Legal Challenge to IR Hiring Practices

Four workers recruited by a labour hire company to work in Inland Revenue call centres are asking the Employment Court to determine that they are in reality employees of the government department.

PSA Lawyer Fleur Fitzsimons explains 

For about as long as the New Zealand state has been collecting tax, the people doing this important work have been part of the PSA.  

Over the years these members have negotiated in good faith with Inland Revenue for their terms and conditions of employment.  The relationship has had its up and downs but there has always been a collective agreement containing provisions like annual leave, hours of work and what happens if the employer wants to change the way work is done. 

That is until IR started using a private company to recruit people to its call centres, who were to be paid not even close to the terms and conditions of the collective agreement. 

The labour hire company is called Madison Recruitment Limited and is listed on the New Zealand Stock Exchange.  That’s right, private individuals are now receiving a dividend gained from work done by people working in IR.  

IR has put in place a scheme whereby they claim not to be the employer.  In this way IR avoids paying people working as public servants the agreed rate of pay and other conditions in the PSA collective agreement.  Even the much celebrated living wage for all core public service workers is not paid to these workers and many have been placed on 90 day trial periods. 

There are many hundreds of these people in IR call centres giving vital information to taxpayers, alongside PSA members who are paid the conditions of the collective agreement.   A very large number have joined the PSA.  IR and Madison claim these workers are employed by Madison and not IR but the PSA does not agree. 

We consider all workers in IR call centres are in reality employees of IR and should be treated as such, including by being paid at least the living wage as well as all salaries and the other conditions in the collective agreement.  With the PSA’s support, Madison workers have asked the Employment Court for a decision that they are IRD employees. 

The legal tests are clear and well established in other cases. The legal test the court will apply involves looking at who controls the work, to what degree the people doing the work are integrated into the employer, and what the real nature of the employment is. 

These PSA members from Madison attend training run by IR, and then do the same work in the same way as other IR employees.  However, they did not receive the salaries, meal allowances or overtime entitlements they should under the PSA collective agreement with IR. 

If the workers’ litigation is successful in the Employment Court, we will look to sort out the situation for these members and any others who have faced the same problem. 

If you know anyone in this situation, encourage them to join the PSA so we can best represent their interests.