Exodus blamed on law reform

By ADAM GIFFORD

A campaign against the Government's employment law reform is driving the IT professionals New Zealand needs for its future economic health, out of the country.

Linda Peters, managing director of recruitment firm Resource Edge, says "Every day I have contractors saying `get me a contract in the UK'."

Council of Trade Unions president Ross Wilson says some law firms, employer groups and Opposition politicians are focusing on extreme scenarios and spreading misinformation.

"I had to sit at an employers' conference listening to Richard Prebble misrepresent what was in the bill. All that is having an effect on business confidence," Mr Wilson says.

In recent years IT recruitment firms have done an increasing percentage of business as agents for contractors who prefer the flexibility and higher pay rates contracting offers.

Now contractors are being told clause six of the Employment Relations Bill will turn them into employees, which can be enforced at the whim of union officials or labour inspectors.

Employers fear the bill will mean they will suddenly have to carry contractors as employees and face complicated and expensive dismissal procedures when projects finish.

There are also widespread fears the tax status of contractors will change, which assurances from Finance Minister Michael Cullen have done nothing to quell.

Ms Peters says larger companies are trying to shift IT staff onto the permanent payroll, but have found few takers.

"There is a strong division between corporate clients and smaller clients. Our smaller clients say `We have to get this work done,' so they will continue to use contractors and take the risk. The corporate clients say no contracts will be signed past 31 July."

Resource Edge contractors last week had a seminar on the bill from Helen Thorpe, senior lawyer from the Employers Assistance consultancy.

Ms Peters says the mood was extremely negative.

"The contractors are saying the bill is taking away their freedom to choose. If the employer is happy and the employee is happy, why change this because someone dictates it?"

She says many of those at the meeting asked her to find work for them in Britain as soon as their current contracts finish.

"Over half the contractors we had on our books at the beginning of the year, are now over there."

She says IT people believe the Government is unwilling to compromise or change the bill.

"The Labour Party has sold out to unions and unionists are saying it's payback time. The industry being hit is the software industry because they are not waiting to see what is happening. Those people are on the planes and out of here."

Mr Wilson says there is no way unions are going to interfere in IT contractors' affairs. The bill is not intended to do that, he says.

Lyndon Keene, a spokesman for Industrial Relations Minister Margaret Wilson, says the politicians are heeding the message that clause six needs clarification.

The existing legislation does not have a clear definition of employee and the common law interpretation is inconsistent, he says.

"Good law is clear law and if this is not clear to the public, the Minister will make certain it is clear."