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Back the Redundancy Protection Bill

Written By: - Date published: 11:37 am, December 23rd, 2009 - 25 comments
Categories: employment, workers' rights - Tags:

While most Kiwis are getting ready for Christmas there are tens of thousands who will be having a hard time this holiday season because they were made unemployed this year. And most of these workers will have had no redundancy protection to tide them over.

That’s not good enough. It leaves workers and their families high and dry, it cuts productivity by putting pressure on skilled workers to take the first unskilled job that comes up and it means some employers can use redundancy to drive down wages in the way Telecom did to its lines engineers earlier this year.

It doesn’t have to be this way. The Aussies have minimum redundancy protection in law and so does nearly every other OECD nation. There’s no reason Kiwi workers should be hung out to dry.

I’ve got a members bill that has been drawn from the ballot that would provide minimum redundancy to all Kiwi workers and we’re campaigning for the government to back it through its first reading.

We’ve all heard John Key talk about looking after Kiwis through the recession and rising unemployment and about catching up with Australia. Backing my bill to select committee would be a bloody good start to doing both of those things.

You can help the campaign by visiting www.hardtimes.org.nz, downloading the petition and getting your friends and family to sign these holidays.

If we work together on this we can make sure next Christmas is easier for laid off workers and their families than this one will be.

Darien Fenton MP

25 comments on “Back the Redundancy Protection Bill”

  1. ieuan 1

    Why wasn’t a minimum level of redundancy protection put into law during the 9 years Labour was in government?

    • Bright Red 1.1

      Good question it should have been. Of course, not everything can be done at once. You never heard Labour being called a do nothing government. This is one of the things they should have found time for but didn’t.

      Of course, you’re really implying that anything they want to do now is invalid because they didn’t get round to it last time, which is silly. By that logic, Labour should have had everything finished in 1935 and we should be asking why National didn’t get its current policies done between 1990 and 1999.

      Anyway, since you’re so obviously unhappy that the redundancy protection bill wasn’t passed under Labour, I take it you’ll fully support it being passed now?

      • ieuan 1.1.1

        I’m not implying anything, that is what you are reading into my comment.

        I don’t think there is any chance that Darien’s bill will get made into law by this government so my supporting it or not will make no difference.

        But for the record; some level of minimum redundancy built into law is a good idea.

        • Bright Red

          Of course that’s what you’re implying ieuan, have some respect for your audience.

          You’re implying that Labour doesn’t really believe in this otherwise they would have done it in their last term. It’s a stupid argument, but it’s the one you’re making.

    • Daveo 1.2

      Because they were scared of business. Remember the Winter of Discontent?

      There was a a lot of work done near the end under Trevor Mallard and they put together an advisory group. The policy was then taken and made part of Labour’s 2008 election manifesto. It would be going through Parliament now if Labour had won the election.

      I would have liked to have seen it done sooner, along with a lot of other things. But Darien Fenton wasn’t the minister then and can hardly take the blame.

      But none of that matters now. It’s a good policy, it needs to happen and National should support it.

  2. Lanthanide 2

    What happened to the Telecom lines engineers / Visionstream fiasco?

    I haven’t heard anything about it lately, so I’m guessing Visionstream won in the end?

    • Daveo 2.1

      Win for the union in Northland, compromise in Auckland. As I understand it the end point was basically getting Visionstream to agree to take on subcontracting companies that workers could be employed by rather than working as dependent contractors. They got that in full in Northland and only in part in Auckland.

  3. gitmo 3

    The bill looks sensible and straightforward. Have you considered that it might have some unintended side effects ?

    • Daveo 3.1

      Seems to work just fine in Australia and on union worksites in New Zealand.

      • gitmo 3.1.1

        I was thinking it might be a disincentive to long term employment in small businesses ?

        • BLiP

          Perhaps if a business is unable to compensate its employees for its own failings it shouldn’t be in business?

        • Daveo

          I haven’t seen any evidence that that’s the case. It might be a disincentive to laying off your long-term employees though.

          • Roger

            Yes, and while redundancy is where an employee is removed from their job because the business has no need for that particular role, the disincentive to make a long term worker redundant does create an opposite incentive to retain the worker in another part of the business. This creates new skills and experience for the worker and they get to stay employed. The advantage for the business is that they keep a good employee and upskill their labour force as well as adding verstility. They also save on recruitment costs by being able to promote people internally and create a sense of good will and loyalty between business and workers thus reducing staff turnover.

