New employment law will harm lowest paid workers

Posted By TEU on Jun 13, 2013 |

Tertiary Update Vol 16 No 19

A proposed new employment law is likely to drive down the wages of workers in sectors that are particularly vulnerable to exploitation: all cleaning and food services plus caretaking, orderly and laundry services in certain sectors such as health, aged care and education.

Universities and polytechnics that tender out cleaning or food services could use these new laws to force down tender offers from contractors, and thus force down the wages of their cleaners.
Under the current law, when these services are contracted out, the workers have the right to transfer to the new employer with their existing terms and conditions of employment.

The new law proposes that incoming employers with less than 20 employees should be exempt from all these requirements. There is a big incentive for employers to form companies with 19 employees, since they can undercut other tenderers for contracts by telling the workers: ‘take these lower rates or get another job.’

TEU deputy secretary Nanette Cormack says employers that use this law to pay their workers less, win a race to the bottom on workers’ pay and rights. They will be able to employ everyone on 90-day no rights trial periods if they like.

Some employer groups have also expressed concern that the law change will drive down pay and reward ‘cowboy’ employers rather than good employers. For instance Patrick Lee-Lo, president of Building Services Contractors New Zealand, which represents cleaning contractors, says the law changes will lead to low-paid workers being replaced by cheaper contractors, or having their pay and conditions reduced for the same job, when a contract is re-tendered or a company changes hands.

“This will play into irresponsible operators’ hands and make cleaning staff even more vulnerable, which works against what the legislation was designed to do.”

Parliament’s industrial relations select committee will probably see the government’s proposed new employment law for the first time today, and will schedule a date for the public to make submissions on the bill.

Also in Tertiary Update this week:

  1. Student: staff ratios climb slightly
  2. Younger women take growing role in workforce
  3. Wānanga boss meets TEU
  4. Massey students say money pressures affect their diet

Other news

Trade unionists have labelled a suggestion by the Employers and Manufacturers’ Association to double the current 90-day trial period for employees as “disgraceful” – Stuff

IRD is running an advertising campaign telling parents to do something about their adult kids who are overseas and are not paying back their student loans fast enough – TEU Facebook

Britain should revive polytechnics in a bid to solve its technical skills deficit and offer a pathway to industry for students not suited to academic university courses, experts have urged. Polytechnic status was abolished by John Major’s Conservative government in 1992 when all higher education institutions were given the green light to become universities – The BBC

Oxford University’s willingness to accept donations and form partnerships with people and businesses that are mired in controversy puts it at the bottom of the ethical league table – The Guardian

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