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Richard Prebble's Speech On ERB Changes

At Carlton Hotel Ballroom
Mayoral Drive, Auckland
7.30am, Wednesday, 19 July 2000



The Employment Relations Bill is an attack on business, on the sanctity of contract, on free enterprise.

Make no mistake about it. The Employment Relations Bill has nothing to do with promoting good industrial relations.

The law is part of an extreme left ideological belief in socialism, that individual rights and freedoms are secondary to the so-called right of the collective.

This Bill’s purpose is to promote trade unionism.

The leaders of our government sincerely believe that New Zealand will be a more just society if the significant social and economic decisions of our businesses are made by trade unions. They see unions as being democratic collective decision making. They do not accept that property owners have rights.

I am a member of the Select Committee that is this week in the final stages of deliberating on the Bill.

Parliamentary privilege prevents me from releasing the details of the deliberation until the House reports. Final decisions on the Bill will be made by the coalition caucuses next Tuesday. When the Bill is reported to Parliament, I will be keen to tell of the intrigue and deceit being practised.

The coalition’s tactics are deceitful. First, the government introduce an over-the-top new law. The Bill contains provisions that trade union officials have said go beyond even their wildest dreams. This Bill gives the trade union movement more power than any previous industrial legislation. The clause that makes it illegal for the owner of a business to make alternative arrangements in a strike, has made the strike an industrial lethal weapon. In the days of compulsory unionism, strikes were illegal!

There was a huge reaction to the Employment Bill. There are more submissions on this Bill than any in history. In 1990 there were just 445 submissions on the Employment Contracts Act, and some 18,000 on this Bill. Of the substantive submissions 75% were against.

Labour’s spin doctors are working overtime.

Helen Clark says “there will be substantive amendments”.

Margaret Wilson says “some clauses need redrafting”, and Michael Cullen says “the opposition to the Bill is the result of a letter from Richard Prebble”. Labour blames everything on a letter from me! Michael Cullen also says ACT is responsible for the collapse in business confidence!

Do not believe Labour. Michael Cullen is the same person who told business audiences prior to the election that “Labour planned only technical amendments to the Employment Contracts Act”.

I appeared on platforms with both Clark and Cullen where they totally denied that they were going to introduce a Bill along the lines of the Employment Relations Bill. It was “Tory lies”. The Tory lies have turned out to be all true.

The reaction to the Employment Relations Bill has stunned the government.

Helen Clark’s statement on Face the Nation is very revealing. She said she used polls, not to change policies, but to change her style and the words she uses.

The government has not changed its policy, which is to promote trade unionism. The changes to the Employment Relations Bill are of style, not substance.

The core purpose of this Bill is to deliver power, money and members to trade unions, and it does.

The unions get their power from the following key provisions:

 Unions receive a legislated monopoly. Only unions can negotiate a collective agreement.
 Unions get open access to your business to recruit, discuss union business, promote union education and to check up on you. Even if there is no member of the union employed, it is illegal to deny entry.
 Only union members can vary a collective agreement.
 Only union members can strike.
 Only union members can decide whether to have a multi-workplace agreement.
 New employees must be hired on the union collective – de facto compulsory unionism.
 And only union members can be on the collective – further de facto compulsory unionism.
 Multi workplace strikes are legalised. Pilots would have won the Ansett strike.
 Employees can not be instructed to do the work of striking workers – the wharfies would have won the 1951 waterfront strike if the Employment Relations Bill had been law.

This is the heart of the Bill – and I predict it will be unchanged in its effect.

There are clauses where Ministers have asked the law drafters to re-draft the clauses so they sound different, but in legal effect are the same - a level of political dishonesty I have never seen before.

Other things won’t change – employers have to pay, and pay and pay. The compliance costs of this bill are horrendous

Employers pay for trade union meetings, trade union education, for employees to bargain, for providing advice about the union, and instructing employees how to bring personal grievance cases against themselves.

And employers must collect the union fees.

Grievance cases can under the Bill be brought for anything in the Human Rights Act. Personal grievance cases will be easier to bring and even harder to defend. It is a licence to sue the boss.

So have we had any wins at all – some.

The trade union movement has told the government to give away their attempt to force independent contractors to be employees.

The left hate owner-drivers because the experience of owning your own business makes you a capitalist - and even an ACT voter!

It’s owner-drivers who tell union officials to get lost, ignore black bans and drive through picket lines.

No owner-driver has turned up to the Committee to support the Bill – hundreds of independent contractors from drivers to couriers, to IT workers, to rural post deliverers, to pre-school providers have come and given eloquent evidence of how being an owner of their own business has transformed their lives. They do not want to swap the freedom, the choice and the individual responsibility for the dependency of union membership.

Margaret Wilson’s fears are correct.

Independent contractors quickly become staunch supporters of the free enterprise system. There is nothing like mortgaging your house to own your own business to becoming very intolerant of those who want to free load.

The coalition has realised that they would have major civil disobedience if they pressed on with that clause, so I predict it will be massively changed. It’s clear from Margaret Wilson’s statements that the government is too ideological to abandon the clause completely. Any attempt to legislate the definition of independent contractors will produce uncertainty for the country’s over 100,000 contractors. Today the law is certain, as set out in Court of Appeal decisions. Once Parliament redrafts the law, uncertainty is created. As the new law will be interpreted by the erratic Employment Court, any change could have bizarre outcomes.

