The Spark October 2009
As the recession has bitten, redundancies have risen and unemployment figures have begun to climb, Labour’s Darien Fenton has had her Private Member’s Bill drawn from the ballot. The Bill would enforce a minimum redundancy payout on all employers, starting at four weeks pay after one year of employment. The Labour Party of course is the party that introduced the Employment Relations Act, which does not even provide a definition of the word redundancy, let alone provide significant protection for workers. New Zealand workers actually have no legal right to redundancy compensation and very few have provision for it in their contracts.
Workers at LWR’s Wairarapa sites who were made redundant earlier this year have been told that they are unlikely to receive any more than seventy percent of their entitlement in redundancy and holiday pay. Approximately eighty percent of staff with written employment agreements (contracts) have no redundancy provisions at all according to a Massey University survey commissioned for the Department of Labour’s Restructuring and Redundancy Public Advisory Group.
The generally accepted legal definition of redundancy is the one provided by the Labour Relations Act of 1987. It states that a redundancy is “… a situation where…[a] worker’s employment is terminated by the employer, the termination being attributable, wholly or mainly, to the fact that the position filled by that worker is, or will become, superfluous to the needs of the employer…” New Zealand case law has always focussed on the position, not the worker, so it is the position that becomes redundant. What this means in effect is that it is the employer’s right to decide the structure of the business and, consequently, to make positions redundant, provided that the redundancies are “genuine” and are “carried out in a fair and reasonable manner”. The ERA added some largely worthless prerogatives to define “fair and reasonable”, primarily around the concept of good faith. Despite legal requirements for consultation with workers and their representatives and a 2004 amendment to the ERA intended to strengthen the definition of what a “fair and reasonable employer” would do, the Employment Court has consistently interpreted the law as placing the decision making power firmly in the hands of the employer:
“So long as an employer acts genuinely and not out of ulterior motives, a business decision to make positions or employees redundant is for the employer to make and not for the Authority or the Court…”
Those “genuine” reasons are very broadly defined: The introduction of new technology Rationalisations of staff to increase business efficiency Restructuring business operations Closure of the business Outsourcing Sale of the employer’s business
These conditions of “genuine” behaviour can be, and are, interpreted very broadly, making it very easy to define a job as a redundancy if it suits the employer to do so.
Workers cannot depend upon the Labour Party to gain them any improvements in their working conditions. Now in opposition after nine years in Government, Labour has suddenly discovered that the working people of this country have been having their rights and conditions eroded. Labour has proved time and time again that when in government they are both unwilling and incapable of delivering sufficient real gains for workers. That the Fenton Bill needed to be introduced as a Private Member’s Bill is itself indicative of Labour’s inability to deliver for workers. Workers will only get real gains when they fight for them as workers, because the Labour Party will not deliver.