Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 1 entitled:

begs leave to report as follows:

The purpose of this measure is to require successor employers of a covered establishment to retain at least fifty per cent of incumbent, nonsupervisory employees in the event of a divestiture.

Testimony in support of this measure was submitted by the ILWU, the Hawaii State AFL-CIO, and two private citizens.

Testimony in opposition to this measure was submitted by the Department of Labor and Industrial Relations, the Chamber of Commerce of Hawaii, the Honolulu Japanese Chamber of Commerce, the National Federation of Independent Business, the Hawaii Business League, the Hawaii Bankers Association, the Society for Human Resource Management, the Hawaii Hotel Association, Hawaii Reserves, Inc., the Estate of James Campbell, the Hawaii Business Roundtable, the Hong Kong China Hawaii Chamber of Commerce, Retail Merchants of Hawaii, Macy's West, Times Supermarket, H2O Transportation, and Olsten Staffing Services.

Your Committee finds that the culmination of the events of September 11, 2001, and the continued distressed condition of the State's economy has forced many businesses to close or transfer ownership. This trend has resulted in mass layoffs, loss of continuity of service, increased burden on state services, and disruption in the lives of the displaced workers, their families, and communities. Your Committee disagrees with the current practice of displacing employees who have loyally served in their positions, in some cases for twenty or thirty years, once there is a transfer of ownership, yet no change occurs in the type of business conducted. Your Committee also disagrees with the onerous practice of otherwise firing employees en masse only to then require them to reapply for the same positions that they had been holding involving the same duties of which they had been faithfully executing for many years.

Your Committee determines that the retention of incumbent workers is healthier for the State's economy because it provides stable employment to residents, and efficient, uninterrupted service to consumers.

Understanding that certain types of businesses would be unduly burdened, your Committee has amended the measure by excluding construction companies due to the cyclical nature of their work and staff management.

Additionally, your Committee has eliminated the amendment of the definition of "covered establishment" to remain consistent with the definition of covered establishment under the Dislocated Worker Law, chapter 394B, Hawaii Revised Statutes.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1, S.D. 1, and be placed on the calendar for Third Reading.