1. 8 May 2017 Hannah Malloch, Senior Advisor Employment Relations Policy
OECD report “Back to Work: New Zealand” MBIE’s response to the findings and recommendations - and what happens next
8 May 2017
Hannah Malloch, Senior Advisor
Employment Relations Policy

2. Overview How the paper came about Who was involved
Roles of OECD and others
Key findings and our thoughts
Recommendations and responses
Next steps
Questions

3. Background
OECD commenced Displaced Workers research programme and sought participant countries
DoL interested to better understand the labour market impacts of the GFC
Delayed until 2015
8 other OECD countries have participated
Comparator report coming

4. Role of NZ Government and stakeholders
OECD
Stakeholders
Methodology and research programme development
Research tour - visit NZ to meet with stakeholders
Analysis and report drafting
Consultation on draft
Incorporation of feedback
Media engagement
Publication
Contribute information – eg statistics and context
Comment on drafts and ensure that other interested stakeholders have an opportunity to contribute
Keep interested Ministers informed and engaged
Participate in public discourse

5. Key findings
About 1.1 per cent (approx. 29,000 workers) reported being laid off; dismissed or made redundant.
The unemployment rate has been slow to improve since the GFC and unemployment is lasting longer.
84 per cent of displaced workers find new jobs within two years.
Wage losses in the first year since displacement are partially offset by redundancy payments.
In the second and third year since displacement the wage loss is about 20 per cent.
NZ has very flexible labour market settings.

6. Our thoughts on the findings
Some validation for the flexibility for current labour market policy settings – link to productivity lifting efforts.
Shows the range of factors that can make someone more vulnerable to redundancy (demographic, skills, region, sector, etc.). This is going to be looked into further.
There is a disconnect between the findings and the recommendations – the findings praise the regulatory flexibility, but then recommend more rigidity.
Findings are being used as an input to the policy work to understand the changing nature of business and employment.

7. Recommendations and responses
Strengthen employer responsibilities by requiring a longer minimum notice period and a mandatory notification of each redundancy to trade unions (if any) and the relevant authorities.
Response:
The principle of good faith means employers must give reasonable notice rather than a minimum notice period. There is also a continuity provision.
We understand that many businesses already notify unions and MSD when restructuring or liquidating.
Any mandatory notifications to authorities would need a constructive purpose.

8. Recommendations and responses
Explore ways to reach out to all displaced workers in need of support, by 1) contacting displaced workers early on; 2) expanding employment services for skilled workers; and 3) providing incentives to public employment services to assist people who are currently not eligible for income support.
Response:
People more likely to seek and receive employment service support are those who are eligible for income support. MSD services will not likely meet everyone’s needs.
Agree that we need to think wider. Role for other providers? Who pays? Customer-centric view needed of what services would be in demand and what influences supply/take up.

9. Recommendations and responses
Consider replacing the voluntary redundancy payments with a mandatory active redundancy insurance system. By combining financial support with pro-active employment support upon redundancy the focus would lie on reintegration and fast job-to-job transitions. The insurance scheme would cover all workers irrespective of their individual working arrangement and can be financed by a payroll-based levy.
Response:
An interesting recommendation; though it seems disconnected to the research findings.
No current work will look to progress this significant and structural change – the only work will be to seek understand this option better.

10. Recommendations and responses
Strengthen training guidance and counselling for adults as well as the framework for recognition of skills acquired on the job.
Response:
Several government agencies are working in this space – notably TEC, Careers NZ, and MSD. MBIE has a link to this work though its Skills and Employment Policy Team.

11. Recommendations and responses
Ensure and sustain the adequacy of welfare payments and take-up of benefits among those who are eligible to avoid that displaced people fall into poverty.
Response:
MSD has formula and frameworks that aim to ensure that welfare payments are adequate and those who are eligible do not face barriers.
MSD is currently considering the OECD report and they are engaging with their Minister on the report.

12. Next steps Work ongoing to: This work will consider:
Understand the changing nature of business and employment
Assess redundancy policy settings and to consider what more can be done to assist displaced workers to transition to suitable jobs.
This work will consider:
The OECD recommendations
Further research by MOTU on displacement of workers
Predictions about the changing nature of business and employment
Insights into the worker experience
The potential for regulatory and/or non-regulatory responses

13. I welcome any questions you have.