Charles Chauvel made a very good point about the Hobbit Enabling Act that National pushed through Parliament on Warner Bros’ instructions and National’s lawmaking practice in general last night.
The HBA says that the provision that all film workers are contractors “does not apply if the person is a party to, or covered by, an employment agreement that provides that the person is an employee.”
What this is meant to do is say ‘you’re an employee if you are called an employee in your contract, if not, you’re a contractor’. The problem is that it doesn’t say that. Straight off, you can see the definition is sort of circular: ‘you’re an employee if you’re an employee’ but it gets worse because to define ‘employment agreement’ we rely on the very case that this law is meant to be supersede.
To understand, we have to go back to the Bryson case. Bryson was employed (without a written contract) by 3-foot six (a Jackson company) working fixed 8-hour days. He had a set lunch break, he got training, he was paid $18 an hour. In every way, you would describe him as an employee of 3-foot six. Six months in, the bosses presented Bryson and his workmates with contracts that referred to them as ‘independent contractors’. Bryson objected, because he didn’t want to lose his employment rights and have the employers’ GST and ACC costs lumped on him.
The Surpreme Court decided, in keeping with well established law, to apply the ‘duck rule’ – if it looks like an employment relationship (set work hours, breaks, expectations of holiday pay etc), it is an employment relationship. It was held that Bryson in fact did have an employment agreement and was an employee, despite 3 foot six attempting to make him into an independent contractor.
Following that ruling the law was clear: it is the facts of the employment relationship that give rise to the employment agreement, not the mere words on the paper the bosses thrust under the worker’s nose. The law was so settled that there has not been one more case over whether a worker is an employee or a contractor in the five and a half years since it was decided.
So, let’s go back to the law: the provision that all film workers are contractors “does not apply if the person is a party to, or covered by, an employment agreement that provides that the person is an employee.”
How do you define an employment agreement? Bosses will say that it’s simple, if the contract calls the worker an employee they have an employment agreement. But the Hobbit Enabling Act doesn’t expressly say that, so we have to go to case law.
Since the Bryson case hasn’t been explicitly overridden by this law its findings still stand. Bryson still forms the basis of how ‘employment agreement’ is defined, ie on the facts, not on the mere wording. Or, at least, that’s a strong argument that many people will make if their employer tries to reclassify them as an independent contractor.
Before workers and employers knew that if they were, on the facts of the working relationship, in an employment relationship then the workers had employment rights. Now, the workers might say ‘the facts of my work mean I have an employment agreement, therefore my employment rights remain’ while the bosses might say ‘no you don’t, your contract says that makes you a contractor’.
So, the ‘problem’ hasn’t been solved at all. ‘Certainty’ hasn’t been provided. In fact, there’s greater uncertainty.
There will be many people right now looking at their working relationships and contracts to try to work out how to apply the HBA and Bryson, and who is an employee and who is a contractor. Reasonable people will disagree with strong arguments, which will lead to court cases.
Speaking in what appears to be Gabblese, Key seems to be acknowledging that the law doesn’t actually do what it purports to do:
“I rely on PCO and the lawyers to put all that stuff together. It’s never a perfect process going through urgency, we acknowledge and accept that, even when it’s a clarification for law. As a general rule we try and send legislation through a proper process right through to the select committee, just sometimes that’s not the case and this is not one of them.”
Take away the mangled syntax and information-free statements (yes, John we know it didn’t go to select committee, the question is why not) and Key is saying ‘yeah, we rushed and we stuffed up but I’m relaxed about it’.
Don’t you love a Prime Minister who refers to the law that he has just forced the Parliament to go into over-time to pass as “all the stuff”?
This is what you get when you rush through poorly thought-out laws. Whenever a new law is passed people have to look at it and decide how it applies to them in the real world. When the drafting is vague and doesn’t wholly address the existing situation, people are going to have strong and legitimate disagreements on how to interpret the new law and those disagreements have to be decided in court. It can be better to have settled law that is sub-optimal rather than constantly changing the law so nobody knows where they stand.
If this law had gone through select committee it would almost certainly have come out with this problematic drafting fixed so that there could be no confusion as to what an employment agreement is.
Which is exactly why you don’t rush though laws. But it’s National’s standard practice to do so. It has rushed through all kinds of legislation with vague definitions that are now leading to court cases.
Rushed law is not good law. By abusing the lawmaking process and slamming half-arse bills through Parliament, National is simply creating more problems for the future.
PS. I’ve just watched Chauvel’s third reading speech. Apparently, Wilkinson added a last minute amendment that an employment agreement must be in writing, thinking this cleared up the problem Chauvel has identified. As Chavuel explains, this doesn’t clear things up – it makes things worse. He also points out that by weakening labour laws, we’ve violated the China Free Trade Agreement. God, how embarrassing.