Hereora Dave: Status of Redundancy Payments Bill — Second Reading 
Hereora Dave: Status of Redundancy Payments Bill — Second Reading 
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DAVE HEREORA (Labour) 
: 
 I feel privileged that I am able to contribute to this debate. I will share with other members some of the situations that occurred during my time as a union organiser. I stand in support of the Status of Redundancy Payments Bill and in doing so I will reiterate its purpose which is to amend the preferential claim provisions of personal and corporate insolvency legislation to introduce preferential status for workers’ redundancy entitlements. 
I would like to pay tribute to a group of workers that have been affected by redundancy. The example I will relate is an acknowledgment of the immense hurt and heartache that occurred as a result of contracting out services in our public hospitals. In doing that it is important to acknowledge the moral issues surrounding a redundancy announcement. Obviously the first effect it has on workers is that it creates insecurity as far as providing for their family and insecurity about their home. It also lessens the opportunities they have for contributing within the community. 
The example I give involved 130 cleaners who were contracted out. It was very difficult for us as the union responsible for negotiating their transfer terms and conditions to have the contractor accept liability for the redundancy as part of that transfer. I believe to this day that we were fortunate that their first employer agreed to transfer their redundancy entitlements to the contractor as a part of their terms and conditions. Members can imagine the relief that we felt in managing to achieve that. Although the contractor refused to pick up any liability of service of employment with them we however managed to firm up redundancy entitlements for those workers in the negotiations. 
The length of service of those workers—130 of them the majority of whom were Pacific Island and Maori women—ranged between 15 percent of them who had 25 to 30 years’ service to 75 percent of them who had between 5 and 15 years’ service. Their average earnings were not a helluva lot. Their earnings per annum ranged between $18000 and $22000. On their particular entitlement for redundancy they would have received between $10000 and $12000 if they had been there for 30 years. That is not a helluva lot in today’s situation but I suppose it was in respect of the provision of redundancy for that group of workers. 
I reiterate that it was not easy negotiating those terms so for me this bill provides the opportunity to offer some form of protection for that situation. Following a 3-month period with the new employer we assumed that things were not going right. We assumed that through their constant restructuring and attempts to save money that there was a possibility redundancy could occur. After 8 months of constant approaches to that employer on the issues surrounding redundancy and constant denials those workers were called to a meeting one afternoon and told that the company had been liquidated. 
One can imagine the despair of all those workers when they were told that there was no work for them for the next day for the next week and no employment security for them to continue to offer protection for their families. As their union representatives we assisted them with paying their power bills and helped with food—the basic essentials that were necessary to get them through. During that period we also renegotiated a contracting service for that group and managed to stitch up a deal on terms and conditions that were relatively less then than that which they had enjoyed with their previous employer. To this day that group of workers does not have the opportunity to stop and enjoy an afternoon break—that was a part of their new deal. 
So when identifying talking about and giving acknowledgment to the moral issues surrounding redundancy we begin to realise the importance of putting up protections—although they are minimum protections—for workers who are vulnerable. I reiterate that of those 130 workers the majority were women who were considered to be the main earners in their families. They all had families they all had children and overnight they had nowhere to go. 
Some 7 years later we managed to receive some part payment in respect of their redundancies. That part payment amounted to just over 1 percent of their total entitlement. For workers who had given their service for between 25 and 30 years and who loved their jobs they ended up with a redundancy package worth less than 1 percent of their total entitlement. This bill is timely in introducing some protections although they are minimal to ensure that we do not revisit that situation ever again. 
Before the tea break the leader of the ACT party mentioned that this bill would kill small businesses. Throughout his address to us I did not hear him talk about big business. Although he did say that this bill was designed to support our union buddies he did not talk about big business. The company that I have talked about is a foreign company and was a big business. It came to our shores secured this contract and formed itself into another company. To this day I know that the reason it formed the new company was to avoid paying out that redundancy. Let us not forget that as a part of the transfer of conditions it was responsible for holding in its bank account the redundancy entitlements of all those workers for when it came their time to be made redundant. All that went out of the window as well. The company jolly well knew that it was responsible for protecting the interests of its employees by holding that redundancy entitlement on their behalf but it was gobbled up as part of the liquidation. So it is timely that we have legislation that gives us the opportunity to protect those workers. 
I will finish by saying that this bill will protect redundancy as structured in an insolvency and it will amend the Companies Act to make redundancy payments a preferential claim when a company goes into liquidation or receivership. The workers from Tempo DNC had to line up with all other unsecured creditors for their redundancy payments and it is now a matter of record that they did not get what was owed to them. They believed quite rightly in my view that should their employment with the company cease they would be compensated in some measure through redundancy agreements for their loss of employment.