Goodbye paydays
Surviving the redundancy hit
Redundancy packages are dwindling, with 11 per cent of private sector employees working under collective employment agreements offering no redundancy pay at all.
Workers on precarious terms have more than doubled since 2009, when just 5 per cent of private sector employees on collective employment agreements (CEAs) walked away with nothing if their jobs were axed.
It was most common for people starting new private sector jobs covered by CEAs in 2003 to begin with seven to 10 weeks of redundancy.
These days, the most common payment is four to five weeks, though if Government jobs are counted, that rises to six weeks.
Academic Stephen Blumenfeld from the University of Victoria’s Centre for Labour and Employment, which tracks redundancy trends, says many people aren’t even covered by CEAs. Entitlement to redundancy is ‘‘rarely found in individual employment agreements’’, he says.
Barrister Catherine Stewart, head of the Auckland District Law Society’s employment law committee, agrees: ‘‘It is becoming increasingly common for contracts negotiated post-GFC to include clauses saying no redundancy is payable.’’
This has all happened despite evidence many people are living hand to mouth, and have precious little savings to fall back on. Four in 10 people told insurer Cigna last year that they couldn’t pay the bills for more than a month, if they lost their income.
There is no right to redundancy compensation in employment law, Stewart says. It is one of the reasons the OECD scores New Zealand low compared to other rich countries on worker protections against being dismissed.
Blumenfeld says: ‘‘As has been the case for the past 25 years in New Zealand, without the support of a trade union or other advocate, which the vast majority of workers in New Zealand do not have, workers are compelled to accept
‘I would like to see the government put it into legislation that all contracts have to have a redundancy clause, just to help out the common little worker.’
Frank Robertson, just made redundant, again
whatever the employer offers, on a take-it-or-leave-it basis.’’
Frank Robertson is a 63-year-old production worker being made redundant from Radfords Yarns in Christchurch as the factory closes. His wife works there too, so it’s a double blow for the family, and he knows he’ll be up against it to find a job at his age.
Robertson reckons it’s his fourth or fifth redundancy, and thanks to a collective agreement the First Union helped negotiate last year, workers at the factory will get four weeks’ redundancy pay.
It’s a frightening time for workers, he says. He’d like employers and politicians to recognise the impact of redundancies on people.
‘‘I would like to see the government put it into legislation that all contracts have to have a redundancy clause just to help out the common little worker.’’ He reckons four weeks, plus an extra two from the second year, would be fair.
The other trend in redundancy is lower maximums that can be earned by long service to an employer. Most commonly it’s now set at between one and 13 weeks in collective agreements. In 2003, 41 per cent of employees on such contracts were entitled to 40 weeks or more in compensation.
And redundancy can come fast, with two-thirds of workers on collective agreements entitled to only four weeks of notice, though some contracts say no notice has to be given.
Kim Campbell from the Employers and Manufacturers Association says: ‘‘There isn’t much incentive for an employer to pay redundancy.’’
It is not a focus for job seekers, and is a contingent liability for businesses, he said. ‘‘When you are applying for a job, you are thinking of getting it, rather than getting out,’’ Campbell says. ‘‘You are contemplating not the end, but the beginning.’’