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More anti-worker policy from the Nats

Written By: - Date published: 2:14 pm, July 8th, 2008 - 55 comments
Categories: national, workers' rights - Tags:

On Sunday, Bill English let slip that National still intends to take away the work rights of employees of small businesses for the first 90 days of employment. Now, National’s Shane Ardern has spilled the beans on the Nats’ policy to cut the contributions to hundreds of thousands of Kiwis’ Kiwisaver plans.

In the Te Awamutu Courier, Ardern says‘[ Kiwisaver] needs adjusting from the employers’ contribution angle, from one size fits all approach, to allow for pressure on smaller business employers.’ This probably means National would allow small businesses to opt-out of employer contributions. That certainly fits with Kate Wilkinson’s earlier comments about removing the compulsion on employers from Kiwisaver.

700,000 New Zealanders are Kiwisavers, thousands are signing up each day. Over 22% of Kiwis work in businesses with fewer than 20 employees. That’s 160,000 Kiwis, so far, who would lose employer contributions to Kiwisaver under National’s policy.

As with National’s 90-Day No Work Rights Bill, not only would National’s Kiwisaver policy screw over employees of small businesses, it would also screw over small businesses. Who is going to choose to work for a small business if they would face 90 days when they can be fired on the spot for no reason and don’t get any Kiwisaver contributions from their employer?

These are regressive, reactionary policies from National that strike at the heart of our work conditions. No wonder they are trying to keep them as quiet as possible.

55 comments on “More anti-worker policy from the Nats ”

  1. “Who is going to choose to work for a small business if they would face 90 days when they can be fired on the spot for no reason and don’t get any Kiwisaver contributions from their employer?”

    All those ex-SPARC employees looking for a new job next year perhaps ?

  2. “This probably means National would allow small businesses to opt-out of employer contributions.”

    “it would also screw over small businesses.”

    So given that small businesses would still be able to optionally offer Kiwisaver contributions how does this disadvantage them ? If they needed to offer this to entice workers then surely they would, the employment market would force their hand. I can’t really see a downside (apart from an EPMU perspective of course).

  3. “All those ex-SPARC employees looking for a new job next year perhaps”

    Hey a tory laughing at people losing their jobs. There’s something new. Bit like John Key smiling as he fired those 500 Merill Lynch staff.

    Apart from opposing the policy as a weakening of work rights, I don’t see what the specific ‘downside’ for a union would be. In fact, if the policy encouraged more people into larger work places that would tend to have a positive impact on unionisation – small work places are more expensive per worker to organise and, partly becuase of that, tend to have lower union membership. Larger work places are more highly unionised, in general.

  4. MikeE 4

    Removing compulsion is not anti worker.

  5. MikeE. feel free to elaborate.

  6. Steve: “if the policy encouraged more people into larger work places that would tend to have a positive impact on unionisation”

    I would have thought the EPMU perspective was the worker perspective. Otherwise what you are saying is that what is bad for workers is good for unions. That kind of makes sense,a little like insurance companies, unions use fear to sell their services. If people are strong enough to stand on their own feet they don’t need unions.

    “Hey a tory laughing at people losing their jobs.” Yes, as a taxpayer I am more than happy to see the overpaid policy wonks and project managers at SPARC and similar wasters of my hard earned money get the axe. I would much rather the money was in my pocket than theirs.

  7. Renee van de Weert 7

    If about 1.4 million people are employees and if most enterprises in New Zealand are sme’s and, (only stats I could find in haste)back in February 2006:
    96.4% of enterprises employed 19 or fewer people.
    86.8% of enterprises employed 5 or fewer people.
    63.6% of enterprises had no employees
    that’s a lot of people who need to have a good think about the Nats policies, I reckon.

  8. BeShakey 8

    If people are strong enough to stand on their own feet they don’t need unions.

    …or the unemployment benefit, or legal protection from exploitation, etc etc.

    It looks like the JK tactic of spouting meaningless lines that don’t stand up to scrutiny has taken root in his followers.

