Redundancy bill would be “death knell” for small businesses
A private member’s bill that would require employers to pay compensation to redundant employees would cost jobs and destroy businesses, an employment services provider has warned.
Labour MP Darien Fenton’s Employment Relations Amendment Bill was drawn from the ballot a couple of weeks ago and is due for its first reading this Wednesday.
And if passed it could be the “death knell” for many small New Zealand businesses, according to Max Whitehead, Principal of the Whitehead Group.
“Small business is the lifeblood of the New Zealand economy and this bill is the last thing New Zealand business needs during the current recession,” he said.
The bill will entitle all employees with more than one year’s service to at least four weeks’ notice of dismissal.
They will also be entitled to redundancy compensation of at least four weeks of pay for the first year of continuous service with the company and an extra two weeks for each full or partial year of service up to a maximum of 26 weeks.
Redundancy has been defined in the draft bill as “The substantial disappearance of the work performed by an employee, by reason of the restructuring, downsizing, going into receivership or administration or cessation of the operations of the employer.”
Mr Whitehead said that each week small business owners had to assess how much longer they could afford to pay wages and stay afloat.
This often resulted in the sacrifice of a few jobs too keep afloat and retain their existing employees.
“In Auckland alone 1000 jobs are sacrificed each week. Adding redundancy compensation costs will force many struggling employers to close their doors.”
He said that while National had the number to block the bill, it was known to make “last minute trade-offs” which in this case would be “disastrous”.
Earlier this year another Darien Fenton bill, the Minimum Wage and Remuneration Bill, which would have extended the minimum wage to contractors, was rejected at its final reading after passing its first two readings under the Labour Government.
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Comments and questions11
A bill like this is a waste of valuable resources. There surely are more important issues for the polis to get their heads around.
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As usual an idiot from the labour party who, like all of them, has no idea how a business runs, they just see business owners as capitalists with an endless supply of money!
Thank god for some common sense from people like Max Whitehead - this bill must be thrown out, a shame Darien Fenton couldn't be thrown out with it!!
My son set up a business last year and now has four employees. If this socialist bill had been passed before he was prepared to give it a go, there was no way that he would have started up his small business.
This clown from the labour party needs his head read! Small business is already weighed down with falling revenues, increased costs plus an ever growing increase in compliance costs. Small business is the life blood of the economy with enough pressures without this brainless gits ego to add to their growing list of problems.
Matthew, I think you'll find Darien Fenton is a women, so therefore "she needs her head read".
hooray for this bill. the bill wont stop employers employing people (still have 90 day stand down and <1yr is no redundancy) but it will make them think twice before downsizing/restructuring which in the end are just euphemisms for job losses for workers.
if NZ wants to be a high wage economy then you actually have to pay higher wages incl redundancy packages.
Under MMP, where so many MP's have no constituients to answer to, everyone votes on party lines making the opposition redundant- why pay them- Make the likes of Darien Fenton redundant them tax payers money won't be wasted on such stupid ideas
Higher wages need to be earned with higher productivity, not just giving handouts. Restrict population immigration, causing a labour shortage, then wages will rise. Not do like Clark/Cullen and get net migration of 45000 in one year causing all sorts of chaos, and wages to be kept down. This also led to the housing bubble in NZ for which wwe are all suffering.
Labour really do not have a darned clue do they? Jobs are disappearing right ,left and centre and now they want to further cripple the company that has had to make some staff redundant. So-in reality-they want all of the people at that particular company to lose their jobs because the operating $$$$$ will have to go out in redundancy payments!! so another company closes down,or into liquidation and even more people join the dole queue. You labour people are slowly destroying our country and you do not seem to understand. You need to have a job and responsibilities and learn about consequences--BEFORE becoming an M.P.. How many labour people have that experience?? University or public service jobs DO NOT COUNT!! Or union ones!!
My last job the redundancy clause = your notice clause. Therefore most people were on 1 month each way, regardless of period of service. Seems fair to me. NZ small business like yourn sons should smarten up and at least have a redundancy clause inserted to protect themselves, so they can retrench in a way that is fast & swift; given that it is always brutal. No matter what biz you are, time to time you will always hire somone who talks the talk but of course never walks the spin, like most 'dead wood;' employees. Fortunately i had a 3 month notice clause, so i got to go the beach for a while, whilst the rest went to WINZ.
Businesses *and* workers are hurting in the current downturn. It doesn't seem to me like it's an "either/or" choice. To claim that Fenton's bill is a "death knell for business" is simply inflamatory hyperbole. Families of those made redundant don't deserve to starve, neither does anyone want to see industry crippled. Honestly, I think the bill is a step in the right direction - not sure I agree with all the detail - but for the good of the country as a whole I hope the government supports it through to the select committee so at least everyone (business included) can all have the debate about what best to do in what are tough times for everyone.
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