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Address to Industrial Relations Conference - Harre

Hon Laila Harré
Associate Minister of Labour

Address to the 14th Annual Industrial Relations Conference
7 March 2000, The Carlton Hotel, Auckland.

Good morning, and thank you for the opportunity to speak to you at such an important time for the future of industrial relations in New Zealand.

When I addressed this conference last year New Zealand was in its ninth year of National Party government and I was an Alliance MP arguing the need for major legislative change to improve workplace relations.

In November last year New Zealanders supported that call for change by electing a Labour-Alliance government, a government which will next week introduce a bill to parliament which first and foremost repeals the Employment Contracts Act.

The Employment Relations Bill delivers on the Alliance and Labour’s pre-election promise to redress the fundamental inequality in employer/employee relationships created by the ECA. It does this by increasing opportunities for the collective and good faith bargaining of employment contracts.

The Employment relations Bill will not make anyone do anything. But when people make decisions about how they bargain – and in particular when workers choose whether to bargain collectively or individually – it will protect and promote that choice.

Much of the bad press for the Employment Contracts Act was generated by the use of tactical bargaining methods sanctioned by that Act which undermined the right of workers to choose whether they bargained alone or as a group – a union. The inherent inequality of bargaining power meant that some employers elected to use strategies that amounted to “making hay while the rain poured.” Cutting labour costs became a key focus for many facing real competitive pressures. And we know that once that process begins the imperative is for others to catch up – or more precisely – down.

In this way the ECA failed to live up to even its own propaganda. The language of bargaining choice was disproved by the evidence. The Act failed to deliver the productivity growth promised.

Such promises would have been very hard to keep. There is much evidence suggesting that productivity has little connection with bargaining. Sweatshops can be highly productive, as can full-blown co-operatives.

Perhaps part of the failure of the ECA was that it made promises which wage bargaining legislation can not deliver. All in fact that we can hope to do with our industrial laws is to enable people to bargain in the fairest possible conditions. Which is why the promotion of collective bargaining, the protection for those who bargain individually, the requirements of good faith and honest dealing, and the effect settlement of disputes will underpin the new laws.

Good faith bargaining – Labour and the Alliance

Much has been made of the small number of differing policy positions of Labour and the Alliance when it came to discussing details of the Employment Relations Bill.

One of the key issues has been the question of who is covered by a collective agreement and how far the protection of that collective agreement extends.

In our work we looked carefully and practically at the issues raised by the question of coverage, rather than limiting ourselves to the mechanics.

With this focus we aimed to put in place a regime that protects new workers by removing employers’ ability to undermine opportunities for collective bargaining to take place. We discussed the objectives of collective bargaining and we identified the problems that we had sought to solve in our policies.

One problem we identified was the particular vulnerability faced by a new worker. It is the plight of the new worker – especially the young new worker – that has come to typify the negative perceptions of the ECA. The “take it or leave it” contract had to be a target of any legislation that sought to restore some balance in the bargaining relationship.

Another problem we identified was that the ability to bargain with individual workers outside the collective bargaining process could lead, and indeed has often led, to an undermining of collective bargaining itself.

It is interesting that two of the topical case studies you are featuring at this conference – those of the Fire Service and Ansett – were also of great interest to us.

What characterised both disputes was the use of direct negotiation, or if not negotiation, communication of offers, as a way around the collective bargaining process.

If we were to promote collective bargaining, as opposed to merely permitting it where the employer acquiesced, clearly we needed to ensure our legislation would not sanction such conduct. It won’t. These experiences have informed the development of our principles for good faith employment relationships.

And finally there has been the use of non-standard employment, whether through dependant contracting, contracting out, or fixed term contracts, which have become a tool for getting around minimum code provisions or employment arrangements.

So you will not find elaborate coverage arrangements in this law. Collective agreements will be negotiated by, and will cover, union members. What you will see is the promotion of collective bargaining through a range of measures including new worker provisions, good faith requirements and procedures around the use of non-standard employment.

Equal bargaining is collective bargaining

The promotion of collective bargaining underpins the new legislation because it is the means by which sustainable workplace relationships and agreements can be built.

Of course, collective bargaining was permitted under the ECA. But permission is not enough. A choice to negotiate collectively is only a choice that workers can make for themselves. Thus any law which left the question of how workers would bargain to negotiation with the employer could not have in practice been neutral about that choice. All too often, the conflict over whether bargaining would be done collectively or individually, has driven much of the industrial action experienced over the last 9 years.

New workers are vulnerable workers

While promoting collective bargaining, the new law will do more to protect individual workers than did the ECA.

