Brooke van Velden is New Zealand's Minister for Workplace Relations and Safety, a portfolio she has held since November 2023 as part of the coalition government formed by the National Party, ACT New Zealand (her party), and New Zealand First. As a member of ACT, a libertarian-leaning party, van Velden has championed policies aimed at enhancing business flexibility, reducing regulatory burdens, and balancing workplace relations. Before entering politics, she worked in public policy and communications, including roles at the New Zealand Taxpayers’ Union, which shaped her pro-market, limited-government philosophy. Her tenure as minister has been marked by a series of reforms to the Employment Relations Act, reflecting her commitment to employer empowerment and economic efficiency.
On December 9, 2024, van Velden announced the Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill, which seeks to reinstate employers' ability to deduct pay from employees engaged in partial strikes. Partial strikes involve workers performing some but not all of their duties—such as "working to rule" (strictly adhering to minimum job requirements) or refusing specific tasks—while still attending work. This tactic is often used during collective bargaining to pressure employers without fully halting operations.
The policy reverses a 2018 decision by the previous Labour government, which prohibited pay deductions for partial strikes unless employees completely withdrew labour. Under the new bill, employers can deduct wages proportional to the work not performed, provided they notify unions and justify the calculation. If unions dispute the deduction, they can appeal to the Employment Relations Authority for adjudication. The bill passed its first reading in December 2024 and is progressing through Parliament, with implementation expected in 2025.
Van Velden has framed this as a necessary rebalancing of industrial relations, arguing that partial strikes disproportionately harm the public and employers while employees face no financial consequence. Examples cited include hospital MRI technicians limiting scans (delaying cancer treatments), teachers refusing to teach certain classes (disrupting education), and train drivers working to rule (affecting commuters). She posits that reinstating deductions will incentivise quicker resolutions at the bargaining table and minimise community disruption.
Context of the Policy
The re-introduction aligns with broader coalition government objectives to bolster employer rights and streamline labour laws. It follows other reforms under van Velden’s watch, such as removing unjustified dismissal protections for high earners (over $180,000 annually) and reducing personal grievance payouts for employee misconduct. These changes reflect a shift toward a more employer-friendly framework, consistent with ACT’s deregulatory agenda.
Historically, pay deductions for partial strikes were permitted under National-led governments until Labour’s 2018 repeal, which unions hailed as a victory for workers’ rights. The reinstatement has reignited debate, especially as many public sector collective agreements are set to expire in mid-2025, potentially increasing industrial action.
Analysis of Effects
Effects on Employees
Financial Impact
Wage Loss: Employees engaging in partial strikes will face immediate financial consequences, with pay docked based on employer-assessed reductions in output. For low-wage workers, such as those on or near the minimum wage ($23.50/hour as of April 2025), this could strain household budgets, particularly if disputes drag on.
Disproportionate Penalties: Critics, including the New Zealand Council of Trade Unions (NZCTU), argue that deductions may exceed the actual loss of productivity. For instance, a 10% reduction in work could trigger a larger deduction if employers overestimate impact, raising fairness concerns.
Bargaining Power
Reduced Leverage: Partial strikes are a strategic tool for unions to exert pressure without the risks of full walkouts (e.g., public backlash or replacement workers). Pay deductions weaken this tactic, potentially forcing unions toward full strikes, which are costlier and riskier for workers.
Escalation Risk: The NZCTU warns that penalising partial strikes could escalate disputes into more disruptive full strikes, as workers may feel compelled to maximise impact to offset losses.
Workplace Dynamics
Morale and Trust: Employees may perceive the policy as punitive, eroding trust in employers and the government. This is compounded by van Velden’s reported reluctance to meet with the NZCTU, signalling a dismissive stance toward union concerns.
Chilling Effect: Fear of pay cuts could deter workers from using partial strikes, even in legitimate disputes, potentially suppressing collective action and weakening labour rights.
Effects on Employers
Operational Flexibility
Response Mechanism: Employers gain a tool to mitigate the financial and operational toll of partial strikes. For example, a hospital facing limited MRI scans or a school with disrupted classes can offset costs by reducing pay, easing pressure to concede quickly in negotiations.
Cost Management: Businesses, particularly small and medium enterprises, benefit from avoiding full wages for reduced output, aligning labour costs with productivity.
Bargaining Leverage
Incentive to Negotiate: Van Velden argues that deductions encourage unions to resolve disputes faster, as workers face immediate consequences. This could shorten industrial actions, benefiting employers reliant on consistent operations (e.g., transport or healthcare).
Risk of Backfire: However, if unions escalate to full strikes, employers could face greater disruption, negating the intended benefit.
Legal and Administrative Burden
Compliance Costs: Employers must calculate and justify deductions, risking disputes if unions challenge their math. Appeals to the Employment Relations Authority could tie up resources, especially for smaller firms lacking HR expertise.
Reputation Risk: Aggressive use of deductions might damage employer-employee relations or public perception, particularly in sectors like healthcare where goodwill matters.
Broader Implications
Public Impact: Van Velden emphasises that partial strikes burden the public (e.g., delayed medical care, disrupted transport). Deductions may reduce such actions’ frequency, but escalation to full strikes could amplify public inconvenience.
Economic Context: With inflation at 2.2% (exceeding the 1.5% minimum wage rise for 2025), workers already face real-term pay cuts. Adding strike deductions could deepen financial stress, potentially fueling discontent amid New Zealand’s post-recession recovery.
Political Divide: The policy underscores a rift between the coalition’s pro-business stance and labour advocates. Opposition parties (Labour, Greens) and unions decry it as “anti-worker,” while business groups like Business NZ likely welcome the flexibility.
Van Velden’s rationale—that deductions restore fairness and efficiency—rests on the assumption that partial strikes disproportionately harm employers and the public. While this holds in high-stakes sectors (e.g., healthcare), the policy’s blanket application risks oversimplification. Not all partial strikes cause significant disruption; some are symbolic or low-impact, yet employers could still impose deductions, potentially punishing intent rather than outcome.
The NZCTU’s counterargument—that this will escalate tensions—is plausible. Historical data under prior deduction regimes (pre-2018) could clarify whether disputes shortened or intensified, but such analysis is absent from current discourse. Without it, the policy’s effectiveness remains speculative.
For employers, the benefit hinges on execution. Overzealous deductions could provoke legal challenges or union backlash, offsetting gains. For workers, the policy aligns with a broader trend under van Velden—curtailing protections (e.g., high-earner dismissals, grievance reforms)—suggesting a deliberate shift toward employer dominance in labour relations.
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