Risk

Written By: - Date published: 9:21 am, December 12th, 2008 - 41 comments
Categories: national/act government, workers' rights - Tags:

If you’re still wondering what the Fire at Will Bill (about to become law just over a day after it was first made pubic) is all about take a look at No Right Turn’s analysis. It is a poorly-written and poorly thought-out law. It takes away your right, if you are fired when the first 90 days of working at a small or medium-sized business, to challenge the fairness and legality of that dismissal. And National/ACT plans to extend to that all employees in all workplaces as soon as possible.

Now, ACT’s David Garrett, a former employment lawyer, tells us that there is nothing to worry about because only “3-5%” of employers are bad employers who are going to abuse this new law by sacking people without justifiable grounds. He also said only “3-5%” of employees are bad employees who need to be sacked. Basically, what he is telling us is that the law transfers the risk from employers to employees. Under the previous law, an employer had to go through a fair, unonerous dismissal process and have fair reasons for that dismissal if they were unlucky enough to get a bad employee. Now, the risk is on the employee – you take the risk, if you go into work with a small or medium-sized business, of getting one of the bad employers and unfairly losing your income, your livelihood, your occupation. A small risk to employers has been traded for a large risk for employees.

I tell you what, I know not all employers are bad but I won’t be taking any jobs at small or medium-sized businesses, not worth the risk. I would only take such a job if the pay was higher to compensate for the added risk. I imagine that all high skill workers will think the same way. High skill workers will steer away from small and medium-sized businesses. And when National/ACT extends it to all businesses, high skill workers will find a nice safe job and stay there, creating a rigid workforce inimical to economic growth.

But the people we should be worried about are those who don’t have the choice. It is always those people that are referred to as ‘vulnerable workers’ (although I don’t like that dis-empowering term) who have no choice. They have to take what work they can get. Getting a job will be a game of Russian Roulette for them, with a “3-5%” chance of losing it all. Many won’t risk playing that game at all.

We’re in danger here of creating a US-style labour market. At the high skill end, you have workers who are afraid to change jobs (in their case, to protect their health insurance and other benefits). At the low skill end, you have abused, low-paid, under-employed workers who are used inefficiently and discarded on a whim by employers. This law does not put us in that situation but it does set us on that path.

41 comments on “Risk”

  1. Tigger 1

    Pity the law won’t cover the recently elected government…

  2. Tim Ellis 2

    Interesting analysis SP. But why would you not go and work for an SME if the probationary period was not in your employment agreement? Where is the risk of being fired within 90 days, if it isn’t in your contract?

    Oh, that’s right. That very slight flaw in your analysis. The 90 day probationary period isn’t compulsory, and if employers can’t find employees who will accept it, then they will remove it from their contracts.

  3. Andy 3

    TE: Your point just emphasises the fact that this legislation disadvantages people with the least opportunities in employment, the people we should be protecting and encouraging into employment. This bill will also hurt young employees, especially those entering the workplace for the first time. It is an embarrassment that this government is rushing the employment relations bill amendment in such a fashion. Why not accept feedback, be it positive or negative.

  4. I’ll tell you what Steve, I’m about to bring my girlfriend to this country and she’s already extremely worried – especially that she won’t be able to work for several months while she gets her work permit processed in New Zealand. This law is going to affect people like her and I’m having problems bringing myself to tell her this. She’s a good worker and very competant in her field (she has a Bachelor of Design) but this new law is only going to make things more risky for her as being allowed to stay in New Zealand often requires proof of stable employment.

    The speed of this legislation and National’s use of urgency is not just anti-democratic but an outright abuse of power and I’m already beginning to wonder about this country, especially those who try to justify their actions. The last straw would for me would be if National try to fuck my girlfriend over with this law because if they do we’ll both be leaving, for good.

  5. PeachyBehinds 5

    [deleted]
    [lprent dad – you are banned]

  6. Sweet cheeks 6

    [deleted]
    [lprent dad – you are banned]

  7. Tim Ellis 7

    TE: Your point just emphasises the fact that this legislation disadvantages people with the least opportunities in employment, the people we should be protecting and encouraging into employment. This bill will also hurt young employees, especially those entering the workplace for the first time. It is an embarrassment that this government is rushing the employment relations bill amendment in such a fashion. Why not accept feedback, be it positive or negative.

    The other side of that argument Andy is that right now employers aren’t giving the most vulnerable workers–young workers, workers with criminal convictions, workers with poor English, low-skilled workers–a chance. It’s just too risky to take those people on, for many employers. SP is right, this legislation is all about risk. Right now the costs associated with taking on a marginal worker outweigh the likelihood that they will deliver value to a business.

