NEW LABOUR LAWS

Press, Volume LXXII, Issue 21809, 15 June 1936, Page 12

NEW LABOUR LAWS

; MINISTER MAKES A SURVEY •employment promotion ACT EXPLANATION OF IMPORTANT PROVISIONS Tr. n mam provisions in the Government's amendments to the industrial l.iws of the Dominion are explained j btrics of statements, prepared by tne Minister for Labour, the Hon. Hj, Armstrong, which will appear in -The Press" in the next few days. It lias not been easy for those affected by the amendments to follow them in detail during their passage through the House, and the Minister’s survey is designed to make them clear and thus avoid any confusion. The acts covered by the statements a - e —The Employment Promotion Act, ine Fan- Rents Act. the Factories Amendment Act. the Shops and Ofnces Amendment Act. and the Industrial, Conciliation, and Arbitration Act. Tne statement cn the Employment Promotion Act is as tallows; The Employment Promotion Act, 1936, consolidates and concentrates in tne act the provisions dealing with assistance to persons out of employment and the promoting of additional employment, which have hitherto been tcaitcrcd through the Unemployment 'JKci 1930 the amendment acts of *.1931. 1932. 3934. and sundry finance Jacts. At the same time the opportunity has been taken to give statutory lauthority to certain administrative derails previously given effect to by regulation, and additional clauses have ■been added to correct anomalies and to ensure more efficient administration. The more important changes in the legislation are outlined as follows: — Abolition of the Unemployment Board—The Unemployment Board is abolished and the administration of ine Employment Promotion Act is vested in the Department of Labour «under the control of the Minister for Labour). For this purpose the Secretary of Labour is charged with most of the functions previously exercised by the Commissioner of Unemployment. except that the Commissioner of Taxes now assumes control of the assessment and collection of employment tax as if it were income tax.

Collection of Employment Tax —Now *.aat assessment and collection of the f mployment tax are functions of the Commissioner of Taxes, the necessity i or submitting two separate returns of income for employment-tax and income tax purposes will in due course disappear. The collection of the tax will still, however, be effected through tne post office. Control of expenditure—All expenditure from the Employment Promotion Fund is subject to a direction of the Minister for Labour, with the approval of the Minister for Finance. Exemption of employment tax for income tax —Section 5 of the Unemployment Amendment Act, 1931, which allowed amounts paid as unemployment tax as a special exemption for j.-icome lax purposes, has not been reproduced in the present act. The proper place for such a provision is in the Land and Income Tax Act, and the Government may yet decide to' proceed with the appropriate amendment of that act.

Apportionment of income—Where income received in advance is appert oned over one or more years by the Commissioner of Taxes for income tax purposes, that apportionment now automatically becomes operative for employment tax. Default Assessments Power was given previously to make default assessments on persons who laued to make declarations of income or made faulty ones, but the complementary power to fix a date by which objtclu n to the default assessment Cju.'d be lodged, was omitted. Section 22 adds the necessary power, and allows tlie Commissioner discretionary puv.tr to accept, if he thinks fit, objtenens made after the time allowed has expired. Costs o: Administration —This expenditure was previously charged directly against the fund. The new act makes such expenses a charge on the consolidated fluid in the first place, and such proportion of those expenses as the Minister for Labour (with tho approval of the Minister for Finance) shall direct, will be recouped to the consolidated fund from the employment promotion fund.