  9. Daveo 9

    Bryan you have to understand that unions aren’t the same as companies, they don’t act purely out of mercenary self-interest and don’t have shareholders or profits.

    They’re democratic organisations that try to improve conditions for working people because they believe in it not because they’re in it for the money.

  10. Renee van de Weert:

    “63.6% of enterprises had no employees” this group doesn’t need to worry about this particular policy they are self employed and will be more than happy that National is planning to reduce the size of the government burden on them.

  11. Daveo: “They’re democratic organisations that try to improve conditions for working people because they believe in it not because they’re in it for the money.”

    Look at the CV’s of the Labour Party MP’s, union officials are in it because they want to ride around in 7 series BMW’s spending other peoples money.

  12. Daveo 12

    If people are strong enough to stand on their own feet they don’t need unions.

    Joining a union is about standing on your own feet rather than kneeling down before your employer.

    It’s the right who always suggest workers should simply run away to a different employer when they don’t get treated properly.

  13. TomS 13

    I think MikeE was reading another bumper sticker.

  14. Stephen 14

    Look at the CV’s of the Labour Party MP’s, union officials are in it because they want to ride around in 7 series BMW’s spending other peoples money.

    That really is ridiculous Bryan.

  15. Bryan. “Look at the CV’s of the Labour Party MP’s, union officials are in it because they want to ride around in 7 series BMW’s spending other peoples money.”

    That’s moronic.

    Look at the CV’s of the National Party MP’s, businessmen are in it because they want to ride around in 7 series BMW’s spending other peoples money.”

    How about this, go to a public meeting and ask an ex-union Labour MP why they’ve spent their lives in roles that pay less than equilivant roles in the private sector. Ask them what drives them.

  16. infused 16

    I really don’t see the problem. Like someone else said, if you don’t like it, get a job where the company offers the employment contributions. Damm, that was hard…

    The market will force their hand.

  17. Stephen 17

    Yeah, I don’t really see the ‘injustice’ of reducing the amount of money companies HAVE to give their employees!

  18. Steve: “Look at the CV’s of the National Party MP’s, businessmen are in it because they want to ride around in 7 series BMW’s spending other peoples money.’

    No, no businessmen become National MP’s so they can retire into the Chairmanships of SOE’s like KIwibank, KiwiRail,NZ Post etc …

  19. Rex Widerstrom 19

    Given the fact (as outlined in Renee van de Weert’s comment above) that the majority of people work for small businesses when I hear this sort of policy announced I assume one of the following three things to be true of the speaker:

    1. They’ve never worked for a small business.
    2. They’ve worked for small businesses but have been fortunate enough to have always had a boss who is calm, fair, level-headed and is a good businessperson, capable of budgeting to pay staff even when the market tightens.
    3. They’ve worked for small businesses, know the reality, and are a bare faced liar.

    When John Howard introduced Workchoices, removing the right to fight against unfair dismissal from anyone employed by a firm with less than 100 staff, he at least had the excuse of having been a suburban solicitor prior to entering politics and thus being in category 1. Not that there wasn’t plenty of evidence – anecdotal and research – telling him of the reality.

    All I know of Shane Ardern was that he was a dairy farmer before entering politics, so perhaps he too comes under category 1. But then what’s he doing formulating policy for the vast majority who aren’t?

    A huge multinational sees you as a cog, yes. But if you’re spinning fast enough and your KPIs (or whatever the buzzword-of-the-day is) are up to scratch, they’re unlikely to let your immediate boss sack you because it’s clear you know vastly more than s/he does. But if your immediate supervisor is the boss, and there’s no law to stop him…

    Politically, it’s just stupid. The handful of bad bosses who run small businesses love you. The vast majority of workers hate you. The unions have a clear target to aim at. And the big companies really don’t care.

    Anyhoo, given what NZIER are saying today the economy’s in such a nosedive, less and less of us will have to worry about this whole “having a job” thing anyway.