    If you think there might be discrimination under the new law, then there’s a hell of a lot of discrimination against the most vulnerable workers now, who never get a look-in to a job in the first place.

  8. student_still 8

    I’m sick to death of the forum on ‘stuff’ regarding this issue. Everyone is wanking on about how people need to ‘get out into the real world’, ‘have a go’, ‘make a buck’ – and apparently this is why aspiring to have a career in business is superior to any other vocation? For some reason we should have an endless amount of respect and kudos for people who ‘make something out of their lives’ by starting up their own wee enterprise. Apparently it should be perfectly acceptable to pass legislation that allows these people to use their employer status to create mini dictatorships within their businesses. One person even suggested that ‘I PLEASE PLEASE PLEASE have a go at starting up my own business’ , as if this may lead to me ‘seeing the light’ and coming out with a greater understanding of the plight of the employer. This person also said in their post: ‘This [the Fire at Will Bill, I assume] is about real people trying to make a go of it and needing all the help they can get to get ahead and make a buck. We need these people and we should be grateful that these people have seen fit to risk their own money to better NZ society through their efforts.’

    EXCUSE ME??!!!

    For a start, are people who go into business really actually risking their own money? Or would it be more accurate to say they are risking the BANK’S money, that they borrow to start up the business?

    In my opinion, I’m not so sure why the taxpayers/government (or banks for that matter) should help ‘you’ ‘make a buck’ and ‘get ahead’. Some could argue that people who start up their own businesses with little capital and limited business knowledge and experience (as many do, I’m sure) are just like beneficiaries standing in line for a hand out, except they don’t NEED their benefit just to live, they WANT it to turn a profit.

  9. Carol 9

    I’m also getting a bit fed up with MPs from the National benches this morning saying they have a mandate for this bill because at the elections people got out and voted for National’s “brighter future” and rejected Labour’s “wasted opportunities”. No they didn’t. National got into government because a lot of traditional Labour voters just didn’t go out and vote. Most didn’t choose National’s spin, they just didn’t vote.

    Paula Bennett gave a rousing speech – she speaks well, but the content was a lot of misinformation. She invoked a mythical socialist state under the last Labour-led government, that had got young people used to being told what to do so they can’t think or act for themselves. In contrast, she used Key-speak to say how National was backing young people to show initiative to use their talents, through this 90 day bill.

  10. Quoth the Raven 10

    Reading over at Tumeke someone had this little bit of information. Convention 158 of the ILO says: Article 4 of the Convention articulates this requirement as follows: “[t]he
    employment of a worker shall not be terminated unless there is a valid reason for such
    termination connected with the capacity or conduct of the worker or based on the
    operational requirements of the undertaking, establishment or service’. The Committee of
    Experts has frequently recalled in its comments that the need to base termination of
    employment on a valid reason is the cornerstone of the Convention’s provisions. That to me is clear and explicit our government is breeching International Labour conventions as set out by the U.N.

    Tane was wondering whether it might be in breech of the ILO’s conventions. Reading that I think the 90 day bill is.

  11. Draco T Bastard 11

    We’re in danger here of creating a US-style labour market.

    Which is exactly what the Hard Right have been demanding since the late 1970s. The National Party as a whole took until the late 1980s to figure that one out but then took up the cause with gusto.

  12. Bill 12

    QtR
    I agree that it appears the 90 Day Bill contravenes the ILO.

    But no worker dismissed under the 90 Day Bill will be able to show that to be the case because they have no avenue for appeal/ challenge nor a platform even just to have their version of events heard.

    In the mythical world of the boss, of the 90 day bill, dismissals are for performance related issues. Because this is unchallengeable it is allowed to confound reality.

  13. millsy 13

    Well folks, you have it now….a new class of disposable workers.

    BTW: I have decided to create a website that will name and shame employers and businesses who have misused this law. If anyone wants to get stuck in and help out, e-mail me at: thekiwiurbanexplorer@gmail.com

  14. Billy 14

    Why do you guys insist on calling this government a “NACT government” or a “National Act” government? The Maori Party have no less generous arrangements than ACT has. Yet they do not seem to get a mention. Why, I wonder?

  15. Billy 15

    I have a question for you lefties.

    Do you think National are enacting this amendment to the Act because:

    a. they think this will be a good way to shaft workers for the benefit of National’s consituency?; or

    b. they genuinely believe (in your view, no doubt, misguidedly) that this will reult in more people being employed?

    If you think it is the former, why do you they limited it to small workplaces?

  16. Bill 16

    c.  workers getting shafted is an utterly inconsequential side effect of the unquestionable fact that power should reside, wholly and rightfully, with the employer. What are the lefties on about?!

    20 today. Every workplace tomorrow.

