Legislation on redundancy ‘possible this year’

Press, Volume CXVI, Issue 34151, 12 May 1976, Page 2

Legislation on redundancy ‘possible this year’

W I P»«»» A«»oefat«m> AUCKLAND. May 11. Legislation on redundancy might be possible this year if the Government clarified its thoughts within the next six weeks, said the Minister of Labour (Mr Gordon) today.

"If it is possible to legislate this year to rectify the anomalies that still exist, it would be my earnest desire to attempt to do so,” said Mr Gordon, when addressing the Industrial Relations Society. Be defended the Government’s decision to step into the redundancy situation with regulations promulgated in mid-April.

‘Fundamentally, we saw a position where private enterprise employers were either being picked off deliberately bv some unions or, alternatively. we faced a situation where we had to deal with the State services in regard to their redundancy claims." he said. Mr Gordon referred specifically to the Post Office, where with the adoption of subscriber toll dialling there could be redundancy on some of the toll switchboards. In considering any legislation. three major definitions were required

First, there would be redundancy which would cover permanent workers taken on for long-term employment. Second, there would be severance pay, which the Government saw as being applicable basically to workers taken on on a job or site which they knew would end their employment when the work was finished. Third, there was a new definition of "completion pay,” for a man who served right through a job. and particularly for th<» last two or three weeks until it was actually completed, knowing that he himself would be responsible for finding the next job he needed.

"Completion pay" was an incentive payment' to encourage employees to remain on the job or site.

As to where the line should be drawn between the responsibility of the emnlover and the resoonsibfHty of the St’tp •n redundancy S't'”>tion=, Mr Gordon said Hahilftv should fall on a comnanv if it was th" result of its action® If. however, extraordinary c’rcvm stanc"s arose, economic or otberr’is". possibly at the dictate of Government noliev or brought about bv Government action. there was logic for the argument •hat the Government should have some responsibility. Some <?f the more conservative or logical peonle suggested that the Government’s responsibility went so far as to nay an imemnlovmen* benefit to those unfortunate enough to become redundant. "There may be some merit in letting it go at that — but •odav’s circumstances seem to dictate otherwise.” Mr Gordon said.

The second part of the proposed legislation being considered by a Parliamentary committee nrovlded for the “stabh’shment of a board for the retrainms of redundant peonle and finding of suitable emnloment for them. Mr Gordon said that within his caucus committee were many who favoured making the ~ board responsible for

redundancy. Through adoption of this suggestion, it might well be found possible to remove the entitlement of a lump-sum cash payment to a man who became redundant if the board could find another job for him within three or four days, “while he was taking his holiday pay or other normal entitlements.” The question arose whether such a man could take his continuing redundancy entitlement on transfer from one job to another.

“Fundamentally, we believe not,” Mr Gordon said. "But that leads us to the equally vexatious question as to whether he can transfer his sick-pay entitlement, or, on this year's precedent, receive payment by way of a cash benefit.”

There was a strong suggestion to support British legislation which invoked a requirement for 104 weeks of continuous employment with an employer before qualifying for redundancy pay. ‘Cruneli issue’ “One of the crunch issues which arises from that is the obvious removal of the need to pay out large sums of cash to redundant people for whom jobs of no less satisfaction or of equal opportunity are available to them early,” Mr Gordon said.

This would be one of the greatest advantages accruing from the establishment of a redundancy board. A problem would be to decide marginal cases. There would have to be a tribunal of some kind. Mr Gordon said he was a little askanced at the thought that the Industrial Court might be asked to adjudicate should redundancy become a widespread issue. He thought the broad pattern followed in Sweden might have application in New Zealand. There, the unions themselves played a significant role in the alloca-

tion of unemployment benefits and in the handling of redundancy. "I see marked advantages in having the union responsibility bought over into a beneficial field where they themselves are responsible for the administration and the paying out of benefits entitled to their fellow workmates.” Base to sitart Involvement of the unions might well add to the lustre, the character, and the standing of the unions themselves.

A simple way of financing the board could be by the worker, the employer, and the Government paying a third each.

“That’s relatively simple, but I doubt acceptable in many quarters,” Mr Gordon said. But not hundreds of thousands of dollars were involved, and he believed the base suggested by the Labour Administration — employers paying .025 per cent of wages as a levy for retraining and reemployment — might not be a bad base on which to start.

In the short term, the Government had settled on a week a year as the basic criterion for payment of redundancy. It was likely that a greater period of qualification might be required, possibly the two-year period applicable in Britain. A shorter qualification might be required for severance pay where a person had been taken on for a shortterm contract and then became redundant. Mr Gordon said . that wage-fixing, be it for ordinary working remuneration or such issues as redundancy, was not best carried by . Government regulatory process.

“The sooner we can stop that the happier the National Government, the F.0.L., the Combined State Services Organisation, and other parties are going to be,’’ he said.