17 July 2002

Alliance releases Employment Relations Policy

Alliance Leader and Associate Minister of Labour, Laila Harré, released the Alliance’s Employment Relations policy today in advance of a speech to Business New Zealand.

The Alliance policy builds on progress made in the area of Employment Relations since the election of the Labour-Alliance Government and introduces some new initiatives such as a Working Hours Commission and Pay Equity legislation.

“The Alliance has had some very significant policy gains in Employment Relations over the last 2 ½ years”, said Ms Harré. “A strong Employment Relations Act, 12 weeks Paid Parental Leave and significant increases in the minimum wage, especially for young people, would not have happened without the Alliance.

“These policies have vastly improved working conditions for many workers. We want to be back in Government for a second term, working on our next set of priorities for working people.”

“We want to further improve minimum conditions, provide better protections to the most vulnerable and low paid workers and make more progress in helping working New Zealanders balance the demands of work and life outside the workplace.”

Laila Harré listed the Alliance 2002 Employment Relations priorities as:

 Strengthening of the Employment Relations Act to provide better protection to low-paid and casualised workers and ensure that agreements can be settled where workers have little bargaining power.
 Protection of jobs, wages and conditions when a company is sold or work is contracted out.
 A boost to low wages, including extending the adult minimum wage to 16 and 17 year olds.
 Re-introduction of a system of wage orders based on inflation, in the state sector in the first instance.
 Four weeks annual leave.
 Fourteen weeks paid parental leave.
 Protection of low paid, casual and vulnerable workers.
 A Working Hours Commission to work towards a reduction in working hours.
 Introduction of pay equity legislation and strengthening equal employment opportunities

“The Alliance’s Employment Relations policy recognises the demands that exist on workers’ lives outside the workplace, especially care-giving responsibilities, and the need for legislation to ensure a balance between work and life.

Laila Harré also used the speech to Business New Zealand to urge business to take an active leadership role in promoting a more equal New Zealand.

“There is a risk at this election that we will sell ourselves short by accepting less than could be delivered by a government with a real vision for a socially just and economically productive society.

“I suspect that you know in your hearts that putting three square meals a day into every child’s tummy is more important than the model of the car we drive. And that is exactly the nature of the choice that some of us will make and encourage others to make in ten days time.”

Employment Relations Policy 2002
Introduction
Alliance Employment Relations policy is one part of an overall policy for sustainable development, social justice and work-life balance. We believe that employment relations legislation should recognise the dignity of productive work and facilitate healthy, open and co-operative employment relationships. Such legislation should be rights based, consistent with ILO conventions and address the inherently unequal bargaining power between employers and workers.

The Alliance recognises the demands that exist on workers’ lives outside the workplace, especially care-giving responsibilities, and the need for legislation to ensure a balance between work and life.

Greater participation by workers in decisions affecting their work environments, production methods and company direction is an important goal of Alliance policy. We recognise the interdependence of management and labour and recognise the need for effective disputes procedures to resolve workplace conflict. We also recognise the need for strong unions of workers, independent from the employer to defend and extend the interest of their members and working people as a whole.

The Alliance promised to repeal the Employment Contracts Act and we delivered. The Employment Relations Act encourages workers to join unions and negotiate collective agreements where they wish. There are new rules for good faith bargaining that make it more difficult for people to walk away from negotiations. Workers, rather than employers, can decide whether they want to talk to the union in the workplace. Paid stop work meetings allow workers to discuss their negotiations. The new Mediation Service and Employment Relations Authority make it quicker and cheaper to sort out personal grievances or other problems between employers and workers. Employment Relations Educational leave has been introduced.

The Alliance believes the new law is a significant improvement on the anti-worker Employment Contracts Act. However the ERA is still weak on providing protection to low-paid and casualised workers, preventing freeloading on unions and ensuring that agreements can be settled where workers have little bargaining power.

Those who are in low paid work are often hardly better off than on the inadequate unemployment benefit. Precarious employment such as casual and part-time work is replacing the full time job for many. Others are working longer hours to earn the same take home pay as a forty hour week used to provide. Despite minimum wage improvements won by the Alliance in government, significant numbers of low paid workers are still not earning enough to cover basic living costs. The “working poor” are making increasing use of food banks.

