'Time right' to restore security to redundancy

16:00, Dec 03 2012

A Hamilton-based MP is reviving a failed bill to protect the incomes of employees who are made redundant.

Labour women's affairs and early-childhood spokeswoman Sue Moroney yesterday told the Waikato Times the time was right to put her colleague Darien Fenton's Redundancy Protection Bill back on the political agenda.

"I see the bill as being very timely because of the sheer number of people who through no fault of their own are finding themselves on the scrap heap because the Government doesn't have an economic plan," she said.

The bill - which was originally defeated at its first reading in 2010 - was drawn from the ballot last week and is on the order paper to be debated tomorrow.

It will amend the Employment Relations Act 2000 and give workers minimum entitlements when redundancy looms.

"It's a significant bill for the thousands of New Zealand workers who have been made redundant in recent times . . . because what we know is that about 80 per cent of workers don't have a redundancy agreement in their employment agreement."


Employers will be required to give four weeks' notice of redundancy, four weeks' remuneration for the first year of employment and 2 weeks for each subsequent year. The maximum redundancy package is set at 26 weeks.

"The job market is so flat that when someone is made redundant it is very hard to replace that income quickly and their family will be without an income for longer and longer periods."

Ms Moroney said her Paid Parental Leave Bill proved a private member's bill can pass the first hurdle despite opposition from the National-led Government, but she had "yet to test" her level of support.

Waikato Chamber of Commerce chief executive Sandra Perry said the timing was not right for Ms Moroney's bill and it would increase costs for businesses.

"Businesses are reasonably buoyant right now and trying to get on with their own company business, and these business compliance issues are just not required."

Mrs Perry said redundancy packages worked in the 1990s when the economy was stronger but many businesses would not be able to bear the added costs.

"This is a huge cost for business and it is something that was around in the past and it would be too high a cost for small business."

Many employment contracts had a four-week notice of redundancy clause and workers were entitled to negotiate the terms of their contracts.

"I am sure some people in their individual contracts have been able to negotiate a reasonable redundancy but for the majority it is just not the way of the business environment any more.

"Employers are not going to be in favour of it. It will make them very edgy about employing people."

Ms Moroney said it was "a rewriting of facts" to suggest redundancy impacted on business.

"Redundancy has always been paid by employers and it is a really important mechanism to ensure that it is a genuine redundancy and not an underhanded way of getting rid of someone for performance matters.

"It's a flatlining economy that is doing the damage and that's really clear to see at the moment."

Waikato Times