Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 3033 entitled:

begs leave to report as follows:

The purpose of this measure is to require a successor employer or entity of a covered establishment to retain one hundred percent of the incumbent, nonsupervisory, and nonconfidential employees in the event of divestiture.

This measure also:

Testimony in support of this measure was submitted by the ILWU Local 142, the Hawaii State AFL-CIO, the IBEW Local 1186, the IBEW Local 1260, the IBEW Local 1357, the Hawaii State Teachers Association, and two individuals. Testimony in opposition to this measure was submitted by the Department of Labor and Industrial Relations, the Chamber of Commerce of Hawaii, the Retail Merchants of Hawaii, and the Society for Human Resources Management – Hawaii Chapter.

Your Committee finds that over the past several years, the state of the economy has resulted in the closure or transfer of ownership of many businesses in Hawaii. This phenomenon has left displaced workers throughout the State, forcing many to rely on state services for their survival and welfare. Your Committee further finds that these displaced workers are often dedicated employees who have served in their positions for extended periods of time. These employees are the backbone of the operations and their displacement upon the transfer of business ownership is burdensome and often unnecessary, particularly when no change in the type of business conducted occurs. On the other hand, when the type of business conducted changes with the new ownership, the retention of all incumbent employees is not always necessary or prudent, although a reasonable number of incumbent employees should still be retained.

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

Accordingly, your Committee has amended this measure by making technical, nonsubstantive changes to accurately reflect the language of the Hawaii Revised Statutes, to reflect proper and preferred drafting style, and to provide further clarity.

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. 3033, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3033, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.