New Zealand is an international country with high population mobility. Due to our small size, many Kiwi companies look to international talent to fill crucial or critical roles.

Having worked in the employment and immigration space over the last 20 years, since before the current immigration act was even created (in 2009), I am well experienced in the process of obtaining and renewing work visas, and I am proud to do my part in helping New Zealand grow. While in usual circumstances a visa renewal may be a routine process, recent Immigration Policy shifts have rendered the normal, abnormal. In response to the tightening work visa requirements, an increasing number of New Zealand businesses have opted to abandon their Accredited Employer status, or to let it expire. The cost has become too great.

At the same time, there have been developments in the Employment Courts which may mean that in certain situations there are good faith obligations for employers, requiring them to take reasonable efforts to support an employee’s work visa application, prohibiting employers from simply letting a visa lapse as a means to avoid proper termination processes. If an employer is found to be in breach of their good faith obligations, then it may be subject to pay a substantial penalty.

It now falls onto employers to tread carefully on the balancing act of complying with Immigration requirements and employer good faith obligations. I am of the view that it is an overall net positive development for our society as a whole. However, it does mean that greater care is needed when embarking on hiring a migrant worker. My experience is that during the 2022-2023 ‘boom’ many businesses neglected seeking proper advice, focusing on the gold rush of foreign labour. Now that the chickens have come home to roost, it is time to consolidate and look within for ways to promote stability and sustainability for the next 5 years.

Good Faith and Enhanced Employee Protections

One of the primary implications of good faith requirements is the enhanced protection they offer to employees. By mandating that employers actively support their employees’ visa applications, this obligation help ensure that workers are not unfairly disadvantaged due to their immigration status. This protection is particularly important for migrant workers, who may otherwise be vulnerable to exploitation or unfair dismissal. This has been a sticking point in the later half of 2023 to now, and I have been involved in a number of investigations and or disputes where the particular intricacies of visa obligations interact with employer obligations. According to feedback in the industry, my experience is hardly unique.

One example of bad faith termination - an employer, upon discovering that a poorly performing employee’s visa is due to expire, might instead choose to let that employee’s visa lapse as a way to circumvent proper termination procedures. This could leave the employee without legal recourse and in a precarious situation, suddenly without lawful status in New Zealand and pressured to leave or face deportation. Bolstered good faith requirements may prevent such scenarios by ensuring that employers cannot use visa status as a tool for unfair dismissal.

The Challenge of Increased Employer Responsibility

Good faith obligations significantly increase the responsibilities of employers. The case law is suggesting that businesses ought to support their employees’ visa applications, by not just doing the rounds of paperwork, but may, depending on the situation, require further actions such as carefully considering the alternate ways the business may support the employee.

This increased responsibility can be seen as a double-edged sword. On one hand, it ensures that employers are more diligent and accountable in their management of employees’ visa statuses and consideration of what it can do on an operational level. On the other hand, it can also impose additional administrative and financial burdens on employers, particularly smaller businesses that may lack the resources to manage these tasks effectively.

I would suggest that any employers facing such a situation seek specialist assistance before taking any action or falling into inaction. The courts have also deemed inaction to potentially reflect lack of good faith.

Improved Job Security for Migrant Workers and Higher Productivity

For migrant workers, the introduction of good faith obligations can lead to improved job security. Knowing that their employer is legally required to support their visa applications can provide a sense of stability and security, reducing the anxiety and uncertainty that often accompanies the visa renewal process. This is a good thing, and we as a country will agree that it is the right thing to do!

This improved job security can have several positive effects. It can lead to higher job satisfaction and loyalty, as employees feel more valued and supported by their employers. Additionally, it can enhance productivity, as workers who are not preoccupied with concerns about their visa status are likely to be more focused and engaged in their roles.

Good faith obligations can also have a positive impact on employer-employee relationships. By actively supporting their employees’ visa applications, employers demonstrate a commitment to their workforce and a willingness to invest in their employees’ futures. This can foster a sense of trust and loyalty, leading to stronger and more positive relationships.

Employees who feel supported by their employers are likely to be more engaged and motivated in their roles. This can lead to higher levels of job satisfaction and productivity, benefiting both the employee and the employer. Additionally, a supportive work environment can enhance the overall workplace culture, making it more inclusive and welcoming for all employees. Ultimately, a work visa can have the potential to lead to a pathway to residence in New Zealand. Ensuring that employers understand their part in this process can lead to better outcomes for all, with motivated workers returning dividends to the business in the form of increased productivity.

Administrative and Financial Implications for Employers

The big gripe from business usually falls along the lines of how the enhanced good faith obligations will bring about significant administrative and financial implications for employers. Supporting an employee’s visa application involves a range of tasks, from gathering and submitting documentation to liaising with immigration agencies or the Immigration New Zealand officers. These tasks can be time-consuming and in most cases is more cost effective if deferring to specialized providers.

This is of course paired with the direct financial costs associated with the visa application process, such as application fees and processing expenses. Immigration New Zealand’s new fees regime on 1 October 2024 will see, in some instances, a doubling of the application fee. For most small to medium size businesses, these costs will without a doubt be particularly burdensome. Employers will carefully consider the benefits of hiring international talent against such increased administrative and financial challenges.

Another important implication of good faith obligations is the need for employers to ensure compliance with all relevant immigration laws and employment obligations – not just the Employment Relations Act, but all the surrounding gamut of case law, relevant legislation and not to mention the process of following an Investigation or Mediation itself. If the employer does not get it right then it could face a hefty fine or penalty at the Employment Relations Authority.

Another issue is the increased administrative burden on employers, particularly smaller businesses that may lack the resources to manage the visa application process effectively. This can lead to additional costs and time commitments, which may be difficult for some employers to manage. Most employers are not employment or immigration experts, and trying to learn about the process ad hoc is very stressful and distracting from the business’ real work.

Although not a legal problem per se, the conventional wisdom is that where there are people, there is the potential for conflicts or misunderstandings. Miscommunication or failed expectations on the visa application process can again lead to a claim in the Employment disputes area. Employees may seek compensation even when no longer within New Zealand – it is in a business’ best interest to tread carefully.

Less Work Visas?

The implications of clarified good faith obligations for employers to support work visa holders will have significant implications for both employers and employees. If everyone behaves properly, obligations may be seen not as a negative experience, but as an internalised world view of not being an evil employer.

The benefits of good faith obligations in creating a fairer and more supportive work environment for migrant workers outweigh the potential drawbacks. By fostering a sense of trust and loyalty, enhancing job satisfaction and productivity, and promoting compliance with legal requirements, the net positives will contribute to a more just and equitable workplace. Employers must therefore internalise these standards of fairness and demonstrate that they are committed to supporting their employees’ visa, if any,

It is not the Kiwi way to endorse indentured servitude. While I would expect the net number of work visa applications decrease with these various levers being pulled to disincentivise migrant labour, I am hopeful that the balance will come in the form of increased net migration of valued, skilled and committed workers, with the expected outcome of the majority of such to become long term productive residents of New Zealand.