  20. Aaron Kirk 20

    Luckily I’ve opted-out. Mind you its going to take 8 weeks before mine and my employers contributions are reimbursed.

  21. Stephen 21

    opted-out of free money Aaron?

  22. Scribe 22

    Steve,

    Do you honestly think all (or most or many) small-business owners are heartless people who would remove those contributions if they were not compulsory and fire people after 89 days?

    Most small employers were employees once. And they know that some people will up and leave if they can do the same work down the road for the same pay but also get employer contributions for Kiwisaver. And they also know how hard it is to recruit new staff; that would be doubly hard to do if you’re not offering employer contributions.

    In short, I wouldn’t expect a mass pull-out of Kiwisaver contributions by small-business owners.

  23. “Luckily I’ve opted-out. Mind you its going to take 8 weeks before mine and my employers contributions are reimbursed.”

    “opted-out of free money Aaron?”

    Not so much free money Stephen as a defacto tax rebate given it’s OUR money we are getting back. Everyone should signed their kids up for Kiwisaver just so they can get some of their hard earned taxes out of the lefts grasping hands.

  24. Let’s assume Aaron is on the average fulltime income of $46K.
    – his annual contributions to Kiwisaver would be $1880
    – He would receive a $1000 one-off payment on joining
    – He would receive $1040 a year in matching payments from the Government
    – He would receive a minimum of $460 a year in employer contributions (entirely covered by the Government tax credit to employers)

    – even assuming that the investments don’t have any return, after one year, Aaron would have made a return of 133% on his $1880 and be on the way to building up a decent retirement nest egg

    Yeah, lucky Aaron.

  25. bill brown 25

    Do you honestly think all (or most or many) small-business owners are heartless people who would remove those contributions if they were not compulsory and fire people after 89 days?

    You can say this about all of these worker friendly policies: Probation, KiwiSaver, Tea breaks…

    But it’s not the “most or many” good employers that these are aimed at. It’s the employers that will exploit their workers.

    Honestly, if an employer is a good employer these policies have no impact – so why would they care. If they’re a bad employer – and they do exist – then they need to be forced to treat their workers better.

  26. Tane 26

    Yeah but Steve he might have other reasons why he hasn’t joined. Say you’re saving for something else in the short to medium term, or you’re on a low income (the 4% bar is bloody high if you’re on minimum wage).

    You’re right though that all other things being equal you’d be insane not to join.

  27. BeShakey 27

    Many people seem to be assuming small business and large multinational are different things, this isn’t necessarily the case. Many of the large multinational fast food companies are run as franchises. These will be key users of the 90 day hire and fire rule – get in some young kid on crap pay, fire them after 90 days and get another (easy when the economy starts going backwards).
    The only people that could realistically gain from this are those looking to work in skilled occupations, for a small employer, but without much work history, how many of those are there?

  28. Scribe. No I believe that most small business owners are good people.

    I also believe most food producers are good people, that doesn’t mean we don’t have minimum food standards.

    Most employers wouldn’t make employess work in dangerous conditions but we have workplace safety standards.

    I also believe most people don’t kill other people but we have a law against it still.

    We have these complusory things to protect against the bad ones, not because everyone is bad.

  29. Stephen 29

    Bryan, yeah I know – why i don’t really complain about taxes that much.

  30. Disengaged 30

    BeShakey, do you actually realise how much it costs to recruit and train staff, especially when lost productivity is taken into account?

    The majority of new hires (40% according to the Centre for Creative Leadership)do not meet expectations until they have been in the role for 18 months or more. So Why would an organisation choose to expose itself to the expense of continually hiring (and then firing) new staff every 89 days? That assumption is ludicrous. The HR requirements alone would negate any perceived benefits.

    Scaremongering much!?

  31. disengaged – I hate being picked up on non-substantive points in what i write but I’m going to do it to you – 40% equal a majority?

    This policy exposes workers to the danger of being fired for no justifible cause and, in some industries where it is practical (fast-food), being rotated through short-term contracts to keep them sackable at will.

