HRC Submission on the Employment Relations (Flexible Working Hours) Amendment Bill



Transport and Industrial Relations Committee
13 July 2005

Contact person: Dr Judy McGregor
EEO Commissioner


1. Introduction

2. Scope of the Submission

3. International Human Rights

4. Balancing of Rights

5. Summary of Proposed Amendments re Employers and
Employees

6. Conclusions

1. Introduction

The Human Rights Commission welcomes this opportunity to make a submission on the Employment Relations (Flexible Working Hours) Amendment Bill.

1.1 The purpose of the Human Rights Act 1993 is to provide better protection of human rights in New Zealand in general accordance with United Nations Covenants and Conventions on Human Rights. The major functions of the Human Rights Act are (a) to advocate and promote respect for, and an understanding and appreciation of, human rights in New Zealand society; and (b) to encourage the maintenance and development of harmonious relationships between individuals and among the diverse groups in New Zealand society.


1.2 The Human Rights Commission has a specific statutory responsibility in relation to discrimination relating to employment. The Human Rights Act prohibits discrimination on the grounds of sex, marital status and family status. In relation to employment matters s22(1) states that it is unlawful for an employer to “offer or afford the applicant or the employee less favourable terms of employment, conditions of work, superannuation or other fringe benefits, and opportunities for training, promotion, and transfer than are made available to applicants or employees of the same or substantially similar capabilities employed in the same or substantially similar circumstances on work of that description.”

1.3 Additionally, the Human Rights Commission has been given an enlarged mandate for employment equity. Section 8(1)(c) created the position of an Equal Employment Opportunities Commissioner which came into force on 1 July 2002. Section 17 outlines the EEO Commissioner’s functions which include section 17(b) to provide advice and leadership on equal employment opportunities and section 17(e) to monitor and analyse progress in improving equal employment opportunities in New Zealand.


2. Scope of the submission

2.1 The submission addresses the question of whether the Employment Relations (Flexible Working Hours) Bill achieves its objectives set out in the Explanatory Note of:
fostering dialogue and better relationships in the workplace
increasing the employment rate for parents of young children by offering them expanded flexible working opportunities
assisting parents to balance work and family life.

All of the objectives are commendable and are supported by the Human Rights Commission in fostering equal employment opportunities.

2.2 The submission utilises a human-rights approach to help answer the question of whether these objectives are advanced by the proposed legislation, and recommends the utility of this approach to the Committee.

Adopting a human rights approach ensures: 

  • the linkage of decision-making at every level to the agreed human rights norms at the international level as set out in the various human rights covenants and treaties;

a balancing of rights, where necessary, to maximise respect for all rights and right-holders;

  • an emphasis on the participation of individuals and groups in decision-making;

the introduction of accountability for actions and decisions, so that individuals and groups can complain about decisions that affect them adversely;

  • non-discrimination among individuals is being sought, through equal enjoyment of rights and obligations by all individuals; and an empowerment of individuals and groups by allowing them to use rights as leverage for action and legitimise their voice in decision-making.

 

3. International human rights

The Universal Declaration of Human Rights, the touchstone of human rights in the modern world, asserts several fundamental principles that are relevant to the bill. For example, Article 16 (3) states that “the family is the natural and fundamental group unit of society and is entitled to protection by society and the State.” Article 23(3) states that “everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection” and Article 24 states that “everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.”

 

