Employers, unions clash over income insurance scheme

Employers, unions clash over income insurance scheme | Insurance Business New Zealand

Employers, unions clash over income insurance scheme

Kiwi organisations gave conflicting opinions on the proposed $3.5 billion New Zealand Income Insurance Scheme (NZIIS), as indicated by the consultation submissions released by the Ministry of Business, Innovation and Employment.

Several major employers said they opposed the NZIIS, including grocery store chain Woolworths NZ, Auckland University, and logistics firm Freightways, Stuff reported.

Woolworths, which has more than 20,000 employees in New Zealand, said that it understood the aims of the NZIIS, but it objected to its proposed design. Woolworths said that because it rarely lays off staff, its employees are likely to not benefit from the scheme and end up “subsidising other businesses or industries where redundancies are much more common.”

In its piece, Auckland University said that the mandatory employer contributions to the NZIIS are outside of the university’s budget for staff salaries. It also said that there is a risk that the scheme would cost more to run than had been anticipated.

Freightways’ reservations were similar to Woolworths’, and it called for measures to protect businesses that do not cut staff numbers often.

“Freightways is keen to see any income insurance scheme include appropriate protections and incentives for businesses to avoid cross-subsidisation by businesses such as Freightways of organisations who pursue far more aggressive displacement programmes,” the company said.

On the other hand, several employee unions supported the NZIIS, with E tū saying that Kiwi workers need “a universal mechanism to make sure workers have enough money to make ends meet when faced with job insecurity.” It raised the example of Auckland printing company Ovato, which announced its closure earlier this year.

According to E tū, displaced Ovato workers may only end up receiving the statutory cap of $25,480, no matter how much they are owed. Furthermore, the workers also have outstanding wages, leave, and notice payments owed to them, as well as a claim for unpaid wages from the first COVID-19 lockdown in 2020.

Unions Manawatu, which represents around 25,000 workers in multiple industries, said that the NZIIS is a “step forward”. The organisation supported extending the scheme for claimants whose training will run longer than the prescribed months, as it gives workers the opportunity to leave twilight industries and to gain a fresh start in their careers.

“We believe this scheme will bring benefits to all strata of our society and is a good progressive step in the history of the labour movement,” Unions Manawatu said.