Law lauds Hobbits, hobbles low-paid

HIDESIGHT

More than 4000 Kiwis are employed making movies and TV shows. There are 30,000-plus cleaners and thousands more deemed by Parliament to be "vulnerable workers".

Politicians happily perform policy backflips and triple somersaults for the movie and TV business. They don’t lift a grudging finger to help cleaners, catering, laundry and hospitality staff.

Exhibit one: the Hobbit trilogy – the government put Parliament into urgency, declared all film production workers independent contractors, rebated all GST payments and gave Warner Bros tens of millions of taxpayer dollars in handouts.

Exhibit two: cleaners and others – the government sat for three years on a required statutory review, decided to leave the industry hobbled with unworkable labour law, agreed to make complex labour law even more complex and the so-called reforms don’t come into effect until the second half of 2013, another year away.

The difference in treatment is stark. And a shocking illustration of what politics is too often about.

At issue is Part 6A of the Employment Relations Act. The previous Labour government passed the law against the National party’s ferocious opposition.

The National-led government is now defending Part 6A with a series of tweaks that only make bad law worse.

Part 6A enables existing cleaners and other specified workers to transfer from the business that loses the contract to the winning one. The workers transfer with all their existing terms and conditions intact.

Part 6A's purpose is to protect “vulnerable workers”. It sounds good but it's counter-productive.

To boost wages there must be investment in equipment, new technologies and training. That investment is driven by the healthy competition that ensures a business must constantly figure out how to do better with less to remain viable.

Part 6A stifles that competition and depresses wages as a consequence.

As predicted, Part 6A has collapsed the training of cleaners and investment in physical capital. Why invest in training when you competitor could nab your workforce tomorrow?

The Ministry of Business, Innovation and Employment has reviewed Part 6A. Its report is truly woeful.

It declares that Part 6A “creates an even playing field for employers so fair employers cannot be undercut by employers who provide less favourable terms and conditions of employment”.

The triply oxymoronic ministry believes competition drives wages down. If that was true, North Korea would be wealthy and South Korea poor. The report’s garbage.

But it’s good enough for the government and cabinet has decided to tweak 6A. Outgoing business will now have to forward employee information to their competitors.

There is to be a process to “help the employers agree how to apportion liabilities for accrued service-related entitlements of employees who are transferring”.  

Employees must decide to transfer to a new employer within five working days. And, bizarrely, businesses with fewer than 20 employees will be exempt from the provisions of Part 6A if they are the incoming employer.

The government must think it okay for small-to-medium business to drive down wages but not for big business to do so. 

It doesn’t explain why all the rest of us are left out in the marketplace without the “vulnerable worker” protection to have our wages endlessly driven down by competition.

There is no policy logic to this. The tweaks serve simply to make a counter-productive dog of a policy more complex and less workable.

But politicians fall over themselves to help the movie business. Hanging out with celebrities on the red carpet is good politics. Being seen with cleaners, caterers and hospitality staff, not so much.

And so the “vulnerable workers” are politically invisible. Policy that simply sounds good will do for them.

They work away in the dead of the night to pay their tax to subsidise the movie moguls. And to make the politicians who hobble their business look good.