Working to rules: More rights, less work

The third part of the Business Herald series on workplace regulation

By JIM EAGLES business editor

The tilting of personal grievance rules in favour of employees will act as a serious deterrent to taking on extra staff, businesses say.

Business Herald surveys of about 700 businesses have found that the new personal grievance rules are one of the least popular parts of the Employment Relations Law Reform Bill.

On a scale of 0 to 10 - where 0 is strongly negative, 5 neutral and 10 strongly positive - the proposed new rules scored 1.8.

Medium-sized business were the most concerned, giving the rules 1.5.

Small businesses, on 1.9, were a bit less worried, and large companies were the least concerned at 2.2, although still highly negative.

Auckland Chamber of Commerce members who took part in the surveys commented on how the personal grievance process, particularly the difficulty in getting rid of bad workers, was discouraging them from hiring staff.

Their comments included:

* "As a small business owner, the additional costs and regulations are more inclined to dissuade me from taking on additional staff."

* "Employing, dismissing or making positions redundant is more hassle than it's worth. We try to use independent contractors wherever possible."

* "Like other business owners who have had to watch the collective opportunism of employees, I've decided not to employ permanent staff."

* "Laws should protect everyone but unfortunately it is often the undeserving employees who take advantage of the law, causing far more problems than they were ever worth as workers in the first place."


* "We are expecting to employ staff for a 2004 expansion. These changes [to the personal grievance rules] have a cumulative negative impact and we now intend to employ only self-employed contractors. There is too much risk in taking on new employees ... "

The change has been welcomed by Council of Trade Unions president Ross Wilson as a reasonable response to what he describes as "an innovative approach" by the courts to the existing rules.

"We want the test to be moved back to where it was in the beginning of the 1990s, where it was an objective test applied by the courts, rather than a subjective one, of what is a fair employer.

"We're very satisfied that that issue has been picked up and justice can hopefully be done for all the people in that situation."

THE CHANGES

Employment Relations Law Reform Bill

The legal test for deciding whether a dismissal is justified becomes objective - "what would a fair and reasonable employer do in the situation?"

Employers must consider and balance the "legitimate interests" of employer and employee

The Government says the change has been made because case law has been widely interpreted to mean that only the employer's perspective counts

Employment lawyers predict it will make it harder to sack delinquent workers

They also say it will give judges greater discretion to decide if dismissals are justifiable