News
Shall we just agree that the law doesn't apply?
First published in The Independent, 12 September 2007.
Imagine how different life would be if you could somehow agree that the rules simply didn't apply to you.
What if, for example, the All Blacks could negotiate things so that the offside rule didn't apply to them at the World Cup? Possibly, such a fruitful outcome (not to mention a major bending of the rules of the game) might be accompanied by some sort of economic compensation for their disadvantaged opponents.
Surprisingly, the law occasionally allows for outcomes just like this. Certain pieces of legislation allow you to "contract out" of the law that would otherwise apply.
For instance, consider New Zealand's Property Relationships legislation (formerly the Matrimonial Property Act). In the ordinary course, this legislation operates on a philosophy that the parties to a marriage of a certain duration own property equally - and should divide it accordingly if their marriage dissolves.
But this particular piece of law allows parties to contract out. If you don't want this ordinary rule to apply, you can agree with each other before you get married that a different rule of property sharing will apply if your marriage dissolves.
In other words, you are taking the law, and changing it by agreement to fit your personal circumstances.
Under New Zealand law, the concept of contracting out does not apply to employment legislation. In fact, the key employment laws - the Employment Relations Act and the Holidays Act - expressly prohibit it. This means, for example, that employers cannot negotiate with employees to give up their (reasonably favourable) protections under employment law.
There are, of course, some policy reasons which underpin this. It would be undesirable for New Zealanders to be placed in a situation in which they might give up their right (for example) to the minimum wage - perhaps in exchange for some preferential treatment in the allocation of desirable shifts.
But the fact is that employment legislation does not always readily fit the circumstances of each and every workplace situation.
Take, for example, the Holidays Act. One might have assumed that the fundamental aspects of this legislation would apply equally to all workers. For example, if you work on a public holiday, you should be allowed to take a holiday on another day (which would otherwise have been a working day for you).
For those of us who work Monday to Friday, this concept is easily applied. But case law over the last few years has shown that many of us do not work in this regular pattern and that this supposedly simple provision can cause any number of difficulties in different workplaces. For example, in the case shift workers who are required to work a period of days on, and then to have a period of days off work. Or for deep sea fishers who embark upon voyages which can last for several weeks, followed by periods off work once back on shore.
In these more irregular workplace situations, shouldn't the employer and employee be permitted to contract out of those parts of the law that simply do not fit their circumstances?
There are, of course, different views about this prospect. Some would say that the possibility of commercial negotiation and trading away of statutory rights inherently disadvantages employees. Others would argue that the market - balanced by a degree of common sense - would provide the best outcomes.
There has been news this month which might suggest that the concept of contracting out can work in employment, depending upon the workplace situation and the bargaining strength of the parties.
The New York Times has reported that IBM used to permit its employees to take three weeks of holiday each year, which was closely monitored and recorded. But now the company says that it no longer wishes such stringent rules around vacations to apply, and that employees can self regulate their number of days off each year and, indeed, their working hours. In other words, you can take as much annual leave as you like, and work whenever you want.
The company provides its employees with performance targets that must be met as a requirement of each role. But it is up to the employee to regulate hours of work to ensure that the performance goals are attained. And on that basis, it is simply a matter for the employee as to whether and when vacations are taken.
Indications are that the system is popular with employees with one describing it as akin to the culture change experienced when one moves from a high school environment to the self regulated environment of university.
Critics are swift to point out that the solution would only work in an industry such as technology, where most jobs are capable of being performed to suit the convenience of the employees doing the work.
But perhaps what it does suggest is that the concept of contracting out of legislative requirements can work in employment. What if, for example, you agreed to take less holiday, but earned more pay? Or what if you agreed to work Monday to Friday every week, irrespective of public holidays, with a pre-agreed block of holiday time each year?
Whether this type of self-imposed regulation of entitlements (and the implicit surrender of some legislative benefits) would be a good idea in New Zealand - and across all industries - is a more open question.
