Pay cut clause cut out of job support scheme proposals

It was originally intended that bosses whose companies moved to a Government subsidised nine-day fortnight would have had to take pay cuts as well, it was reported tonight.

TVNZ news said the planned forced pay cut was dropped due to lobbying from business.

The scheme lets private sector businesses, workers and unions negotiate voluntary agreements to reduce their hours of work to a nine-day fortnight.

The Government pays employers $12.50 an hour per worker – the adult minimum wage – for up to five hours a fortnight.

Management of at least one firm that took up the scheme took pay cuts but Social Development Minister Paula Bennett told TVNZ it would have been too complex to make it mandatory.

The Government expanded its nine-day fortnight job support scheme to include businesses with 50-100 workers in April.

When the scheme was introduced after February's jobs summit it applied to businesses with more than 100 workers, and it has had limited success.

It had been estimated that expanding the scheme would open it to another 2000 firms and about 140,000 workers.

If about 6000 workers from medium-sized businesses took part, it would cost around $4.5 million.

TVNZ said 48 companies had applied for the subsidy, with 43 being approved.

It was estimated this covered about 3500 workers and saved or delayed the axing of 550 jobs.