Sunday, November 8, 2015


Not surprising the news that the Labour/Green dominated WCC is being taken to Court by the Wellington Chamber of Commerce over its decision to require Council contractors to pay their staff the so called 'living wage'.

Let's take a step back.    The so called 'living wage' was the brainchild of an Upper Hutt vicar who calculated what he considered to be necessary for a single income family of four to survive on.   The more intelligent among you will spot the immediate problem ... pay it to everyone and not everyone will have a family to support.   Single persons will be demonstrably better off than those with dependents.   Some may see this as proof the argument is fatally flawed.   That, I guess, can wait for another debate.   What we do know is that currently the living wage is assessed to be $19.25 per hour while the WCC interpretation of that is .70c lower at $18.55.

Back in 2013 the WCC voted to pay its own staff the living wage.   Last month they voted 9-6 to require its outside contractors to pay the same.     The additional cost was calculated at $1.7m over the life of the contacts to be paid by Council as a top-up to the original contract payment.   To offset this cost the Council voted to cut its personnel and travel costs by $250k p.a. to compensate.   The inevitable question follows ... if Council can function without this provision why then the provision in the first place.   Councils are required to be prudent with ratepayer money.

That aside, the Mayor and Councillors were specifically warned in writing by Kevin Lavery, CEO, that their own (WCC) legal advice had it that the Council would be acting ultra vires by paying 19% more than the going rate for security services without seeing any 'tangible benefit.    They were further warned that their decision would likely be tested in the Courts ... and now it is.

A considerable dilemma for Council.    Who is going to represent them in Court given the advice tendered by their own 'in house' lawyers ... outside lawyers ... more cost to the ratepayer?   Then the likely spectacle that lawyers acting for the applicant will call Lavery to give evidence against his own Council and specifically the advice tendered to Council.    This has the potential to end in tears.

But it's not all doom and gloom.   If the Court were to find in favor of the applicant then Council and specifically the Mayor and Councillors who voted for the motion could find themselves, jointly and severally, having to cough up the $1.7m payment..   That would be a huge first for local government and send shock waves through the industry.   Many might opine ... not before time.

One final point.   Leadership is all about 'do what I do' do rather than 'do what I say to do'.    Just how hypocritical is it for Councillor Mark Peck, sometime Labour MP for Invercargill, to vote for the motion while at the same time declining to pay the staff in the Wellington eatery owned by him the living wage on the basis that the business couldn't afford it.   Chardonnay socialism personified.   Happy to spend ratepayer money to indulge his grand design but when it comes out of his own pocket and it's duck for cover fast.   Peck deserves everything the Court may throw at him.   Couldn't happen to a nicer guy.

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