Protection for workers in hard times

Written By: - Date published: 9:00 am, May 3rd, 2010 - 32 comments
Categories: unemployment, Unions, workers' rights - Tags: ,

Darien Fenton’s Redundancy Protection Bill is before the House this week (provided National doesn’t cancel Private Members’ Day again).

80% of Kiwis (basically, the non-unionised ones) don’t have any redundancy protection. If they lose their jobs, they’re out on their arse with nothing. All other developed countries, except the US of course, have protections in place for workers who lose their jobs and income through no fault of their own.

Fenton’s Bill will provide all New Zealanders with a minimum right to:

a) notice of dismissal of no less than 4 weeks; and

b) compensation for redundancy in the amount of 4 weeks’ remuneration for the first full year of the employee’s continuous employment with the employer; and

c) further compensation for redundancy in the amount of 2 weeks’ remuneration for each subsequent full or partial year of the employees’ continuous employment with the employer, up to a maximum entitlement of 26 weeks’ remuneration.

That’s based on minimums that unionised workers receive.

Will the Bill pass? Labour, Anderton, and the Greens are behind it. Last I heard, the Maori Party were going to back it. ACT are against it, of course. But National is said to still be mulling it over.

Help John Key make the right decision for all the working Kiwis who are still losing their jobs every week. If you have any of the Hard Times postcards around, mail them off. Or email Key at j.key@ministers.govt.nz and tell him to do the right thing.

32 comments on “Protection for workers in hard times”

  1. lprent 1

    I’ve seen a few people unexpectedly made redundant with nothing more than outstanding pay. Then they have to find a job and try to deal with WINZ (always a bit of a pain with weeks between appointments) while living off their savings.

    Frequently it only takes a month or two to get into a poverty spiral that is really hard to get out of if they don’t have family and friends that they can get support from.

    Redundancy should not be an issue for competent managers. You can normally use natural attrition if you recognise an issue arising in the business. The real issue is that at present there really isn’t a penalty cost for managers shedding people. There should be. It will greatly assist in getting rid of the deadwood managers and business owners.

    Just on a side issue. I have no idea if it is Brownlee’s incompetent management of the house, or his deliberate policy of getting rid of members day debates, but he has managed to probably miss more members days than any other ‘leader’ of the house through an apparent mismanagement of the legislative programme.

    Personally, I’m leaning towards the incompetence scenario. Anyone else got any ideas?

  2. One could make the observation that the National Party, collectively, are *terrible* employers. They bad-mouth their staff publicly. describing thousands of them as “waste”….and not making any useful differentiation between or among them. They make it clear they won’t be paying anyone any more money, with the implicit assumption they are being paid too much already (You know – Cops, nurses, teachers, fire fighters, prison staff….and so on).

    That this is the party generally seen as representing business owners and employers is even worse. Any competent HR manager would look at this behaviour and recoil in horror.

    The wonder of it all is that anyone on a wage working for these people actually votes for them. Talk about shooting yourself in the foot. No wonder emotive wedge issues were crucial to the last election. They needed something to distract from the reality of what they say and do.

  3. Darien 3

    Thanks to everyone who has supported this bill through the Fair Deal in Hard Times Campaign. It’s not over if the bill doesn’t proceed. We will keep campaigning on this right through to the next election.

    • big bruv 3.1

      I bet you will, Labour are always very generous with other peoples money.

  4. Clarke 4

    As an employer this Bill has my wholesale support.

  5. Rex Widerstrom 5

    An excellent move… one of the best I’ve seen from Labour this term. A real point of difference politically, takes the party back to its core business, and addresses a real need.

    Having found myself redundant more than once (indeed, as Tane once commented here long ago, employing me seems like a guarantee of eventual insolvency 😀 ) I can attest that lprent’s description of what happens above is correct. For most people, more than a month or two between jobs and you’re on a downward spiral of losing your home and your savings from which it takes years to recover, if at all.

