Government targets 'unfair' business tactics in new proposal

The Government has proposed ways to protect consumers and businesses from "unfair" commercial practices.  

These practices can cause "significant stress for consumers", Commerce and Consumer Affairs Minister Kris Faafoi said on Monday, and lead to financial difficulty for both individuals and businesses. 

They include the use of pressure tactics, deception and contract terms that are "very one-sided", said Mr Faafoi. That could be shifting risks onto one party, or allowing one party to "unilaterally vary the terms of a contract".

Minister for Small Businesses Stuart Nash echoed Mr Faafoi, saying he's concerned about the impacts relating to payments on small businesses. 

"Small businesses can face significant cash flow issues as a result of other businesses not paying them on time as per contract terms. This has flow-on effects for other parts of the economy, especially for the families and communities these businesses support."

He said the Government wants to "build a more productive, sustainable and inclusive economy, but we won't get there with these types of practices in the marketplace."

Greg Lloyd, a Wellington barrister specialising in employment law, raised issues around "bad employment practices" in an opinion piece Newshub published in May. 

He said one of the practices he finds most objectionable is in the construction industry, where workers are often labelled "independent contractors". 

"By doing so employers relieve themselves of a whole raft of obligations such as paying the minimum wage, annual holidays and sick leave, KiwiSaver, paid parental leave, providing safety gear, unfair dismissal obligations and more."

While existing provisions in the Fair Trading Act and Commerce Act protect consumers and businesses against a range of unfair commercial practices, the Government wants to make sure there aren't any gaps.  

"We need to strike a balance to ensure any changes are proportional to the problem. We want honest businesses to continue to compete effectively, negotiate firmly, and freely enter into contracts," said Mr Nash. 

Despite New Zealand being ranked the least-corrupt country in the world earlier this year, Transparency International New Zealand chair Suzanne Snively said at the time complacency remains the biggest challenge facing the country.

She said there needs to be "more public involvement in Government decision-making and a publically accessible registry of the beneficial owners of companies and trusts".