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Improvements to redundancy rights planned

Hon Trevor Mallard
Minister of Labour

9 October 2008 Media Statement
Embargoed until 12.30pm
Improvements to redundancy rights planned

Options for a statutory minimum for redundancy compensation and notice will go out for public consultation next year, Labour Minister Trevor Mallard announced today.

The recommendations to consider a statutory minimum for redundancy are contained in a report by the Public Advisory Group on Restructuring and Redundancy, released by Trevor Mallard today.

"The government's preference is for some sort of statutory minimum, subject to consultation via a discussion document process next year. The current law offers no statutory entitlements to employees for notice or compensation in the event of redundancy, unless these were provided in their employment agreement.

"This means that employees who are made redundant who do not have these protections negotiated into their employment agreements do not have the best protections and support they could have. The Labour-led government has improved workers rights in numerous areas over the last nine years, and this consultation on redundancy is an ongoing part of our plans looking ahead," Trevor Mallard said.

"Introducing a minimum floor for redundancy compensation and notice would bring New Zealand’s legal protections in to line with international trends and be consistent with recent developments in the minimum code," Trevor Mallard said.

The advisory group – which included union, business and public sector representatives – recommended the Government consider:

• A statutory requirement for redundancy compensation and notice, including options for introducing a statutory formula

• Extensions to the Security in Change initiative (aimed at smoothing the transition of people made redundant into alternative jobs) and the need for wider policies to help activate the labour market, and

• Encouraging but not requiring notification to government agencies of potential or upcoming redundancy situations.

The Department of Labour will prepare a discussion document, expected to be released for public consultation next April. The discussion document would include options for introducing a statutory minimum for redundancy notice and compensation, extending the Security in Change initiative and possible mandatory notification arrangements.

The Public Advisory Group's report and associated cabinet paper is available at http://www.ers.govt.nz/relationships/r-r-report.html


ENDS

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