Consultancy's part in review questioned

19:40, May 15 2012

Questions are being asked about why the Labour Department hired a private consultancy directed by a former Treasury secretary and ACT candidate to analyse a legal protection for vulnerable workers.

The work was completed last week and comes as unions brace themselves for changes to industrial relations laws they say will undermine collective bargaining, create more litigation and lead to lower wages.

Graham Scott is a director of Sapere Research Group, which was paid $50,000 to undertake a cost-benefit analysis of Part 6A of the Employment Relations Act.

Part 6A provides "continuity of employment" for groups of employees such as cleaners when a business is restructured and the work handed over to a new company.

Before it was introduced by the former Labour government in 2004, competitive tendering drove down wages and some workers faced the uncertainty of multiple restructures despite doing the same job.

Under the amended 2006 legislation, a review had to be carried out after three years and the results presented to Parliament.


Leaked department documents show the review was completed in April 2010 and a draft report recommended that the provision be retained.

However, the department ordered that further work be done and contracted Sapere.

Labour's industrial relations spokeswoman, Darien Fenton, said she believed the outcome of the review was not what Labour Minister Kate Wilkinson wanted.

"I don't believe this Government has ever liked Part 6A, they voted against it." She was very concerned about the involvement of Dr Scott in Sapere.

"This is a vital piece of employment law because it affects the most marginalised workers. I don't imagine an ex-Treasury head or ACT candidate would have the slightest concern, care or understanding of what life is like for those people," Ms Fenton said.

It was difficult to understand how a cost-benefit analysis could be done on a protection provision.

Service and Food Workers Union national secretary John Ryall was also concerned.

"It appears to me there may have been some agenda to undermine the findings of the report."

The report was written with assistance from an advisory committee involving union and business representatives.

"It was a pretty balanced committee and the report reflected that fact. I'm not quite sure why these outside consultants were brought in," Mr Ryall said.

Ms Wilkinson said she had no agenda over Part 6A. "I have absolutely no pre-determined ideas."

The review was not late, she said. "It was extended, but we really want to make sure we get the best advice possible. We wanted the full details in front of us so we can make an informed decision."

Ms Wilkinson said she had no concerns about Dr Scott's involvement in Sapere and was not aware whether he had personally worked on the analysis.

A spokeswoman for the department said three consultancies were sent tender requests for the work and company directors were not considered when tenders were evaluated.

The minister said she was considering the latest report, which included Sapere's analysis, and would release it in due course.

Dr Scott did not return calls.

The Dominion Post