  6. big bruv 6

    “80% of Kiwis (basically, the non-unionised ones) don’t have any redundancy protection.”

    Then that 80% are idiots, there are numerous companies who offer income protection, it should not be the job of the employer to pay redundancy to workers they no longer need or want.

    “If they lose their jobs, they’re out on their arse with nothing.”

    Tough luck, and once again I note that you are being economic with the truth, sadly they have access to my money via WINZ.
    If they have not put anything aside for a rainy day then that is their problem not mine.

    Business owners already have to carry sick leave, holidays, maternity leave, bereavement leave and a host of other government imposed costs, compulsory redundancy is a stupid idea that does nothing to foster personal responsibility.

    • Clarke 6.1

      Business owners already have to carry sick leave, holidays, maternity leave, bereavement leave and a host of other government imposed costs, compulsory redundancy is a stupid idea that does nothing to foster personal responsibility.

      Good attempt at a smoke-screen, big bruv, but when it comes down to it you’re just being an apologist for businesses that are so incompetently run that they can’t cope with the entirely predictable costs of New Zealand’s regulatory environment … and when they do go broke, they’re so poorly managed that they can’t even make provision for their workers.

      Don’t think of this as an additional cost on employers – think of it as societal insurance against incompetent management.

      • big bruv 6.1.1

        The only smoke screen emerging from this discussion is the one you put up re “incompetent management”.

        Of course this is an additional cost on employers, you cannot class it as anything else, it is also another reason as to why an employer would think twice, and then a third time, about talking on extra staff when things begin to pick up again.

        Insurance is not something that should be left to what you call “society” , insurance is a personal item and something that any smart worker would have.

        I note that Labour did nothing about this during their long and disastrous term in power, only now do they think this is such an important piece of legislation.

        You make an interesting point about our regulated environment, under this stupid piece of legislation a boss would be forced to take into account a persons length of employment when working out who is going to be made redundant, if things are tight he may well be forced to pay off a good and productive worker who has not been with the company for a long time over a lazy and unproductive long term time server.

        Business is the survival of the fittest, the workers should be in the same boat, a boss looking at redundancies should be able to get rid of who he wants when he wants and not have to worry about paying out ridiculous redundancy packages.

        • Clarke 6.1.1.1

          You make an interesting point about our regulated environment, under this stupid piece of legislation a boss would be forced to take into account a persons length of employment when working out who is going to be made redundant, if things are tight he may well be forced to pay off a good and productive worker who has not been with the company for a long time over a lazy and unproductive long term time server.

          Are you serious? I mean, if you deliberately set out to illustrate my point about incompetent management you couldn’t have done better.

          If the business has been putting up with – in your words – “a lazy and unproductive long term time server” without doing anything about the employee’s performance, then it’s clearly bad management. Anyone with the faintest speck of HR expertise knows that there is a structured and straightforward process for performance management, and this expertise is both widely taught (e.g. NZIM) and available as external expertise from a great many providers. And putting up with poor performance whilst refusing to take advice about fixing the problem is pretty much the definition of managerial stupidity.

          It’s clear from your example that both society and workers need protection from this kind of poor management, and there is no reason why the costs of this ineptitude should be inflicted on the staff, their families or the taxpayer.

          You weren’t quite right when you said that business is survival of the fittest – it’s more akin to survival of the smartest. In that context, Darien’s proposal isn’t a redundancy provision so much as a stupidity tax.

          • big bruv 6.1.1.1.1

            “If the business has been putting up with in your words “a lazy and unproductive long term time server’ without doing anything about the employee’s performance, then it’s clearly bad management. Anyone with the faintest speck of HR expertise knows that there is a structured and straightforward process for performance management, and this expertise is both widely taught (e.g. NZIM) and available as external expertise from a great many providers. And putting up with poor performance whilst refusing to take advice about fixing the problem is pretty much the definition of managerial stupidity.

