New Zealand wants to be able to fire poorly performing senior managers
According to a recent report by the New Zealand Initiative, a macro and microeconomic research institute, the country's productivity gains are hampered by the protections that senior managers enjoy in the event of dismissal. One section of the law passed in 2000 protects employees from unjustified dismissal, but it also apparently serves to protect company directors… a situation that neighboring Australia has addressed, by abolishing these protections for senior managers. Researchers in the New Zealand initiative say their country should do the same. “No one wants to see vulnerable employees unfairly dismissed. But by extending these restrictions to senior managers, the law prevents companies from getting rid of managers who do not live up to their responsibilities,” says Roger Partridge, an expert at the think tank. However, he adds: “By protecting poorly performing managers, the law risks putting the company – and the jobs of ordinary employees – at risk. This report’s conclusions are consistent with those of the 2014 Productivity Commission, which highlighted poor quality of management as one of the reasons for the lack of productivity in the economy.” New Zealand In 2017, a draft law similar to the Australian law was introduced, but was rejected due to its complexities and the threshold considered too low (NZ$150,000, or €88,000 annual salary), for which the protection exemption could be triggered. The research institute therefore recommends setting the threshold at the equivalent of around €150,000, or the basic salary of ministers, who can be “sacked” at the discretion of the Prime Minister. Roger Partridge concludes that “this threshold would make it possible to take into account less than 1% of managers who They earn the most income, while CEOs and senior managers whose performance has the greatest impact on productivity include.”
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