  32. bill brown 32

    Employers that have workers that have to be trained will not be affected by this policy. It’s unlikely, as you say, that the employer will find any problems in the first 90 days anyway – you talk about 18 months.

    So it’s only employers who employ workers who don’t need any real training. These workers are necessary for the employer but are generally just warm bodies – anyone who wants the job can do it anyway. These workers are highly interchangeable and therefore need to be protected.

  33. Billy 33

    Ever been into a McDonalds with out a “Hiring Crew” sign in the window?

    Where will this inexhaustable supply of rotating workers come from?

    You guys are just making no sense.

    The only reason for an employer to do the rotation you fear is for the sole purpose of being an arsehole. Most of those I have met are more intersted in keeping his, her or its business running efficiently.

  34. BeShakey 34

    Disengaged – as noted by Steve, my point was about low/no skill jobs. In these cases it doesn’t take 18 months to upskill. Likewise, the recruitment and HR costs aren’t that high. Comparing practices in businesses/industries where this policy is never going to be a major feature is at best disingenous and at worst misleading.

    Billy – noticed how we are entering (or more likely already in) a recession? Given that Bill English said that any party that claimed they could get unemployment under 6% was lieing, I wouldn’t be surprised to see unemployment increase post-election (although to be fair I suspect it will happen regardless of the outcome of the election).
    The reason employers would do this is to keep costs down. As has already been pointed out by others, this applies to a minority of employees, but that is who we have to protect against (I thought Steve made the argument well).

  35. But having a very flexible work force is a way of keeping your overheads down – fire at will, fire those who refuse to do overtime etc. read my work story from ‘on the distribution of labour’, tens of thousands of workers are in that situation, and the 90 day Bill moves more into that state.

    Beshakey. umm, I think I just accidentally deleted your comment

  36. Gustavo Trellis 36

    Perhaps TheStandard should remember that during the Kiwisaver consultation period, there was no mention that it would be compulsory for employers. That was a nice budget surprise for the people they had supposedly consulted with.

  37. Daveski 37

    Surely this act can be applied with common sense?

  38. lprent 38

    Gustavo:

    should remember that during the Kiwisaver consultation period, there was no mention that it would be compulsory for employers.

    Unlikely. In fact I’d say impossible.

    Even a moments thought would tell you that for a super scheme to be transportable between employers for an employee, it must be compulsory on employers. Since the whole point of kiwisaver was to make it a lifetime savings system, then it was a requirement of the design.

    I suspect that is just one of those nice myths that the right like. Sort of a fluffy blanket to substitute for thinking.

    BTW: ‘TheStandard’ in the way you referred to it doesn’t exist. It is a machine and doesn’t have opinions. Try talking to a writer who is a human.

  39. r0b 39

    That was a nice budget surprise for the people they had supposedly consulted with.

    KS contributions are phased in over 4 years (and followed a significant cut in company tax rates). As surprises go it was a pretty tame one.

    And the benefits of KS are not just personal, they are economic, and they are already being felt:
    http://www.stuff.co.nz/4592706a13.html
    NZ finally has a much needed a source of investment. Messing with it is just repeating Muldoon’s short sighted economic vandalism from the 1970s.

  40. dave 40

    Who is going to choose to work for a small business if they would face 90 days when they can be fired on the spot for no reason
    The very low paid workers who cant afford Kiwi Saver, probably dont know about it and certainly knot know about the 90 day rule. IN other words a lot of people

  41. Rex Widerstrom 41

    Scribe asks:

    Steve, Do you honestly think all (or most or many) small-business owners are heartless people who would remove those contributions if they were not compulsory and fire people after 89 days?

    Can’t speak for Steve, but I’ll take “many”. Not a majority certainly. I know anecdotes don’t make for evidence, either (I wonder if the Standardistas can provide any Employment Court stats on size of company vs unfair dismissal claims?). But thinking about myself, my former partner in NZ and a couple of friends of hers I helped out in the Employment Court I can point to employers who:

    – Hired someone to work at a business they mismanaged, then when it started to fold accused the person of theft so as to avoid having to pay holiday pay, notice, etc. (There were three separate cases of this – different employers, different employees).

