A radical extension of employment law

August 24th, 2013 at 10:00 am by David Farrar

Stuff reports:

Tens of thousands of women have been given a new weapon in the fight for equal pay after a landmark court decision.

Both sides of the debate have called the Employment Court’s ruling on Thursday a “significant” shift, which is likely to give unions more power to fight employers over gender discrimination.

Even when it isn’t gender discrimination!

The Employment Court has ruled women in female-dominated industries can now compare themselves to men in other industries requiring similar skills when pushing for pay equality.

Employers had argued women workers should only be compared with men in the same industry doing the same work and warned a broader view would be “unworkable”.

However, the court rejected the employers’ interpretation, claiming they could “simply perpetuate discrimination in rates of pay to women”.

This is a fairly radical extension of the law. The law was passed so that if an employer had men and women all doing exactly the same job, and they were paying the men more than the women, it would be illegal.

The court has now interpreted this as saying now they no longer have to be doing the same job, or even be in the same industry. It can compare the job of say a teacher to a police officer and decide for all of New Zealand that teachers must all be paid the same as police officers!

Currently industries traditionally considered “women’s work” could continue to pay women poorly simply because a small group of male co-workers shared their low wages, the court said.

This is the key point. There was no evidence at all that male workers doing the same job were being paid more. In fact they were not.

One can debate about whether or not courts should have the power to declare workers in one industry must be paid the same as workers in another industry. I don’t think they should. But what is galling is there has been no debate in Parliament and no law change.

TerraNova executive director Terry Bell said the company was still considering whether to appeal the court’s decision.

I hope they do. Such a radical and far reaching decision should be made explicitly by Parliament.


Minimum wage and KiwiSaver

August 22nd, 2013 at 11:00 am by David Farrar

Stuff reports:

An employment case that could effectively raise the minimum wage for workers enrolled in KiwiSaver is being “watched closely” by employers, a lawyer says.

The case, which was heard in the Court of Appeal yesterday and could mean an extra $450 a year for those on the minimum wage, was described as of “considerable public interest” by one of three judges assigned to make a final ruling.

Lower Hutt caregivers Vasivasi Faitala and Dalrene Goff took employer TerraNova Homes & Care to court last year, arguing it was unfair that they had to pay their own and TerraNova’s KiwiSaver contributions under their employment agreement.

At the time, the women earned the minimum wage of $13.50 an hour, made up of $13.24 plus 26c for TerraNova’s KiwiSaver contributions.

Most employers pay the contributions on top of an employee’s salary, but some favour a “total remuneration” approach that includes their contribution, on the grounds that it treats all staff equally.

Although that approach was legal, Ms Faitala and Ms Goff argued it was a breach of the Minimum Wage Act, and the Employment Court agreed, ordering TerraNova to pay any compulsory contributions in addition to the workers’ gross salaries.

TerraNova’s lawyer, Elizabeth Coats, told the court yesterday that although the KiwiSaver Act said compensation should be paid on top of a salary, there was a provisional clause that allowed it to be included if both parties agreed.

It will be interesting to see how the Court of Appeal rules. For my 2c I think the employees are in the right, and likely to win.

While you can agree for KiwiSaver to be based on total remuneration, and hence deducted from what would be your gross salary, I don’t think such an agreement can over-ride the minimum wage requirement.

Tags: , ,

CTU “expert” doesn’t know international law

August 20th, 2013 at 3:00 pm by David Farrar

The CTU have brought over Sharan Burrow, the General Secretary of the International Trade Union Congress, to try and whip up opposition to the very modest and minor employment law changes being made by the Government.

They obviously wrote a press release for Burrow, and I can only assume Burrow didn’t read it. The release claims:

“The New Zealand Government has binding obligations under the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the ILO Constitution, the ILO Declaration of Fundamental Rights and Freedoms at Work; and ILO Convention No. 98 on Right to Organise and Collective Bargaining. All of these instruments say the same: New Zealand must uphold and promote the rights of workers to bargain collectively and to take strike action in support of these rights.”

I guess they are hoping no one actually reads those covenants and conventions. Take the ICESCR:

International Covenant on Economic, Social and Cultural Rights Article 8 (1) – “The States Parties to the present Covenant undertake to ensure: ….(d) The right to strike, provided that it is exercised in conformity with the laws of the particular country…”

So the right to strike is clearly not unlimited.

All the law changes do is say the employers can not be forced into a multi-employer contract – they have to agree to it.

The other semi-significant change is merely returning the law to where it was when Labour introduced the ERA in 2000. This “states the duty of good faith does not require the parties to conclude a collective agreement. Instead, the Employment Relations Authority may declare whether collective bargaining has concluded.”

I suspect what the real opposition is about, is the law change that doesn’t force new employees to fund a union unless they opt out.


