Paid Parental Leave

[John Edmundson <jwe21@xxxxxxxxxxxxxxxxxxxxxxxx>]

The largest bank in New Zealand, WestpacTrust, announced to staff on
Friday that they have decided to top up the government's paid parental
leave provisions to pay its staff full pay for 12 weeks. The
Labour/Alliance government recently introduced a state funded part
payment of parental leave for three months, effective from July 1st this
year. This policy initiative, one of the Alliance's key election
commitments and now claimed by them as a demonstration of their ability
to push the government to the left, was won over quite vocal resistance
from the business lobby. The final policy was a somewhat watered down
version of the Alliance's original proposal, which was for an employer
funded scheme, payed for by levy on businesses on the basis of their
number of employees. As it was finally passed, the scheme does not pay
the entire wage of the worker for the three month period, there is a cap
on the weekly payment.

The bank's new scheme tops up the employee's income to the normal level.
The entitlement does not have to be taken up immediately and can be
taken by either partner. So for example a woman could have her baby,
take some time off, and then her partner could take the paid leave
entitlement some weeks after the birth. The bank's "diversity
consultant" also clarified that the entitlement was available to any
"primary care giver" employed by the bank for a minimum of 12 months at
the time of the birth. This includes adoptions and the diversity
consultant also made it clear that it included same sex couples. For
WestpacTrust staff, this is obviously  good news and has generally been
welcomed by staff. The bank described it as a policy matched to New
Zealand conditions, and noted that New Zealand was now ready for this
move.

This raises a number of interesting points. Firstly, the policy is not
the result of negotiations with FinSec, the bank workers' union, over
collective employment agreements, although the union has issued a
statement congratulating the bank for the initiative. In fact, the bank
has been hostile to proposals for paid parental leave when they have
been raised by the union in the past, significant considering that its
parent company, the Westpac Banking Corporation in Australia fully funds
three months paid parental leave for its staff there.

Secondly, for readers outside New Zealand, the idea that a large bank
might have a diversity consultant on the payroll might seem rather odd.
Here, that passes without comment. The ruling ideology in New Zealand
since the election of the fourth Labour government in 1984 is all about
inclusiveness and the celebration of diversity. While the bank's
statement that the new policy would include same sex couples has not
raised a glimmer of oposition, had the policy not been so, there would
have been a howl of outrage. My wife has worked as a frontline staff
member for WestpacTrust and its predecessor, the community owned
TrustBank for just over fifteen years and has often had Lesbian
supervisors, while other gay/lesbian personnel have held high positions
in the bank. Smart capital in New Zealand these days sees great
advantage in pitching itself to niche markets such as the Maori or gay
middle class. While there is certainly a section of society who still
hold anti-gay views, they are no longer the people in power. Even the
conservative Christian Heritage Party has backtracked on this issue.

But back to the parental leave issue. Of course nothing is quite as it
seems. The scheme is partly tied to a return to work by the employee.
This takes the form of a part payment handed over after a transition
back into full-time (or presumably part-time if that was the case
previously) employment. In Australia, the bank pays the full three
months pay as there is no state provision there, and furthermore the
worker is not tied to a return to work.

Even more interestingly, the bank's experience in Australia demonstrates
that the decision to pay three months full pay has resulted in a nett
gain for the bank. This is because they have improved the rate of return
to employment by parents by at least 10%, saving significantly in costs
associated with replacing skilled staff, training etc. In New Zealand,
the bank expects that the policy will only cost them in the first year,
by year two, the bank expects to be benefitting financially from the
policy.

This is not news to Alliance leader Lailla Harre, who also noted that
the WestpacTrust scheme is amongst, but not the most generous scheme
operating in New Zealand. As she observed, the bigger the company, the
more likely it is that the employer can afford the initial upfront costs
- hence her proposed centralised employer funded scheme to spread the
load. Clearly though, if three months paid leave, even when entirely
funded by the company, as in Australia, is still a nett earner for
business, there is nothing threatening to capitalism
about implimenting such a scheme. Certainly it's good for workers to get
it - I know we could have done with it when our kids were born - but it
proves yet again that reforms like these are not about changing the
system, rather they can serve to strengthen it.
John Edmundson





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