A major success for the Alliance in the last Government was the introduction of Paid Parental Leave. This was only obtained through the persistence of Alliance Leader, Laila Harré, combined with the campaigning work of women’s and trade union groups. The Alliance is proud of this legislation but is also aware of the further improvements that need to be made.
Policy Goals
The Alliance aims to improve the lives of working people and their families through:
 Strengthening the Employment Relations Act.
 Protecting jobs, wages and conditions when a company is sold or work is contracted out.
 Boosting low wages, including the abolition of the youth minimum wage for 16 and 17 year olds.
 Re-introducing a system of wage orders based on inflation, in the state sector in the first instance.
 Four weeks annual leave.
 Fourteen weeks paid parental leave.
 protecting low paid, casual and vulnerable workers.
 working towards a reduction in working hours.
 introducing pay equity legislation and strengthening equal employment opportunities

Strengthening the Employment Relations Act
The Alliance promised to repeal the Employment Contracts Act and we delivered. The Employment Relations Act encourages workers to join unions and negotiate collective agreements where they wish. There are new rules for good faith bargaining that make it more difficult for people to walk away from negotiations. Workers, rather than employers, can decide whether they want to talk to the union in the workplace. Paid stop work meetings allow workers to discuss their negotiations. The new Mediation Service and Employment Relations Authority make it quicker and cheaper to sort out personal grievances or other problems between employers and workers. Employment Relations Educational leave has been introduced.

The Alliance believes the new law is a significant improvement on the anti-worker Employment Contracts Act. However the ERA is still weak on providing protection to low-paid and casualised workers, preventing freeloading on unions and ensuring that agreements can be settled where workers have little bargaining power. The ERA also needs to be amended so that the ‘good faith’ provisions require employers to directly address workers’ family responsibilities.

Key changes that the Alliance wishes to see in the Employment Relations Act are:
Protecting jobs and conditions when a company is sold or is contracted out to a new employer: The Alliance will amend the Employment Relations Act to protect workers when their jobs are transferred to a new employer. Examples include the sale of a business, or the changeover of a cleaning contract from one contractor to another. In these circumstances the workers already doing the work should be able to keep their jobs on the same terms as under their old employer. The changes will be modeled on the European Union’s Acquired Rights Directive and will take into account the recommendations of the government’s advisory committee on contracting out.
Arbitration for the first collective agreement and where the good faith bargaining rules are broken: Under the current law, it is possible to go on and on negotiating an agreement without reaching a settlement. This costs time and money and means that the only way to force a settlement is through industrial action. We believe that workers should be able to choose arbitration, rather than industrial action, as a means of settling their first collective agreement. And where one party is proved to have broken the good faith bargaining rules the other party should be able to ask for arbitration as an alternative to negotiation. The process and rules for arbitration will be developed in consultation with the CTU and Business New Zealand before the new law is introduced.
Collective Agreements - an absolute right:In many cases employers have tried to block some workers – e.g. senior employees – from being part of the collective agreement. The Alliance will make it clear that it is up to union members to define the type of work that will be covered by the agreement and it will be a breach of good faith to try to change this definition.
Dealing with the question of freeloading: The Alliance strongly supports having collective agreements that cover all the people in a workplace –especially new workers - and not just union members. However this means that non-union members benefit from the bargaining done by the union without contributing to the cost. The Alliance believes that where a majority of people in the workplace (union and non-union) vote for it, the collective agreement should cover all workers and non-union members should be required to assist with the costs of negotiating the agreement.
Right to strike: The Alliance believes that workers should have the right to strike over social and political issues as part of their wider democratic rights. The Alliance will ratify the core ILO conventions 87 and 98.

Fairer Pay
Further minimum wage increases: The Alliance promised to increase the minimum wage and it has. 18 and 19 year olds no longer have to wait for their 20th birthday before being entitled to the adult wage. 16 and 17 year olds must now be paid at least $6.40 an hour – a big leap from the $4.20 they got three years ago. We have legislation in Parliament that would also require trainees and apprentices to be paid at least the youth rate.

The adult minimum wage is now 42% of the average wage. The Alliance will increase it over time with the aim of reaching two-thirds of the average wage. This is the same target as that set by the European Union Social Charter. We will phase out the youth minimum wage for 16 and 17 year olds so that young people qualify for the full wage. Minimum wage protection for young people under the age of 16 is also a priority. A suitable rate will be announced in the 2002 minimum wage review after considering information currently being prepared by the Ministry of Youth Affairs and the Department of Labour.
Inflation adjusted wage increases: The current wage disputes in the health and education sectors highlight the fact that public servants have received wage increases lower than the rate of inflation for a number of years.

The Alliance believes that it is ridiculous that teachers, nurses and other public servants should have to strike simply to try and keep their wages up to the level of inflation, while Members of Parliament and others covered by the Higher Salaries Commission receive automatic wage adjustments.

The Alliance will legislate for automatic cost of living increases in the state sector. Similar issues also apply to workers earning above the minimum wage but without the bargaining power to keep their wages at the level of inflation.