            Spoken like a man who has never run a small business in his life and spoken like a man who drips with the arrogance of the liberal, educated left.
            Sure, big companies will have HR departments, and these people are well skilled, however, you know as well as I do that the vast majority of business in NZ are small to medium and most are run by owner operators.

            These people might be extremely talented at what they do, their skills are fantastic, however they are not people who have been to university, often they work a full day and then go home and try and do the books, for you to suggest that they are “bad managers” just shows that you know very little about the real world.

            I suspect this is more of your smoke screen, like all from the left you and the truth are strangers, you seek to paint every employer as the big bad company when you know this is not the case.
            Somebody once said that we are a nation of shop keepers, that has not changed, when many of them make a bad staff choice it is not as easy as you people keep insisting it is to get rid of bad staff.

            • lprent 6.1.1.1.1.1

              Spoken like a man who has never run a small business in his life…

              bb: Jez that is extremely simple minded of you, and shows a complete inability to learn from your past mistakes.

              If there is one thing that you should have learnt from uttering such statements here is that your mindless prejudices do not match with reality. There are quite a number of commentators here who have run businesses, who still run businesses, who have managed businesses, who own businesses, and who have or do employ staff. That includes me for most of those.

              The majority of them on this site are centre, centre-left or just left. Basically they’re not ideological right bigots like you and can think past simplistic prejudices and slogans that you get stuck on.

              While we’re on the subject of your simplicity. There was a wee matter I was meaning to raise with you

              I read a totally inadequete article of yours on Clint Heines blog during the weekend. Apparently it was on Street who I gather you thought was ‘troughing’ the system.

              During the entire article there wasn’t one bit of information about what she was alleged to have done, or even a link to it. There wasn’t even a link to anything to where people were alleged to have defended her. In fact the whole post was pretty well devoid of information apart from the garbage from your uninspired brain.

              Now I know that the wee mutual mastubation society that is the NZ wingnut bloggers probably have some idea of what you were talking about. However how about doing something really basic and letting everyone else know as well.

              I agree with ‘James’ who commented

              Who’s actually defending her because she’s gay? Has someone actually said, “It’s ok cause she’s gay?” The post is a bit vague. No links, no quotes. Seems like projection to me. Not surprised.

              I’m surprised that even Clint lets you tarnish his site with a rubbish post like that… You’re even letting the wingnuts down..

              • big bruv

                You felt so moved by the article that you had to come here and comment?

                Is that because like all bullies you can only play when you make the rules?, or are you afraid your comment might be deleted?

                I must have hit the mark though for you to make mention of it, guess I must have hit a raw nerve.

              • felix

                You know I’ve wondered why Clint ever decided to let bruv post on his site.

                I’m pretty sure he just keeps him around because in a way he makes Clint seem relatively sane and coherent.

              • lprent

                bb: It was on my routine weekend scan of other blogs. I don’t have time to spend on many blogs during the week, so I usually spend a couple of hours during the weekend seeing what has been happening. I force myself to scan some of the wingnut blathering so I can see the current patterns…

                Didn’t comment on Clint Heines blog because I went to have a hunt for whatever it was you were talking about – you sure as hell weren’t telling anyone. Didn’t get back to cricket heaven to give you your required education.

                Forgot about it until I saw you pop up here acting like a dork.

                So I took an opportunity to give you some basic training in the fundamentals of how to write a post. The first rule is to assume that not everyone already knows the story already, outline it, and provide links for people to track into if they want to.

                You don’t want me to point out your writing flaws?

                😈 Besides it is funnier where more people will read it. You really should reread your posts after you write them and before you publish them. Think of it from the viewpoint of someone who hasn’t heard of the story. Incidentally Tane and the commentators beat that into me here when I started writing posts

    • Rex Widerstrom 6.2

      big bruv suggests:

      there are numerous companies who offer income protection

      Excuse me, but WTF? That’s not income protection insurance as it’s commonly offered, which is in fact:

      Income protection insurance provides an income stream for you should you become unable to work due to an injury or illness. In the event of a claim, the insurer will pay an amount (normally up to 75% of your gross salary in Australia) until you have recovered sufficiently to work again, or up until the maximum benefit period as stated in the policy which is normally 2 year, 5 year or up to age 65.