Firstly, it will protect new workers employed in work covered by a Collective Agreement. Such workers will be able to make a genuine choice once they are established in a workplace, as to whether they want to join the collective or to bargain on their own.

The provision of information will be central to the protection of individual workers – both at the time of employment and throughout the relationship.

The Code of Good Faith - legislating good behaviour

The good faith principles set out in the Employment Relations Bill will make collective bargaining work.

Employers will be bound by a Code of Good Faith when they sit down to negotiate contracts. No longer will they be able to make take it or leave it offers to new employees, and there will be greater requirements for information and fairness in negotiating individual agreements.

A common complaint among young workers is that they can’t even take their contract home to show mum and dad before signing on the dotted line, and that’s just wrong.

The Code of Good Faith won’t just apply at the point of bargaining. It will set out a minimum standard of conduct to be adhered to during an employment relationship. The aim here is to ensure that employers respect labour relations for what they are – human relationships that involve people not chattels.

Short, sharp dispute resolution

Like all human relationships those in the workplace will from time to time be subject to disputes.

There are two main criticisms of the dispute resolution process under the ECA – the length of time it takes for a case to be heard and the high cost of access to legal representation.

These criticisms are common to both employers and employees. They come from workers seeking reinstatement and employers who say they have felt pressured to buy their way out of a grievance even when they considered themselves to be in the right.

The solution is to make dispute resolution quick and accessible with a view towards reinstatement. If it takes two years for a case to come before the Employment Court what chance is there of restoring positive workplace relations?

So what this means is that in the event of a meltdown at work and before an actual dismissal the Employment Relations Bill will create access to immediate dispute resolution through a mediation service.

But many workers aren’t even aware of their rights in the event of a workplace dispute, and in some cases the brief window of opportunity has passed before they realise they are in a position to make a formal complaint. Provisions in the bill will address this concern.

An objective of the legislation is to emphasise mediation before disputes are aired in the decision-making institutions.

Mediation will be the first call for settling all matters, with a view towards reconciling issues at a primary level and restoring the workplace relationship.

The mediation service will be well resourced and accessible to ensure parties involved in disputes can resolve their differences as quickly as possible and get back to work.

Where mediation fails, an employment relations authority will adjudicate.

We're not imposing compulsory arbitration. The idea is to provide as many incentives as possible for parties to continue to negotiate.

The right to take disputes to the Employment Court will remain, but in most cases it will only be an option where mediation failed. Certain issues will be able to go straight to the Employment Court for consideration, such as lockouts and strikes, or other issues concerned with collective relationships.

The aim of these institutions is to keep costs down and make it unnecessary to involve a lawyer every time an employer or employee has a problem.

The intention of the legislation is to provide processes that enable problems and disputes to be dealt with a close as possible to the point of breakdown in the relationship.

We want to move away from the judicial environment that often results in having to accept the breakdown and compensate parties for their losses.

Workplace rights – educating the people

In New Zealand there is a generation of workers with no experience or memory of collective bargaining or union membership. There’s a real need to educate people about the options available to them, and this bill actively promotes employment relations education by giving employers and employees the right to paid education leave.

The Employment Relations Bill – compulsory unionism in drag?

Detractors of the Employment Relations Bill have labelled it a thinly veiled attempt to revive compulsory unionism.

Nothing could be further from the truth, and such a statement is akin to saying that the ECA will deliver productivity gains for New Zealand. All that it’s done is make people work longer for less, and that’s not good for the economy.

The Employment Relations Bill means employees feel encouraged if they choose to join a union and negotiate collectively. That choice will be respected and every effort is made in the new law to avoid it being undermined.

Conclusion – it’s all about a fair deal at work.

The ECA fundamentally changed the way labour relations were seen. They became erroneously viewed as a strict contractual agreement under which negotiating conditions is like negotiating a commercial transaction.

The Employment Relations Bill doesn’t make anybody do anything. It recognises the fact that labour relations involve people, and that collective bargaining is the form of bargaining most likely to reduce the inequality between employers and workers in the bargaining environment.

The next step in improving workplace relations in New Zealand will be modernising the minimum code, part of which will be legislating for Paid Parental Leave Bill, modernising the Holidays Act, and bringing more certainty to the minimum wage setting process.

I can assure you that good progress is being made on the drafting of the Employment Relations Bill, and it is due for introduction next week. Select committee consideration will take place during April and May, and I encourage all of you to have your say on the framework the Labour-Alliance government has designed to restore collectivism and good faith in New Zealand’s industrial relations framework.

Thank you.

Further comment contact Claire Hall, press sec, (04) 471-9902
or 025 270 9001

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