The Alliance believes that a system of general wage orders should be re-introduced to compensate all workers for increases in the cost of living. Collective bargaining would then be able to concentrate on real wage increases and improving working conditions. The Alliance will work with the CTU and employer groups to introduce this policy.
Protection for Casual Workers
The Alliance is concerned that casual workers often miss out on basic employment rights and can be dismissed from their jobs more easily than other workers. We will consider whether a definition of casual work needs to be included in the Employment Relations Act and whether any additional protections are needed. For example we will consider whether additional grounds for a personal grievance should be failure to offer available permanent work to a casual worker without justification and unfair treatment of a casual worker in the allocation of work.

We will also ensure that other employment legislation such as Paid Parental Leave and ACC is amended to ensure that casual workers are not discriminated against under these Acts.

We will enable ‘portability of entitlements’ so that workers can carry over their statutory minimum entitlements from job to job so they are not disadvantaged by having a string of short term jobs in terms of access to sick leave, paid parental leave, etc.

Part-time workers
The Alliance will amend legislation so that it will be illegal to discriminate against part-time employees in terms and conditions of employment, including job security.

Redundancy

There will be a standard redundancy clause in the minimum code to ensure that all workers have a right to a minimum redundancy payment. There will be an 'early warning' consultation requirement through unions. Legislation will be introduced to protect outstanding redundancy payments in the event of bankruptcy or insolvency.
The State Sector
It has long been recognised that the establishment of fair wages and conditions in the state sector poses specific problems because the employer is also the purchaser of services and can set the price mechanism. These problems need to be specifically addressed. In particular there needs to be some mechanism for the re-assertion of the principle of fair comparability for state servants. The Alliance supports the recreation of an independent pay research unit and the introduction of annual inflation adjusted wage increases for state sector workers.

Pay equity and equal employment opportunities

Equal employment opportunities and equal pay for work of equal value are essential components of the Alliance’s approach to ensuring equality for disadvantaged groups in paid work. We will actively progress efforts to develop a fair and effective mechanism for Pay equity determinations and ensure a more vigorous enforcement of the equal employment opportunity requirements of the State Sector Act 1988 and Local Government Act. We will require the provision of equal employment opportunities in the private sector and state owned enterprises and ensure the public sector provides a model of best practice both in EEO and the provision of pay equity. A “Responsible Contractor Policy” will be developed so that all public funding goes to service contractors that meet minimum labour and EEO (including pay equity) standards. This will prevent service organisations from competing on the basis of the cost of labour.

The Alliance will review the progress of the Equal Employment Opportunities and Pay Equity provisions of the 2001 Human Rights Amendment Act in improving the pay and employment opportunities of women. In particular, the functions of the Equal Employment Opportunities Commissioner will be assessed in terms of effectiveness in:
 developing, promoting and monitoring the provision of equal employment opportunities in New Zealand workplaces.
 the extent to which leadership and promotion of best practice in pay equity is advanced.

Hours of work

While many workers are unemployed or underemployed in casual or part-time employment, other workers are being forced to work long hours, well in excess of 40 hours per week, with often little or no compensation for the extra hours worked. Both ends of this continuum have a negative effect on workers and their families.

The absence of penal rates in many individual and some collective agreements has led to many workers having to work long and antisocial hours to support themselves and their families. With the minimum wage set at a more realistic level the lowest paid workers will have less need to work long hours to earn a reasonable income. Those who do will be compensated. A premium rate will be added to the minimum wage where a worker is required to work in excess of forty hours or five days in any week. This would be at the rate of no less than 150% (time and a half) of the minimum wage. An absolute maximum of allowable hours of work per week will be set for reasons of health and safety, and quality of life.

The eight-hour day and forty-hour week was introduced in New Zealand before many other countries. It is still perceived as a reasonable limit to ordinary pay working hours. But it no longer exists in law. This situation can be changed. In many countries shorter working weeks are being progressively introduced, the most recent example being France.

A Working Hours Commission: The reduction in working hours is an important but a complex issue. The Alliance will establish a Commission on Working Hours. As well as union and business representation, the commission will include expert and lay members who can take a broad view of working hours issues. The Commission will be resourced to undertake research and public consultation.

Its brief will be to recommend to Government a suitable length for the standard working week of not more than 40 hours, whether there should be any exception above or below this standard, and how the standard should be implemented and enforced.

It is envisaged that there will be an ongoing role for the Commission in the implementation, evaluation and modification of the standard working week.

Shop Trading Hours: New Zealand shops are open for more days in the year than shops in almost any other country. There are only three and half days a year when most shops can’t open – ANZAC Day morning, Good Friday, Easter Sunday and Christmas Day. The Alliance opposes any significant change to these restrictions. Any further exceptions should only be considered after discussions between the National Distribution Union, the Retail Merchants Association and interested community organisations. Where there are exceptions workers should have an absolute right to refuse work on the protected days.
Holidays and other Leave
A new Holidays Act:
The current Holidays Act is a mess and the Alliance has worked hard to get a Labour Alliance Government Holidays Bill before Parliament. The Alliance has succeeded in getting a lot of improvements in the Bill. Some of the real improvements are allowing sick and domestic leave to be accumulated to 15 days; providing reasonable bereavement leave in addition to sick/domestic leave; allowing weekend workers to take the Christmas and New Years Holidays at the weekend rather than on the Monday; and providing a day in lieu and time and half for those who work on public holidays.

