Leading the charge on contractor rights

Leading the charge on contractor rights

Our union is leading the charge to strengthen rights for contractors and labour hire workers in public and community services.

The PSA made a change to its rules in 2018 by enabling contractors and labour hire workers  to become members.

The change recognises the responsibility unions have to protect the rights of all working people.

It comes as more and more people working in public and community services are being denied their basic rights at work - because they’ve been hired as self-employed contractors or are employed by a labour hire company or temp agency.


Kerry Copy

PSA national secretary Kerry Davies

Genuine contractors currently do not have the legal right to bargaining collectively or entitlement to annual leave, sick leave or KiwiSaver contributions.

Employees of labour hire companies may work in a public or community organisation - but attempts are made to prevent them from signing up to the collective agreement that workers directly employed by the organisation enjoy.

“These workers can have their contract cancelled with little or no notice which makes it hard for them to ask for better conditions,” says PSA national secretary Kerry Davies.


Contractors and labour hire workers often do the same work as directly employed workers. Frequently, they work alongside each other. In many cases, they are in a legal sense employees even if they are not treated as such.

Many people in administrative and other office roles in the public and community services sector are now working as purported contractors, along with many care and support workers, cleaners, security guards, drivers and IT workers.

The PSA is concerned there is a risk of a divided workforce - with poorer pay, terms and conditions for so-called contractors and labour hire workers, and a lack of respect for their rights.

“There’s a gap in relation to valuing people’s work,” says Kerry.

“It is detrimental to the spirit of service, work culture, and ultimately the delivery of services to our communities.” 


The PSA has made a submission on the Government’s consultation process which is looking at improving legal protections for contractors.

In order to stop a race to the bottom, the PSA believes minimum standards must apply to all workers.

We particularly support mechanisms to properly classify workers, which would lead to the direct employment of many workers currently contracting in public and community services. 

We also want dependent contractors and labour hire workers to have the right to bargain collectively through their unions. This would reduce the power imbalance in the work relationship.


The PSA has also mounted a legal challenge to Inland Revenue’s practice of hiring Madison workers, asking the Employment Court to determine they are in reality employees of IR.

As a result, the recruitment agency has increased their starting rates, but their pay and conditions still lag behind the colleagues they work alongside.

We believe Madison workers at IR are being treated unfairly. They are hard-working, skilled and valued by their colleagues, and their terms of employment should reflect this. 


Our members are helping the PSA’s efforts to gain a fairer deal for contractors by forming a champions group and contributing insights about their own experiences of contracting to our submission.

Joe Wood, Auckland Council PSA member

Joe Wood Auckland Council

I am now an employee of Auckland Council after being a Madison temp worker at the council for 15 months. During that time my contract was extended every three to five months.

Being a contractor did not give me flexibility.

Instead I found it difficult knowing I only had a five day notice period. I felt a lack of control, dependent on my temp agency, without the benefits of a regular worker.

I found it difficult to look at work with a long term perspective.

I am passionate about advocating for the rights of workers and hope contractors join unions to give all workers more of a voice.

The future of work and flexible work has to take all workers on the same journey – not leaving contractors behind.


Kelvin Wilson, Inland Revenue Delegate, Dunedin

Kelvin Wilson

I have worked with Madison contractors and also helped supervise them. We had a portion in our call centre, and others sitting beside us doing exactly the same work.

I remember one Madison worker being pressured about taking time off for morning sickness in a way that employees wouldn’t be.

Our PSA members tried to defend the Madison workers. We wondered why aren’t we hiring them, they’re brilliant.

We were using them in areas we wouldn’t traditionally use them. They were doing everything the same as us, we would train them up, they’d become knowledgeable and then they’d be gone.

We did befriend the temp workers but we started to get ‘new face fatigue’.

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