  4. Santi 4

    What a joke! The market ddetermines the rules of emplyment. There is no such thing as a “safe” job.

    Harden up.

  5. tsmithfield 5

    BLiP “Perhaps if a business is unable to compensate its employees for its own failings it shouldn’t be in business?”

    Maybe you should try running your own business sometime and employing people. When we were starting out we paid our staff better than we paid ourselves.

    Now, even though a small business, we have tried to do what we can for staff if we ever have to lay them off. We give four weeks paid notice plus four weeks redundancy pay. This gives them two months to find another job. We would struggle to do too much more than that.

    • Tim Ellis 5.1

      You don’t get it Mr Smithfield. Employers have it easy and are just stealing food from workers mouths by charging “profits” so simply. Being an employer and taking risks is below somebody like BLiP.

  6. tsmithfield 6

    Just actually read the proposed bill. Looks like we’re pretty close to meeting the minimum requirements now anyway.

    From a business perspective, I think it is a good idea to give staff some minimum protection. The reason we have is to make it more attractive for our employees to stay. We spend a lot of money training them, and want to retain them for as long as we can.

  7. Bright Red 7

    minimum redundancy also disencourages businesses from letting people go the moment the economy goes bad. Look at countries with good redundancy protection (France, Germany etc) they have had higher unemployment for other reasons but the point is that their unemployment rate has been barely affected by the global recession. Then look at the opposite case, the US. It helps smooth out the boom-bust cycle, or at least its impact on workers.


  8. Ron 8

    And us. The number of sparkies and builders I know who are now snowed under as their companies try to return to pre recession workrates without the staff they laid off as soon as there were clouds on the horizon.

  9. Rex Widerstrom 9

    Such a move is to be applauded. I would hope, however, that NZ’s unions would be as accommodating and creative as those in Australia, who supported initiatives like the temporary introduction of four day weeks so as to avoid job losses.

    It was an Australian union which urged the Rudd goverment to spend the surplus on paying workers in some industries to stay home for a day rather than handing out $900 to every taxpayer to spend on plasma tellys, acknowledging that employers simplky didn’t have the money to continue paying wages at the current level.

    It’s that kind of acceptance of reality and abandonment of rhetoric that can lead to real, sustainable solutions.

  10. Darien 10

    Thanks for the comments everyone. There are some details about the bill that need to be discussed and that’s the purpose of Select Committee, but it is pretty straightforward. It’s a question of whether we think it’s fair that there is no redundancy protection in law for New Zealand workers, when workers are laid off through no fault of their own. Around 90% of union agreements have better than the protections prescribed in the bill. These firms seem to cope, as someone has noted above.

    I acknowledge there are perhaps some issues about small business and NGOs. There are also arguments about how redundancy could or should be funded, but in a members’ bill, it’s not possible to go into that kind of depth. However, with National Party support, we could a long way towards getting these questions resolved and implementing something which, after all, is pretty standard in most countries, except for NZ and the USA.

    I’ve had interesting feedback about the nine day fortnight – one of the reasons many employers didn’t take up the easy option of just closing up shop was because of the costs of making longer term workers redundant – so in a way redundancy costs saved jobs, and provided an incentive to try to keep the business operating. But 53% of employers in a recent EMA survey said they used redundancy as a means of cost cutting and I have heard some horrific stories since I launched the campaign around this bill.

    And just one other perspective : there’s been an increase in enquiries to the DOL call centre and cases in Mediation and the Employment Authority around redundancy rights. Most employers just want to know what they are up for and how to go about it. The lack of clarity about redundancy notice and compensation in law means having to face a disputes challenge at the worst time – and it probably costs a lot more.

    Good on you TSmithfield –

    And before anyone asks : I’ve had my own small business, and also was an employer of over 70 staff (and had to make some people redundant) so I do have some idea of the pressures involved.

  11. jcuknz 11

    Adding further burden on employers is plain stupid socialist nonsense …. it is a national responsibility and the government should bear the burden …. not to hand out largest willy nilly but ensure workers have immediately enough to adequately maintain them and their families.

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