12 Dec 2018

Gig economy workers need better rights - Perpetual Guardian CEO Andrew Barnes

From Nine To Noon, 9:37 am on 12 December 2018

The chief executive who moved his staff to a four-day working week - without losing productivity - is calling for a rethink of "gig economy" work, saying employers should not be encouraged to treat staff unethically. 

Andrew Barnes trialled a four-day working week at trustee company Perpetual Guardian for eight weeks in April with more than 200 workers in its six offices. 

A cook in a professional kitchen.

Photo: 123RF

"What we did is we went full time on this on the first of November, so gradually all of my staff are going on this pay-for-five, work-for-four regime," he says. 

"I expect we’ll have about 80 percent of the staff on it just after Christmas." 

He says staff reported a better work-life balance, less job stress and improved performance, along with a slight increase in productivity.

"I’m seeing happier staff, so that’s looking pretty good. Our productivity’s holding up, and it’s delivering on what we said it would: it’s reducing stress, it’s improving that work-life balance." 

Perpetual Guardian chief executive Andrew Barnes

Perpetual Guardian chief executive Andrew Barnes Photo: Supplied

Now he's turning his focus to the rights of those in the "gig economy": contractors who mostly work for one company but are treated as freelancers.

"If you look at the legislation in the UK they talk basically about contractors, employees and then a category in the middle that’s called 'workers'."

"You therefore don’t get redundancy pay but you get all the other benefits - and those benefits aren’t available currently under New Zealand legislation. 

"We don’t have that designation in New Zealand."

He says the workers in New Zealand's gig economy - in temporary, casual, contract or part-time work - are therefore missing out on the protections afforded by employment law.

"The gig economy was often put forward as a flexible working arrangement - the question is: whose flexibility? Is it the flexibility of the worker or the flexibility of the employer? 

"You see in the gig economy people on contracts which have no protections in terms of minimum wage, access to holiday pay, access to superannuation, access to sick pay." 

He says that's a bad outcome for everybody. 

"They want to get the same outcomes as an employee does - namely, they want job security, they want the ability to buy their own home, etc - but actually these people are not being given the chance to do that and we, the taxpayers, will sooner or later pick the tab up for this. 

"These people if they fall sick have no safety net; if they’re on minimum wage they’re not putting enough money aside to save for their retirement; they are not going to have the chance to spend time with their families, because the time that they are working is determined, actually, not by them ... whether work is available is determined by the employer."

The current system encourages employers to adopt a gig economy workforce, he says. 

"It is cheaper to adopt a gig approach. Get outside of all the safety nets; get outside of all the necessity for holiday pay and sick pay; and get outside - sometimes - the necessity for minimum wage. 

"Why is that a good thing? I personally think it’s not."

He compares that to his own situation. 

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Casual or contract workers should be afforded the same protections as employees, Andrew Barnes argues. Photo: 123RF

"I have massive responsibilities under health and safety - so if something happens to one of my employees whilst they are working in my premises or indeed driving one of my cars, I am criminally responsible as a director. 

"If somebody wipes themselves out with a lime scooter, are we seeing criminal responsibility being attached to the directors of Lime?"

The four-day week wasn't easy to set up either. 

"I’m ... having to actually work my way around the constraints of the Employment Relations Act and the Holidays Act to deliver flexibility.

"Under section 65 of the Employment Relations Act, you have to define ‘normal’ hours of work ... basically  I have to put a system in place to circumvent four days becoming the norm as opposed to the five. 

"Because you’re notionally working for five, even though you’re working for four… I have to accrue holiday pay for the 40 days that I’m gifting you off.

"I don’t think that’s right - that I should be at a  disadvantage when I’m trying to do the right thing - but you do eventually have to face the reality that if it is more cost-effective to do that, more and more people will go down that path."


Barnes is hoping for legislative change. 

"I think we should be trying to look at our legislation - which is very much a construct of the 19th century in many ways, and arguably getting a little bit worse as we coming back to now designating tea breaks - to actually start to say ‘let’s focus on actually how people do work today'.

"Giving a focus to productivity as opposed to hours I think is the way we should be going."

He says there is a way to potentially provide sick leave, holiday pay or job security for someone potentially working multiple jobs on a part-time or casual basis.

"I would treat it exactly the same way as you’re looking at KiwiSaver, you could actually monetise it, in effect.

"You could say 'look, if you’re going to have four weeks of leave a year we will calculate what that is on a per-hourly rate and for each contract you do ... we will be putting a portion into your holiday fund or your sick fund.

"It may be that there is an ultimate cap on that, that once you’ve accumulated x-amount of sick pay it doesn’t accumulate any more beyond that point."

He says that holiday or sickness fund could be an extension of KiwiSaver. 

"You could end up putting more money into your KiwiSaver and allowing people who work in gig economy to be able to extract money from that in defined circumstances."

The alternative, he says, is a return to a time of heightened conflict between worker and industry.

"Think about the destruction of guilds by factories and then subsequently the organisation of labour in the late 18th century, early 19th century ... It’s exactly the same parallel, we’re going through exactly the same stages all over again."