The Post: Employment law changes all about who is in control

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Does this government seek the “contractorisation” of the workforce? That question has been posed to me, post-election, by people alarmed at what might happen to employment rights under the new workplace relations minister, ACT’s Brooke Van Velden.

Putting a libertarian in charge of dealing with trade unions is, of course, mildly provocative. And there’s no doubt that times will get tougher for working people.

Fair Pay Agreements, which would have boosted wages and conditions in poorly paid industries, have been scrapped. A below-inflation minimum-wage increase leaves the poorest workers going backwards.

And large employers will soon be able to sack staff without justification in their first 90 days on the job, even though a 2016 Treasury report on this practice found it doesn’t significantly increases hiring rates, but does ensure “many employees face… increased uncertainty about their job security for three months after being hired”.

New Zealand’s ‘Shaky Isles’ nickname, in other words, applies not just to geography but, increasingly, to employment rights.

For decades now, firms have been making their employees redundant and replacing them with contractors. Last week NZ Post reportedly sought to join the trend.

The attraction, for employers, is that contractors aren’t entitled to four weeks’ paid holiday, 10 days’ sick leave or KiwiSaver contributions. They don’t get minimum wages or protection against dismissal; they can’t bargain collectively for a fair slice of firm revenue.

Conservatives like to paint all this in the glowing light of ‘flexibility’, arguing it gives workers greater freedom. But that paint is whitewash. Sure, there is ‘flexible’ working for highly paid, highly skilled contractors who choose that life. But that has nothing to do with badly paid, badly treated workers who have had a sham form of contracting imposed upon them.

The genuine contractors are those who decide who they work for, and how they work; they determine the profits they make and the risks they take. When, by contrast, a firm dictates all or much of the above, the ‘contractor’ is just a disguised employee.

As with many things in life, it’s all about control – and those who have little control suffer. One in three workers, the Council of Trade Unions estimated in 2013, has a precarious job.

Precarity may now spread further – if the government can get its plans straight. The National-ACT coalition agreement promises to “maintain the status quo” that people who have signed a piece of paper saying they are a contractor cannot then challenge that document in court.

Embarrassingly for the government, this is the exact opposite of the status quo. Currently, people can challenge such a declaration. And it’s vital they can do so.

Individuals desperate for work, who are at their most vulnerable, can readily be coerced into saying they’re contractors, even if they’re really employees. So employment legislation, like some other laws, assumes that certain rights are ‘un-waivable’: they cannot be signed away.

In response to The Post’s questions, Van Velden wouldn’t say how the coalition agreement got things so badly wrong, nor what the government actually intends.

But she’s obviously exercised by court cases like that brought by Uber drivers, who – quite reasonably, and like their colleagues overseas – are arguing that because the rideshare firm essentially controls their pay and the conditions under which they work, they are not contractors but employees. The drivers won the first round of their case, which faces an appeal by Uber next month.

Van Velden laments the “uncertainty” this creates for employers. But the solution she clearly has in mind – to take away the right to challenge one’s employment status – would create certainty for corporations only by removing it from workers.

It would evoke John Key’s infamous ‘Hobbit law’, which let Warner Bros dictate New Zealand legislation and prevent film workers from doing what the Uber drivers have just done. Even partners at law firm Buddle Finlay, hardly militant trade unionists, argue such moves would expose more people to exploitation. And with no minimum wage to prop them up, lower-end pay rates would fall.

All this is, admittedly, a complex area: not everything about Uber drivers, for instance, fits the classic profile of an employee. But the previous government was at least trying to create certainty the right way: by protecting the most vulnerable.

With the support of Business NZ, ministers had floated various ideas: for instance, a court determination that one worker was an employee could be applied to all their equivalent co-workers, ensuring rapid and widespread justice.

Chris Hipkins, however, fed those ideas into last March’s now-notorious ‘policy bonfire’, preventing Labour from setting the agenda on precarious work. ACT is now filling the resultant void. Only up to a point: whatever libertarians outriders might wish, full-scale “contractorisation” isn’t yet on the agenda. But the direction of travel is clear.