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Employers obliged to take on unneeded staff


Employers obliged to take on unneeded staff: new law from today

From today some employers will find themselves forced to employ people they don’t need, the Employers & Manufacturers Association (Northern) says.

The element of farce is introduced in the Employment Relations Amendment Act (No.2) which came into effect from December 1st.

“Under the new law, employees identified as ‘vulnerable’ can choose to transfer to a new employer on the same terms and conditions when an organisation restructures or out sources part of its work,” said Alasdair Thompson, EMA’s chief executive.

“If an employer picks up the work previously done in house by ‘vulnerable’ workers, they will have no choice but to take on the old firm’s staff.

“This means when a company wants to change its suppliers, say its catering staff, it may well end up with exactly the same people doing the work, though under different management and wearing a different company uniform.

“So if a business was unhappy with its cleaning contractors and decided to cancel its contract with company “A”, and gave the contract to company “B”, the employees from company “A” could elect to transfer to company “B”.

“Government’s wish to protect a minority of employees in a small number of circumstances has resulted in a nonsense that hamstrings everybody. It does New Zealand’s reputation no good.

“If a new employer decides to make redundant the people who transfer, they become entitled to redundancy compensation. If the redundancy compensation is not set by their employment agreement, employees must bargain with the new employer for redundancy entitlements. If they cannot reach an agreement over the redundancy, the Employment Relations Authority is empowered to determine what the entitlement will be.

“But a new employer is unable merely to negotiate redundancy compensation then hire new staff to fill the same positions – they have to have genuine reason, or risk personal grievance claims.

“From December 1st employers must also add an employment protection provision to all new employment agreements, and to all existing agreements no later than December 1st, 2005.

“These employment protection provisions must set:

• a process that the employer will follow when negotiating with a new employer about the restructuring of a business;

• the issues that the employer will negotiate with the new employer concerning affected employees’ terms and conditions of employment, including whether they would transfer to the new employer on the same terms and conditions; and

• the process to be followed at the time of the restructuring to determine what entitlements, if any, are available for employees who do not transfer to the new employer.

“Vulnerable employees are defined as those providing caretaking, laundry services and orderly services in specified sectors, and all employees working for cleaning service businesses or food catering firms. Government can review and add other types of employees to the list of vulnerable employees at any time.”


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