No one else to blame

July 30th, 2013 at 9:00 am by David Farrar

Stuff reports:

A worker, who was fired after his boss saw Facebook photos of him at a waka ama championship when he was meant to be at home sick, faces bankruptcy if hit up for legal costs.

Bruce Taiapa, of Gisborne, must pay his former employer, Turanga Ararau, $12,315 after he took the training institute to the Employment Relations Authority. It ruled the institute was entitled to sack him because he misused his sick leave. He appealed to the Employment Court, and lost that appeal.

So he took the case, lost it, and appealed, lost that, and is now complaining he can’t pay the legal bills.

Wouldn’t it have been a better idea to just accept the (justified) sacking and look for another job? Or not to have pulled a sickie and facebooked photos of you away at a sporting event.


6a should go

July 25th, 2013 at 11:38 am by David Farrar

Stuff reports:

Cleaners converged on Parliament this afternoon to protest against proposed employment law changes. 

Beating red buckets with wooden spoons, they chanted “Hands off 6a”.

The Government wants to scrap the clause, which protects low-paid workers when their job is restructured.

The demonstrators, mostly from the Service and Food Workers Union, handed over more than 2000 submissions to the Transport and Industrial Relations select committee on the proposed Employment Relations Amendment Bill.

Parliamentary cleaner Mareta Sinoti told the crowd of around 50 that scrapping the clause would cause “suffering”.

“We are cleaners, we work hard at a time when most people are at home with our families,” she said. “Few people ever see us at work, but when you come in the morning your offices are clean.

“We work hard on low wages … part 6a is the only job security we have.”

Part 6A ensures the jobs of vulnerable workers – like cleaners and caretakers, laundry staff, or hospital orderlies – are transferred to a new contractor on the same terms if a firm is restructured.

The current 6A is almost unworkable, and the Govt’s changes to it are fairly minor. What they should be doing is scrapping the clause alltogether.

If a company wins a contract through offering a better service or lower price, then they should not have any obligations to the staff of the company that lost the contract. That is how competition works. It also gives staff an incentive to make sure their employer stays competitive and quality.


Strikes and Lockouts

June 19th, 2013 at 12:00 pm by David Farrar

As reported last week, Jami-Lee Ross has a bill which will remove the prohibition on temporary labour during a strike or lockout.

Now I don’t have a problem with employers being able to use temporary labour to remain operating during a strike. Without that ability, a union can cripple an employer.

However I do have a concern over the possibility than an employer would lock out current staff, and use temps to force them onto a new contract.

Personally I dislike both strikes and lockouts. I think it is incredibly hard to have a harmonious workplace if either side resorts to the ultimate action of a strike or lockout. I am happy to say I may even dislike lockouts a little bit more, as I don’t like employers trying to force current staff onto a new contract. A shift from a current contract should be one that is mutually agreed to.

There’s even part of me that wonders if employers should have the ability to do a lockout? But as unions have the right to strike, I guess you need an equivalent power for an employer.

But how often do we have strikes and lockouts?

The average numbers of strikes every year since 1986 has been 66. The average number of lockouts is 2. So very very few employers ever resort to a lockout, as it should be.

The average hides the dramatic change over time as this graph shows.



You can see the impact of the Employment Contracts Act in 1991. It brought to an end the era of three strikes a week. The 4th Labour Government say 176 strikes a year. 4th National Government saw it drop to 52. 5th Labour Government was 35 average and the first term of 5th National was just 19 a year, or one every three weeks or so. It’s good we have fewer strikes that in the past, but just a few years ago there were 60 in one year under Labour.

Anyway the number of lockouts is extremely low. For the last decade an average of only one a year. So any claims of employers locking staff out should be read in that context.

However if the bill gets through a first reading, and makes it to select committee a possible option to be considered is to remove the prohibition on temporary labour for strikes, but not for lockouts? I’d be interested to hear debate on the pros and cons of that.

To my mind, that could be a good compromise as it would discourage both strikes and lockouts. If an employer can use temporary staff, then a union is less likely to resort to a strike, which is good. Strikes should be a last resort. Once you’ve had a strike it is very difficult to have a trusting employment relationship.

However if you allow employers to use temporary labour for lockouts, that could encourage some employers (not many I am sure) to do a lockout – and I view that as undesirable also.

So repealing the ban on temporary labour for strikes, but not lockouts, would seem to be a good compromise.

