Red Alert

About Part 6A

Posted by on October 27th, 2012

We’ve known since May how the government plans to cut wages further when a leaked Cabinet paper forced the Minister of Labour to announce their proposals to weaken collective bargaining laws.

But since then, there’s been delay after delay, and while most of the government’s proposed employment law changes have been settled for some time now, Part 6A of the Employment Relations Act, the important provision that provides protection to vulnerable workers in situations of employer change has gone back and forth to Cabinet.  It looks like we will see the Government’s decision pretty soon ; Cabinet is due to consider the final paper, which includes Part 6A and Kate Wilkinson confirmed last week that the changes will be introduced before Xmas.

Part 6A of the Employment Relations Act was hard won and I hope won’t be lightly pushed aside by the government.

In 1999,  members of the Service and Food Workers Union began a campaign called “Contract Workers Count” out of concern for those employed by private contractors in public hospitals, commercial cleaning, catering, security and rest homes. Over the previous ten years, these low paid workers had suffered multiple changes of contractors and each time, their jobs were up for grabs and their hours and wages reduced as the competitive pressure in these industries landed on the wage costs.

Five years later, the Labour government passed Part 6A into law which enables “vulnerable employees” to follow their work if it is transferred to a new employer, (where the business is sold or their employer loses a contract to another employer). The affected workers in this situation can elect to transfer their employment to the new employer, taking their current terms and conditions, service and accrued entitlements with them.

Undoubtedly, there’s been some disputes over part 6A, but the Courts have sorted that out – although obviously not to the satisfaction of some companies, who would rather see the return to the dog eat dog approach of competitive tendering of the past.

The most important thing to remember is that part 6A applies to a particularly vulnerable group of workers.  They are not well paid; many are on minimum wage or just above.  Take Parliament’s cleaners. Parliamentary Services is going through a re-tendering process right now and is under pressure to cut costs. Without the right to transfer to a new contractor that Part 6A provides, John Key’s cleaner could be sacked and replaced with someone else employed on fewer hours and less pay.

However, I fear that the decisions around Part 6A will not be good news.

I live in hope that the government will not succumb to pressure and take their ideology out on the cleaners, kitchen workers and other vulnerable workers of our land.

Contract Workers still Count.

27 Responses to “About Part 6A”

  1. John Ryall says:

    You are right about Part 6A Darien. It was a very important piece of legislation targetted directly at workers whose jobs were regularly up for tender and who had very little bargaining power with their employer because of this.

    When the final piece of legislation was passed in 2006 it contained a provision to review its effectiveness within three years. This review, which had both union and employer groups involved, concluded it was effectively meeting its goals of protecting vulnerable workers.

    However, the required report to parliament on the statutory review has never been reported back to parliament (as is the requirement in the Employment Relations Act) because the Government has been trying to change it in order to respond to the bleating of small contractors who feel the requirement to employ the minimum wage cleaners on their same terms and conditions is unreasonable.

    The Government has spent more time listening to them rather than the vulnerable workers, for whom the provision was designed.

    There has also been criticism that Part 6A does not proscribe how the accrued annual holiday leave of the transferring workers is going to be paid for if the money is not handed over by the outgoing contractor. The Department of Labour has spent an inordinate amount of time looking at how this bad-faith behaviour of employer-on-employer could be regulated.

    However, this week the High Court has awarded nearly $300,000 to LSG, a flight catering company, when their competitor Pacific Flight Catering lost a contract, transferred 25 staff and refused to hand over the money for their accrued entitlements. The Court said that incoming contractors had the right to sue the outgoing contractor for the money for the accrued entitlements.

    This decision would seem to make all the work of the DoL redundant.

    The Minister of Labour needs to report the 2009/10 review of Part 6A back to parliament and agree that there are no changes needed to it. It is effectively working to protect vulnerable workers and should stay in place.

  2. Ann says:

    What is particular galling is that one of the contractors Crest Cleaning complains about having to take on cleaners who have not had any training, but is reluctant themselves to provide training for their part time workers, citing that it is not financially viable to do so.

