Employers and unions back 9-day fortnight

Delegates devour lunch as they listen to a presentation. Photo / Kenny Rodger

Up to 70,000 workers could have part of their wages paid by the Government under the "nine-day fortnight" proposal approved at yesterday's jobs summit.

The proposal was popular with both unions and employers, putting pressure on the Government to adopt it as a way to save jobs in distressed companies.

But Prime Minister John Key ruled out full Government funding of 100 per cent of employees' wages for the 10th day each fortnight, and unions and employers disagreed about who should bear the rest of the cost.

Mr Key said the Government would not necessarily adopt the proposal to pay even half of an employee's wages.

"It's more likely that we would fund training than wage replacement," he said.

The broad proposal is to "retain jobs by reducing wage costs while firms' earnings are down" with a "possible focus on a nine-day fortnight or maximum six-week block release".

The detailed proposal that went to the summit from a working group was that the Government should pay half the normal wages of up to 10 per cent of fulltime employees for one day a fortnight, when the employees would be released for training or community work.

Officials calculated that, if the scheme covered 10 per cent of all employees working at least 20 hours a week in firms employing at least 20 people, it would help 70,000 people and cost $191 million a year, including $63 million to subsidise training or tuition.

Andrew Little of the Engineering, Printing and Manufacturing Union, who helped to design the proposal, said the subsidy would be restricted to companies that would have to lay workers off otherwise.

"One of the challenges is to work out eligibility criteria - employers who are facing having to lay off people, so instead of laying people off here's a way of keeping people."

Mr Little personally pushed for a 100 per cent Government subsidy but he said the Labour Department suggested paying only a half- subsidy.

On behalf of the unions, Mr Little then proposed that the employers should cover the other half of their workers' wages.

But this provoked a storm of protest from employers who said it wouldactually make things worse for them if they had to pay nine and a half days' wages but get only nine days' work from their employees.

They said that if the Government was only willing to pay half the tenth day's wages, the other half would have to be borne by the employee as effectively a 5 per cent wage cut.

Mr Key said the scheme needed more work, including "what the training would look like, whether it would be on-site or off-site".

He noted that the Government would have to pick up the full cost of unemployment benefits if workers were simply made redundant.

"That is the challenge, to consider one programme against another."