Tags: , ,

The Employment Relations (Continuity of Labour) Amendment Bill

June 13th, 2013 at 12:30 pm by David Farrar

Jami-Lee Ross has had pulled from the ballot his Employment Relations (Continuity of Labour) Amendment Bill. The purpose of the bill is:

to repeal section 97 of the Employment Relations Act 2000. Section 97 prevents the use of volunteers, contractors, or other casual employees by an employer during a strike or lockout

His rationale:

Any employment legislation needs to provide a balance between employers and employees to be fair. Section 97 creates an imbalance by providing unions with a significant legislative advantage during negotiations. The restrictions placed on employers preventing them from engaging temporary replacement labour to maintain business continuity duringa strike or lockout even extends to family members, volunteers, and willing workers from associated companies that may wish to work within an organisation to maintain business continuity. Restricting the ability of employers to engage temporary replacement labour can have a considerable impact on the productivity and financial viability of an organisation. These restrictions particularly affect the primary production processing industries where production cannot cease without considerable loss to a business.

As far as I’m aware, employees on strike can engage in other work, so it seems only fair employers can do much the same, and use temporary labour to keep revenue flowing. Otherwise a union action can cripple them.

Prior to the enactment of the Employment Relations Act 2000, no equivalent provision existed in any New Zealand employment legislation.

I’ll be interested to see what the situation is in other countries.

I think it is fair to say the the Labour Party will fight this bill with all their might.

UPDATE: It will be interesting to see how parties vote at first reading. We can assume National and ACT will vote in favour, and Labour, Greens and Mana against.

NZ First had this to say when the ERA was passed in 2000:

Part 8 – Clauses 97-111 – Strikes and Lockouts
Under these clauses employees are allowed to strike for a collective agreement, to obtain a multi-employer collective contract, and on the grounds of safety and health.

It prohibits an employer from using replacement labour during a strike but does not prohibit striking workers taking up other employment. This has the potential for a few employees to, in some circumstances, hold the employer, the industry, and sometimes the country, to ransom until their demands are met.

On the basis of their 2000 statement, one would expect they would at least vote for the bill at first reading so it can be considered by a select committee.

Tags: , , , ,

Employment dispute stats

June 6th, 2013 at 11:00 am by David Farrar

Laura Walters at Stuff reports:

Trade unionists have labelled a suggestion by the Employers and Manufacturers’ Association to double the current 90-day trial period for employees as “disgraceful”.

An EMA study of all personal grievances last year showed only 15 per cent of employers successfully defended performance-related grievances in front of the Employment Relations Authority .

EMA manager of employment services David Lowe said it was hard to manage employees with fluctuating performance, and extending the 90-day trial to 180 days would allow employers to identify potential issues with workers.

It’s not a disgraceful suggestion. One can debate it without hysterics. However on the substance of the issue, I’m more inclined to the CTU view that the EMA view that it should remain at 90 days. Of course the CTU thinks there shouldn’t be one at all, but that is a different debate. I think 90 days is adequate to identify a dysfunctional employee. In fact in my experience i often becomes apparent within a few weeks. So I think 90 days is an appropriate period of time for a trial period.

Claims in favour of employers:

Redundancy grievances: 29 per cent (23 out of 80)

Misconduct: 26 per cent (48/122)

Performance: 15 per cent (6/41)

Constructive dismissal: 46 per cent (26/56)

Disadvantage: 27 per cent (18/66)

Claims for reinstatement: 50 per cent (5/10)

The 15% stat for performance claims reinforces my view that it is almost impossible to dismiss an employee legally, just for being incompetent.

The EMA analysis showed 34 claims were made in 2012 by employees whose employment finished within the first 90 days, and 91 per cent of them won.

People forget the 90 day trial provision is not mandatory. It is an option.


Union nonsense

April 27th, 2013 at 11:00 am by David Farrar

Stuff reports:

Council of Trade Unions president Helen Kelly said many of the changes appeared technical, but taken together they were the biggest assault on workers rights since the early 90s.

I thought that was the 90 day trial period? Remember all the claims of how it would lead to horrific abuse? Well – where are the horror stories? we were the only country in the OECD without a proper trial period law, and they claimed it was the end of humanity or something when it came in.

The changes would not only affect union members but hundreds of thousands of other workers covered by collective agreements, she said.

What nonsense. It is illegal for anyone to be on a collective agreement unless they are a union member. So what Kelly has said is impossible. There are no workers on a collective contract who are not union members.

The changes are here:

  •  The Authority will have to either provide an oral determination at the end of its hearing, followed by a written record within three months
  • The extension of flexible working arrangements so any employee, not just caregivers, can ask for flexible work. Employees will also be able to ask for flexible work arrangements from the start of their employment.
  • A return to the original position in the Employment Relations Act where the duty of good faith does not require the parties to conclude a collective agreement. Instead, the Employment Relations Authority may declare whether collective bargaining has concluded.
  • Allowing employers to opt out of multi-employer bargaining.
  • Allowing for partial pay reductions in cases of partial strike action.
  • Removing the 30-day rule that forces non-union members to take union terms and conditions.
  • Changes to Part 6A so employers have greater certainty over the transfer of employees in certain industries such as cleaning, catering, orderly and laundry – if there is a restructuring or change in the contracted service provider. Small to medium-sized enterprises with fewer than 20 employees will also be exempt.
  • Greater clarity as to what confidential information employers are required to provide to affected workers in situations such as dismissal or redundancy.
  • Parties will be required to provide notice of a strike or lock-out.

