Protecting vulnerable workers: still work to do

Overshadowed by the Budget, the Minimum Wage and Remuneration Amendment Bill passed its second reading last week. I missed it amongst the Budget excitment, but Stargazer picked it up. It’s important.

The Bill provides minimum wage rights to workers employed as independent or dependent contractors. (The latter depend on their employer for work, as many truck drivers do, for example.) These workers are not covered by most of the laws that give employed workers rights to paid holidays, paid parental leave, wages protection, personal grievances and so on. The Health & Safety in Employment Act is a rare exception.

This is not a problem for those workers who are truly in business in their own right. IT specialists, graphic artists and the like. They tend to have sought-after skills and can look after themselves. They choose to work as contractors for the flexibility, freedom from dopey bosses, etc.

It is a problem where the legal distinction is used as a loophole by unscrupulous employers to avoid their obligations to their employees. Too often the contractual relationship is a facade for exploitation.

Recently leaflet deliverers employed as contractors and paid 25 cents an hour have featured on Fair Go. This is an extreme case. Given that the deliverers are aged 12–16 years, it doesn’t bother me as much as the often gross exploitation of adult workers. Think courier drivers, truck drivers, pizza deliverers, polytechnic lecturers, cleaners, home care workers, forest workers, actors. (In fact, as the Bill applies to those aged 16 and over, it won’t cover the teen leaflet deliverers highlighted by Fair Go anyway.)

This is not a new development either. Fred Gerbic, a Labour MP and very nice man, conducted an official enquiry into the situation of dependent contractors under the 4th Labour Government, but the times weren’t ripe for protecting vulnerable workers…

Such workers used to have effective recourse to the courts, but the neo-liberal Court of Appeal stymied that in 1993 by applying the “black letter rule” to the contracts in dispute: if the contracts said that they were contracts for services (i.e. contractors), then they were, unless they were a sham. (The contract in the case that changed the common law — involving a courier driver — was a sham, but that didn’t seem to matter.)

The Employment Relations Act 2000 requires the courts to consider the nature of the contractual relationship when determining the type of contract, which is useful.

Predictably, the Nats oppose the Bill. It seeks “to turn people who are self-employed into employees, essentially against their will”, they say. “By and large it is a matter of choice as to which status one has—whether one is self-employed or whether one is an employee.”

Yet again, the Nats turn a blind eye to the plight of the most vulnerable workers. You know, the people who suffered wage cuts, lost key employment conditions and lost their union coverage under the Employment Contracts Act. These people are not “contractors” by choice, and it’s no use saying that they have redress in the courts. Few cases get to court.

Darien Fenton’s Bill at least provides these workers with the same minimum pay protections as everyone else who is effectively an employee. It would be good to see all of the other protections extended to these workers, but it is an important first step. It’s long overdue. Well done Darien.

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Tags: Employment Relations Act, Workers' rights