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Ending fear and promoting fairness in workplace

25 July 2000 Speech Notes

Ending fear and promoting fairness in the workplace


Venue: Rydges Hotel, Rotorua


My colleague Michael Cullen has recently taken on the task of promoting new ways of solving our superannuation problems. The difficulty we have with superannuation of course is that there is no cross-party agreement on the essentials.

To the observer relying on media reports it must appear that workplace legislation is being treated by parties in a similar way.

We have an election, change the government, and completely change our industrial relations.

That's not a situation which would be good for businesses and enterprises able to look ahead more than 2 years.

I want to suggest to you that there is more common ground than you may think.

Before 1984 New Zealand Industrial Relations sat solidly on the three-legged stool of compulsory arbitration, compulsory unionism and National Awards.

Under that system it was possible for a worker to be a member of a union without wanting to be, and for both unions and employers to become parties to contracts without knowing about it.

And an unwilling employer, or union, could be taken by the so-called other side to arbitration.

The decision at arbitration would be taken by looking not so much at the specifics of the particular industry but by looking at other industries under a system of strict relativity.

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The Labour Relations Act and related moves took away one leg of the stool – compulsory arbitration.

But in effect the rest remained, and workplace relations remained highly regulated by the Court, and subject to its direction.

The Employment Contracts Act removed the other two legs of the stool. It went further.

It established workplace relations as a contractual relationship akin to the buying and selling of commodities.

Contracts were able to be enforced, but it was a buyers market.

Sellers had little option but to lower the price, and lower the price, and lower the price. Unions were not even mentioned in the Bill. They were intended to disappear.

To a significant extent, they did disappear, despite the heroic efforts of their leaders, delegates and members.

Criticism of the Employment Relations Bill based on the theory that it will take us back to the so-called "bad-old-days" usually recalls which relate to one or the other legs of compulsory unionism, national awards, and compulsory arbitration.

It is very important to understand how misguided that criticism is.

The introduction of the Employment Relations Bill by a Labour Alliance government means, in my view, that these props of the old system are gone for good.

They will not return.

Future historians will see the Employment Relations Bill as the final dividing point between the old world and the new.

The Labour Relations Act of the fourth Labour government and the Employment Contracts Act of National will be seen as left and right vacillations about what I believe will become the new consensus of business and management, unions and employees.

I believe the Employment Relations Bill, at its heart, contains the elements which will take employment relations in New Zealand forward for decades.

All political parties, with the inevitable exception of ACT, will find themselves committed in the future to these elements.

There will be no support from Employers, managers, employees or unions for change.

In the arguments over specific clauses, and how many angels are required to form a pin-dancing union, some of the basic intent of the Bill has been obscured.

The Bill itself says:

[it] "is based on the understanding that employment is a human relationship involving issues of mutual trust, confidence and fair dealing, and is not simply a contractual, economic exchange. This basis requires specific recognition in any regulation of the relationship – something not satisfactorily achieved by general contract law."

New Zealanders do not want their workplaces to be marketplaces.

They do not want their labour to bought and sold as if it were a commodity.

New Zealanders believe in the dignity of labour, and the right of employers to expect a fair day's work for a fair day's pay.

They know that employment relationships are not like trade relationships.

They expect there to be institutions capable of helping solve employment problems.

This is the public consensus. It is what New Zealanders voted for at the last election. It is what the Employment Relations Bill will deliver.

Look again at what the Bill itself says:

"The overarching objective of the Employment Relations Bill is … to build productive employment relationships through the promotion of mutual trust and confidence in all aspects of the employment environment.

"In order to achieve this primary purpose, the Bill specifically

 recognises that employment relationships must be built on good faith behaviour; and
 acknowledges and addresses the inherent inequality of bargaining power in employment relationships; and
 promotes collective bargaining; and
 protects the integrity of individual choice; and
 promotes mediation as the primary problem-resolving mechanism; and
 reduces the need for judicial intervention".

The Employment Relations Act is the way of the future.

It will work in practice for business. It will work in practice for employees.

Managers and unions will find that the great fear which has afflicted workplaces since 1991 will be removed.

This fear has varied from workplace to workplace.

In some it has existed as a vague apprehension, of anxiety for the future which was not there before.

In others it has been a real, and focussed fear of the loss of conditions, and income, and rights, and dignity, with no ability for defence or even to be listened to.

And in some this fear has taken the form of actual terror, of the harasser, of the bully, or the sweatshop owner.

They have hidden behind the weakness of unions, the inadequacy of institutions, the slowness of justice. They have hidden behind the inhuman atmosphere engendered by the treatment of labour as just one more thing to be bought and sold.

That fear will be eliminated. And there will be no support for its return.

Employers and managers, too, have suffered from fear associated with the contracting approach to workplaces.

The "We have a problem, let's go to court" approach is not an approach which is in tune with New Zealand culture.

