Employment
The Govt is looking to extend sick leave provisions to contractors, but other workers will still be left out of pocket by Covid isolation rules
For a New Zealand actor, Marianne Infante has the dream gig: a full-time role on Shortland Street. But TV roles come and TV roles go; the terms and conditions for actors’ work careers can be as tough as for any contractor.
From starting out as a team member at KFC in downtown Christchurch, Infante has worked a string of poorly-paid roles – so she was speaking from experience in her submission to a Parliamentary committee, calling for fair pay agreements, holiday pay and sick leave for contractors.
Infante’s submission this month is one of many from workers arguing for more protection for low-income workers. “The hours and workload demanded of me as a contractor are actually really more of an employment structure instead of a contractor schedule as I don’t have a say on the hours of my day like a contractor really should,” she says. “I don’t get holiday pay or sick leave. This would be great to revisit.”
“As a freelancer, it is always a fight … Contractors in the hustle and the grind of the arts industry, we are vulnerable and prone to being undervalued, coupled
with imposter syndrome and the fact that there is a scarcity mindset due to the lack of jobs or recognition of our mahi.”
She says workers in the arts are undervalued emotionally, but even more so financially. “We are a flexible and empathic community, however we all have to survive rent, especially in Auckland, bills and general life costs.”
A three-way working group – employers, unions and government – reported this year that contractors are having to work long hours to fulfil the terms of their contracts and out of financial necessity. They have no guaranteed breaks, and very limited ability to take annual leave or sick leave – such leave is generally at the contractors’ expense.
Now, Workforce Relations Minister Michael Woods is planning to change the law, as soon as possible, to improve conditions for vulnerable contractors. That’s based on the recommendations of the Tripartite Working Group, to clarify the boundary between genuine commercial contracting and employment relationships.
READ MORE:
► 43,000 casual workers short-changed by Matariki holiday
► Unions and employers urge changes to who is a ‘contractor’
► Fair Pay Agreements – what lies ahead?
► Employers going in blind with long Covid, impacting on sick leave
► ‘Divisive’ menstrual leave policy gains momentum
“This clarification, along with appropriate enforcement, would reduce the incorrect classification of many vulnerable workers as contractors, and ensure those workers receive the minimum entitlements of employment,” says a spokesperson.
That’s welcomed by unions and workers who have made submissions on the extension of sick leave and the implementation of the Government’s proposed fair pay agreements – but some argue it doesn’t go far enough.
The pandemic has changed the nature of work. For many professionals and other office workers, that’s given them greater freedom. But for others in customer-facing or manual jobs, it’s become more difficult. Courier and Uber contract drivers have gone to court seeking acknowledgement that, to all intents and purposes, they are employees who should have the same entitlements as salaried 9-to-5ers.
“The community benefits from our work. It would be great if our livelihoods don’t have to suffer.”
– Marianne Infante, actor
A casual support worker for a NGO tells the select committee of being unable to get the Covid support from either her employer or WINZ during the lockdown. “I am unable to support myself when I am sick due to being denied the sickness leave and wellness leave which is not mentioned in my casual contract.”
Another parent, with a large family, has worked for the same employer for 20 years. He wants less bullying and fewer obstructions around use of leave provisions including sick leave. “I live from pay cheque to pay cheque on my salary,” he says. “This is not the New Zealand I grew up in or want for my children and grandchildren.”
Teachers seek more sick leave
It’s not just contractors and casuals. Nurses and teachers are also seeking better sick leave provisions. Melanie Webber, the president of the secondary teachers’ union PPTA Te Wehengarua, says schools are reporting that they have never had as many teachers run out of sick leave as they have this year.
“While there are some provisions in place to cover Covid-related absences, the multitude of other illnesses which are impacting on staff and their families and the requirement that teachers are more cautious than usual about coming to school with symptoms mean that teachers are running through their sick leave more quickly than normal,” Webber says.
Teachers would be seeking to extend their sick leave entitlements in upcoming collective employment agreement negotiations, she says. “It is not the sort of job where you can work from home, or only part of your normal working hours, as classroom cover is still required. It’s just that much more difficult to manage. Most professionals have some discretion available to them in their employment but it is not available for teachers.”