  3. Ehoa says:

    This is going to have a major impact when HBL finishes restructuring its non-clinical staff one-stop-shop recruitment Hub in the Health Sector. It’s bad enough as it is, but its going to get worse — good luck with your negotiations John.

  4. Dorothy says:

    more and more jobs are now on a contract basis – this is going to be very important for all workers.

  5. Allyson says:

    Hi Darien. Your comment that our Govt is deliberately planning to cut wages is either very silly or a big fat lie. I like to think MPs are honest , so lets assume you made a mistake.

    God bless, Ally

  6. SPC says:

    Allyson is quite right …, the government is only “faciliating” the ability of new contractors to reduce the pay and conditions of staff. Companies intending to maintain or improve conditions and pay are free to do so under the current regime.

    Has anyone proposed that, to ensure that the minimum wage is enforced, there needs to be some assurance that the work (required to be done) can be done in the amount of time that they are being paid to do it?

  7. Tim G says:

    Ally, you’re a genius!

    The government is trying to weaken employee advocacy groups, remove protection for vulnerable employees, allow employers to walk away from MECA negotiations and dock wages for partial strikes so that employees can be paid MORE! Such sound logic!

    Darien is merely drawing an inference from a set of facts. Pray tell, what sycophantic spin can you possibly put on these changes to put lie to Darien’s inference?

    Goddamnitall, Tim.

  8. bbfloyd says:

    This all looks like the last piece of the puzzle dropping into place…. For the last four years, Workers from right across the spectrum have hade their hard won rights, and entitlements stripped away, one by one…. while we have been sereneded by a chorus line of “journalists” telling us what a good thing it is that business can now, finally be profitable as a result of the “purging” of the last of any socialist taint on our pristine market economy…..

    in generations past, ordinary working men, and women, paid for those rights with their lives…. How meekly do we throw all that away??

    What sort of cowards are we, that we would cheer while a government led by a man who has already proven to be no friend of this country, turns the clock back far enough to make it possible for our grandchildren to have no conception of the society new zealand gave itself the chance to become…

    The Savage Labour government may as well not have bothered for all the good it is going to do us in a few years, if we just lie down, and let the gains we’ve made as a society towards maturity be thrown under the chariots of the “capitalist empire”…

    Suffice to say, I’m disgusted with what passes for modern governance, and with a society capable of forgetting so quickly, the lessons learnt so hard…..

    And by the way, Little ally…. If that was supposed to be a serious comment, then one or two less “fortifiers” might help some sort of thought process to occur…..

  9. Monty says:

    Darien – there are some massive issues with the protection of vulnerable workers legislation. In the end it does not really do anyone any favours. In other words while the purpose of the legislation was to “help” those at the bottom of the food chain, the reality in practice is somewhat different. I believe the whole approach is wrong.

    I have worked in the property industry for 20 years and have a good grasp of what goes on. Lets look at cleaners as one of the beneficiaries / victims of this legislation.

    In my experience companies rarely retender the cleaning services if a good job is being done. going through the re-tender process is time consuming and expensive. The cleaning contracts are usually put out to tender when there is a sever lack of dis-satisfaction with the cleaning company that has not been resolved through the usual management processes (both cleaning company and client company)

    When is all falls apart and cleaning company know they have lost the contract they leave the worst workers in place and replace the existing good cleaners with the useless ones (2-3 months out)

    The new company comes in and straight away identifies the poor cleaners and starts the process of removing them but “ultra-managing them ”

    But part of the problem lies in the fact that cleaners know they have a job no matter who the employer is. The problem with cleaners is that bad ones and there are a few are lazy, do the minimum they can, are poorly supervised (management issue) lack self responsibility and lack ambition.

    The well meaning but useless and unworkable legislation in effect does not help anyone.

    If a cleaner is good and well respected the new company will more often than not actually pick up the good workers if they can. The sooner the vulnerable workers legislation the better. But of course Labour don’t care about the unintended consequences of their policies they just like to be seen to be caring .