  17. Akldnut 17

    Billy

    A. Yes  Reason: Because they get more mileage and money out of “Big Business”
    B. Yes  Reason: Because they’re the ones who are misguided.

    And to answer your previous post they’re called Nact because between them they effectively control Govt and have no need of the others who were just a bonus on their way to “total world domination”. (starting with NZ)

  18. lprent 18

    Billy: Who cares about ‘in theory’ compared to ‘in practice’ in actual parliamentary politics

    So far (as far as I can tell) the MP only seem to vote for things that are on confidence and supply.

    Act on the other other hand vote for everything the Nats put up while saying that they did not go far enough.

    As predicted, the MP look very isolated relative to Act in the arrangements. This could probably be attributed to the bulk of the National MP’s views tending to overlap with those of Act, while only a few have views taht overlap with the MP.

    We just call it as we see it. You could always suggest a alternate viewpoint – I’m sure that it’d get some responses.

  19. Billy 19

    Akldnut,

    the only problem with that theory is that big business will not benefit from the change.

    Why do you think they didn’t extend it to bigger employers if their motives were to shaft workers in a play to their constituency?

  20. Akldnut 20

    Billy seing as how you want us to answer a few qustions – heres a few for you!

    1. How about the smaller sized businesses with potential to grow past the 20 employees, but can’t afford to employ a HR officer so that they have to avoid employment tribunal or court action. Will this (Fire At Will) Bill just stymie their growth? 

    2. Have you questioned number of 20 employees, why was it set so high – or low for that matter? – Who did you ask and what was the answer?

    3. Have you questioned  the implication that the bigger businesses have more money and therefore can afford to go to tribunal/court?  – Who did you ask and what was the answer?

  21. Pascal's bookie 21

    Give it time Billy. They can’t shaft everyone all at once. They’re conservatives.

  22. Billy 22

    Only too pleased to oblige, Akldnut.

    1. It depends on how much risk those employers perceive in employing people compared to the profit they think they can derive from having a bigger workforce.

    2. I have not questioned it. If you want the benefit to apply to small work places, you have to set the number somewhere. If the problem that the left see is that the number is too high, I guess we’ve won.

    3. I do not understand the idea was about profitability of the employer, rather their sophistication. If one is employing more than 20 people, you probably have an HR person.

  23. Akldnut 23

    Billy “Do you think National are enacting this amendment to the Act because:

    a. they think this will be a good way to shaft workers for the benefit of National’s consituency?; or

    constituency = (the group of voters belonging to) any of the official areas of a country that elect someone to represent them nationally

    I take that literally to mean owners of big business as well.
    If there was any chace of being shafted by the owner of a small business ie. less than 20 employees, its obvious that big business will gain because potential employees will be lining up at their HR officers front door!!!

    Just another shrewd move to and for the big boys!!!

  24. Billy 24

    I am asking these questions because I am genuinely interested in what you guys think the Nats are up to.

    PB, you’re a sensible cat. Do you believe they are dastardly or misguided? ‘Cause surely they can’t be both.

  25. Pascal's bookie 25

    Generally I think most of them are stupid and some of them are wankers. There is some overlap.

  26. Akldnut 26

    Fair enought billy but still why haven’t you questioned the magic number, is it just blind faith or accepting anything they say is right?
    Small business IMO should be set around 10

    BTW I’ve worked in three companies with over 20 workers and none had an HR officer, one company had 400 nation wide (250 being in Auckland).

    I think if you look at the big picture since taking power and their sopposedly centrist position prior, I myself would say that the earlier picture was a forgery and now it’s under scrutiny we’ll see how many cracks there are in the paint and if we’re now seeing the real painting behind!!!

  27. Billy 27

    Akldnut,

    I haven’t focussed on the number to a great degree, mainly becuase all of you have been telling me that no number is acceptable. If the position of the left is now that the change would be acceptable if it were set at employers with fewer than 10 employees, I think we’re getting somewhere.

  28. Akldnut 28

    Absolutly not! What I’m saying is that in my eyes a small business is 10 or less but as far as the removal of employment rights or options of employment. 
    My position = ZERO Tolerance

  29. Billy 29

    Akldnut. It’s “10 or fewer”. I thought everyone except National’s billboard designers knew this.

    People seem to be either in the “oppression of fundamental work rights” or the “sensible, measured proposal” camp. Maybe the number is relevant but, so far, you are the only person I have heard focus on this.

  30. Bill 30

    If businesses were having genuine problems with probationary periods as they existed until now, all they had to do was five minutes homework and write a process into their agreements.

    Oh, hang on. They did have procedures written in ( where they could be bothered to follow the law and actually have written agreements). But then didn’t follow them.

