Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee Speaker Recalled 
Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee Speaker Recalled 
[Volume:660;Page:9174] 
DARIEN FENTON (Labour) 
: 
 I am pleased to take a call on Part 2 of the Injury Prevention Rehabilitation and Compensation Amendment Bill and this morning I will address two issues that are affected by this part. The first is around the abatement of holiday pay. We heard some very interesting comments from the Minister yesterday and also in response to previous questions. He said workers who receive their holiday pay when they are on accident compensation are double-dipping. This provision is one of the most miserly provisions in the bill. 
Hon Ruth Dyson 
: Disgraceful. 
DARIEN FENTON 
: It is disgraceful. We are talking about pre-injury earnings so we are talking about workers who have been working happily in their jobs—not going to work to deliberately be injured as the Minister has suggested in past comments. They are working happily in their jobs and accruing holiday pay and in some cases they have not been able to take their holidays. They may be saving them up or may be thinking about taking a holiday with their family and then they are injured on the job through no fault of their own. They go on to earnings-related compensation. If those workers are then fired because it is a frustration of contract or if they are made redundant for some other reason they suddenly because they have lost their jobs have to use their accrued holiday pay. The earnings-related compensation stops and they have to use their holiday pay before that compensation resumes. 
I think that provision is very mean. If workers are lucky enough to have used their holidays before being injured this does not apply to them; they carry on receiving earnings-related compensation. How mean is this provision? This is such a mean and miserly provision. In fact the Cabinet paper that recommended these and other changes says the estimated saving from this provision is $1 million. In the scope of the scheme that is a tiny amount of money. Yes it is a saving but it will be paid for by the injured workers themselves. Treasury actually warned that the relatively small savings did not seem to justify the unfairness of this provision. It said “Claimants may think it is unfair to have weekly compensation abated because of annual leave accrued while they were earning or accrued in a previous financial year but that was not paid until termination of employment.” As I said workers who have taken their holidays prior to being injured receive earnings-related compensation but if they have not taken them—because they were too busy or hard-working or because they have not been able to agree with their employer on when they will have their holidays—then that is just tough. They have to give up their holiday pay—their very own money that they earned as holiday pay—and have their earnings-related compensation suspended. 
We spent quite a lot of time on this provision in the Transport and Industrial Relations Committee; it was very interesting to try to get clarification of it. The member opposite Michael Woodhouse insisted that when workers are on accident compensation they actually accrue holiday pay. In the end we all agreed that they accrue leave and if they go back to work they actually get that leave. But I am here to tell the member that I have talked to all the unions about this and a whole lot of wage claims are coming to employers based on Michael Woodhouse’s insistence that workers who have been on accident compensation should be accruing holiday pay. I have gone and told them to thank Michael Woodhouse and the National Party for that and a whole lot of pay claims are coming their way. 
Hon Darren Hughes 
: Did he make a mistake? 
DARIEN FENTON 
: Well he will not admit he has; that is the problem. He will never admit it. Right to the last minute at the select committee he insisted that he was right. So I thank Michael Woodhouse. I have given the advice to the unions. They are taking it seriously and saying Michael Woodhouse thinks he knows what he is talking about so they are off to do a whole lot of pay claims for all those workers on accident compensation who did not receive accrued holiday pay. 
The other issue I will talk to this morning is the proposal to reduce the weekly compensation for seasonal and part-time workers. This is another miserable provision. It particularly affects workers who are women Maori Pasifika and in low-paid jobs—around half a million workers. These are workers in meatworks fish processing and a whole range of seasonal jobs. This provision will change the basis of the calculation of their pay back to the pre-2008 basis. It means that they will end up much much worse off than they would be at present should they be injured in their jobs. As I said this provision will significantly affect low-income workers and it also exposes those workers to manifestly unjust compensation. They will end up not just on the minimum wage for earnings-related compensation but in some cases on a heck of a lot less than that. It is very very unfair. 
I will give an example of the negative impact of this change. A young mother who has been financially dependent on her partner for most of the year undertakes seasonal work for 20 hours per week and is severely injured during the fifth week on the job. Her $450-per-week earnings for the 4 weeks prior to her injury will be divided by 4 weeks initially under new clause 36 (1) in schedule 1 and she will receive 80 percent of this or $360 for 4 weeks only after the first week of incapacity due to the injury. For the rest of the time that she is incapacitated her weekly compensation will be calculated by dividing the total amount of her income over her brief employment. Eighteen hundred dollars divided by 52 weeks is $27.70 a week. That will be the compensation for that worker. How on earth is that woman supposed to help her family to survive on that? It is a long way from real compensation which we should remember is one of the Woodhouse principles that the National members say they support. It is a long way from real compensation for her severe work injury and it is an unacceptable erosion of the social contract that underpins the scheme. 
Furthermore the process by which that worker is categorised as non-permanent is to a large degree very arbitrary. It requires the Accident Compensation Corporation (ACC) to essentially make a guess as to whether the employee would have continued to work for another 12 months. There is no way of knowing that. It assumes that seasonal workers go to work for 3 months. It does not take into account that many seasonal workers go from one job to another. It just assumes that they work for 3 months and that is the end of it. It should go without saying that in many cases it cannot be foretold by ACC whether a worker would have continued to work after his or her seasonal job ended. Given the severe nature of the possible consequences of being a non-permanent employee under this bill the test is fraught with uncertainty and that is simply unacceptable. For these reasons we believe that this proposed amendment is absolutely unfair and should not proceed. 
The other whack that will happen for seasonal workers—they get a double whammy—is that they will go on to injury-related compensation and because they are seasonal workers they will be paid out their holiday pay. 
Hon Ruth Dyson 
: They’re not on holiday. 
DARIEN FENTON 
: They are not on holiday; they are injured. But they will have to use their holiday pay. Their payments will stop. The $27.70 a week that the woman I have described might be entitled to will stop and she will have to use the holiday pay that she has accrued in her seasonal job. That is incredibly unfair. 
Hon Ruth Dyson 
: Michael Woodhouse said that was all right did he? 
DARIEN FENTON 
: Yes and so did the Minister. He kept on saying that workers who are injured should not be better off when they are on earnings-related compensation. Well I think I have demonstrated this morning that under this provision workers will be significantly worse off. It is totally unfair that that woman should receive $27.70 a week. It is totally unreasonable. 
I do not accept the Minister’s assertion that somehow these workers are gaming it. The implication of the Minister’s comments is that workers are gaming the system and better off under the provisions that Labour introduced in 2008. We brought in those provisions in 2008 for casual and seasonal workers for the very reasons that I have described: because what was happening before was unfair. Again I say that we are talking about the most vulnerable workers in our country. There are around about half a million of them doing very important work and being paid the minimum wage. They are struggling along trying to feed their families and to do the best they can and hopefully trying to find another job in between. One group of workers who were brought to our attention in the select committee were school support staff. We know from the fair pay campaign late last year that these are very low-paid workers. They are affected by this provision. 
The CHAIRPERSON (Hon Rick Barker) 
: I call Lynne Pillay. 
Hon Steve Chadwick 
: That was a very good speech.