ERB a case of A, B and see

By BRIAN FALLOW

WELLINGTON - There will be no contractors - they will all be employees - if the Employment Relations Bill passes in its present form, Employers Federation chief executive Anne Knowles says.

As the bill stands, in deciding whether A is an employee of B, the main thing is how much A is under B's control and direction and integrated into B's business.

Mrs Knowles yesterday told the parliamentary select committee considering the bill that every contractor would meet those tests.

"There is no business which does not control [its contractors] to the extent of saying what work needs to be done, the timing and the quality of the outcomes required. And there is no business which would pay to have work done which was not an integral part of that business."

The federation says a wide range of tests, not just two, should apply in determining whether someone is an employee or a contractor.

The confusion and uncertainty arising from people being employees for the purposes of some legislation but not for others is "unwarranted and unacceptable."

The federation is also critical of the bill's continuity of employment clause, which requires the employer to continue to employ every employee bound by a collective contract during the term of the contract (and up to 12 months after the expiry date, once the union has initiated bargaining to replace it).

This applies unless the agreement expressly provides otherwise.

"The effect of the proposed provision is that if there is no redundancy provision in the collective agreement, the employer is obliged to pay all remuneration that would have been received by the employee until the agreement expired."

The federation says the purpose appears to be to establish a floor for redundancy payments that the parties have not themselves agreed to - going against a Court of Appeal ruling that redundancy is only payable when agreed to by the parties.

The Council of Trade Unions wants the provision scrapped and replaced with one ensuring all the terms and conditions of employment continue with a new owner, if a business is sold, or new employers, in the event of work being contracted out.

"However, such a proposal does not address the issue often at the heart of a decision to sell a business or contract out work - that the labour costs are simply too high to be sustained," the federation says. A one-size-fits-all prescription is inappropriate, it says.