    – Hired someone on a verbal contract, paid them occasionally (with “a bit extra to compensate” when there was some cash in the kitty) and then sacked them when they said that they (and their creditors) would actually like a regular income, thanks.

    – Treated someone appallingly for six months in the hope they would leave, then finally snapped and rang them and told them to “f*** off”. When the person returned the locks on their office had been changed and their PC was being searched.

    – Hired someone, then after a while told them the position was being dis-established and they’d have to leave, only to immediately replace them with an under-age family member.

    – This has to be my favourite – the guy (who wore a beard) whose attitude to a staff member changed completely when the staffer started sporting a beard. Some belief that only the leader of the pack sports a mane, perhaps.

    – Hired someone under a written contract in one capacity, changed the entire nature of the job, then fired the person when they couldn’t or wouldn’t do the new job.

    – As above but then escaped paying any compensation (as well as paying a lot of other creditors, many of them small businesses) by going into Voluntary Administraion, declaring a zero dividend, and then trading on.

    That’s but a handful of examples. So yeah, heartless sums up many small employers. Or brainless. Or both. Then again the greatest people I’ve worked for have owned their own small business. Some have remained lifelong friends. And I have in the past and am currently owner of a small business.

    So not all. But enough to ensure that workers need protection, including tough sanctions against the handful of a**holes.

  42. Steven 42

    Gee, what’s the problem here people?

    I caught the tailend of this story on the news before and thought it must have been a major blunder or something. Talk about clutching at straws for a beat up. The problem here is there is simply far too much bludging going on in NZ now and nowhere near enough personal responsibility and incentive for people to stand on their feet and try and make it on their own wihout the Government. Hence NZ desperately needs a change in direction.

    Kiwisaver should be more flexible, both for the employer and the employee as well. There should be a 2 percent option to pay into it and there should be some knd of Kiwisaver payment option tied in with paying off student loans. Perhaps not post 2005 student loans where they are free money, but people with student loans prior to 2005, and more specicially still prior to the introduction of paying it like a weekly allowance. That would win votes among people who went to uni in the 1990s and still have a noose over their heads called a student loan that is costing them another 8-9 percent out of their (low) wages on top of 4 percent for Kiwisaver, particularly as a fare chunk of what they are paying back past compounding interest as much as principle.

    Why the argument that all small business owners and employers are all out to screw the workers? Employment law is skewed wildly in favour of the empployee as it is, with samll employers themselves screwed if they hire a bad performing or cheating employee. With the extra week’s annual leave, relentless pricing and cost increases, stifling red tape and now the 1 percent extra to spend on the wage bill how do you suggest they pay for it all other than taking a wage cut themselves?

    And to make comments about employers hiring and firing staff at will if a 90 day period is brought in simply negative scaremongering by people who supposedly want to help out the average guy in the street. The best way you can do that is by leaving them alone.

  43. sean 43

    “even assuming that the investments don’t have any return, after one year, Aaron would have made a return of 133% on his $1880 and be on the way to building up a decent retirement nest egg”

    or he could provide for his own retirement and make a lot more than that.

    There isn’t any point in joining Kiwi Saver to get a few 100k back at the end (as long as it hasn’t nosedived), when you can do it yourself and get a few million back and be retired by 55. The only people who should join Kiwi Saver are those that are unmotivated to do it themselves. It is no where near a silver bullet.

  44. ak 44

    Right on Rex. Like yourself, anyone who has spent much time at all in advocacy/social work etc has a dozen such stories, and knows full well that the employment law supposedly “skewed wildly in favour of the employee” is seldom pursued due to practicalities and the dire immediate circumstances facing those affected.

    You’re right – most employers are good as gold: but the a****holes number in the thousands and the harm, misery and resentment they cause can be severe and persisting.

