This was published on the Radiolive website on 5 October.
There’s an old Kiwi maxim: a fair day’s pay for a fair day’s work, but that doesn’t ring true for many thousands of Kiwi workers.
For the past three decades there has been a steady growth in what is described internationally as non-standard work, including temporary workers, casual and labour hire workers and a substantial increase in the use of independent and dependent contracting.
Some contractors are highly skilled, entrepreneurial individuals, who are able to extract a significant premium for their efforts outside traditional employment.
However, for many, the opportunities of earning a secure and stable income are remote. Their classification as contractors effectively gives them no rights to the minimum protections provided for those classed as employees under New Zealand Law. For these workers the employment relationship, with its rights and obligations, under current law has become meaningless.
Look around you. Many fast food delivery workers, truck drivers, couriers, construction workers, caregivers, security guards, cleaners, telemarketing workers, forestry workers, even actors and musicians are contractors.
While Labour is pushing for the minimum wage to be $15 an hour, these workers have no guaranteed minimum wage.
While we enjoy our Christmas breaks, these workers have no paid holidays.
If we are treated unfairly at work, we can challenge our treatment under the law, but contractors have no such right.
If we want to join a union and bargain for a collective agreement, we are guaranteed that right, but that’s prohibited under competition laws for contractors.
Over the past few years many contractors have been in touch with me to talk about their situation. When Telecom announced that its two biggest network Engineering contractors, Transfield and Downer EDI had lost their contracts for the Northland and Auckland network to a new company, Visionstream, 700 skilled lines engineers were told if they wanted work they would have to move from being employees to contractors.
These workers were powerless. If they wanted a job they had to give up secure income and employee protections, buy their own vans and equipment and take all of the risks of the job on themselves. Many did. And they’re now struggling.
Some horrific stories from truck drivers hit the headlines. They had mortgaged their houses to buy the rig, and then the companies they were contracted to slashed hundred of dollars off their weekly pay claiming the drivers were overpaid. They showed me the figures; many are earning below minimum wage. Every week sometimes dies on the road through a truck related injury. We respond with ever-stricter safety laws, but does anyone ever think that the drivers are speeding, cutting maintenance, working over legal hours because that’s the only way they can make a living as owner-drivers?
Courier drivers are in a similar situation. As vehicle drivers have been converted from employees to contractors, courier drivers have been required to provide their own vehicle, pay for vehicle maintenance, insurance registration, and other running costs.
New Zealand is not alone in this phenomenan. Studies are taking place around the world and some governments have implemented new legislation to regulate dependent and independent contracting.
In this dog-eat-dog world of increasing competition, firms often turn to contracting as a means of avoiding the costs of employing someone directly. Others do it in a cynical attempt to avoid labour laws.
The International Labour Organisation has dedicated many conference discussions to finding a solution, saying that the protection of (all) workers “is at the heart of the ILO’s mandate and all workers, regardless of employment status, should work in conditions of decency and dignity.”
While Labour accepts there are advantages for businesses in different contracting arrangements and for that matter, advantages for some highly skilled workers, these must be balanced against the fundamental rights of fairness and equality.
There is a lot of discussion and thought required on this topic. But in the end, Labour doesn’t believe that it is the Kiwi way for the “law of the jungle” to prevail.
If we fail to regulate the growing incidences of independent and dependent contracting, we expose growing legions of workers to having no rights at all.
And in doing so, we make every other job that relies on the foundations of the employment relationship vulnerable to unacceptable competition.
The point that most people don’t understand about contracting is that they have to be paid about three times what an employee is paid. This is because their work could look like this:
Monday: 4 hours
Tuesday: 8 hours
Wed: 8 hours
Thurs: 4 hours
Friday: 8 Hours
Monday: …
Tuesday: …
Wed: 4 hours
Thurs: …
Friday: …
An employee gets 8 hours per day everyday, the contractor doesn’t. The time that they’re working has to cover the times that they’re not. On top of that they also have to cover all the other expenses that an employee doesn’t have – lawyers, insurance, accountants, tools, etc.
Businesses love the fact that most people who start in contracting have NFI about these extra expenses. Expenses that the business no longer has to cover and so their profit goes up while the new contractor’s living standard goes down and can, and often does, result in their complete financial collapse.
If businesses were paying the full amount for contractors they wouldn’t go anywhere near them except for the few times that they may need to. This also applies to government contractors as well which is why cutting public servants and getting in contractors inevitably costs more.
“Courier drivers are in a similar situation. As vehicle drivers have been converted from employees to contractors, courier drivers have been required to provide their own vehicle, pay for vehicle maintenance, insurance registration, and other running costs.”
What labour law reforms were conducted when Labour was last in power to change this? After all that research had been done then. Is Labour lobbying Michael Cullen to get rid of all the NZ Post contractors and and employ them instead?
What are your thoughts on the Greens ideas to increase the costs of operating these vehicles that have so many in self employment and will essentially drive them out of business? Sadly your intentions well intended, will fail many of those who are willing to compete in an environment where there are not enough big employers to sustain such work forces.
“The time that they’re working has to cover the times that they’re not.”
That’ll explain van man’s aggressive driving then.
“In this dog-eat-dog world of increasing competition, firms often turn to contracting as a means of avoiding the costs of employing someone directly. Others do it in a cynical attempt to avoid labour laws.”
With a right merchant banker as pm and big business filling the donation coffers, I expect nothing less.
“Sadly your intentions well intended, will fail many of those who are willing to compete in an environment where there are not enough big employers to sustain such work forces.”
That’s because your govenment has done sod all to create jobs.
Workers working without rights, and being forced to pay costs for the privilege, is modern day slavery.
How very u.s we’ve become in such a short time.
