Media Release (For immediate release)

Bill will Cost Jobs and Cause Closures

Labour Spokesperson Darien Fenton’s proposed Bill will require employers to pay compensation to redundant employees. The Employment Relations Amendment Bill is due for its first reading on Wednesday 19th August.

“If passed, Fenton’s Bill could be the death knell for many small businesses”, says Max Whitehead, Principal of the Whitehead Group. “Small Business is the life blood of the NZ economy and this Bill is the last thing NZ Business needs during the current recession.”

Whitehead says that each week small business owners have to assess how much longer they can afford to pay wages and stay afloat. He explains this often results in the sacrifice of a few jobs to keep afloat and retain their existing employees. “In Auckland alone 1000 jobs are sacrificed each week. Adding redundancy compensation costs will force many struggling employers to close their doors,” he says.

The Bill will entitle all employees with more than one year service to: A notice of dismissal of no less than four weeks.

Compensation for redundancy of four weeks remuneration for the first full year of continuous service with the company and an additional two weeks for each full or partial year of service up to a maximum entitlement of 26 weeks.

The definition of redundancy in the draft Bill is given as ‘The substantial disappearance of the work performed by an employee, by reason of the restructuring, downsizing, going into receivership or administration or cessation of the operations of the employer. “The National Government has the numbers to block this Bill, however Nation has been known to make last minute tradeoffs– that would disastrous,” says Whitehead.

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