By GEOFF HARDY
It is a great time to be an employee. Under the Employment Relations Act employees have state-funded mediation, procedural fairness rules, personal grievance procedures, a justification requirement before their employment can be terminated, good faith bargaining rules, rights to consultation on changes that would affect their employment,
rights to compensation or unilateral re-writing of their employment contract if they have been unfairly pressured, and a right to join a union and get a collective employment agreement negotiated.
On top of that, they have all the standard privileges like paid holidays, paid sick leave and bereavement leave, parental leave entitlements, a minimum wage, redundancy, ACC cover, health and safety rights, etc.
And all those benefits are likely to be enhanced by proposals now in the pipeline, such as guaranteed continuity of employment or redundancy when a business is sold or a position is contracted out, free health care for work-related accidents, pay equity for women, and strengthened safety, holidays, and equal opportunities laws.
Many employees go on to establish businesses of their own, and we are fortunate they do, because the small-medium businesses they set up form the backbone of the economy, and some eventually become the foundation for our most successful enterprises in years to come.
But in the eyes of the law, a miraculous transformation occurs the minute they cease to be employees and become business proprietors. Clark Kent turns into Superman.
He - or she - is suddenly all-powerful. He has no need of regulated hours of work, time off on full pay, guaranteed continuity of work, and other special rights and protections.
In fact he is so prosperous that he can now afford to give all these privileges to those whom he employs. And all this apparently happens overnight.
Of course in many cases the reality is different.
The new business proprietor mortgages everything he owns to capitalise his business, and personally guarantees his overdraft and lease payments. If he fails, he is bankrupted and loses everything (or at least everything that he has not had time to gift to a trust).
He spends 10 years working 70-hour weeks before the business starts to pay dividends. Frequently he earns less than his employees.
When he goes home at night he takes the job with him. He lies awake at night wondering how he is going to cover next week's bills, and his health and his marriage suffer.
He faces an ever-increasing bureaucratic burden as new laws are introduced and new responsibilities heaped upon his shoulders, and the business environment becomes increasingly competitive and hostile.
Just consider what he has to cope with from a legal point of view alone. Hundreds of different acts of Parliament affecting business, including the Resource Management Act, the Health and Safety in Employment Act, the Accident Insurance Act, and the Employment Relations Act.
Tax obligations alone include income tax returns, PAYE, GST, FBT, ACC, and deductions for student loans, child support, superannuation and union fees.
The Labour/Alliance Government was supposedly committed to reducing compliance costs for businesses, yet this did not happen.
The proposed amendments to employment and health and safety laws will increase the burdens on employers rather than reducing them.
And a parliamentary select committee with a majority of Government appointees rejected most of the red tape-cutting amendments to the Resource Management Act that were proposed by the previous Government.
When things go wrong in business and disputes arise, the situation worsens.
Small-medium businesses cannot afford to take advantage of the justice system like those on legal aid or the major corporations can.
Disputes Tribunals are cheap and effective, but they can hear disputes involving only $7500 or less.
There is state-funded mediation available for bigger cases, but only in employment disputes and (soon) construction industry disputes.
In other types of disputes if you cannot get your opponent to agree to something like mediation or arbitration then you have to go to the district court or High Court. A barrister's fees can range from $100 an hour for a relative novice to $500 an hour or more for a QC, and 90 per cent of those hours are spent before they even get to court.
In addition, the court fees for getting a hearing in the district court have recently gone up to $120 plus $450 for each half-day in court. For the High Court it is $4000 plus $1100 for each half-day in court.
I think we put the wrong people up on a pedestal. My heroes are not the unemployed, the nine-to-fivers, or the high-profile corporate executives, but rather the small-medium business proprietors.
They work so hard and make so many personal sacrifices, and they are critical to our economic prosperity, yet we do very little to reward or encourage them.
I don't favour repealing these troublesome laws and leaving everyone to their own devices.
As long as there are unscrupulous businesspeople around, and there always will be, then we need laws to set minimum standards of behaviour and unfortunately we need the bureaucracy that goes with it.
What I would like to see is a realignment of our priorities as far as Government assistance is concerned. I believe we should have more resources channelled towards assisting start-up businesses and less towards those who aren't prepared to make the same effort.
There are many forms of small business assistance already in place, but they are too hard to track down, too restricted in their application, and too miserly.
What about state-funded agencies that will do all the tax returns and similar compulsory paperwork for small businesses for a subsidised cost?
Small businesses would also benefit from a state-subsidised business mentor programme, much bigger in scale than the present underfunded programmes, where every entrepreneur can go for guidance and inspiration at a reasonable cost.
Similarly the role of the Disputes Tribunals could be vastly expanded so that every small business, no matter what field they are in, could collect debts or resolve disputes amounting to, say, $100,000 or less, quickly and inexpensively.
Small-medium businesses could also be exempted from the more onerous or less appropriate aspects of the laws that act as a disincentive to expand.
Whatever approach is taken, in my view it is long overdue.
* Geoff Hardy is an Auckland lawyer specialising in company, commercial and business law.
Superman needs some help
By GEOFF HARDY
It is a great time to be an employee. Under the Employment Relations Act employees have state-funded mediation, procedural fairness rules, personal grievance procedures, a justification requirement before their employment can be terminated, good faith bargaining rules, rights to consultation on changes that would affect their employment,
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