Most of these changes were in National’s 2011 election policy. It is good they are keeping their word and implementing their policy.

Very pleased to see the 30 day rule is going. It is a stealth form of compulsory unionism where new staff are forced onto the collective contract and will become union members unless they opt out after 30 days.

My view is that union membership decisions should be purely between the employee and a union. if an employee wants to join a union they should go to their website, pay the fee, and join up.

UPDATE: To clarify the Employment Relations Act defines a collective agreement as being between an employer and a union covering at least two employees. Only a union can be party to a collective contract. The law previously allowed any group of employees to negotiate a collective contract.

Non union members can have the same terms as a collective contract in their individual contract, but they are de facto union members who still have to pay union fees – they just don’t get a vote. This is what has the unions so worried – they’ll lose the income from new employees who are forced into paying them fees if they do not opt out.




April 3rd, 2013 at 3:00 pm by David Farrar

Stuff reports:

A Gisborne man was justifiably fired after his boss saw Facebook pictures of him at a waka ama championship when he was meant to be at home sick, a court has found.

Bruce Taiapa has lost an appeal to try and overturn an Employment Relations Authority ruling that his employer, the training institute Turanga Ararau, was within its rights to sack him in July 2011 because he misused his sick leave.

Employment Court chief judge Colgan backed up the authority’s ruling in a decision released yesterday.

In March 2011, Taiapa, 59, asked to take a week’s leave without pay so he could attend the waka ama championships in Rotorua. He was granted only three days off because no-one was available to cover his work.

The next Monday, he called in sick, saying he had a damaged calf muscle.

Two days later, his boss saw on Facebook a picture of him at the championships. Taiapa was smiling and giving the thumbs-up.

That is beyond stupid – both the calling a sick when you are not, but competing in waka champs and being photographed there.

Once he returned to Gisborne, Taiapa got a doctor’s certificate stating that he had been unfit to work for the past week. He returned to work three days later.

This is one of the reasons I am skeptical of the numbers on the sickness benefit. It is all too easy to get a certificate.

After a series of discussions, manager Sharon Maynard dismissed Taiapa for misusing his sick leave and misleading his employer. Maynard said she had lost trust and confidence in Taiapa.

Taiapa’s lawyers argued Turanga Ararau should not be able to dictate where Taiapa recuperated from his illness.

I don’t think taking part in a waka championship is recuperation!

Tags: ,

Why we need more substance over process in employment laws

January 25th, 2013 at 12:00 pm by David Farrar

Natalie Akoorie at NZ Herald reports:

Mr Gostmann was dismissed without notice from Independent Refrigeration and Electrical in Whakatane in August last year after making a series of costly and serious errors.

In one of the incidents an apprentice asked Mr Gostmann if cables had been isolated when they had not. The cables short-circuited when the apprentice went to move them and he narrowly avoided electrocution.

So almost killed someone.

When Mr Gostmann was interviewed for the senior position early last year, he told Mr Faber he was a refrigeration engineer with 15 years’ experience in South Africa. But when he could not perform basic duties alarm bells rang.


When Mr Faber made inquiries with Mr Gostmann’s former employers in South Africa he was told Mr Gostmann was merely a handyman.


His only qualification in the industry was the equivalent of a two-week course completed for immigration papers and that a reference from his former employer was actually signed by an unwitting office person.


ERA member Rachel Larmer also accepted evidence that Mr Gostmann’s named referee was someone who worked at a supermarket, rather than at a coolroom and display refrigeration manufacturing company in South Africa, as stated on Mr Gostmann’s curriculum vitae.

However, she criticised Independent Refrigeration for not attempting to improve Mr Gostmann’s poor workmanship through a performance management or monitoring process.

He lied about his experience and was unqualified – and it is their responsibility to improve his performance?

She also said the company should have carried out more thorough reference checks but acknowledged Mr Gostmann was 50 per cent to blame for his dismissal because his work was not up to standard.

The reference was effectively false, and again this is the company’s fault!

She told Independent Refrigeration to pay $10,304 to Mr Gostmann for distress compensation.


Who would want to be an employer?


Drinking on the job

December 24th, 2012 at 12:00 pm by David Farrar

Abby Gillies at NZ Herald reports:

A company has been cleared after firing two senior workers and health and safety representatives caught drinking in the locker room during a liquor ban.

Henry Nee Nee and Andy Nathan claimed they were unfairly dismissed from Auckland-based import and export handling company C3 following the February incident that involved a group of employees drinking on site.