    If an employee didn’t adhere to the agreement, they suffered repercussions…and still will.

    Now however, for up to 90 days, the employer gets to behave like an eejit ( all sorts of unrealistic demands including straight up breaking of the law. eg deny breaks, extend/reduce rostered hours at the drop of a hat, bully, harass, ‘play favorites’..the list goes on and on) and if pulled up on their behaviour by a new employee can fire said employee with no repercussions.

    Perfect.

  31. John BT 31

    Part of the reason that nice Mr Key is in power and able to pass this 90 day bill is because he is smart, understands where the money comes from and has a social concience (witness the turnaround on the housing policy once they found out how bad the situation is). I do not believe Mr Key intends to be a one term Prime Minister, so surely, if this bill is going to have a major negative effect on the workers it will be gone by lunchtime as they say. You see Mr Key knows that workers are also voters.
    It is a bit like this blog really. If you only want to play with those that agree with your position, even when it is unreasonable, sooner or later your circle of friends becomes very limited. Now I am sure that the nice Mr Key wants to have lots of friends so we will keep getting good laws to help out all those poor employers.

  32. Quoth the Raven 32

    Billy – Do you not think someone can be stupid and malicious?

  33. Billy 33

    QtR,

    Yes but I do think the two possibilities I cited are mutually exclusive. Either:

    1. they desperately want to shaft the workers for the benefit of the employers; or

    2. they genuinely think (you guys believe wrongly) that employers are more likely to take a chance on employees if they have an easy get out of jail card if it turns out to be a fuck-up.

    For the record, I am both stupid and malicious. You should try it. It’s quite fun.

  34. Jimbo 34

    This law is not that ususual around the world. It will become accepted in NZ and the Labour party, when it next has the chance, will not repeal it.

    When I’m employed for a full-time job, I can leave AT ANY TIME for any reason without compensating my employer for the losses I cause it. After accepting a permanent role, I can nevertheless walk out on Day 1 because I don’t like my colleagues, or the work is too hard, or I’ve had a better offer from someone else. My employer would have no rights at all. No responsibility to pay my recruitment and training costs, no compensation for damage to the business, nothing. Why is that?

    The new law is designed to give the employer something similar to what the employee ALREADY has – the ability to “fix” a mistaken appointment in a relatively painless way. The good thing for workers it that this should make employers more likely to *take a chance* on someone with no track record, or a less than perfect CV. That is a great result for the genuinely most needy people in society.

    The employer’s ability to fix a mistaken appointment is (1) limited in time; (2) limited to certain causes (performance issues); (3) only available to some employers. The employee’s ability to walk away without paying compensation is absolutely, 100% unfettered.

    Some perspective is needed. The mechanism is not perfect, but it’s definitely not an end to workers’ rights or anything like it.

    Urgency was a joke but that’s a different issue. National should have made the case for this law properly because it’s a case that can be easily made on principled grounds.

  35. keith 35

    Once this bill is up and running I would like to see the workers-rights movement produce a publicly available database of the businesses that abuse this fire at will legislation.

  36. Swampy 36

    Never mind the new law, there are already numerous ways of getting round the previous law.

    You miss the point massively, try being someone who is classed “unemployable” who might get a chance under this new situation.

    Try being a small business employer tangled up in red tape under all the laws passed by Labour because they want to stifle small businesses which sneak in under the radar for their union friends.

    I’m not really a fan of urgency being used to pass this law. However the outrage is pretty well manufactured and I’d say the unions have been preparing for this in their self-appointed role as guardians of union work rights ever since Labour lost the election.

  37. Swampy 37

    The situation you refer to already exists. It exists when a government creates a “Jobs Jolt” programme and seeks to create political capital by moving disadvantaged “unemployable” beneficiaries off the long term unemployed register into work they are ill suited for or which is downright demeaning and patronising.

  38. Swampy 38

    This to “student_Still”

    Is profit a dirty word? Profit is when you have some money left over after you paid the bills, like all the wage slaves want to have some money that they can spend on an overseas holiday or whatever. Spare your anti capitalist sentiment for the Workers Party or some other 0.1% credibility forum.

  39. Swampy 39

    The ILO is a socialist crock. They don’t even allow for people to choose NOT to join a union in their definition of “freedom of association”.

  40. Bill 40

    To swampy.

    To paraphrase Adam Smith; net profit is wages unpaid.

    So is (net) profit dirty? Depends how you view theft I suppose.

  41. Bill 41

    How about levelling the playing field a bit by undercutting any temptation on the part of a boss to abuse their new found power?
    90 day probation where co-workers, not the boss, have the right to terminate a new employees employment.
    Anybody care to highlight any problems with such an approach?

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