In the red corner

Restraints of trade can be used to keep working people down. They can be a handbrake on productivity and innovation, and they don’t usually serve the industry well in the long run.

A couple of years ago, a friend came to me for legal advice. She was picking up dress-making and design work through our local mums’ network and wanted to set up her own business. She had been working at the mall hemming jeans for years on

10-hour shifts, and her boss would regularly remind the workers of the restraint clauses in their contracts.

‘‘These clauses are rarely enforced,’’ I told her. ‘‘I don’t have the money to go to court to find out,’’ was her response.

And that’s the problem: restraints have a huge impact on low-wage workers who can’t afford to challenge an unfair limitation on their ability to earn a living. And, because they can’t afford to wait it out before switching, they get stuck in low-wage jobs.

We want to see workers being able to

secure higher wages at businesses that are able to make the most of their skills and potential, or get out on their own and upskill others.

When she eventually quit her mall job to start her dressmaking business I referred her to my friend, employment lawyer Helen White, who is now the Labour MP proposing a member’s bill to reform restraints of trade.

New Zealand also lacks sector-wide bargaining in our labour market, which can allow employers to undercut each other, causing a race to the bottom on wages which comes at the cost of our most vulnerable workers and undermines productivity.

To make sure workers get a fairer deal, we are introducing Fair Pay Agreements to set basic employment conditions across an industry. We have brought back meal and rest breaks, and restored protections for vulnerable workers. We have also boosted the minimum wage and passed equal pay legislation, because we believe that a hard day’s work deserves a fair day’s pay.

As we rebuild the economy, we have an opportunity to design better support for New Zealanders who lose their jobs through no fault of their own.

We’re looking at a scheme that could provide those who lose their jobs with around 80 per cent of their income, with minimum and maximum caps.

Further details on this will be announced in the near future.