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AWF Madison says changes to labour law will suppress innovative employment arrangements

Thursday 28th June 2018

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AWF Madison Group, the country's biggest contract labour firm, says government proposals to strengthen the rights of part-time, temporary and contract workers could stymie innovation in the labour market.

Chief executive Simon Bennett expressed concern that the Labour-led government has now started following through on the Future of Work initiative. "Some mooted changes are positive, others considerably less so," he said in the company's annual report. 

"More worrying are some of the provisions of the Employment Relations (Triangular Employment) Amendment Bill currently before Parliament," Bennett said. The bill introduces changes to the Employment Relations Act to support collective bargaining and the role of unions in the workplace. 

Bennett said the widespread view among unions is that part-time, temporary and contract workers should be afforded the rights of permanent employees, and should be able to bargain collectively. "This view is reflected in the Bill in provisions that will, we believe, suppress, not support, the ability of employers and workers alike to seek innovative employment arrangements." 

According to the AWF Madison chief executive, New Zealand won't be able to benefit from the economic efficiency and flexibility a contingent workforce enables "if a mindset prevails that contingent working is just a means by which employers seek to exploit workers".

He noted that regulation must enable innovation and not punish it and underscored that part-time and temporary work are powerful paths into full-time employment. 

Bennett pointed to the success of the so-called 'managed service' contracts overseas - where an entity outsources a function rather than a specific task. He said AWF Madison recently signed a managed service contract with a large government agency for a four-year period. 

"This channel is integrated with the workforce plan and is designed to drive sourcing and retention of high performing workers. The visibility of this workforce enables pay rate alignment, cost savings and quality measurement," he said. 

Separately, Bennett said AWF Madison is exploring  "the addition of a complementary business to leverage our market position and deleverage our reliance on internal talent. The business may be a provider of current services that we can utilise and on-sell."

In late May, the company reported that its profit dropped to $5 million in the year ended March 31, from $5.9 million a year earlier, even as revenue rose 9 percent to $279.3 million. Employee expenses climbed 10 percent in the year to $253.2 million and other operating expenses lifted 12.8 percent to $12.4 million, cutting into profit.


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