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The Employment Relations Bill

A Bill before Parliament that can cause a record drop in business confidence is a seriously flawed piece of legislation. Government ministers are now trying to assure business that the Employment Relations Bill does not do what they think it does and that it will be amended.

It’s not working – the business sector remains very afraid.

When Labour campaigned to repeal the Employment Contracts Act, business was unconcerned. Helen Clark said that the new law “will not affect good employers”. Michael Cullen said “we are just moving the law more to the centre”.

The Employment Relations Bill was therefore a great shock. It’s over 187 pages of new law, very radical law. The new law’s purpose is to promote trade unionism, and that it will do. The Bill gives extensive power to trade unions.

Under the Bill only trade unions can negotiate a collective agreement; all new employees must start on the collective; firms must collect union fees. In other words, it is de facto compulsory unionism.

What business fears is a provision that legalises strike action to achieve a multi-employer agreement. Under this provision, employees of Air New Zealand could go on strike to get the same agreement as Ansett. A further provision makes it illegal to replace striking workers.

A handful of employees could stop a company. A strike by MAF veterinarians who are members of the PSA could stop the whole export meat industry.

As a member of the Select Committee hearing evidence, we have heard of employers who have already been threatened by the union organisers. We have heard how waterside workers want a multi-employer agreement. We have listened to disgruntled telecommunications workers who have been open in saying how they will use the Bill to get back industrial conditions they believe are owed them.



I do not believe that the government intends compromising on any of these issues. 48% of Labour and Alliance MPs came out of the trade union movement. All of the government MPs on the Select Committee have a union background.

There are many side issues where cosmetic changes can be made.

Unions are not really interested in whether companies are profitable so the requirement to hand over confidential financial information will be dropped. Unions don’t care about directors so the personal liability of directors will be modified. Companies have said they simply won’t sign collective agreements that do not allow staff to be laid off when there is no work, so that clause will change.

The Greens, who hold the balance of power, and whose vote is needed to pass the law, have said they won’t support the clause making independent contractors employees, so that clause will either go or be drastically amended.

The expansion of the grounds for bringing personal grievance cases will remain, and despite savage criticism by lawyers, so will the new industrial relations “Star Chamber”, the Employment Relations Authority. People without legal training will have the power of a High Court judge to tell businesspeople how to run their companies.

The new industrial parking wardens, labour inspectors, with the power to issue instant fines, to enter businesses without a search warrant and inspect premises and books without notice, are coming.

So too is the right for any trade union official to enter any business they claim coverage of at any time.

The cost and the risk of business is about to increase and government wonders why so many business people have lost confidence in New Zealand as a place to invest and create jobs.


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