The proposed changes to the Employment Relations Act (ERA) would make workers in the cleaning industry more vulnerable, according to the Building Services Contractors New Zealand (BSC).
The Organisation’s President Patrick Lee-Lo described the changes to Part 6A of the Act as ‘disappointing.’
This part of the Act (in its current form) aims to prevent low-paid workers from being replaced by cheaper contractors or having their pay and conditions reduced for the same job when a contract is re-tendered or when the ownership of a company is transferred to another party.
Labour Minister Kate Wilkinson announced on October 30 amendments to the section of the ERA, which according to Mr Lee-Lo did not go far enough to address the ‘real problems.’
BSC represents New Zealand’s building services contractors who provide a diverse range of cleaning, maintenance and other services.
It had lobbied strongly for Part 6A to be revised.
Ambiguous rules
Mr Lee-Lo said that the proposal to exempt small and medium businesses employing less that 20 employees from the provisions of Part 6A when they take over a contract, would create a loophole for a number of franchise cleaning companies.
“It is not clear whether the changes apply to 20 full time employees or to 20 part-time staff. Potentially, franchisors could state that a franchise-owner is an independent operator and, if an operator or site has less than 20 employees, they could be exempt from the law,” he said.
“Is that what the Minister wants?” he asked.
According to him, some franchise operators ‘parcel out’ contracts to several other franchisees. Therefore, if they gain a major contract employing 30 staff, none of the new employers will have any obligation to those staff.
“This will play into irresponsible operators’ hands and make cleaning staff helpless, which would work against the main intention of the legislation.
But Mr Lee-Lo said that some of the changes were welcome.
“Some key elements are covered including transfer of funds for transferring entitlements but other areas are left pending. This really does not address the significant problems for building services contractors and workers which have been created by Part 6A and the changes could, potentially, be damaging for reputable companies across the sector,” he said.
Mr Lee-Lo said that his organisation was hoping for positive changes to occur following its scheduled meeting with Ms Wilkinson this month.
Another viewpoint
BusinessNZ Chief Executive Phil O’Reilly agreed that while the proposed changes to ERA would improve but not significantly alter employment processes.
He said that the ‘good faith’ framework of the legislation will remain, with improvements to some of the details on bargaining and contract processes.
“Part 6A has caused difficulties for companies operating in the cleaning, catering, orderly and laundry industries. Requiring new contract operators to employ staff working under the previous contract owner has been an unnecessary burden for a number of small businesses, and exempting businesses with less than 20 employees from this provision is a common-sense solution,” he said.
Appropriate changes
Other changes around bargaining will also go some way towards more successful workplace relations, he said.
According to Mr O’Reilly, some changes would be appropriate.
These include not requiring parties to keep bargaining in circumstances where there is no likelihood of reaching an agreed solution subject to the decision-making power of the Employment Relations Authority, and removing compulsory sign-up rules in collective agreements.
“These and other moderate amendments to ERA should allow for better workplace communication and relations,” he said.