They said they were singled out for disciplinary action because they were union delegates and representatives on the health and safety committee.

Does being a union delegate mean you can drink on the job?

I would have thought being a health & safety rep would require model behaviour.

Nathan denied drinking on the premises and Nee Nee said he had drunk only ginger beer.

However, the investigation concluded Nee Nee had invited a group of six employees to drink beer in the locker room and all five drank 66 bottles of beer between them.

66 bottles between five? That’s would be impressive if it were not at work.

In disciplinary meetings, Nee Nee and Nathan admitted they had initially falsely denied their involvement, saying they had acted unwisely.

In April they were dismissed for serious misconduct – a decision they appealed against.

ERA member Eleanor Robinson found that unlike the other men involved in the incident, Nee Nee and Nathan “had tried to mislead C3 about what had occurred … and had not admitted their culpability until the disciplinary meetings on 5 April 2012″.

So, as if often the case, it was the lying that got them sacked.

As an employer I’ll often only give warnings even if dismissal is warranted. But if an employee lies, that makes it incredibly difficult to ever have sufficient trust in them again. We all stuff up at work from time to time – but lying about it makes it worse.


Legal to sack a hottie

December 23rd, 2012 at 7:00 am by David Farrar

Reuters reports:

The Iowa Supreme Court has ruled employers in the state can legally fire workers they find too attractive.

In a unanimous decision, the court held that a dentist did not violate the state’s civil rights act when he terminated a female dental assistant whom his wife considered a threat to their marriage.

The seven justices, all men, said the basic question presented by the case was “whether an employee who has not engaged in flirtatious conduct may be lawfully terminated simply because the boss views the employee as an irresistible attraction”.

The high court ruled that bosses can fire workers they find too attractive and that such actions do not amount to unlawful discrimination.

The actual court judgement is here.

I await the PSA standing up for the rights of hot workers not to be discriminated against.


Now that’s an abusive boss

December 8th, 2012 at 4:00 pm by David Farrar

News.com.au reports:

Former Mildura laundry owner Kevin Andrews has been convicted of repeatedly bullying several of his workers physically, psychologically and verbally at his business between 2007 and 2009.

Magistrate Hugh Radford said Andrews’ “disgusting and appalling” behaviour had caused workers to suffer nightmares and depression up to five years on.

Mr Radford said Andrews had asked one employee to bring his dogs to the laundry, “and if an employee stuffed up they would be bitten by the dogs, that is the employee would be locked up with the dogs in a shipping container”.

“Further the accused threatened the employees that he would dissolve them in acid, a substance that was available to them in the workplace,” Mr Radford said. …

Andrews also referred a female employee as a “big fat bush pig”, called women “brain-dead c—s” and had said “all women are dogs”.

I’m amazed he was only fined $50,000!


Labour now wants to unionise paper boys!

December 5th, 2012 at 2:00 pm by David Farrar

Lisa Beech from Caritas writes in the Herald:

Parliament will this week debate whether working children aged 16 or younger should be regarded as employees rather than contractors, when Te Tai Tonga MP Rino Tirikatene’s private member’s bill is introduced on Wednesday.

The bill is here. It states:

The purpose of this Act is to amend the Employment Relations Act 2000 to provide that all persons aged 16 and under who perform labour for remuneration in New Zealand are to be regarded as employees, with all the rights that such status confers.

Oh good god. That means babysitters and paper boys would now become employees. Even Scouts doing bob a job might end up as employees.

The minimum wage act would probably then apply, so 10 year olds can’t be hired for less than $10 an hour!

Nice to see Labour focused on the big issues such as giving 16 year olds the vote and 10 year olds the right to go to the Employment Relations Authority!

Of concern to us was that many of the children working as contractors were in turn sub-contracting younger siblings to do their work – over half of those children in our study involved younger brothers and sisters in their work.


While some worked under parental supervision, others did not. One 12-year-old had sole supervision of his 8-year-old brother and 6-year-old sister while undertaking delivery work on the road.

By contrast, the directly employed children were expected to do their rounds themselves, or had sick leave cover provided from the wider pool of employed children.

This must be stopped. You can’t have younger siblings helping their older siblings out.

We learned subsequently that the year after the release of our 2007 Delivering the Goods report, a 6-year-old girl died on the roads while accompanying her 12-year-old brother on his delivery round.

Very sad, but kids die in accidents. Some fall down drains. Others get hit by cars. Each loss is a tragedy. But that doesn’t mean turning kids from contractors into employees will mean no such accidents happen. And note in this case the six year old was not substituting for her brother – she was accompanying him. This is what kids do – like to hang around with their siblings and help them (or annoy them).