  • The idea that societal changes have new and different consequences for men, women and families in the labour market is implicit in the instruments on equality of opportunity adopted by the United Nations over time. 
  •  In particular, the fourteenth paragraph of the Preamble of the United Nations Convention on the Elimination of All Forms of Discrimination against Women, 1979, to the effect that State parties are “aware that a change in the traditional role of men as well as the role of women in society and in the family is needed to achieve full equality between men and women.”
  • In the most recent Report on New Zealand by the United Nations Committee on the Elimination of Discrimination Against Women the Committee noted its concern about the problems women in New Zealand face in reconciling their personal and family lives with their professional and public responsibilities.
  • Although New Zealand has not ratified the International Labour Organisation (ILO) Convention Workers with Family Responsibilities Convention, 1981, it is the most relevant and up-to-date instrument and provides for authoritative guidance about reconciling employment and family responsibilities. It states. Article 1: This Convention applies to men and women workers with responsibility in relation to their dependent children, where such responsibilities restrict their possibilities of preparing for, entering, participating in or advancing in economic activity. Article 2: The provisions of this Convention shall also be applied to men and women workers with responsibilities in relation to other members of their immediate family who clearly need their support, where such responsibilities restrict their possibilities of preparing for, entering, participating or advancing in economic activity.
  • It is clear from Article 1 that the Convention does not have a narrow focus in relation to either age or categories of children but simply talks of dependent children. It is also apparent in Article 2 that the Convention does not restrict the notion of responsibility to children only but talks of “other members of their immediate family who clearly need their care or support.”
  • Both these issues are relevant to the Bill, which restricts the duty on employers to consider seriously requests for flexible working arrangements from parents of children under the age of five where the parents are employees of six months standing and for the parents of disabled children with an age limit of 18 years.
  • There is no coverage in the proposed amendment bill of caring responsibilities for children aged over five who are not disabled or for other members of the immediate family such as employees with dependent parents or disabled children who are adults, for example.
  • The demographics of ageing in New Zealand means that elder care will be of increasing significance for families, employees and employers, and could have a profound impact on New Zealand’s future labour market. The proportion of people in New Zealand over the age of 65 will more than double from 12 per cent in 1999 to 26 percent in 2051. In approximately ten years time the entire baby boomer cohort will either be older workers, in retirement or in care.
  • The Human Rights Commission is concerned that the proposed legislation elevates a narrow range of family responsibilities above others in terms of legal entitlement to request flexible working hours. The amendment bill as currently proposed does not reflect the spirit of ILO Convention Workers with Family Responsibilities Convention, 1981, which covers all dependent children and members of immediate families needing support.

 

4. Balancing of rights


Employers and employees are clearly two groups most directly affected by the proposed legislation. In general the arguments for social and economic benefits for employees are better developed in research and societal thinking than for employers.

4.1 Employees
Improving the balance between work and family responsibilities is a policy imperative in most developed nations. Traditionally it has been promoted on social justice grounds. For example, Time for Equality at Work, the global report under the follow-up to the ILO Declaration on Fundamental principles and Rights at Work , states: “one way of allowing working parents to harmonize work and family is by permitting them to work fewer hours than a full-time week or by modifying their hours of work according to their care responsibilities”.

  • More recently business case arguments have been linked to the promotion of flexible work arrangements. The same report states that in countries where there is a plummeting fertility rate, rises in life expectancy, restrictive immigration policies and labour skill shortages, “it is crucial to keep working mothers in the workforce to compensate for shortfalls in labour supply” and for the payment of taxation. “Part time work has permitted working mothers to reconcile domestic duties with remunerated work”, the report states.
  • Internationally and domestically there is clear support for a better reconciliation of work and family responsibilities for women in particular, as the traditional bearers of the greater share of primary caring responsibilities.
  • More recently, in New Zealand and elsewhere there has been increasing awareness of the need for policy visibility and recognition of men in caring responsibilities in modern families.
  • What is less clear is the legislation, policies and practices that best achieve the outcomes of balancing work and family responsibilities, as well as achieving gender equality and social equity.
  • The Bill is based on very similar legislation in the United Kingdom which has been in force since 2003. There is positive support from within the United Kingdom for flexible work in general. The Equal Opportunities Commission said recently that the significant increase in flexible working in Britain over the last six years demonstrates that flexible working has become a permanent part of Britain’s workplaces. Acting EOC chair, Jenny Watson said, “forward looking companies have realised that letting their employees both men and women work flexibly or part-time has a direct and positive impact on productivity.”
  • New research in the United Kingdom also shows that, in general, working part-time is both complex and controversial. A research review by Professor Patricia Leighton suggests that it is still too early to assess the impact of the “right to request” flexible working, but it seems that the most likely impact will be an increase in part-time and varied hours.

    Leighton lists a number of cautionary points which need to be noted including that the individualised arrangements around flexible working are an ad hoc response to the family and work-life balance needs of employee which will therefore be seen as a concession rather than the product of legal or social principle.

    The most important of her cautionary points concerns the impact of flexible working on careers and rewards, with part-time workers experiencing a lack of recognition of their roles. It would be ironic, indeed, if the granting of flexible work arrangements had unintended negative consequences for advancing equal opportunities in employment.

 

  • The Human Rights Commission supports integrated and comprehensive research into the EEO implications of part-time and flexi-work that takes account of contextual factors such as the patterns of the labour market and of employing organisations. A strong evidential basis, and overseas comparative studies, will provide the most robust platform in New Zealand for legislation, policy and practice.
  • Consideration should be given, too, to the role the Department of Labour, can play in an education campaign for employers and employees about the benefits, consequences and trade-offs involved in flexible work arrangements including part-time work.

