Hon Ruth Dyson
Minister of Labour

8 September 2006 Media Statement

Fairer deal for vulnerable workers

The passing of the Employment Relations Amendment Bill means a fairer deal for vulnerable workers affected by restructuring, said Minister of Labour Ruth Dyson.

"The passing of the legislation underlines the Labour-led government's commitment to protecting specified ‘vulnerable’ employees such as cleaners and food catering service workers.

"The terms and conditions of employment of these specified employees have successively been undermined when the work they do is contracted out, transferred or sold to another business, or brought back in-house..

The legislation amends Part 6A of the Employment Relations Act to clarify protections for employees who are affected by the sale or transfer of a business, or contracting out of work.

"The Labour-led government’s policies with regard to vulnerable employees have not changed since additional protection was first introduced in 2004. This legislation ensures that the original policy intent of those 2004 amendments to the Employment Relations Act is delivered on."

Further amendments proposed in a Supplementary Order Paper will require the disclosure of labour costs to potential new employer wishing to take over a new business or new contract. This will also improve the level of protection provided to vulnerable employees because an employer will be less likely to underestimate the labour costs they will take on if the vulnerable employees choose to transfer.

Potential risks will also be minimised for businesses deciding whether to restructure as they will not have to ‘tender blind’ for contracts affected by this legislation.

"This legislation balances protections for those employees who are most vulnerable, with rights for businesses who will be subject to additional obligations. It will not implement a large-scale shift in employment rights; instead, it will deliver on what Parliament intended in 2004."

ENDS

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