@Al1en
“That’s because your govenment has done sod all to create jobs.
Workers working without rights, and being forced to pay costs for the privilege, is modern day slavery.
How very u.s we’ve become in such a short time.”
Labour were happy to keep with the status quo during their term of government too and that was in the boom days!
I don’t think you factored in record low unemployment figures through the Labour 00′s, or the timely re-balancing of employment relations in favour of workers before making your quip.
I’m sure there are many on here who can point out where to find all the supporting evidence.
I’d do it myself, but I’m contemplating whether you’re being serious, in which case that’s sad, or whether you think I should take you seriously, in which case that’s really funny.
I wonder if our forgetful pm remembered to pay WB the extra $14m peter jackson s.o.b negotiated whilst shafting kiwi workers.
I’m sure they would have reminded him when they summoned him over the other week.
Which Kiwi workers did he shaft?
Contracting not only means no security for the worker, but also, no responsibility for the employer,hence the number of ” consultants” having to contact themselves to this government, having lost their jobs, despite still being needed.
“Which Kiwi workers did he shaft?”
Which one’s hasn’t he?
Plenty of $300 per hour Consulting Jobs going in Wellington I believe, writing reports about things that have already been written about before, however it’s all a waste of taxpayers money when you have a PM that is too busy to read reports.
I can only assume that Darien and other employment relations enthusiasts aren’t reading this thread.
Indiana, it is a travesty that no-one has called your odious rubbish yet. You said:
and, because you got away with it the first time:
It was called the Employment Relations Act. Amongst its many reforms intended to build productive employment relationships and enhance the bargaining position of all employees (unionised and otherwise) was an attachment to the definition of employee (as against a contractor) which requires that the Courts, when asked to decide whether a person is an employee or a contractor, must determine the real nature of the relationship between the parties. In doing this, the Courts are required to consider all relevant matters, including the parties’ intentions. In other words, it has to look further than any statement describing the parties’ relationship, which including a written contract (because many contracts seek to define employees as contractors to remove them from the ambit of the ERA).
This is the exact same provision (section 6(1)) in the ERA that the nats hooked into to screw over people involved in film production and to limit their rights.
Try to get better informed before you go blasting off misinformation, because it makes you (sound like) an ignoramus.
@Rob S – film production staff. If you actually want to begin informing yourself on these issues you can start with:
http://www.parliament.nz/en-NZ/PB/Legislation/Bills/BillsDigests/4/b/6/49PLLawBD18091-Employment-Relations-Film-Production-Work-Amendment.htm
Hopefully you’ll then go and seek out some more high level commentary instead of playing concern troll on this blog.
And Al1en, s.o.b. is too kind for that *spits*.
@ Tim G,
I’m reading , just ignoring the idiots that seem to love the Labour Blog because they can’t manage to convince their overlord Nactional to be courageous enough to have their own. Oh that’s right, they pay their contractor over at bitter, spiteful, divisive, racist, Kiwibog.
However, thank you for your insightful contribution.
The film production staff that rallied against the union action seemed more interested in the potential loss of the filming.
Maybe it was never a real threat for them to move production, but it’s a very big bluff to call.
There are plenty of circumstances where films have been made in places for these reasons – Cold Mountain is a good example, that was filmed in Romania rather than the US.
I am aware of the bill and it’s function thanks Tim G. There is an argument to support it, which should have been fleshed out and discussed more (rushed bills almost always turn into farces). The argument of course being that the film industry is very project based, and desires flexibility of workforce.
I also understand the argument against it, but choose to think that if film/TV is produced in NZ then there is more chance for our artistic production types to work in this sector.
I also think that there are benefits quantifiable and intangible to having more films made here. Previous government lauded Jackson for his contributions?
http://www.beehive.govt.nz/node/13611
“The film production staff that rallied against the union action seemed more interested in the potential loss of the filming.”
Like those films were ever going to be made anywhere else but NZ.
Some people go easy, some people make a stand and fight.
Good on the lovely Robin Malcom and the lovlier Helen Kelly for having more balls than the weak chinned wonders marching you mention.
If I hadn’t, in protest, vowed to never watch a Jackson movie again, I’d have watched a bootleg with no qualms about denying wb and jacko their 30 pieces of silver.
Actually, there isn’t.
That’s probably true of a lot of the positions but not all of them. The problems occurred when employers started treating permanent positions as contracting positions. The courts looked with disfavour on this and found in favour of the employees. The NACT bill ran roughshod over those court rulings but only for making films.
In other words, they bent over backwards to give WBros and PJ the favours that they demanded to make films here.
So? Doesn’t make the actions of this government any better.
Thanks for your comments all. I have beene reading them, but it’s been a full on week. As a matter of interest, I’ve been talking to film production workers in the last couple of weeks and all is not rosy. This article describes it :
http://werewolf.co.nz/2012/10/dealing-with-mistah-hollywood/
” but it’s been a full on week.”
Yes, full of it to say the least
Thought we may have seen you at Billy Bragg at the Auckland Town hall Friday night. Good to see the Labour Party and Greens represent though. You missed a good one all the same.
Kia Kaha Darien.
Hi Darien. You do not mention that many contractors are happy because they do not belong to a Trade Union. Will you make them belong to organisations they dislike? Workers rights are now enshrined in law and a secondary unionised layer of protection is largely unnecessary to all but the most vulnerable.
Waitakere man is a contractor with a van and a ladder and will never swap his lifestyle for the sake of the Labor party.
Hi Allyson : that’s quite a strange comment. I have never suggested that this is about forcing anyone to join unions. It’s voluntary after all and has been now for thirty years. Workers rights are enshrined in law for those who are employees and apply equally to union members and non unnio members. But there are no workers rights for contractors. If you don’t want them, fine, but many others do.