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Come Out Of Your Ivory Tower Minister

"It's time the Labour Minister came out of her ivory tower and accepted her interpretation of the status of dependent contractors is totally at odds with that of lawyers, employers and self employed contractors at the coal face," Opposition Industrial Relations spokesperson Max Bradford said today.

"Margaret Wilson continues to delude herself that the dependent contractor provisions in the Employment Relations Bill will have no impact on thousands of contractors.

"The Law Society - representing lawyers operating in the real world of employment law - is totally clear that independent contractors will have their employment status changed to employee.

"The Law Society has advised that Clause six of the Bill 'will cover almost all independent contractors even those who are truly independent and are in business on their own account'.

"The Institute of Directors shares the same view, as do groups representing thousands of independent contractors like Barnadoes workers, courier drivers.

"New Zealand Post has warned that it expects the 1700 courier deliverers and mail contractors will be covered. It also warns New Zealanders will pay more to send parcels if the Bill goes through. Rural mail delivery fees will rise too.

"The film industry, the information technology industry and professional consultants are also facing big problems.

"The Minister is setting these contractors up because she won't admit she is wrong. Why is the Minister being so stubborn? Is there some other reason why she won't she listen?"
Ends

Excerpts from submissions before the select committee

Morgan and Banks New Zealand Limited Current drafting of the Bill means it is likely that all contracting staff are potentially caught and will be deemed to be employees of the client organisation. This could have a significant impact on unemployment numbers as companies will be less likely to employee as permanent staff the skill sets that are only required on a specialised, short term basis. They also will not want to incur the employment costs. The impact of the Bill is likely to exacerbate the exodus of qualified people from the country, due to the lack of flexibility in the work environment. We are not aware of any other country with such a sweeping definition of "employee"

Alectus Recruitment Consultants Ltd Have concerns with respect to our employees who work as temporary staff employed by Alectus while on client assignments. Section 6 of the Bill specifies certain tests that determine whether a worker is an employee. We believe a possible (and almost certainly) unintended consequence of the wording of section 6 is that our temps on assignment may claim they are employees of the client company (and not Alectus) with many unforeseen consequences.

AMP Services (NZ) Ltd/The New Zealand AMP Agents' Association The basis of AMP's success has been its community presence through Agents - independent contractors paid commission. These self employed Agents have been making the transition along with AMP in recent years to become Financial Advisers. AMP believes that a local community business presence backed by a strong corporate will provide a competitive advantage. The definition of employee in clause 6 is extremely wide, and will potentially cover almost all workers engaged as advisers in industries such as the insurance and real estate industries. If AMP's, or the Adviser Businesses advisers are deemed to be employees under the Employment Relations Act, AMP will then be bound by the provisions of the Act in relation to matters such as personal grievances, bargaining and union access. This will significantly increase the burden and economic cost to AMP of engaging these workers, and as a result it is likely that AMP will no longer choose to engage independent contractors, which will deny both AMP and its advisers the opportunity to have flexibility in their working arrangements.

Screen Producers and Directors Association SPADA is primarily concerned that clause 6 of the bill, the definition of an employee, and Clause 81 dealing with fixed term contracts do not fit with the procedures and practices of the screen production industry.... The screen production industry has been identified as an emerging key source of foreign exchange and a key creative industry employer. In 1998/99, the industry earned $155million in foreign exchange and spent $307million production. We expect both these earnings to more than double this year and employment in the screen production industry t continue to surpass many of the traditional labour-intensive industries. The impact of the Bill as it stands, on the screen production industry would seem to be at variance with the initiatives of both the Government and our industry which are designed to encourage growth, employment and export potential of this creative industry.

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