Bradford Sue: Status of Redundancy Payments Bill — Second Reading 
Bradford Sue: Status of Redundancy Payments Bill — Second Reading 
[Volume:614;Page:10431] 
SUE BRADFORD (Green) 
: 
 On behalf of the Green Party I would like to say how delighted I am that Mark Peck’s Status of Redundancy Payments Bill is finally back in the House for its second reading and on its way to becoming law in the not too distant future. I sat in on the Commerce Committee for the purposes of its consideration of this particular legislation and during that process I listened with interest to submitters from both sides of the equation—employers and workers. I think the bill as amended and back before the House tonight adopts a very fair approach and has taken everyone’s interests into account despite what the previous speaker was saying. 
This legislation recognises that there is justice in removing the arbitrary $6000 limit on wages and other payments owed to workers in an insolvency situation and that redundancy compensation as negotiated between staff and employers is particularly important at a time when workers are actually being made redundant. There is no use people going through the difficult process of negotiating fair and reasonable redundancy clauses into employment contracts if when the chips are down such contracts are rendered completely meaningless. There is no question that everyone suffers when a company or other employing body goes bust but given that it is likely that employees’ entire income derives from that organisation they are the most vulnerable group involved and it is imperative that they be enabled to retrieve as much of what is rightfully theirs as is reasonably possible. 
As the law stands at the moment employee redundancy entitlements do not receive preferential status when a company becomes insolvent. This means that laid-off staff have to queue up with all other unsecured creditors for whatever percentage of moneys owing is paid out after the Inland Revenue Department is satisfied. We welcome this amending legislation which when passed will mean that employees’ redundancy pay will be given priority status over other unsecured claims and over some preferential claims in an insolvency situation. 
This bill also does a good job in getting rid of the current limit of $6000 on preferential claims in the case of insolvency and raising it to $15000. The $6000 cap had not been increased since 1988 and I congratulate the Government on not only supporting this rise but also being willing to amend the bill so that there will now be a review of the level of the cap every 3 years in accordance with increases in average weekly earnings. 
One issue I was concerned about during the select committee process was the situation of pay in lieu of notice. Union submitters sought amendments so that workers’ rights to pay in lieu of notice should be recognised as a liquidator’s expense in order that payments could be made immediately. After all such payments are usually treated in law as being the same as wages or salary during the notice period. However I was fairly convinced by arguments made during the committee process that in fact it would not be particularly fair on other creditors to extend priority conditions to pay in lieu of notice where that pay was in relation to a time period past the point of the commencement of liquidation or bankruptcy. Pay is a priority debt if accrued in the 4 months prior to the beginning of the insolvency process but not if it has accrued after that point. 
As I said earlier I think members of the committee have taken a very fair approach to this legislation and what we have is a compromise that should both clarify and practically assist all those involved in insolvencies and liquidations. No one wants to think about these things until they happen but unfortunately they do happen. It behoves us as responsible lawmakers to pay attention to the needs of those most affected at such times. I congratulate Mark Peck on navigating his member’s bill with such success through the tides of political fortune in this place and I look forward to it becoming law in the near future.