  10. @Monty : if your experience is that companies rarely tender work if a good job is being done, your experience must be extremely limited. Cleaning and catering services come at the top of the list of areas for “efficiencies” when budgets are stretched – it’s not about quality, it’s about cost. And stop blaming the workers for poor work. Try managing the staff properly, try some training, try paying people properly and stop expecting this will be done in fewer hours, where the only option is to work harder, work faster and cut lots of corners. Try talking to workers who have worked for in the same job for years, had multiple contractors, each time, hours and wages cut on an already meagre income. The BSC are condemning these changes; they are interested in building quality business services and they know part 6A is a crucial part of that; people like you are only interested in doing it for the cheapest cost.

  11. @bbfloyd : “What sort of cowards are we, that we would cheer while a government led by a man who has already proven to be no friend of this country, turns the clock back far enough to make it possible for our grandchildren to have no conception of the society new zealand gave itself the chance to become… Hear, hear. I am really angry today.

  12. bbfloyd says:

    @Darien….Your anger is fully justified… the attack on what amounts to a substantial percentage of workers in this country will all end in tears, if we are lucky….Much, much worse, if the traitors to our way of life are allowed to succeed…

    @monty python…. I know you now…You’re the cleaning contractor on “planet key”…My commiserations…

  13. Monty says:

    Darien – I am well exposed to what organisations do having worked in property for a significant number of years. There are savings to be made from re-tendering as the needs of the contract can change, but cleaning is a very comprititive business and there is not usually significant amounts of savings to be acheived. The point remains that my substantial experience is that cleaning contracts are usually because of very poor service. And the useless cleaners are a major factor in retendering. Price is not the sole motivation. And why should useless cleaners get protection. I suggest you get out and talk to the organisations that retender their contracts and find out the reasons for them doing so rather relying on the information from your union mates who have a rather one sided opinion.

    When a major organisation (that is the bank I work for) recently retendered the cleaning contract it was for the following reasons

    1. Poor standard of clenaning and poor managment by the cleaning company of the cleaners
    2. Change in specification
    3. Cost savings

    However the biggest motivator was the poor standard of service. But I can confirm that within a very short time frame most of the very useless (and in some instances very decietful) cleaners were “resigned” . All the good cleaners were transferred and are probably happy. But you fail to tell us why the incoming company should be forced to pick up useless cleaners who significantly contributed to the first cleaning company losing the contract in the first place. really good cleaners are hard to find and can always and easily find good work. I see no reason to protect the useless deadbeat cleaners.

  14. Monty says:

    Floyd – I am not a cleaning contractor. God forbid. I have way too much ambition and intelligence to do such an awful job. Dealing with often lazy, deceitful unionised workers as cleaners often are is not how I would want to do in life.

    That is why I employ / contract others to do that for me. (free market is such a wonderful thing.)

  15. @Monty : “I have way too much ambition and intelligence ….” You’re entitled to your very inflated opinion of your superiority over others, but your attitudes are positively neanderthal and quite frankly sicken me.

  16. Ryan says:

    @Darien – so why is it that Crest is doing so well if companies are only at the cheapest cost? Crest clearly is not the cheapest cleaning company in the industry! What would solve the issues is the employer who loses the contract has an obligation to keep their existing staff. This would solve the issue of the lack of training and retention of quality staff.

    Answer me this Monty, why would a company invest in training and pay their staff more when they know that they could lose the contract and their staff could elect to transfer. It’s also funny that little old NZ owned Crest make up 60% of the BSCITO training numbers. The very company that the Labour Party and their partners the SFWU violently dislike is actually the company that pays their staff well (money not going offshore to pay for huge multinationals e.g. OSC, ISS and Spotless) offer the best job security and they make up over half of the industry training in this country? When actually they only have a portion of the market share.

    Furthermore the BSC is a absolute joke, THERE IS NO RECORDS OF ANY INVITATION FROM THE BSC TO THE Dept of Labour TO SPEAK TO ITS MEMBERS SINCE 2010! They do nothing to support their industry, except collect cash off their members and store cash and write gutless press releases!

