Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

Golden handshake may lose lustre

Photo / Thinkstock
Photo / Thinkstock

Executives who are fired from their companies would be less likely to get excessive golden handshakes under a private member's bill being promoted by National list MP Paul Goldsmith.

And employers would be less willing to put up with high-paid staff not doing their jobs properly.

But it appears that Mr Goldsmith would have more chance of his bill being passed under a Labour-led Government than the National-led one.

Mr Goldsmith is proposing that employees with salary packages worth more than $150,000 not have the automatic right to a personal grievance, which they have under present employment law.

Under the current law, even if an employee is paid out under the terms of his or her contract, they can still take a personal grievance case to try to get a higher payout.

Mr Goldsmith says that means that employers are more likely to put up with someone who is not doing the job well or "make a more generous golden handshake to make the problem go away".

He said he had been approached by business, and small business in particular, who saw it as a problem.

His bill did not go as far as Australian law which automatically exempts a high-paid employee (earning over A$129,000) from being able to take a personal grievance.

"The problem that it solves very rarely ends up in a court case. It is the lingering threat there that makes people more inclined to be more generous in settlements and more inclined to avoid a fight."

The bill has been put into the private member's ballot. Labour Minister Simon Bridges said while National supported the proposed bill, the Government would prefer to get officials' advice.

But Labour's labour spokesman, Andrew Little, said last night that it was the sort of thing a Labour-led Government would be keen to look at, especially for chief executives.

He had a concern with the $150,000 threshold because it could include highly skilled engineers, for example, working for companies such as Fonterra, who were well down the chain of command and control over the company.

Subject to a discussion about the threshold, he agreed with the bill in principle and thought Labour would support it to select committee.

The bill is titled the Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill.

Meanwhile, a bill sponsored by National MP Jami-Lee Ross that would have allowed employers to hire temporary workers during strike action was defeated in Parliament on Wednesday at its first reading by 60 votes to 61.

Since 2000, it has been unlawful for employers to take on temporary staff to fill the jobs of striking workers.

United Future leader Peter Dunne held the balance of power on the bill and voted against it.

- NZ Herald

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