It makes no sense in a New Zealand workplace.

As Human Resources professionals you will know the strain and distress which managers feel when formal action is threatened or taken against them.

You will know of the hours of wasted time, and the thousands of wasted dollars.

And you will know of the thousands of relationships – potentially good, productive relationships – which have been destroyed by a system based on dehumanising this human relationship.

Good employers need not fear the force of judicial intervention over minor matters.

Good employees need not fear for the consequences of expressing their opinions and associating freely with other New Zealanders.

Good faith and the honest and open communication that is its consequence will improve productivity and confidence throughout New Zealand business.

When I said last week that the Employment Relations Bill would help business the Weekend Herald searched its database of adverbs and said I did so - "cockily".

Without wishing to crow, let me say it again: The Employment Relations Bill will help business.

Here are some of the improvements over the present law:

 The new Mediation Service, which will provide rapid, professional support to resolve grievances by agreement before they snowball into costly litigation. It will be fair, fast and free.

 The requirement for unions and management to negotiate in good faith: this promotes responsible unionism and protects employers from unfair negotiating tactics, as well as requiring all employers to respond in good faith

 The even-handed and clear bargaining requirements which will help protect responsible businesses from being undercut by unscrupulous business competitors willing to underpay workers

 Union coverage is contestable – meaning employees can choose the union they want, or they can choose not to belong to a union

 Unions will be required to be democratic & accountable to their members.

In addition, the government has responded positively to the thoughtful and constructive submissions by business owners, managers, employees and unions seeking improvements in the Bill.

The select committee has yet to report, but the government has indicated that it will support changes to the Bill.

These include ensuring that:

 genuine contractors will not become employees. And if another law applies – this law will not override it.

 fixed-term contracts for fixed-term work can continue

 responsible communication from employers to their employees during bargaining will be protected; and day to day communication is enhanced by the good faith provisions. The only communications which are prevented are those which would break the underlying good faith provisions of the law.

 employers will no longer face confusion about their responsibilities to staff in the event of a business sale or merger

 the liability of directors under the Minimum Wage Act and the Holidays Act is limited to those very rare situations in which they have directed or authorised underpayments and the company is insolvent. Proceedings can be actioned only by a Labour Inspector – not by a union or employee.

 confidential information is safe from competitors. In negotiations employers and unions can ask the other party for facts to back up claims.

But if it's not relevant it doesn't have to be revealed. And, if the information is of a commercially sensitive nature, it may be revealed only to an independent, confidential third party – not the union.

Employers, like unions, must bargain in good faith, but in the end the agreement of employers is needed for there to be any change in working conditions.

And employees must win their case and cannot – as in the past – rely on a court to impose decisions on unwilling employers.

Good faith and the honest and open communication that is its consequence will improve productivity and confidence throughout New Zealand business.

Employers face a variety of pressures which do not always encourage them to develop a good working relationship with their employees.

The Bill's provisions are designed to redress inequality, provide a real basis for conducting employment relationships in good faith, and provide problem-solving provisions which are aimed at supporting and maintaining on-going good employment relationships.

A partnership in the employment relationship will enable employers and employees to respect and work co-operatively with each other, to create a productive workplace beneficial to everyone.

I believe the Bill will establish a positive framework to support and maintain such partnerships.

The Employment Relations Act is only one part of the approach this government is taking to ensure that New Zealand has the Labour Market it needs.

In my travels around the country one of the most common issues raised is not the impact of the ERB but how we as a country can ensure that we improve our capacity and retain skilled people and ensure that there are opportunities for them to use their skills.

It is all too often that I hear about skilled people leaving the country or of skilled immigrants not be able to find jobs that make the best use of their talents and experience.

You know that our Occupational Health and Safety Laws are being reviewed in an effort to lessen the dreadful toll of death, injury and misery inflicted on people in workplaces in New Zealand every year.

Our ACC reforms are well advanced.

Our new modern apprenticeship pilot scheme has begun. But still more is needed.

The improvement in workplace relationships and safety are one part of the equation. We also need to improve the way we attract and retain immigrants.

Our education policies from pre-school to tertiary need to be specifically linked to the type of workforce we need. Industry training is the key to success for all business and the government must be prepared to play its part. Our Labour policies need to take into account the changes to our population.

We know, for example, and have known for a long time that as the baby boomers begin to retire there will be a much smaller proportion of working age people to support them. And it all needs to link to support our overall economic development programme.

And for this government, all this needs to be seen in the light of our commitment to closing the gaps between Maori success in the economy and that of the rest of society.

The number of Maori entering the workforce as a proportion of the total population is increasing dramatically. Many of the "gaps" are gaps in employment, wages, prospects and type of industry. The government is committed to closing the gaps and, eventually, eliminating them.

The Employment Relations Bill will soon transform New Zealand workplaces.

The workplaces will be free from fear. And for the first time in a decade - there will be fairness.


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