    The law and its application is very important in this area: the worst cases I have dealt with involved employers treating young workers like slaves, “constructively dismissing” (bullying till they left, accusing of theft etc) when the heavy work demand had passed (or the subsidy ran out), then claiming to WINZ that they had left of their own accord, thus denying them even a benefit for up to six months (under the Tory regime). As I say, only a few, but enough to cause a heap of pain. Under Labour, the culture of DWI is a million times more humane: just one more reason I dread a return of the tories.

  45. burt 45

    rOb

    How are you doing?

    You said;

    KS contributions are phased in over 4 years (and followed a significant cut in company tax rates). As surprises go it was a pretty tame one.

    Compared to what was it tame? Who judges the scale of surprises relative to wild and tame? How is that judgment applied to [xyz enterprises] and the individual financial circumstances they have?

    How is projecting a 4% increase in a major cost tame when imposed against a 3% reduction in a potentially much smaller cost? Not all businesses make millions in profits, some pay all profits as wages so there will be no tax cut as such, but there will definitely be a cost increase for KS contributions.

    I’m not saying employee contributions are a bad thing, but I don’t say because I think it’s a good thing that it was tame, it was certainly a surprise.

  46. IrishBill 46

    It was not a surprise, burt. Indeed the first two percent of contributions are totally subsidised in the form of a tax credit for employers of staff on $55k or less. Please explain how this scheme could have been brought in less surprisingly? Perhaps the government should have totally subsidised the contribution for ten years? Twenty? Thirty?

    Given the renowned “ability of private enterprise to adapt” how long did they need? Or are they just complaining about having to pay a little? Remember the full KS contribution is only 4 ninths of the rate an Aussie employer pays and in most cases they’re getting more than 2% of that subsidised. Cry me a river.

  47. burt 47

    IrishBill

    Of course private enterprise will adapt, they will hold back pay rises and take more profits for the shareholders to utilise the lower company tax rate. Please remind me again who the muppet was that put such a large gap between the company tax rate and the top personal rate (made worse by compulsory KS contributions) to encourage such behaviour.

    However before I get onto the subject of ‘all company profits are unpaid wages’ – which I believe is a stance that might have some support from a Communications Advisor of the EPMU, are you a Communications Advisor of the EPMU?

  48. IrishBill 48

    Hmm, who are you burt? I think I’ll keep you guessing and in the meantime you can have a week’s ban to boast about on Kiwiblog.

  49. r0b 49

    How are you doing?

    I’m well thanks Burt (a few aches and pains after a tramping weekend), hope you’re good too.

    IrishBill answered your question much as I would have. And please do read the link in my post of 5:45pm above on the benefits KS is starting to have for the economy even in these early stages.

  50. What’s the fuss? NZ businesses might even take a few more punts on slightly dodgy-looking staff with this lower risk approach. It might even increase employment.

    That’s would be something.

    In my view, if you hate your job, leave. If you hate your staff, fire them. It’s a free country, right? The entrepreneur is a bit a football team manager, trying to juggle all the balls and keep everyone happy. These less artificial constraints, the better.

  51. ramsey 51

    >> In the Te Awamutu Courier, Ardern says”[ Kiwisaver] needs adjusting from the employers’ contribution angle, from one size fits all approach, to allow for pressure on smaller business employers.’ <<

    It sounds eminently sensible to allow a small business to offset Kiwisaver costs back to the govenment via either a tax rebate or a kiwisaver code that effectively means the government helps small businesses grow while looking after the workers.

    Whats wrong with this?

  52. r0b 52

    Whats wrong with this?

    Nothing wrong with offsetting costs to businesses. Already happens under the current scheme.

    The “no one size fits all” rhetoric is, however, probably code for gutting the scheme.

  53. ramsey 53

    Don’t be absurd, its a great scheme on balance and one that previous goverments should have implemented but were too scared to approach incase they were accused of “gutting national super”.

    Your opposition, Key, is on record praising the scheme.

    A bit of fine tuning and it would be better.

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