Contractor says employment bill open to abuse

By IRENE CHAPPLE

The company likely to be most affected by employment law reforms says the new legislation is unclear and open to abuse.

New Zealand's largest cleaning company, Spotless Services, questioned the practical implications of the Employment Relations Law Reform Bill at a select committee hearing on Friday.

Spotless, a contractor that employs between 8000 and 9000 staff, is particularly concerned with proposals around pass-on clauses and transfer of undertakings.

The bill would make it a punishable breach of good faith for an employer to pass on any union-negotiated deal to non-union employees, if there is the intent and effect of undermining the collective agreement.

Unions applaud the proposal because they see free-riding as undermining their strength.

They have long argued that employers use free-riding as a tactic to turn people away from union membership.

Spotless submitted the pass-on clause would create a "divide and rule" strategy among unions and between employees.

Spotless deals with different unions and queried how it could negotiate with all three without being guilty of passing on.

"Staff doing work of equal value could end up with completely different rewards, hardly a recipe for industrial harmony," it said.

The company said an alternative was to produce one settlement, "but spend a lot of time making the employment agreements look different".

Spotless told the committee the bill's underlying assumption was that companies in its industry were poor employers, which it strongly objected to.

The bill has included a protection for vulnerable workers when a business is sold or its work is passed to a new contractor.

A similar move was planned in the original Employment Relations Act in 2000 but was removed after an outcry from business groups.

The Government has said such protections are necessary to protect people in jobs such as cleaning from suffering falling wages and sometimes loss of their jobs through the work repeatedly being contracted to new companies.

Spotless submitted it supports the principle of protecting workers but requirements under the bill were unworkable.

It said the bill allowed situations such as all staff refusing to transfer to the new contractor, even if there were jobs available, and instead demanding redundancy payments.

Yesterday, Spotless' Yvonne Treen said the bill was written badly and would have unintended consequences.

She said the bill needed to be reworked with input from people who understood real life business issues.

"We don't believe this is protecting the employee ... we believe it is protecting the unions."