Other sick leave proposals include allowing workers more than three days before they’re required to show their employer a medical certificate; the College of GPs warns that requests for medical certificates are adding to the pressure on already-stretched general practices.
And a review of the Holidays Act recommends workers should begin accruing paid sick leave from their first day on the job, rather than having to wait six months. The Government has accepted the review’s recommendations and plans to introduce changes to the law this year.
The problem for employers is that all these changes come at great expense. “The Holidays Act was first written and still is premised on the idea that sick leave is an entitlement,” says Business NZ employment relations policy manager Paul Mackay. “Its origins are in 1945 when work was done in the workplace. It takes no account of the availability of working form home, internet and wifi.
“In road transport, we are an industry of low margins and we have had to deal with labour market shortages caused by disruption and changes to immigration, two minimum wage increases, accelerating inflation, Covid-19 related compliance costs, lock-downs, and increased sick leave obligations.”
– Graeme Goldring, PJ Transport Ltd
“To date there’s been little discussion about future-proofing the Act for eventualities such as pandemics, remembering of course that even pandemics end.”
That’s a message reiterated by many transport and hospitality employers, in form submissions to the education and workforce committee this month. “The past two years have been very hard for many small to medium sized businesses, especially because we have been battling through the direct and indirect impact of the Covid-19 pandemic,” say Graeme Goldring, at Papakura-based PJ Transport Ltd.
“In road transport, we are an industry of low margins and we have had to deal with labour market shortages caused by disruption and changes to immigration, two minimum wage increases, accelerating inflation, Covid-19 related compliance costs, lock-downs, and increased sick leave obligations, not to mention a long-term shortage of drivers that was occurring prior to Covid-19.”
Left behind by sick leave changes
The problem for workers, on the other hand, is that even sweeping statutory entitlements leave some people behind. Covid rules have highlighted that: office workers can isolate and keep working from home, but blue collar workers in industries as diverse as logistics, retail, hospitality and cleaning are forced to cut into their sick leave.
That entitlement doubled from five to 10 days last year – but as Covid reinfections become more common, even that is quickly eroded. Thereafter, they must throw themselves on the goodwill and mercy of their employers.
Even the statutory definition of entitlement to sick leave excludes some in lower socio-economic groups. For instance, one can claim sick leave if one is forced to stay home and isolate as a household contact of a spouse, partner or dependant – but that doesn’t extend to young workers who must isolate with sick flatmates, or those with extended families sharing a home.
In 2020 the Government introduced a Covid-19 leave support scheme, paying up to $600 a week to employees and self-employed people who must self-isolate and can’t work at home during that period.
That cost the public purse nearly $661 million in the 2021/22 financial year. This week, neither social development nor Treasury officials were able to answer questions about when that will come to an end – a spokesperson for Social Development Minister Carmel Sepuloni said no decision had been made.
But according to the Budget 2022 estimates of appropriation, the money is all but expended. Finance Minister Grant Robertson has allocated only $50m for the support scheme in the 2022/23 year – which wouldn’t last beyond July at current rates of spending.
“We’ve heard from a significant number of workers that their employer did not want to apply for that, so they did not get access to that paid time off, and that really needs further scrutiny,” says MP Jan Logie.
At Parliament, the Greens are seeking a meeting with ministers about better protections for vulnerable workers forced to take time off work. Logie, the party’s employment spokesperson, was sitting on select committee hearing this week into the Fair Pay Agreements Bill, in which unions and workers raised concerns.
She says the party had welcomed the doubling of statutory leave minimums to 10 days but, since then, much has changed because of the pandemic, and more is needed.
“That extends to people with caring responsibilities, and the option for the state or ACC to be covering the cost of that leave. I think we’ve seen though Covid that there are gaps in our sick leave framework. And I think some of those gaps where we’ve been told about are in professions where people are in high contact, and there’s also high vulnerability, like aged care, and early childhood, and teachers.
“There are good arguments that could be made for a government intervention to enable people to be able to access higher levels of sick leave, particularly when they’re in government-funded sectors.”
Employers urged to take lead
Moves to extend sick leave are not new. Indeed, the Ministry of Social Development introduced unlimited sick leave as part of commercially-styled reforms in the 1990s, alongside cash performance bonuses.
Sue Kellett worked for Work and Income NZ back then. “I remember one guy who would phone up on a Monday morning claiming to be unwell and ‘putting on an act’ of sounding sick,” she recalls. “He wasn’t really sick because he told me so the next day.”
