Hold fire on sick leave during recovery, Business NZ says

Saturday, 19 September 2020

Labour Leader Jacinda Ardern is on the campaign trail, and a major policy divide with National has emerged on sick leave, minimum wage, and workplace relations.

Business NZ says there’s a case for increasing sick leave for workers, but not as businesses fight to survive the Covid-19 recession.

Labour has pledged to increase sick leave entitlement for workers from five to 10 days, and Kirk Hope, chief executive of Business NZ, said: “There’s a case for additional sick leave.”

But, he said: “It would be a useful conversation to have at some time in the future.”

The country is in deep recession after a 12.2 per cent contraction in economic activity in the three months to the end of June.

Kirk Hope, chief executive of Business NZ, says there’s an agrument for more sick leave, but it’s not an argument to have now.

* Increasing sick leave to 10 days a year a matter of 'when, not if' employers say

* Coronavirus: The rights of employees and employers during Covid lockdown

Hope said the extra sick leave entitlement proposed by Labour multiplied by the minimum wage added up to a potential $2 billion a year cost for businesses.

“It’s a fairly big number,” he said.

Hope said some of Labour’s other industrial relations policies- including changes to collective bargaining laws and lifting the minimum wage- were better discussed in “normal times”.

“These times are pretty far from normal,” he said.

On the whole employers had stood by their workers, and managed sick leave well during the Covid pandemic, Hope said.

“There would be cases where people haven’t looked after their employees in the way they should, but on the whole businesses are trying to accommodate issues of illness because this is a high risk environment,” he said.

Northcote MP Dan Bidois says putting costs on businesses now is ‘ridiculous’.

Many businesses were having a very tough time, particularly in Auckland, Hope said.

National leader Judith Collins talks about what New Zealand falling into recession means.

That was backed up by a recent survey conducted by giant insurer Suncorp among its New Zealand customers.

Claire Sutton, executive manager, customer insights and culture at Suncorp, said on average around 26 per cent of people “self reported” as being financially vulnerable during the months since Covid-19 struck the country, compared to around 18 per cent prior to Covid-19.

ACT leader David Seymour says Labour’s plans for extra costs for businesses are a case of killing the golden goose.

“That has increased by 7-8 per cent compared to pre-Covid,” she said.

Business owners were twice as likely to be impacted by household financial vulnerability than its other customers, Sutton said.

National’s workplace relations spokesman Dan Bidois said: “I can’t believe how out of touch Labour is with small business at the moment. They are hurting.”

“I was in Ponsonby the other day and spoke to three or four retail businesses that were closing up. This is left right and centre in my constituency of Northcote, and these guys want to go and add more costs to business at this time, and it’s just ridiculous.”

“This government thinks they have the continual ability to pay, whether it’s an additional public holiday for Matariki, more days off for sick leave, increased minimum wage. Most small businesses I talk to struggle,” Bidois said.

“They’re not creaming it. They make enough to get by, pay their staff, pay their bills, and a little bit to go home, and that‘s it,” Bidois said.

Bidois supported businesses which chose to grant their workers more sick leave, but said: “We didn’t think legislating for more sick days is something they need at this point in time.”

ACT leader David Seymour said: “There’s cutting open the golden goose, and then there’s wringing it’s neck and smothering it, which is what this would do to job creation.'

It was particularly destructive at this time when the economy needed to recover, he said.