Many businesses told the Committee that they would not let a trade union official go through their financial books.

That will, I predict, also be significantly amended.

Since when did a trade union care whether an employee can afford their demands?

The loopy clause holding directors personally liable for wages that would have affected every community trustee will be drafted out of meaningful existence.

In the whole massive hearing processes only one example ever of a director using the Companies Act provisions to avoid paying the minimum wage has been cited - some Thai businesswoman running a sweat shop. She was closed down by the authorities and as she went bankrupt it’s not clear that this clause would have helped the Thai sweat shop workers.

The real damage that woman has done is to give this coalition an excuse to attack one of the basic building blocks of modern capitalisation – the limited liability company. Bad cases, as the saying goes, makes bad law.

The coalition’s strategy is to make changes in clauses that are not essential to the trade union movement. The Ministers want to create the spin with the media that the Labour/Alliance government has listened to business.

By keeping the provisions of the Bill secret, while Ministers claim there are changes, they hope to soften opposition.

The tactic is then to table the Bill at the beginning of August and then rush it through Parliament under urgency before business can analyse what the changes mean. The Bill is a massive 189 pages long and most business people just have not got time to consider it.

Helen Clark has been critical of Margaret Wilson’s handling of the public relations for the Bill. Labour is planning to use all its formidable public relations spin to promote the Bill, claiming they have made most of the changes business asked for. It’s a lie, but they believe that if you repeat lies often enough they become true!

The government members on the Select Committee know nothing of business. None of them has ever employed another New Zealander with their own money. None has ever earned their own income. Every one is a former trade union official.

So they know a lot about industrial law and what will give power to their trade union comrades.

It’s clauses like s257 that enables unions to terminate existing lawful collective agreements on 1 July next year, that deliver great power to unions.

Terminating all existing agreements on the same date will allow the wharfies to go for a single agreement covering all stevedores and to hold the country to ransom; the freezing workers to seek a North Island-wide agreement; the pilots, a single industry agreement. We will see strikes to achieve such agreements – strikes that will cripple the country.

So what is my message?

Do not get mad, get organised.

The Warehouse is absolutely right by not wanting to have the distribution union anywhere near their business.

After October you will be legally barred from helping your own in-house union, but before that date you can.

It is still possible to defeat this Bill.

The Labour/Alliance government is a minority.

To pass this Bill the government needs the Greens.

The Greens are at just 3%.

Their supporters supported the party because of its Green policies. and are beginning to recognise that the Green Party has been hijacked by militant reds, people like Keith Locke, (who welcomed Pol Pot’s victory in Cambodia) a former member of Socialist Action – the militant Communist Party, and Sue Bradford, who used to claim to be a Maoist Communist.

The Green’s survival will depend on winning Coromandel. The Coromandel is a farming and tourism electorate. National won over 50% of the list vote.

Jeanette Fitzsimmons is a lovely lady. You can not doubt the sincerity of a person’s commitment to the environment who recycles their own human waste, you just don’t want to accept their invitation to dinner.

The people of Coromandel knew they were electing an extreme environmentalist, but they did not knowingly electing a socialist.

I do not believe Jeanette is a socialist, but the Greens have adopted the ideology of the left and their caucus resolutions are binding, so it’s the Keith Lockes and Sue Bradfords who dictate policy.

Jeanette Fitzsimmons has no mandate from her electorate to vote for any trade union promoting Bill.

ACT is calling on Coromandel voters to send Jeannette Fitzsimmons a message – put your electorate first – vote against the Bill.

If enough messages, faxes, emails and letters are sent to the Green MPs, the Greens may buckle. They enjoy being MPs and are reluctant to commit political suicide. They need Jeanette to win to keep their MP’s jobs and she needs to vote no to the Employment Relations Bill to have any chance of re-election.

I urge you to send a message to your local MP, to list MPs, because they are your Members of Parliament, and in particular to the Green MPs.

Because make no mistake. The Employment Relations Bill will put New Zealand on the path to third world status.

The Bill is already discouraging the investment we need for growth and jobs.

The Bill makes it risky to offer jobs, especially to those who really need it – the young and the long term unemployed. To anyone with an unsettled employment history.

The Bill will lead to strikes, to demarcation disputes, and to the return of the picket line. The irony is that the employees to make greatest use of the provisions of the Bill will be the State’s own unions – but you and I as taxpayers will bear the cost.

We will see more strikes. We will see less investment.

The real gap, between New Zealand and Australia, will grow.

I want to leave you with one encouraging fact. We only have to put up with the new law for two years.

This is a one term government. The polling gap between ACT/National and Labour and the Alliance keeps closing. Last Monday it was just 2%.

As we see strikes in transport, in social services, in industry, we will see this left wing coalition’s popularity dissolve.

So go from here and organise, organise, organise!


contact: Hon Richard Prebble ph 04 470-6638 or 025-753-128
Press Secretary Mike Lorigan ph 04-470-6648 or 025-203-3231

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