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Contractor's Status Still Threatened By ERB

Members were stunned to learn in the Employment Relations Bill Parliamentary debate, that Select Committee changes do not protect contractors from being turned into employees without their consent, said ACT MP Stephen Franks.

In May this year the Attorney General Margaret Wilson baffled her colleagues and enraged contractors, by insisting that under her Bill “no one will be required to change their employment status unless they want to”. Self employed flooded the Select Committee with protests. There were vows to snarl Auckland traffic or to sell up and leave New Zealand.

“Their fears were backed by numerous expert submissions. The Government soothed the uproar with a new subsection 6 (b) in the definition of employee. It said that on-one could apply to the Labour Court to change their status without their consent.

“But the comfort was a con. The restriction does not extend to the new Employment Relations Authority. The Authority has power in section 172 (1) (c) to decide whether someone is an employee. And the Labour Court could rule in an appeal from the Authority’s decision, without being stopped by the alleged safeguard.

It can force contractors into what they think of as “wage-slavery.
“As well, Minister Laila Harre, admitted in the debate that the precedent effect of an application by another similar contractor is not excluded. The SOP thrown into the Bill doesn’t touch the Authority – and it affects only an unlikely small part of the Labour Court’s business.

“There are many ways for a union, or a Labour Inspector to get a decision on a contractor’s employee status. And this is no oversight.
“Earlier Ministerial reassurance must have been either cynical or devious. Incompetence on that scale seems unlikely.

The express changes to the power for the Authority to decide who is an employee shows that duplicity is a fair conclusion. Section 172 (1) (c) says the reassuring qualification to clause 6 does not affect the jurisdiction of the employment Relations Authority,” said Stephen Franks.


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