Employment law abuse to be rewarded

Last updated 10:48 03/03/2010

Labour Minister Kate Wilkinson has taken a leaf from Finance Minister Bill English’s book. Bill English says he will drop the top personal tax rate because high-income people are evading the tax. Instead of tackling the tax cheats and closing the loopholes Bill English intends to reward their theft from the public purse.

Yesterday Kate Wilkinson announced that because some smaller employers can’t follow employment law the government is considering extending the 90 day probationary period so workers will face longer periods of time in which employers can sack them at will.

Wilkinson says extending the 90 day period would help smaller employers to better cope because employment problems disproportionately affect them.

If we translate that spin into real life we get this: Some smaller employers can’t follow proper employment practices and can’t treat their employees fairly so the government will remove the requirement for them to follow the law for a longer period of time. Ignorance and abuse of the law is to be rewarded with exemption from the law.

The minister freely admits the government has no real idea how the current law is working and the Department of Labour has no evidence to help a decent debate.

She says it appears to be successful and has anecdotal evidence to say so. She seems to have heard from employers saying they like not having to be fair to employees. How surprising.

So now she’s floating the idea of extending the law to larger worksites. Currently the law applies only to sites employing up to 20 people but Wilkinson says the government will consider extending the probationary period to worksites of up to 49 employees.

The proposal indicates just how ideologically driven the government is. Despite employment law in New Zealand being already heavily weighted against employees Wilkinson proposes to tip the balance even further against workers which would increase hardship and reduce the legal rights of employees.

Ironically the Department of Labour discussion document says the lack of union representation in smaller workplaces is exacerbating the problem.

They say employers at small sites often lack the procedures, resources and experience to deal with employment problems and end up with a higher incidence of personal grievances filed against them. At larger worksites union representation can help defuse problems before they reach a head.

Instead of removing the rights of workers because some small employers refuse to follow the law, the government would be better advised to make it much easier for unions to negotiate multi-employer collective employment agreements. This would allow coverage of smaller worksites by unions who currently find it is not cost effective to do so.

In the past New Zealand workplaces benefited from national awards which set industry-wide standards and allowed cost-effective union representation of workers in smaller workplaces.

Since the smashing of that system by the 1991 Employment Contracts Act New Zealand wage rates have dropped drastically compared with Australia, our level of capital investment in innovation and new technology has lagged behind (typically now 20 percent behind Australia), our social problems have escalated and the government’s answer is to hollow out employment rights even further.

Rewarding poor employers who have bad workplace practices is a lazy and cowardly approach to employment law that is a perfect match to Bill English’s approach to high-income taxpayers.

43 comments
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Mike   #1   11:27 am Mar 03 2010

So the minister says she has anecdotal evidence to support a change.....do you have even that much to support your case?

Sheriff of Nothing   #2   11:38 am Mar 03 2010

"Despite employment law in New Zealand being already heavily weighted against employees".

How can you possibly expect anyone to take you seriously with statements like that?

cm   #3   12:01 pm Mar 03 2010

John you are being deliberately ignorant to find some retoric to spew.

Employment issues do disproportionately impact on small businesses. Larger companies tend to have many parallel jobs on the go and can do a lot more "load balancing" to keep their employment levels more constant, smaller companies tend to go through far more volatile cycles of being over and under utilised and thus over and under staffed. Thus, these smaller companies need more flexible employment regulations to make a go of things.

Small companies are the major employer in NZ and they need support. Shut them down, or force them to reduce their efficiency, and they will employ less people... and how will that help?

There are very few Fat Cat small companies. Most are very good to their staff and most small business owners don't take home CEO-level salaries.

Ben   #4   12:16 pm Mar 03 2010

I do not think that you have any conception of the problems faced by owners of small business; the 1001 compliance issues they face. The penalty of spending your life in academia and protesting outside tennis courts.

It is not a matter of refusing to follow the law. It is a matter of lacking the resources to negotiate the labyrinthine processes required to get rid of a duff employee. The vast majority of employers are decent and hard working and loyal to their staff. When these employers get an employee out to rort the system (and such employees do exist)they do not deserve to be punished because they have failed some obscure procedural test. The substance of the claim should be of greater importance.

Cheer up   #5   12:30 pm Mar 03 2010

John you need a holiday, please cheer up, I set you a personal challenge to write a blog that doesn't critisize anyone, moan about anything, or generally fabricate ideas to suit you exceptionally left leaning views. Business isn't out to get everyone John, in fact without it we'd all be up the creek. Smile mate.

ian boag   #6   12:33 pm Mar 03 2010

Mike #1

If we have a look at what sort of basis John and Kate might have for their statements.

John works as a union advocate. He spends a lot of time representing employees in disputes. Even you will no doubt accept that not all employers are angels. From my own anecdotal experience I would say he is right when he says that ignorance of the law, procedures etc by employers is often a problem. He is speaking from day-to-day experience.

If one wanted to bog this whole thing down in detail I don't doubt he can quote cases that even "reasonable" folk would find a bit on the nose.

The Minister is not involved in front-line employee relations stuff. She is advised by a department whose best offer seems to be "anecdotal evidence that the law is working well" whatever that means. I think she's poorly served if that's the best they can do.

I'd be willing to bet that John could produce a whole lot more examples to support his view than Kate could of hers. And she has a whole government department to call on ...

Just so we get this clear, I'm not a rabid socialist, I know that some of the ERA decisions beggar belief etc etc but John knows more about this than most of us because it's how he spends his day.

eddie   #7   12:38 pm Mar 03 2010

And this nonsense of Mr Minto is again another, as if we needed another, example of why NZ does not need Unions. If this is an example of Union thinking, they should never be allowed into any workforce!

kelvin2   #8   01:24 pm Mar 03 2010

Again I am in agreement with John here.

Why should employers be able to stretch out the period in which a new employee is able to settle into a role. We all (those of us who employ people) know that it takes at least six months for new employees to settle into a role, but why let them take so long. Productivity is the mantra, so if they don't show any signs of improvement in the first two months, flick em! There's plenty more people just waiting to be employed. Just look at the thousands that turned up to the Checkout roles in Pukekohe. Small employers need to toughen up. They aren't a charity. They are there to make money. And even if they aren't there to make money, no one will care or believe them. So, flick the bad employees. And don't be concerned that they won't be able to find employment. A sacking may just be the catalyst for them to start their own enterprise. And if the employee would have taken six months to settle into a role? Tough. They shouldn't have slacked around in the first couple of months. It's not as though they were working on the CERN Atom smasher. Lets improve the productivity of the country, make the hard decisions faster.

PS. High income earners don't "evade" tax. That is illegal. They arrange their affairs to minimise their tax obligation, which is totally legal, and is backed by case history going right up to the Privy Council.

Mike   #9   01:44 pm Mar 03 2010

Ian Boag.....I'm a union delegate too.......

I don't disagree that an extension is both unecessary and intrusive.....but just for a change I'd like John to make an argument premised on somethign factual and checkable rather than bluster and fear mongering.

Alan Wilkinson   #10   02:14 pm Mar 03 2010

Minto logic: "If I want to work for a bad employer who doesn't want me I should be able to do so for as long as I choose."

Yeah, right. Pure stupidity bottled and exhibited.


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