Tags: ,

Redundancy law

November 29th, 2012 at 7:00 am by David Farrar

Susan Hornsby-Geluk from Chen Palmer writes in the Dom Post:

 Employees, listen up – here is something you may not know. If you are made redundant you will not be entitled to payment of any redundancy compensation unless you have an employment agreement which provides for this. It does not matter how long you have worked for a particular employer: no contract – no entitlement.

Harsh? Well, Labour MP Sue Moroney clearly thinks so. She recently introduced a member’s bill to Parliament which provides for minimum entitlements for employees if they are made redundant.

If the bill becomes law, every employee would be entitled to at least four weeks’ notice of their redundancy. They would also be entitled to redundancy compensation of four weeks’ pay for the first year of employment plus two weeks’ pay for every subsequent year, up to a maximum of 26 weeks’ pay in total. A similar bill was voted down by the National-led government in 2010.

This is trying to turn the clock back to the 1980s. Redundancy provisions should be negotiated on a case by case basis in collective or individual contracts. One size fits all laws are bad and kill jobs.

Employees may need greater protection in tough economic times, but introducing mandatory redundancy compensation to the level envisaged by Moroney could have unintended consequences.

In most cases the impact of such legislation would be felt by small employers. In the case of large employers, including government agencies, most of these businesses already provide for redundancy compensation in their employment agreements. So, for these employers the legislation will make little or no difference.

However, take your local dairy employing a handful of people. If the business has to restructure to prevent it going under, requiring the employer to pay significant redundancy compensation will only hasten the demise. The knock-on effect is the loss of employment of the other staff.

Exactly.  When a business is already struggling, onerous redundancy provisions can send it under. Labour wails about the lack of jobs on the one hand, yet keeps putting job destroying measures up.

Interestingly, a recent United States study indicated about 57 per cent of men negotiated employment agreement offers, whereas only 9 per cent of women did. In other words, they just accepted what was offered.

This is a fascinating statistic and in my opinion is the largest factor by far in the gender pay gap.


Part 6A restricted

October 30th, 2012 at 4:00 pm by David Farrar

Kate Wilkinson has announced:

Cabinet has agreed to further improvements to the Employment Relations Act 2000, including changes to Part 6A that deals with the cleaning, catering, orderly and laundry industries, Labour Minister Kate Wilkinson said today.

The objective of Part 6A is to provide continuity of employment for employees in specific industries when a business is restructured or sold.

“A review of Part 6A found that there were significant operational issues around transferring employees’ entitlements and information to the new employer,” Ms Wilkinson says.

“Proposed amendments will fix these issues and provide more certainty and clarity for employers while at the same time protecting key benefits for affected employees.

In addition, the review found that while larger businesses had been able to adapt better to the requirements of Part 6A, small and medium sized businesses faced greater proportional costs.

“For example, a husband and wife cleaning team who tender and win a small contract may be currently required to take on any staff doing the work under the previous contract owner.

“That’s why Cabinet has also agreed to exempt small and medium businesses – those with fewer than 20 employees – from the provisions of Part 6A where the SME is the incoming employer.”

Employees in small and medium enterprises account for approximately a quarter of those in affected industries.

I’ve always regarded Part 6A as anti-competitive nonsense. Forcing the company that wins to hire the staff of the company that loses. Doesn’t provide much incentive for staff to make sure their company keeps the contract – their jobs remain.

Restricting it to large contractors is a step in the right direction, and welcome. However personally I’d scrap 6A entirely.

There’s some other welcome changes too:

 A return to the original position in the Employment Relations Act where the duty of good faith does not require the parties to conclude a collective agreement.
• Empowering the Employment Relations Authority to declare in certain circumstances that collective bargaining has ended.
• Allowing employers to opt out of multi-employer bargaining.
• Allowing for partial pay reductions in cases of partial strike action.
• Removing the 30-day rule that forces non-union members to take union terms and conditions.
• Changes around the disclosure of personal information following Employment Court judgments involving Massey University.

Almost all of these were in the 2011 manifesto, so National is simply keeping its word. They are all pretty minor – but important none the less.

One other change:

The right to request flexible working arrangements will be extended to all workers, right from their first day on the job – currently only caregivers are eligible and only after six months of employment.

I think a lot of the future will be people working different and more flexible working hours, rather than the standard nine to five, five days a week. In some jobs too, a lot can now be done from home.


$5,000 for threatening to smash your boss

October 25th, 2012 at 1:01 pm by David Farrar

The Herald reports:

 A telemarketer who told her supervisor she was going to “smash her” has been awarded $5000 for wrongful dismissal. …

Although the women disputed details of the cause, the ruling said it was accepted that they yelled at each other and Cumming said she would “smash” her boss if she did not shut her mouth. …

Immediate after management called at which Cumming had no support person.

At a second meeting she grudgingly apologised to Boon, but warned of further reaction if her supervisor “got in her face again”, said the ruling.

Cumming was then dismissed after director Craig Hudgell said “the threat of violence outweighed all other considerations”.