In addition to what is already in the Holidays Bill, the Alliance believes workers have earned another week off and will legislate for 4 weeks annual leave. We also believe sick leave and domestic leave should be increased to 10 days from the current 5 and the 6-month qualifying period should be removed. In a civilised society additional reasonable bereavement and tangihanga leave should be provided by every employer.

Extending Paid Parental Leave: more weeks, more families, more money:
One of the Alliance’s most important achievements in the first term of the Labour/Alliance Government has been the introduction of 12 weeks paid parental leave. The Alliance championed this policy from the time that Laila Harré introduced her first bill to Parliament in 1998.

The first stage of paid parental leave applies to mothers who have been in the same job for at least an average of 10 hours a week for a year before the baby’s birth and who are taking up to a year’s leave from work. Mothers can share the paid leave with their partners. The scheme pays all the mother’s wages up to a maximum of $325 gross a week. Around 20000 families are expected to apply for paid parental leave in the first year.

The Government will review the scheme after one year and the Alliance already has some plans for extending it:
14 weeks
Since the 1999 election the ILO has increased the minimum leave to 14 weeks under the maternity convention. In government, the Alliance will extend leave to the new international minimum of 14 weeks.
Reducing the requirements to earn leave
A number of women miss out on paid leave because they have not been in the same job for a year at the time of the baby’s birth, or work a small number of hours in a number of jobs. The Alliance will change the rules to ensure that more women can qualify for leave. We will reduce the tenure requirements for leave in consultation with unions, employers and family welfare organisations and expect it to reduce to 6 months initially. We will also reduce the requirement for workers to be employed from an average of 10 hours a week, to 3 hours a week.
Increasing the payment
The current maximum payment of $325 a week still fails to fairly compensate women for the work they do for all of us as parents. It also fails to recognise that paid parental leave is an employment right and should be paid on a par with other forms of paid leave from work.

The Alliance would add a top-up payment of 80% of earnings over $325 up to a maximum of the average male wage ($807/week at Feb 2002).
Self-employed women
The Alliance will extend eligibility for paid parental leave to include the self-employed. This will provide coverage for about 2000 more women. They will need to sign a declaration stating they will not participate in paid work during the period of parental leave.

We will also consult with self-employed women about whether this is the best way to support them in their parenting. This may lead to future amendments to the scheme in order to address their priorities.

Two week entitlement for fathers/partners
While the primary recipient of paid leave can transfer the current leave provisions to partners, the Alliance believes fathers/partners should have an independent entitlement to access paid leave so as to fully participate in the first weeks of their child’s life.

The Alliance will introduce two weeks paid leave, available only to fathers/partners on the birth or adoption of a child (expected to cover about 32000 fathers/partners, including those who are self-employed).

Employer contribution
The combined cost of the current scheme and the Alliance policy is about $85million. Current annual fiscal expenditure is $40.8million. A levy on payroll will provide a centralised fund for the additional $44.2million per year.

The Alliance will introduce an employer payroll levy of about 10c per $100 of payroll per week, or about 70c/week for an average wage worker, and 32c/week for a worker on the minimum wage, to pay for the enhanced paid parental leave scheme.

Health and safety

More people die from workplace accidents in a year than are killed by war. In New Zealand 71people died in workplace accidents from January to June 2002. This has a huge effect on families, communities and our country as a whole.

The 1999-2002 Labour Alliance Government inherited the legacy of ineffective health and safety legislation and a privatised ACC system. This legacy brought with it an appalling record of workplace accidents and deaths. The Government has taken major steps to address this situation. One of its first steps was to re-nationalise the ACC system.

The Alliance will support the passage of the 2002 Occupational Health and Safety legislation.

We will strengthen the ability and resources of Work Health and Safety (WHS) (formerly OSH) to provide safety campaigns and additional monitoring and support in occupational areas with high levels of workplace accident and death.

We will expect WHS to work closely with the Industry Training section of the TEC to ensure that industry-designed and based safety requirements are part of all national qualifications and training in workplaces.

We will ensure that all employees receive workplace health and safety inductions when they start a new job and that all existing employees receive annual refresher training.

WHS/OSH will be charged with developing ‘safe employer’ accreditation in conjunction with the NZQA and relevant industry training organisations and associations and workplaces will be required to meet industry-specified safety standards.

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