Fines and Penalties—All fines and penalties recovered under the Employment Promotion Act or Acts repealed by it are to be credited to the employment promotion fund. Penalties for late payment cf tax have been the perquisite of the pest office to offset tne additional expenses of collection, while only a small proportion of fines inflicted were credited to the fund. In future the whole of the expenditure n.curred in the collection of the tax will be appropriated by Parliament. Sustenance Allowances Among tiie most important changes are those in the section dealing with the payment of sustenance allowances. The minimum rates fixed by section 29 of the Unemployment Act, 1930, have been dropped, and in lieu of them a wide discretion has been given the Minister for Labour, who may, with the concurrence of the Minister for Finance, fix the rates to be paid from time to time. As before, a residence of rot less than six months is a necessary oualification, and no allowance is payable where a person refuses or fails to accept employment considered by the Minister to be suitable in its nature, location conditions and remuneration. The Minister is, however, given an overriding discretion to enable exceptional cases to be promptly and sympathetically dealt with, where these conditions would otherwise prevent the giving of adequate relief. The only persons to whom allowances may not be paid are those under the age of 16 years and males over 20 years of age who are wholly exempt from liability for the registration levy. This represents a vast improvement, in that sustenance may now be paid to males between the ages of 16 and 20 where considered desirable, and to women. Tax Due by Persons Leaving New Zealand and Executors or Administrators of a Deceased Taxpayer—To bring employment tax procedure into line with income tax practice, a section has been inserted defining the liability for tax of persons ceasing to lie ordinarily resident in the Dominion and estates of deceased taxpayers. Tax is now due on income derived up to (he date of departure and must be paid together with any unpaid instalments of tax which has already accrued. before the taxpayer leaves the country. Similarly, the personal representatives of a deceased taxpayer* are made liable for all instalments of employment charge due at the date of death and also for instalments which become due in respect of income derived for any period before the date of death. The corresponding section dealing with liability for the registration levy exempt* the taxpayer or his estate front any instalments falling due after the date of departure or death, as the case may be. Exemptions for Elderly People The exemption from the employment charge granted by regulation to males over the age of 65 years and females over the age of 60, whose income lor the year- did not exceed £lO4,

has been included in the act, and has been extended by a sub-section -which states that where the income of such persons is just over the limit of £lO4 a year, the amount of tax payable will be reduced so that the net income received by that person will not be reduced below £lO4. The same exemption is allowed to people who satisfy the commissioner that through physical or mental disability they are unable to follow any regular employment and whoso income for the year did not exceed the figure of £lO4. Rate of Employment Charge—The rate of tax payable is. stated in the act at one penny in every two shillings and sixpence of salary, wages, or other income liable for the charge, that is, 8d in the £. The rate may be varied by order-in-council, but may not be increased beyond one penny in every one shilling and eightpence (Is in the £). Recovery of Charges If any person is in default with payment of an instalment of the registration levy for more than a month, the amount and any penalties accrued may be deducted from any salary or wages that he may thereafter be entitled to receive. Penalties were not previously covered. This is a necessary provision to protect an employer v ho, by employing for more than seven days anyone in default with levy payments for more than one month (or an unregistered person), becomes liable to a fine of £2O. Under the Unemployment Act, 1930, an employer charged with employing a person in arrear wit]i levy payments could raise as a good defence that he had asked his employee if he was registered and had made payments up to date. The sub-section permitting that defence has not been carried forward, so that now the employer must satisfy himself by an inspection of the employee’s levy book that all current instalments oJ the registration levy have been paid. Recovery of Employment Tax Employment tax deducted from salary or wages may be accounted for by duly cancelled employment stamps affixed to the wage record, and any amounts collected from the employees and not so accounted for are deemed to be held in trust for the Crown until paid over in accordance with the regulations. The Crown is thereby protected, in the case of the bankruptcy of an employer who has failed to account for amounts deducted. Penalties for Failing to Pay Employment Tax—An employer who fails to deduct the employment charge, and everyone who knowingly misapplies amounts deducted is now liable, on conviction, to a fine of £2O and treble the tax due. In adidtion, unless the commissioner is satisfied there has been no wilful neglect or default, a penalty of 10 per cent, of the charge accrues without conviction over and above any other penalty or fine which may become due. Unpaid Tax to be First Charge on Estate—A further new provision creates a charge on the real and personal property of a person who deducts tax from salary or wages of his employees, but does not account for the tax in accordance with the prescribed procedure. Apart from the alterations mentioned above and one or two other amendments of a minor nature, the Employment Promotion Act does not vary greatly the powers contained in the previous legislation. What we are chiefly concerned with is the administration 6f the provisions contained in this legislation to ensure that no genuine unemployed person shall stifler because he is unable to provide himself and his dependents with the necessities of life*