Absolute management acknowledged the dismissal was unjustified.

The authority ordered the company to pay Cumming $5000 and reimburse her filing fee of $71.55.

The company did get the process wrong, but how frustrating must it be to pay $5,000 to an employee you had to sack because she threatened violence against other staff. I think this is a good example of too much focus on process over substance.

I don’t think the initial outburst justified sacking, but to them in a disciplinary meeting assert your intention to do violence if her supervisor annoys her, is surely grounds. You have a responsibility to other staff. Again, they did not follow correct process and admit this, but how very frustrating.


Turning employees into shareholders

October 9th, 2012 at 9:01 am by David Farrar

The Herald reports on a policy just announced by UK Chancellor George Osborne:

The chancellor then sprang a surprise with his plan to swap shares for rights.

Workers could buy up to £50,000 in shares of the company they work for with all profits being tax free. In exchange employees would abandon their rights on unfair dismissal, redundancy and flexible working.

British unions immediately opposed the plan, which is due to come into effect in April 2013.

So long as it is voluntary, I think this is a nice idea. Businesses work better when employees have a stake in it as shareholders. However not sure one does it by way of tax breaks.


Hide says Repeal 6A

October 8th, 2012 at 12:00 pm by David Farrar

Rodney Hide writes in NBR:

You win the contract to clean the local hospital. You succeed because you are good at your job and have a good crew.

The previous contractor was slack and expensive. The hospital gives him one month’s notice. It’s a good result for you. And a good result for the hospital.

But then Part 6A of the Employment Relations Act kicks in. Part 6A enables the existing cleaners to transfer your business. The purpose of this provision is to protect “vulnerable workers”.

Part 6A defines the vulnerable workers by the work they do and where they do it. Essentially, it covers industries such as cleaning and food and laundry services. The real protection is to existing contractors.

Indeed, the previous contractor told the hospital it was no use dropping him in your favour because Part 6A means nothing much would change. It would be the same crew on the same wages and conditions doing the same job. 

Part 6A locks in existing workers and sloppy work practice. It doesn’t protect “vulnerable workers”.

It protects slack businesses and poorly trained and managed workers. It’s anti-competitive. It drives up the cost of cleaning and laundry services including for government, which is the major country’s buyer. 

I regard it as horrific that a winning contractor has to keep on the staff of the losing contractor, and the same terms and conditions. It destroys their ability to be more innovative and flexible.

National rightly slammed the Labour government for introducing Part 6A in 2006. But National in government has done nothing.

There has been a required statutory review of Part 6A in 2009. But then nothing. The minister is still sitting on the result.

The evidence is clear. Part 6A can’t be amended. It should be repealed.

I agree. No employer should be forced to employ staff from a competitor. It also destorys any incentive for staff to perform well for their employer, if they know that even if their employer loses the contract they are guaranteed jobs with the next employer.

Tags: ,

The vulnerable campaign

September 11th, 2012 at 1:00 pm by David Farrar

NZ Herald reports:

A Dunedin-based cleaning company has taken its campaign online saying part of the Employment Relations Act is failing businesses – the site called “vulnerable minister” targets Minister of Labour Kate Wilkinson.

The site is here.

Crest Commercial Cleaning launched the website last week after three years of lobbying the Government to change part 6A of the ERA, which was set up to protect ‘vulnerable’ contract workers.

Under the law if a business changes its contract, ‘vulnerable workers’ are given the right to transfer their employment under the same terms and conditions – the outgoing contactor has a month to notify the new contractor if employees want to transfer.

Crest managing director Grant McLauchlan said the legislation was ambiguous and needed clarity.

He said his company were finding out the day before it took over a new contract.

“We want to be told in due course, because we get to the last day and don’t know if people are electing to transfer – we are left not knowing if we need to recruit our own people.

“It’s so ambiguous, and every time we try and work it out we end up in the employment court.
Personally I don’t think the clause should remain in law at all. A company winning a contract should not be obligated to hire the staff of the losing company.
But if such a clause is to remain, it should at least be workable.
Tags: ,

Employees ordered to pay $4 million

June 15th, 2012 at 3:00 pm by David Farrar

Both employers and employees breach employment contracts, but normally action is only taken against an employer. Let’s face it, if for example an employee resigns with only two week’s notice instead of the required four – it is not generally worth your time to spend money enforcing the contract.

But Andrew Scott-Howman blogs at Workforce on a recent NZ case where it was:

It’s one of the most difficult areas of employment law : what to do where an employee has acted in breach of a restraint, or an obligation of confidentiality. But a recent decision of the Employment Court gives heart to employers – where you can establish breach, some serious consequences may follow for employees.