  17. Ryan says:

    @Monty – statements like that certainly do not help your arguement! (facepalm)

  18. @Ryan : Crest aint doing that well. It’s had more Employment Court cases than any other contractor because it can’t accept Part 6A. It’s not going to do too well out of this amendment either. I imagine they won’t be best pleased. How much does Crestclean pay its workers? How many hours do they work? How do they offer job security? How much funding do they invest in training? Why are they not part of the multi employer collective agreement? Aren’t they a franchise seller and isn’t this the basis of their real objection to part 6A? And why don’t they join the BSC and try to influence it if they are so superior.

  19. Ryan says:

    @Darien – I wouldn’t anticipate that any of its franchisees have more than 20 employees. Do they fall under the category of a SME? Hard to say.

  20. The Al1en says:

    “I am not a cleaning contractor. God forbid. I have way too much ambition and intelligence to do such an awful job.”

    “I have worked in the property industry for 20 years”

    If true, which it probably isn’t, you may well have a bigger pay check, but you rank below politicians tabloid journalists and used car salesmen in the trust stakes, and way down the list of much use to anyone.
    Not really a prime position to boast of surplus intelligence and opine so disparagingly about other peoples awful jobs.

    Like most things in life, you get what you pay for.
    Looking forward to (R)evolution.

  21. Tim G says:

    Oh Monty, not again! Your blithe arrogance and inflated opinion of yourself/verbal defecation on the cleaners has even upset our resident Crest PR guy! (Who to his credit, is at least superficially respectful of cleaning staff.)

    Wait until “Ryan’s friend” (who posted here a couple of months back ;)) hears about this!

    I can only infer that you are completely lacking in insight/socially tone deaf about how it sounds when you trundle out those lines.

    @Darien and the Al1en – hear, hear!

  22. Rob S says:

    Darien – in my experience, companies tender anything for anything if they think they can save, and will balance the results on quality/price etc. It won’t stop them tendering, but it may stop them changing…

    I won’t comment on crest, but being involved in tenders of all sorts, from both sides of the bridge, it is almost always about the financials.

  23. Ryan says:

    @Tim G – I appreciate your support whether its genuine or not. If Monty falls on hard times and find himself cleaning; I hope he doesn’t request a franchise information pack from Crest.

    @Darien – I can only see 2 court cases in recent memory that Crest have been involved in; but hey I am just Googling. And the dispute was around the timing of the election to transfer which is one of the few positive changes in the proposed bill. Not doing well? Crest again awarded in the Deloitte Fast 50. I think a email to Mr McLauchlan congratulating him should be on the cards Darien.

    In regards to a lot of your earlier questions Darien I invite you look at the Crest franchise system which I have myself looked into after this supposed tirade from Crest began. Your answers around job security etc would be answered.

    I can understand the frustration from Mr McLauchlan as these changes still do not provide clear parameters for which business and employees alike can operate; which should be the main purpose to which a labour amendment bill is created. Something these changes do not.

  24. bbfloyd says:

    @ monty grass snake…. “I have way too much ambition, and intelligence”… an affectation that has you on the list for getting fired from the easiest job in the world… shovelling up the “fallout” from johnny sparkles inability to discern truth from lies….

    The glitter, the glitter, it gets everywhere!!!

    such ambition!! and yet you can’t even put two rational sentences together…. The perfect resume for service workers on johnny’s fantasy world….

    Meanwhile, back in the real world, the war on ordinary New Zealanders goes on unabated…With help from those who should know better, but choose to remain ill informed, and bigoted…..

    So far, there hasn’t been a single word written here that doesn’t confirm the basic truth of Dariens words..

    And don’t the ditto heads hate the truth!!

  25. Darien Fenton says:

    @Ryan : so tell me how paying a one off spotting fee of between 20 and 30% of the contract price, plus a monthly royalty of between 5 and 15% plus the cost of the franchise license, equipment, training and a vehicle provides job security in an already marginal industry?