The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government has been urged not to “penalise” all businesses for the actions of a few through its labour reforms, the Chamber’s chairman calling for longer term employee safeguards to be put in place.

Gowon Bowe told Tribune Business: “When we’re making moves to protect employees, we should do so with long-term prospects in mind, not in reaction to immediate events.

“There is a potential that some of these amendments were in response to certain action taken in recent times by certain companies. The Government has mechanisms to deal with those enterprises and it should not be looking at penalising, if you will, all businesses for actions they believe were inappropriate by one or two parties.”

Employers have slammed the proposed changes to the Employment and Industrial Relations Acts, warning that the increased costs and bureaucracy they will create could “cripple” and “bankrupt” businesses across all sectors.

Key among employer concerns is the 67 per cent, or two-thirds increase, in the Employment Act’s redundancy pay ‘cap’.

Line staff are currently entitled to a maximum 24 weeks or six months’ redundancy pay under the Employment Act, gaining two weeks for each year they have been employed up to the 12-year ‘cap’.

However, the Bill requires the ‘cap’ to be increased to 32 weeks (16 years) immediately upon enactment of the reforms. And, ultimately, the ‘cap’ for line staff redundancy pay is to be increased to 40 weeks some two years after the amendments are passed.

As for managerial staff, the existing 48 weeks (12 months/one year) redundancy pay maximum that they are due currently under the Employment Act is to be immediately increased to 64 weeks. Should the proposals pass, the ‘cap’ will ultimately be lifted to 80 weeks after two years.

Mr Bowe said: “Right now you create an exorbitant cost to having an employee with you for an extended period of time. There is no business that is going to actually employ persons for extended periods of time because they can’t afford to disengage with them if the business needs says so.

“That’s where the tenure of employment effectively becomes a liability. While you may have the best performing workers, their tenure becomes a liability and businesses will have to make a choice on whether to keep long-serving employees, as they may not be able to afford to pay out their tenure of contract if anything happens.”

The Chamber chairman argued that the development, and passage, of pension legislation would “have far greater benefits” than changes to the redundancy law, and the employee-employer relationship, when it came “to the protection of rights of employees”.

“It gives the employees a nest egg essentially that accumulates over the length of their employment,” Mr Bowe added.