The case is Rooney Earthmoving v McTague, Whiting and Bartlett (unreported, Employment Court Christchurch, 23 April 2012).  It concerned three men, each of whom had been employed by the plaintiff before establishing a competing company (BMW Contracting).  A previous decision had established that the men had variously acted in breach of a number of contractual obligations owed to the former employer, including enticing away staff, securing customers and using the employer’s confidential information. …

First, the contractual measure of loss will often do just fine. In Plain English, these employees were liable to put the employer in the same position it would have been in if the various contractual breaches had not occurred. In this case, that meant a complicated assessment to work out exactly what business the employees had taken away from their old employer as a result of their breaches.

Secondly, some limitation had to be applied to the damages assessment (ie at some point, if the employees hadn’t acted in breach they would have become legitimate competitors). This involved the application of the doctrine of remoteness – an enormously complicated and contentious area of law in itself.

Finally, the quantum of loss assessed here was, on any view, massive : $4,290,000 – and, of course, because the debt is owed jointly and severally the employer can go after one, two, or all of the ex-employees for the whole amount.

As you can probably tell, this case is an important one for lawyers who may be called upon to advise in cases involving breaches of restraints and confidentiality.

But it is more than that. It is a decision that illustrates that the Court will not hold back in ordering massive damages – where a case justifies that.  And that sort of order will not be a “finger to the wind” type of award, but an astute objective assessment of actual contractual loss.

A $4 million award must be one of the largest in NZ – and especially for an award against employees, not an employer.


The sky is falling … the sky is falling

May 16th, 2012 at 2:00 pm by David Farrar

The CTU is a bit like Chicken Little at the moment. On RNZ yesterday on minor changes to employment law…

The Council of Trade Unions says the changes to industrial relations laws being considered are the worst attack on workers’ rights since the 1990s

In fact the changes are very much around the margins, and fairly in-substantive. The Government should require unions to collect their own membership fees, rather than force employers to be unpaid fee collectors ofr them – then they really would have something to complain about.

But the “worst attack since the 1990s” line is now new. It’s exactly what the CTU said about the 90 Day trial periods in their 2010 submission:

 “The largest step backwards in workers’ rights since 1990.”

I guess they have a macro on their computers that just inserts that phrase automatically into releases and submissions!


Tags: ,

Partial pay for partial work

May 14th, 2012 at 8:53 am by David Farrar

Danya Levy at Stuff reports:

The Government also wants employers to be able to deduct the wages of workers who undertake partial strikes and the papers show new provisions which would allow them to be paid at less than the minimum wage.

Partial wages for partial strikes seems fair to me, just as you get no wages for a total strike.

If you don’t give employers the ability to do partial wages for a partial strike, then their likely response is to lock the employees out entirely – which I think is best avoided.


The Talleys dispute

May 13th, 2012 at 10:29 am by David Farrar

Jon Morgan at Stuff has a long feature on the Talleys and Affco dispute. One extract:

As Talley’s influence increased so did anti-union activity, according to Meatworkers organiser Roger Middlemass. “It was like a cold front arriving.”

He accuses Affco of a string of anti-union acts, including encouraging workers not to sign with the union and of banning the union from posting notices, including its financial statements, in plants.

“It is Dickensian,” he says. “This is not even last century stuff, it’s the century before.”

One example, he says, is the inclusion in the disputed contract of a clause that talks of making union members redundant on the grounds of irreconcilable differences between them and the employer, or them and other workers, or when “the interests of the employer would be best served by terminating the union member’s employment, not withstanding that the union member has not been guilty of any conduct or omission that would justify dismissal on the grounds of misconduct or poor performance”.

“It means that the employer can just say it’s in my interest that you don’t work for me any more. And you can’t take it to court because you’ve not been dismissed, you’ve been made redundant,” Middlemass says. “The word draconian isn’t strong enough to describe this.”

Affco operations manager Rowan Ogg says this clause is “reasonably standard” and that he has it in his employment contract.

Assuming it has been correctly reported, then I have to say the union has a very reasonable case here.  An irreconciliable differences clause is not reasonably standard. The only place I knew which has them is Parliament, because it is impossible for an MPs office to function if the MP doesn’t have total trust in their staffer/s. But this clause probably wouldn’t even stand up in court, which is why there is always a payout of three or more months with it, if triggered. And often, another job found for the staffer with another MP.

That clause basically does ask meat workers to surrender their employment rights, and allow AFFCO to fire them for no substantive reason. Now I’m in favour of trial periods where you can do that as it is always a risk how a new employee works out. But I would not sign a contract like that if I worked at AFFCO.

If reported correctly, the clause also seems confused. Positions are made redundant, not people. You can not have a clause saying you are made redundant if we decide we do not like you.

I am no fan of the tactics of the Meatworkers Union. But that does not mean that they are wrong in refusing to sign the proposed contract. I would not sign a contract like that if I was a meat worker.


Tags: , , ,