Goldsmith bill on personal grievances

Audrey Young at NZ Herald reports:

Executives who are fired from their companies would be less likely to get excessive golden handshakes under a private member’s bill being promoted by National list MP Paul Goldsmith.

And employers would be less willing to put up with high-paid staff not doing their jobs properly.

But it appears that Mr Goldsmith would have more chance of his bill being passed under a Labour-led Government than the National-led one.

Mr Goldsmith is proposing that employees with salary packages worth more than $150,000 not have the automatic right to a personal grievance, which they have under present employment law.

This is a very commendable bill. It doesn’t mean that employees over $150,000 will not have access to employment law. It means that they can contract out of it. And it is hard to argue that someone earning $150,000 is a vulnerable worker who needs protection.

They will still have access to general contract law, and can sue for breach of contract.

Under the current law, even if an employee is paid out under the terms of his or her contract, they can still take a personal grievance case to try to get a higher payout.

Mr Goldsmith says that means that employers are more likely to put up with someone who is not doing the job well or “make a more generous golden handshake to make the problem go away”.

He said he had been approached by business, and small business in particular, who saw it as a problem.

His bill did not go as far as Australian law which automatically exempts a high-paid employee (earning over A$129,000) from being able to take a personal grievance.

The Goldsmith bill just allows a high earning employee and an employer to sign a contract that limits personal grievances. So it might just say that in the event of an inability to work together, the employee will get paid x weeks salary.

The bill has been put into the private member’s ballot. Labour Minister Simon Bridges said while National supported the proposed bill, the Government would prefer to get officials’ advice.

But Labour’s labour spokesman, Andrew Little, said last night that it was the sort of thing a Labour-led Government would be keen to look at, especially for chief executives.

He had a concern with the $150,000 threshold because it could include highly skilled engineers, for example, working for companies such as Fonterra, who were well down the chain of command and control over the company.

Subject to a discussion about the threshold, he agreed with the bill in principle and thought Labour would support it to select committee.

The threshold seems right to me. It isn’t about the job title. Andrew seems concerned that it might impact some EPMU members, but if an engineer is earning over $150,000 they seem pretty capable of negotiating a good contract.

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