It was a brave experiment in trust but one that, sadly, the next generation of management abandoned. In 2002 the Ministry of Social Development spent $3.8m to buy out the contractual provision. The HR boss of the day said one in five staff had taken more than 20 days sick leave the previous year – though she acknowledged abuse was not widespread.
Now, ANZ Bank in New Zealand provides essentially unlimited sick leave – though it prefers to avoid that term. “The health and wellbeing of our staff is a priority,” says Michelle Russell, the bank’s general manager for talent and culture.
“ANZ NZ is more generous with sick leave than required by law. We take a managed approach to sick leave which means we don’t have a set number of days entitlement and can accommodate those occasions when staff need extensive time off due to serious medical conditions or times like now where staff are likely to need more sick leave than usual, either for themselves or to care for dependants who are unwell.
“We refer to our sick leave policy as being ‘managed’ rather than ‘unlimited’ because we do reserve the right to limit this.
“Many of our staff are able to work from home, so they can continue to work while isolating if they are feeling well. For those who are not able to work from home, we provide paid leave during isolation periods.”
The public service, too, has been advised to provide “special paid leave” to those required to isolate without working, and who aren’t entitled to sick leave. According to guidance from the public service commission, Te Kawa Mataaho: “Where it is not possible for an employee to work from home, or to cover periods of unavailability for work, employees should receive paid special leave, paid at normal rates.”
Buddle Findlay partner Sherridan Cook is on the managing board of the law firm. They have given their staff unlimited sick leave – but he does not advocate mandating that through statute law. There are pros and cons, he says.
“The pros are that your employees feel confident to be able to take sick leave, and not have to worry about it running down their balance. And not having to feel as though they need to be working when they actually should be resting.”
He acknowledges the use of sick leave at Buddle Findlay has increased, but he says that’s just because of the pandemic, not because of abuse. “There are benefits for engagement and morale.”
The cons, he says, will be at workplaces where employees game the system. “What we’re talking about is not you and me, it’s the supermarkets and those sorts of employers where it’s more of an issue for the reasons around demographics. And that’s where, unfortunately, employers do see employees potentially abusing it and seeing it as being another 10 days of annual leave.”
Tess von Dadelszen, a partner at Morrison Kent, broadly agrees. “Now is not the time for the Government to consider or introduce a further statutory extension of sick leave entitlements,” she says.
“For many businesses, particularly in the SME space or in industries hit hard by the impacts of Covid-19 and border closures, the existing increase from five to 10 days’ sick leave and the (wonderful and long overdue) new public holiday we have in Matariki have meant a significant and challenging increase in costs.”
However, she argues, employers can choose to provide more than the minimum entitlements, where there is a desire and budget to do so. Some employers already treat time spent off work with Covid-19, or as a household contact, as discretionary paid leave. Others have introduced a higher sick leave limit, and some have unlimited sick leave policies in place.
“Where an employer is taking a ‘more than the minimum entitlement’ approach to sick leave, including unlimited sick leave, having a clear policy in place guiding the expectations and obligations of both parties is key,” she says. “For example, what would happen if an employee appeared to be abusing the trust placed in them as a result of the policy? What would happen if an employee needed to take genuine but extensive sick leave, to the level it was adversely impacting operations and/or the wider team?”
Some employers are introducing these flexible and trust-based policies on a trial basis, she says, preserving the ability to amend or revoke the policy if it doesn’t work out in practice.
Increasingly, the tight job market is putting greater control in the hands of employees. According to Karina McLuskie, a partner at Tompkins Wake, many employers are being asked by prospective employees to have sick leave entitlements from the first day or work, rather than having to wait six months.
“This request is becoming more common as a result of the labour shortage in New Zealand and the bargaining position employees are currently in,” she say. “It is likely that the pandemic has put sick leave entitlements at the forefront of employees’ minds when they are looking at taking on a new position.”
Community benefit
Casual and low income workers may not feel as empowered as McLuskie describes.
Speaking for contractors and poorly paid workers in the arts sector, Marianne Infante asks that the Government, industry and community recognise their contribution with better remuneration.
“The community benefits from our work,” she says. “It would be great if our livelihoods don’t have to suffer.”