      Since I don’t think even Fenton’s Bill goes far enough in offering me some security if my employer goes belly up I’d be happy to insure myself against such an eventuality. So I have some questions:

      1. Which companies offer the “we’ll cover you if your employer proves to be a dickhead and his business goes bust” flavour of income protection?

      2. How do they do their risk assessment? They must be good, because most of the dickheads who employed me and then went bust (some owing me basic things like wages and, in Australia, superannuation) certainly had me fooled with their flash offices and fancy cars.

      3. What would the premiums be like?!

      [lprent: fixed the link and while I was at it, a couple of spelling errors. ]

      • Jenny 6.2.1

        Yes BB we would all like to know this one.

        In fact, I think I will remember this question and keep asking you it, every time I see you on a thread. Until you give an answer.

        Hundreds of thousands of working people would be prepared to pay premiums to such a company, (myself included).

        So don’t keep it to yourself, please.

  7. Clarke 7

    Spoken like a man who has never run a small business in his life and spoken like a man who drips with the arrogance of the liberal, educated left.

    No, actually spoken like a man who’s been running businesses since the late 1980s, and who currently employs 22 staff. Over the years, some have been excellent performers, some less so, and I’ve only had to performance manage a couple. So you might want to be cautious about thinking that you speak for all employers when you clearly don’t – not all of us conform to your kindergarten stereotypes.

    As an employer I fully support Darien’s bill, because it will only come into effect in the following circumstances:

    1. When a business makes staff redundant …
    2. … and they don’t have a redundancy clause in their employment contract …
    3 …. and the business can’t or won’t make provision for paying them a fair redundancy.

    That’s a small number of companies, and this is a very small impost on the cost of doing business.

  8. Kleefer 8

    I agree with big bruv, haven’t these people heard of insurance? If they can’t figure that one out then I’m not too happy to pay twice, for my own insurance to keep me out of trouble and for their welfare payments after they failed to take out insurance.

    • Clarke 8.1

      Why should the staff have to buy insurance to protect themselves from incompetent management?

    • Ari 8.2

      Name me one company that would pay out a redundancy for you if your employer failed to make the payment. I bet you can’t.

  9. big bruv 9

    Clarke

    If as you claim you are indeed an employer (and for the sake of this discussion lets pretend that you are) then please tell me why you think it is your job to pay redundancy if you decide that you no longer need a number of your staff.
    When you hire a new worker you are buying his time and perhaps his skill depending on the type of work, that should be the end of the matter.
    He works 40 hours, you make money from him and at the end of the week he receives a portion of that money.
    There is no earthly reason why you as an employer should have to cover him for his refusal or stupidity in not putting something aside for a ‘rainy day’.

    Thankfully the bill stands very little chance of passing, one would hope that the unions take its defeat with good grace and start to educate their members (and non members) on the issue of personal responsibility.

    • Armchair Critic 9.1

      BB
      An employer’s responsibilities extend beyond having to pay their employees at the agreed rate. Only a sociopath would think otherwise.

      • big bruv 9.1.1

        Rubbish, if I work for a company they buy my time, I expect nothing more from them nor do I seek it.
        When that working day is done I go home and tend to forget about work until it is time to switch on again the next day.
        The employer responsibility is to pay me for the time I have worked and provide a safe environment for me to do that work (or as safe as possible)

        If I am good at what I do then I expect to be paid handsomely, if not then I will take my skills somewhere else.

        That is the end of the matter.

        • Armchair Critic 9.1.1.1

          Two and a half sentences to contradict yourself and find an obligation that employers have over and above paying employees at the agreed rate. Well done.

