Between the lines: Lawyers the only winners with bill

By SELWYN PARKER

Labour's proposed Employment Relations Bill should boost employment - for lawyers.

Unless the select committee tightens it up, the Employment Court will have to run 24-hour sessions while everybody tries to sort it out.

At this stage most employers, those (probably few) self-employed who understand it, and a significant section of the legal fraternity including the Law Society say it is full of holes. "It will create huge uncertainty, a lot of litigation, and substantial employer costs," predicts employment lawyer Tony Drake, of Buddle Findlay.

When, for example, does a self-employed person become an employee? This is the hotly debated part 2 of clause 6 and it affects independent contractors from copy-writers to concrete-pourers.

Part 2 applies two main tests to determine the issue. Essentially the tests revolve around how much an independent contractor is part of an employer's business. This is not merely a technical point because independent contractors are entitled to holiday pay, ACC contributions and recourse to full employment law in the event of a dispute if they are deemed to be employees.

Lawyers say the wording is so loose it will be hard to know whether the worker is an independent contractor or an employee under the law until the Employment Court has given its opinion. This contradicts the implications of the landmark TNT/Cunningham judgment by the Court of Appeal in 1993 which ruled it was predominantly what a contract said that counted in a dispute, not what a court said it should say.

As it stands, the bill opens the floodgates for future and retrospective interpretation. In theory, there is nothing to stop an independent contractor waiting until, say, a three-year contract runs out and then arguing for employee status with all the benefits. The bill's many critics say a tighter definition of an independent contractor would help a lot.

The bill's intent is good. It is avowedly designed to protect independent contractors from being exploited. But independent contractors have their own defence in an increasingly flexible labour market; they can work for somebody else.