Blue Jackie: Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill — First Reading 
Blue Jackie: Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill — First Reading 
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Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak to the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill. I will make some initial comments about the Government’s priorities for creating jobs. Creating jobs is a top priority for this Government. We are committed to a sustainable economic recovery and to creating more jobs for New Zealanders. The Government’s economic policy during the global recession has been focused on this commitment. 
The Government has taken steps to keep people in employment and to assist them when they lose their jobs. We have put in place policies that encourage economic growth and those policies are built on exports and investment rather than on Government spending or consumer spending. Last year the Government’s small-business relief package was designed to help lighten the load of small and medium sized business which employ many New Zealanders. That plan was about improving the environment for business and therefore jobs and growth. 
A number of members’ bills on employment law have been brought to the House. Some have passed into law others have not. Suffice it to say that National believes employment law must expand job opportunities and treat all parties fairly protecting both employees and employers. The purpose of this bill is to insert a new part into the Employment Relations Act providing for minimum statutory redundancy entitlements. 
Currently if an employee is made redundant the employee’s entitlements are governed by his or her employment agreement. If there is nothing about redundancy in a person’s employment agreement the default position is that there is no requirement to pay redundancy compensation. Employers and employees are free to agree to redundancy provisions in their employment agreements. As well the law also provides that redundancy occurs only when a position has become genuinely redundant. Employers are not able to make a worker redundant on a whim. 
Specifically this bill outlines that all employees who have worked for more than 12 months are entitled to redundancy compensation and the bill outlines some requirements around that particular point. National will be opposing this bill. We are concerned that statutory redundancy provisions act as a barrier to employers taking on new staff. That would work against the Government’s commitment to creating jobs and fostering economic growth. 
The Government acknowledges that during the recession redundancies have been of real concern. In late 2008 the Government launched its ReStart package which provided for workers made redundant helping them back into work. This was set up quickly to help provide breathing space for those hardest hit by redundancy. 
The issue of statutory redundancy was assessed in the last term of Parliament in great detail in the report of the Public Advisory Group to the Minister of Labour on Restructuring and Redundancy. Interestingly 14 of the 22 submitters supported the status quo. There are negatives which were noted by the report and they are concerning and numerous. Members of the group were concerned that there would be disincentives to hire more staff and that wages could be reduced. They envisaged that there would be more temporary and contract workers. Importantly they were concerned that by putting greater pressure on businesses jobs would be lost and business viability could be jeopardised. 
Clearly the previous Government was concerned by these findings because it did not go ahead and implement a statutory requirement for redundancy. The previous Government had 9 years to do so and it did not. That is very very revealing. It had its opportunity when it introduced the Employment Relations Act 2000. It failed to do so and that speaks volumes. 
The Government like the public advisory group is concerned that mandatory redundancy provisions will destroy jobs and stop employers from hiring new staff. That would be totally counter to its commitment to create jobs. The Government is also concerned about the significant cost to business which is not insignificant. We consider that this proposal would make redundancy unaffordable for most businesses and there would be a real risk of businesses closing as a result. We will be opposing this bill.