          • big bruv 9.1.1.1.1

            Yep, have to agree with you there Armchair, providing a safe working environment is the one other obligation that an employer should have to provide.

            That is about it though.

            • Armchair Critic 9.1.1.1.1.1

              Well I dunno about that. I reckon that meeting the terms and conditions of the employment contract would be pretty much obligatory.
              And in the absence of law or contract, the obligation to pay regularly and on time has always been big in my book.

        • Jenny 9.1.1.2

          BB, what’s the name and phone number of that insurance company?

    • Clarke 9.2

      Bruv,

      I suspect you and I are a couple of light-years apart on the philosophy of this discussion, but it’s a fair question and one that deserves a fair answer.

      The context for this is the fact that I had to make one staff member redundant at the beginning of 2009, after she’d been with the company for about 2.5 years. Revenue had dried up in the area she was working in, and our profitability at the time was not high enough to let me keep her on whilst we tried to develop a new section of the market. So I made her redundant, and paid her out pretty much according to Darien’s proposed formula – 4 weeks for her first year, and two weeks for each of the other two years (rounded up from 1.5) that she worked.

      The reason I did so had quite a lot to do with fairness, and the assumption of risk. The way we were billing her services was that she was getting just over a third of her hourly rate as income – the other two thirds was going in overheads, downtime and margin. So the bulk of the risk of having her on the payroll was being absorbed by the company, but we were also taking the bulk of the revenue. It was my decision to take her on, and my assumption of the risks that went with that – when she applied for and got the job, at no point did I say to her that she needed to assume the risks of a market downturn in her personal planning or finances. It certainly didn’t say that in her job description, either.

      Basically the social contract is that the investors assume the risks, and the employees only take a portion of the income they earn in recognition of the fact that they don’t share in those risks. Investors go into companies with their eyes open about the likely risks and rewards, but expecting employees to share in the downside with no share of the upside seems completely unfair to me – particularly when no-one is prepared to spell it out in those terms when they’re employed.

      So out of a sense of justice and fairness, I paid out redundancy to her. I didn’t promise her a job for life, it didn’t send the company broke, and it didn’t result in creeping socialism that rotted the brains of all the staff members. But it did give her enough income to bridge the gap between leaving us and finding her next job, and it did provide a sop to my conscience about the fact that I’d made someone redundant who enjoyed their job, and had a mortgage and a family like the rest of us.

      Which probably means that I don’t measure up as a rapacious capitalist, standing astride the bodies of my competitors, fighting my way to the top in some bizarre Darwinian struggle. So be it. Other people’s motivations and the decisions they would likely make in the same circumstances are different – as the saying goes, YMMV. But it’s what felt fair to me.

      Cheers

  10. Darien 10

    @Clarke : good on you. There are many employers who see it the same way as you do and it’s refreshing to hear from you on this blog.

    • big bruv 10.1

      Darien

      Your bill would have had far more credibility had you put it forward during your time in government, you choose not to do so, like many I am left wondering why this was the case.

      I suspect that your bill is nothing more than a sop to the unions and payback for their support of you, no doubt your pals in the union movement are quite happy that this bill has been voted down as it had it succeeded then they would not have been able to use the threat of redundancy as a way of frightening more fools to hand over some of their hard earned wages to some thug by way of union dues.

      It is not often I agree with Henare but he was dead right today, this bill was/is the height of hypocrisy, it got what it deserves.

      • Jum 10.1.1

        Nonsense big bruv. You should have listened to Darien’s reply about redundancy legislation not being necessary at the time. I would go one further and say Labour could be trusted to bring unemployment down even further, which they did.

        NActional however can’t be trusted to do anything but privatise, create cheap, desperate unemployed and that was reason enough alone for Labour to start concentrating on the bill knowing that the untruths and misleading spin by Joyce and Co would mislead the fickle public who would vote in these carpetbaggers. Even Maori understood that and even the United Future voter was swayed into voting for Darien’s bill until his NActional masters reminded him that he was meant to be voting against it.

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