Wednesday, 4 November 2015

Another licensing regime

The Law Commission's report on death recommended shifting funeral directors to a stricter form of occupational licensing.

Currently, funeral directors need to be registered, but registration is pretty simple: adding your name to a list. LawComm recommends barring from registration those with certain criminal convictions or disqualifying circumstances (undischarged bankrupts, for example), and requiring that registered funeral directors hold a relevant qualification or pass a knowledge examination.

A few years ago, Martin Jenkins put together a report on the extent of occupational licensing in New Zealand. They there reckoned that around 20% of workers in NZ were subject to licensing requirements. These kinds of requirements often sound nice, but act as a barrier to entry into particular professions - in doing so, they can restrict employment opportunities.

Here's Law Comm on that point:
This knowledge could be demonstrated by holding a relevant qualification prescribed by regulations made under the statute. As noted previously, qualifications are currently available in both funeral directing and embalming. Currently, there is no formal qualification specifically for operating a cremator, although NZQA-accredited training units in cremator operation are in development. When the cremation training units become available, they could be included in regulations.

However, we have some concern that, because the current qualifications for funeral directing and embalming require applicants to be employed in the industry already, making those qualifications compulsory for registration will give some control to existing industry participants over new participants in the industry. That is an undesirable situation because it may encourage anti-competitive behaviour and stymie innovation or alternative methods of providing funeral services.

The purpose of the qualification prerequisite condition is to ensure that industry participants have the requisite levels of knowledge (or are operating under the supervision of someone with that knowledge). One alternative option to demonstrate that knowledge would be to sit an examination (similar to a person passing the theory test before being permitted to learn to drive a car). This option would enable people to enter the industry without first having to be employed by an existing participant.

We have considered who would be best placed to set this examination. The existing training provider would have the expertise but also a conflict of interest. Alternatively, the registration authority could administer the examination, but that would require some expenditure and a different set of skills than is required merely for the registration process. It may be that the most effective solution is for the examination to be provided by the existing training provider under the registration authority’s supervision to ensure that there are adequate protections against the conflict of interest.
It would be ...interesting... to see whether it's possible to set up a practical knowledge test overseen by the licensing agency that doesn't just turn into a limitation of entry to protect existing funeral directors.

What would happen if you weren't registered?
We think that the potential for a conviction and fine would provide the appropriate level of incentive to comply with the requirement to be registered, and so the new statute should provide an offence of carrying on the business of providing funeral services without being registered or without acting under the direct supervision of a registered person. This should be a strict liability offence—that is, the prosecution does not have to prove a mens rea element of the offence (for example, that the person knowingly, recklessly or intentionally did the action). However, the accused person has a defence if he or she can show total absence of fault on the balance of probabilities. 
On a quick look through the Law Commission's paper, it's hard to see what particular problem necessitates the new requirement.

The main issue they cite is that some people think the current registration regime provides quality assurance where it doesn't. But surely that's an issue for the funeral sector industry organisations to be pushing in their marketing rather than the basis for a new licensing regime. It isn't hard to imagine funeral homes advertising on the basis that their directors are all members of an industry association that requires training: "All our members have trained and certified directors on-site to ensure that your loved ones are treated with the respect they deserve, unlike those other funeral homes."

We really shouldn't be proliferating mandatory licensing regimes.

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