    Proposed Amendment

 

The Bill states that in order to qualify an employee must have “full time care” of a child. This needs clarification to ensure that a limited interpretation does not exclude those with shared care and custody of children. While the focus of the legislation is on primary care-giving, the concept of shared primary responsibility is common and in tune with changing family roles and values.

4.2 Employers
There are several employer-related issues that impact on whether the amendment will meet its objective of fostering dialogue and better relationships in the workplace.

 

  • While the proposed amendment is very similar to United Kingdom legislation, the United Kingdom’s structure of employment is very different. New Zealand businesses are smaller, with 2,220 enterprises having more than fifty employees compared with 67,770 enterprises in the United Kingdom. Approximately 80% of all enterprises in New Zealand employ five or fewer people.
  • New Zealand’s micro to small business enterprise culture has a particular significance in terms of the cost of compliance and the burden of regulation. The legislation takes no account of size of enterprise in the provision of a statutory framework to assist employees to negotiate flexible work to accommodate caring responsibilities.
  • Small business in New Zealand traditionally has a muted voice in policy formation. Unlike other jurisdictions there is no ministry of small business that is consistently involved in debate about whether a particular social or socio-economic objective outweighs the cost of compliance, or that examines the benefits versus the disadvantages for business. Small businesses do not form a large proportion of the business and private sector organisations’ members. For example, only 38 of the EEO Trust’s membership of 364 organisations are small businesses. Whether policy and law-makers are adequately aware of the opinions of, and advice from, small business is a legitimate concern.
  • Recent comments on equal employment opportunities by a member of New Zealand’s Small Business Advisory Council, suggests that small business adopts informal, flexible approaches, and prefers autonomy of choice rather than regulation.
  • Equally, though, there is United Kingdom evidence that small and medium sized enterprises have a poorer record in advancing equal employment opportunities. No comparative research into EEO practices among local small business has been undertaken recently in New Zealand.

    Proposed amendment
  • When an employer receives a request for flexible working, it must deal with the application as soon as possible. It can only refuse the application on one or more of six grounds: the inability to organise work among existing staff, inability to recruit additional staff, detrimental impact on quality, and on performance, insufficiency of work during the periods the employee proposes to work and planned structural changes.
  • The employer must be able to establish the objective existence of the ground they are relying on, even though the grounds appear to be broad. The employer will need to ensure there is sufficient evidence to support its refusal of a flexible working request. This will require the employer to carry out comprehensive investigation.
  • There are two grounds in the United Kingdom legislation that have been eliminated from the proposed New Zealand amendment and these may be significant for small business in particular. These are: the burden of additional costs, and detrimental effect on ability to meet customer demand. It appears that if additional costs are to be incurred such as an employer employing additional staff to cover a flexible time request or current staff working overtime or longer hours, then in the New Zealand context these will not be grounds for refusal. The extra costs will have to be absorbed by the employer.



    5. Summary of Proposed Amendments re Employers and Employees

    If the Bill proceeds, the Human Rights Commission believes there would need to be clarification of “full-time” care and consideration of the two grounds contained in the United Kingdom legislation but eliminated in New Zealand, relating to the burden of additional costs, and detrimental effect on ability to meet customer demand.

    6. Conclusions 
     
    In conclusion after examining the implications of the Bill from both the perspective of employees and of employers five points can be made:


  • The Human Rights Commission supports a comprehensive and integrated approach to flexibility and working hours in New Zealand to ensure both better reconciliation of work and family responsibilities and better business practices. 
     
  • Any statutory framework that aims to regulate employee requests for reduced working hours on the grounds of caring responsibilities should ideally acknowledge all dependent children and members of the immediate family.

  

  • Research into the EEO outcomes of flexible work arrangements, particularly investigation into the possibly negative career consequences for those who opt for part-time work, and the business benefits of flexible work, would provide a greater base of empirical knowledge and a better foundation for legislation, policy and practice. 
     
  • The Human Rights Commission recommends that the Department of Labour conducts an education campaign with employers and employees on the benefits, consequences and trade-offs involved in flexible work arrangements, including part-time work. This needs to be undertaken regardless of whether a statutory framework is introduced. 
     
  • Working time and flexibility would be usefully added to the tripartite discussion model being used by the Government, business and unions for issues such as productivity. Small business in New Zealand should be provided with opportunities to participate and be formally represented.