The Government's much vaunted Employment Relations Act has fallen at the first hurdle, over the MAF vets strike, National's Industrial Relations spokesperson Lockwood Smith said today.

"Negotiations under the ERA failed to resolve the dispute, and in the end the vets decided to 'fight another day'. The Secretary of the National Union of Public Employees, Ivan Finlayson, today admitted the settlement of the strike came as a result of pressure from politicians.

"This highlights the badly flawed nature of the Government's legislation.

"The vets' strike also clearly demonstrates that the Government's Employment Relations Act is going to be very cumbersome and very costly.

"The vets' union, the National Union of Public Employees, has sounded a clear warning that more action is likely as others in the meat industry queue for wage increases. Who will be next?

"At the very least it is estimated that the vets' strike has cost meat workers, farmers and New Zealanders $35 million. It is estimated that $20-$25 million of farmers income has been deferred, if not lost, and that $15-$20 million in workers' wages have been lost, not to mention the long-term cost in terms of New Zealand's reputation for meeting its contractual commitments. These figures may climb as the full costs come to light.

"The ERA raised wage expectations and gave excessive power to unions but has no workable mechanisms to avoid this kind of industrial action. The Government needs to rethink this legislation if this kind of industrial action is to be avoided in the future," Dr Smith said.

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