In the past few weeks, this government has significantly departed from the “change, but no change” mantra upon which it was elected last November. Both the 90-day probationary employment period, and the “nine day fortnight” are significantly different from what a re-elected Labour led government would have introduced. Perhaps then more hypocritically than ironically, the new government has attempted to appeal to the socialist feelings of the workers, in the spirit of “helping our mates keep their jobs”. When in fact, both of the above policies are likely to harm the very working people that they implore to help each other. How?
“Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions.” – Wikipedia
Keeping the above in mind, the 90-day bill, which permits the introduction into the employment contract of a 90-day probation period, in which new staff have no access to a personal grievance case, even possibly under exceptional circumstances (the law has yet to ajudicated on), has significant moral hazard attached – which typically runs counter to the claim of the purveyor that it would help vulnerable workers, in fact will likely condemn many to long periods of casual employment. Employers are more likely now to fire staff than previously – for a reason as simple as joining a union.
The “nine-day fortnight”, which effectively results in those workers in the employ of companies which take it up becoming 90% employed and 10% unemployed, i.e. a 10% cut in wages – with a slap in the face that the dole would be provided on a pro-rata basis to some participating employers. To even receive the pro-rata benefit, will employees be required to go to Work and Income, show their CV, and demonstrate their willingness to look for work, i.e. provide evidence of interviews etc etc? Again, this is moral hazard. More companies, now that it has been made an acceptable commonplace, will undertake this route, even if they were not previously inclined to do so. So in fact, to save 20 jobs, you are asking 200 staff to cut their wages by 10% – and there is no guarantee in these cases that redundancies will not occur, just that it is unlikely to be due to outsourcing.
Whilst it may be a matter of contention of what exactly is a moral hazard, and what constitutes a natural state, it is without a doubt that the Prime Minister and his government are acting in a manner which poses a threat to public decencies, and the morality of a fair go.
