hazardous working conditions. 

What challenges do vulnerable workers face?  

Unfortunately, vulnerability in the workplace often translates to a multitude of challenges. Here are some of the most pressing issues vulnerable workers face.   

Precarious job security due to outsourcing and restructuring 

Many vulnerable workers hold positions in sectors susceptible to outsourcing or restructuring, such as manufacturing, cleaning, and retail. When companies outsource jobs overseas or restructure internally, vulnerable workers are often the first to be laid off due to their lower seniority or lack of specialised skills.   

This can lead to sudden unemployment, financial hardship and difficulty finding new employment due to their age, experience, or immigration status.  

Low wages and exploitation 

Many vulnerable workers can be trapped in low-paying jobs with minimal benefits. Migrant workers, for instance, may be unaware of minimum wage laws or pressured to accept substandard pay due to visa concerns. Young workers starting their careers can also be particularly susceptible to exploitation, facing unpaid internships or minimum-wage jobs that barely cover basic living expenses.  

Unsafe working conditions 

Vulnerable workers are often placed in hazardous situations with inadequate safety training or equipment. This can range from construction workers exposed to dangerous chemicals without proper protection, to cleaners working with harsh cleaning products without ventilation. The pressure to meet quotas or finish tasks quickly can further heighten the risk of accidents and injuries.  

Discrimination and harassment 

Vulnerability often intersects with other forms of discrimination, leading to targeted harassment and unfair treatment. Migrant workers may face racism or xenophobia, while young workers might be subjected to bullying or ageism. Additionally, women and LGBTQ+ individuals working in vulnerable sectors may experience gender-based or sexual harassment.  

Lack of access to employment rights and support 

Many vulnerable workers lack awareness of their legal rights and struggle to access support when faced with unfair treatment. Language barriers, fear of retaliation and complex legal procedures can create significant hurdles in seeking help. Additionally, limited access to unions with collective agreements or advocacy groups can leave them feeling isolated and unsupported.  

Legal framework: Protections for vulnerable workers 

The Employment Relations Act 2000, operated by the Employment Relations Authority (ERA) and the Health and Safety at Work Act 2015 form the cornerstone of worker protections in New Zealand. These laws address unjustifiable dismissal and mandate safe working conditions.   

Greater protections for vulnerable employees were enacted with the Employment Relations Amendment Act 2018 in certain key scenarios, particularly during reforms or restructuring of their roles. These scenarios occur when their employer: 

• Sells or transfers ownership of the business. 

• Outsources the work of vulnerable employees to a different company. 

• Is a contractor and loses the service contract to another company. 

• Is a contractor, and the contract ends because the business or organisation decides to perform services internally. 

Restructuring examples in the workplace 

• A school that employs its own cleaning staff decides to contract an independent company for these services. The existing school cleaning staff can move to the new contracting company. 

• A hospital that initially contracts an external company for its food catering needs decides to terminate this agreement. If the hospital then contracts a different company to provide the same catering services, the employees from the original catering company can join the new contractor. 

The rights of vulnerable workers  

In New Zealand, under the Employment Relations Amendment Act 2018, vulnerable employees are afforded the opportunity to transfer from their current employer to a new one while retaining the existing terms and conditions in their employment agreement if: 

• Their current role is outsourced. 

• A reorganisation results in a new employer assuming control of the business (or the specific segment of the business they work in). 

Vulnerable workers are given a notice period of 20 days, allowing them ample time to consult and make an informed decision about a transfer to the new employer.  

The Worker Protection (Migrant and Other Employees) Act 2023 

 The Worker Protection (Migrant and Other Employees) Act 2023 came into effect on January 6, 2024. It amended the Immigration Act 2009, the Employment Relations Act 2000, and the Companies Act 1993 to strengthen protections for vulnerable workers in New Zealand.   

Main objectives 

• Combat migrant worker exploitation: A crucial focus, addressing unfair practices like underpayment, unsafe working conditions, and visa manipulation. 

• Extend protections to all vulnerable workers: While migrant workers were a key driver, the bill broadens safeguards to encompass other vulnerable groups like young workers, seasonal workers and those facing discrimination. 

• Strengthen enforcement: It introduces new infringement offences and penalties for employers violating worker rights, aiming for earlier intervention and deterrence. 

• Prevent repeat offences: It empowers courts to disqualify individuals convicted of exploitation from managing companies, hindering them from continuing harmful practices. 

What employers need to know  

• Increased accountability for employers: Businesses face stricter enforcement and harsher penalties for non-compliance, encouraging fair treatment of all workers. 

• Enhanced protection for vulnerable groups: Migrant workers, young workers, and others at risk gain clearer legal protections and easier access to justice. 

• Improved transparency and information: Employers must provide clearer pay information and records, enhancing workers' awareness of their rights. 

• Potential economic impact: Some businesses may incur higher compliance costs, but a fairer, more ethical labour market could attract and retain talent, benefiting the economy long-term. 

Seeking advice on vulnerable workers in your business?  

Protecting vulnerable workers isn't merely a legislative matter — it's a collective responsibility.  

Employers, employees, communities, and policymakers all play a crucial role in creating a fairer and more equitable work environment. If you operate in an industry that traditionally relies on vulnerable workers and have questions about your obligations, contact Employsure today.