Peck Mark: Status of Redundancy Payments Bill — Second Reading 
Peck Mark: Status of Redundancy Payments Bill — Second Reading 
[Volume:614;Page:10427] 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That the Status of Redundancy Payments Bill be now read a second time 
. I thank the select committee for the work it did on the bill. It was unusual—not the process that was adopted the process was quite normal—but as the bill went to the Commerce Committee and as no member felt there was any particular issue regarding interest involved in the matter I chaired the select committee as well. So I chaired my own bill and it was a most extraordinary situation that occurred in that respect. I thank members for their indulgence. The committee did include most parties within Parliament. For instance it included the Greens as Sue Bradford was on the committee for the hearing of evidence. 
The bill does a number of things and I thought I would run very quickly through the intention within the bill and the amendments that were made as a result of the submissions process. First of all the submissions that we did hear by and large supported the move towards doing something in this area. Indeed the Government’s work in this area was endorsed by most submitters. This bill amends the preferential claim provisions for personal and corporate insolvency legislation to introduce personal preferences for employees’ redundancy entitlements. This arose essentially as a result of the collapse of the Weddel freezing works in the Hawke’s Bay. Even today I have people coming into my electorate office who tell quite horrifying stories of what happened to them and their families at the time that the Weddel freezing works collapsed and of the loss of entitlements to their families—not just their rights to work but to agreed compensation in the event of such things happening. What this particular bill does is remove the cap of $6000 on preferential claims and raise that. Secondly it will remove the provisions of the Insolvency Amendment Act and section 104(1)(e)(ii) of the Insolvency Act 1967. As a result of that the cap will be raised to $15000 which will provide a more realistic level of expectation for those employees who find themselves in a position whereby they are out of work other than through a fault of their own as a result of the collapse of a company. Their entitlements will be protected up to that maximum but more important there will be a 3-yearly review of the figure. 
One of the problems that have occurred as a result of the operation of the insolvency laws and the preferential credit status that applied to employees was that the amounts they could have expected to pick up by way of loss of wages and redundancy compensation essentially devalued over time and were never revisited. The idea of the 3-year review provision is to allow an opportunity for those particular amounts to be raised by consumer price index increases for example. 
An issue that the select committee considered at some length was whether we should also include payment in lieu of notice. In the end the committee came down opposed to that provision. It did so because it was felt that it would be quite easy to rort that provision. Rather than providing for genuine redundancy compensation provisions it could well be used in the situation of almost an insider-trading situation frankly whereby an employee could sign up for “in lieu of notice” provisions knowing that the company was in some difficulty. By and large that would not act to protect employees but to if one likes enrich those who were probably top of the feeding chain in that respect. It was felt that it was a little difficult and a little dangerous to move in that respect. 
I know that Sue Bradford was keen to see that provision in the bill. We were unable to accommodate what I thought were some very well-founded concerns that she had about payments in lieu of notice being considered part of wages and conditions but the possible rorting of that provision made it an impossibility in this particular situation. 
Further work is being done by the Government in the whole insolvency area and in terms of the rights of employees in such situations. This legislation will act to give employees a holding pattern at this time while that work is completed. 
As far as the work of the select committee was concerned I was pleased that the amendments that were carried were carried unanimously. The select committee did see sense in making this change at this time. Nobody on the committee likes the situation that employees find themselves in when there are job losses as a result of companies falling over. It is the history of this particular Government that very few companies are falling over at all any more. But we cannot know what the future holds. One of the things that my economics has taught me this year is that what goes up has to come down. We also know as well that industries will come and industries will go over time and there will be change. That is the dynamism of economic growth. 
In those circumstances as resources are being moved between one industry and another there will inevitably be some displacement and loss along the way and in those situations the workers should not unduly miss out. This bill is an attempt to address those particular matters. 
It is a pity that this bill which started off in the name of Rick Barker was unable to be progressed any earlier than this but those are the vagaries of the members bill system whereby one takes one’s number and takes one’s chance. I was pleased to pick up the cudgels on behalf of Mr Barker because indeed in my own electorate several of my constituents have faced similar situations when the freezing works industry was going through periods of fairly great restructuring. 
This is a good bill. I thank the select committee for the work it has put into it. I thank all of those who came to the select committee with submissions. The amendments that have been made make it a stronger piece of legislation and I commend it to the House.