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Shock for employers at union demands

Media release

1 May 2006

Shock for employers at union demands

Businesses are in for a grave shock if wage demands announced by the Engineering and Printing Union this afternoon are successful.

The union met with its members and decided it would demand from the 200 employers covered by the collective employment agreement, a 7% increase for 12 months. This follows a 5% rise last year, which ended up affecting businesses all round the country. Inflation is currently running at 3.4%.

The demand is so significant because the National Metals and Manufacturing Industries Collective Agreement sets the benchmark for industry standards for all other union bargaining. It is the largest private-sector industrial agreement in New Zealand, covering more than 2000 workers at more than 200 companies. The agreement is the most influential document in the manufacturing sector.

Auckland employment Relations expert, Max Whitehead, managing director of the Whitehead Group, says if the Metals employers cave in again to these demands it will impact on all employers.

Flow-on effects of that agreement elsewhere within the private sector are assured.

“After the engineering employers caved in last year, every other employer who engaged in union negotiations was meet with demands and expectations of 5% wage increases.

“The Employment and Manufacturers Association Northern did a terrible job of negotiating this agreement on behalf of the employers in 2005 and it is believed to have walked away from the negotiating table.”

He says if EMA negotiators deliver another dismal result like last year, every business in the country will be expected to give the same increases to its workforce, with a resultant hike in wage bills.

“This increase and the current fuel price increases will have an adverse effect all New Zealanders because companies will have to increase the prices in order to be able to pay their workers.”

He adds that the previous employer negotiating team has proven to be ineffective.

Mr Whitehead says, “For the sake of the cost of living for all New Zealanders, the demands of the union for the metals collective needs to be headed with the determination and strength of a united and strongly lead employer negotiation team.”

He advocates disbanding the multi-employer collective agreement or negotiating so it reflects CPI (3.4%).


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