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National's Employment Law policy unveiled

The Minister of Labour, Margaret Wilson has released an analysis of the National Party's apparent policy for employment relations. The analysis is based on the many National amendments put forward during debate on The Employment Relations Bill.

National has promised to fight the next election on the basis of this issue but has refused to outline what its policy will be.

"If the National Party knows it wants to fight the 2002 election on employment relations it must know what its policy is. This policy must be driving the proposals being put forward to amend the Bill before the House," said Ms Wilson.

"All employees and employers should be aware of the bizarre and inconsistent vision for future workplace relations behind the deluge of amendments put forward.

"The weirdest policies relate to government intervention. National obviously has plans to return to the darkest days of Muldoonism, with Ministers of Labour poking their noses into every difficulty, and the coercive power of the state being used to determine the outcomes of disputes.

"National also plans to remove even the minimal protections for workers available under the Employment Contracts Act. National's newly-developed policy would allow workers to be forced to lose their status as employees and become dependant contractors with few or no rights. There would be a ban on raising virtually any grievance after 30 days. The Employment Contracts Act allows 90 days, as will the new law. No matter how much employees had suffered, or what had been unlawfully denied them, there would be caps of $25,000 on compensation for humiliation and $50,000 for the loss of any benefit. This would reduce the levels of all such redress.

"Compensation is not high at the moment. Last year compensation for humiliation, loss of dignity, and injury to the feelings of the employee was set at less than $10,000 in 90% of cases and at less than $6,000 in 75% of cases.

"Possibly the worst elements in National's policy are moves to make it easier to operate sweatshops in New Zealand. National wants to remove the directors' liability clause in the Employment Relations Bill. This clause is needed to make sure minimum wages have to be paid, and sweatshop operators can't simply close down and set up again, leaving workers without wages. It plans to eliminate reference to certain types of homeworker. This will allow exploitative piecework. Combined with the changes National wants for contracting, the policy is a sweatshop charter.

"During the debate in the House National members consistently criticised even the minimum actions on behalf of workers with justified grievances available under their own Employment Contracts Act.

"National intends to introduce a law which will combine the worst of the 1970s with the worst of the 1870s.

"The only thing more bizarre than the content of the policy is National's incredible belief that it will be possible to gain the support of New Zealanders on the basis of the policy," said Ms Wilson.


Attached: A summary of National's policy based on the party's Supplementary Order Papers on the Employment Relations Bill.

A summary of National's policy based on the party's Supplementary Order Papers on the Employment Relations Bill.

Role of Unions:

- Any union or official who threatens an employer who hires non-union staff is liable to a fine of up to $10,000 or deregistration. No corresponding penalty for employers who threaten unions or union members.

- Greater prescription with regard to establishing unions – including society rules to provide for election of officers, expulsion of members etc. All registrations of unions to be Gazetted, along with their rules. Unions required to submit annual returns which includes a schedule of all donations made to political parties. This is a very high level of state interference in private organisations.

- Lack of flexibility for a union to amend its rules – to do so would require the approval of the Registrar of Unions. Members are denied the right to judge for themselves whether rule changes are democratic or in their collective interests.

- A much greater role for the Registrar is envisaged – i.e. greater bureaucracy – includes approval of rule changes, compiling unions' annual returns, and publishing the Register of Unions.

- New Ministerial powers to direct the Registrar to cancel the registration of unions. No grounds for using this power specified. Such highly interventionary powers (widely used in the Muldoon era) have not been seen in law since the 1973 legislation was repealed.

- Minister or Minister's appointee also to be heard or be party to proceedings relating to Unions. These proceedings to go through the Court rather than the Authority. The government would be more involved in the minute detail of employment relations than it has ever been.

- No rights of access to workplaces for representatives of unions for recruitment purposes.

- Employers may make a union representative wait before entering a workplace until he or she has checked the authenticity of the union with the Registrar and whether the person is an actual representative of the union. This gives, in effect, a legal right to employers to obstruct or deliberately frustrate lawful union access.

- Union access can be denied if employer holds a certificate issued by an OSH inspector.

- No paid union meetings.

Certainty for employees:

- Certain types of homeworkers deleted from the definition of employee and not afforded the protection of that status (those whose technical relationship is one of vendor and purchaser – likely to apply to those doing piece-rate work). This represents a change from the Employment Contracts Act and lowers protection against sweatshops being established.

- Disregard for the bulk of case law regarding independent contractors, with the Courts under National's policy being given an express direction to give primary consideration of the 'label' of the relationship, rather than the reality of the relationship. This would allow employers to defeat the provisions of employment law by simply saying the relationship is that of an independent contractor. The ability of workers to seek clarification of their status would be severely reduced by only allowing them to seek a determination prior to a contract being signed.

Collective and individual bargaining and agreements:

National proposes a bargaining environment based on adversarial and highly legalisitic practices. This will not only remove the good faith processes of the new law, but go much further than the Employment Contracts Act in treating employment relationships as analogous to commodity exchanges.


- No requirement to provide information reasonably necessary to substantiate or support claims while bargaining.

- Demarcation disputes will return. Cl 49 "The coverage of a collective agreement to be included in a notice must be limited to the work done by employees who come within that membership rule of a union that is an intended party to the collective agreement."

- No requirement for employers to draw employees' attention to the initiation of bargaining. The deal could be virtually done by the time those most affected got to hear about it.

- A secret ballot for initiating multi-employer bargaining would have to be conducted in the presence of a mediator, who would then be required to report to the Tribunal on the conduct and outcome of the ballot. The further implication of the "presence" requirement is that state-supervised meetings would be required for the conduct of such a ballot, which could not be done by post. The Minister of Labour could be represented in the Tribunal when the "outcome and conduct of the ballot" was reported for such a purpose.

This policy proposes a very significant intervention by the state and the judiciary in the affairs of individual New Zealanders.

- No time limit on the currency of collective agreements.

- No collective agreement to have effect unless it has been made available to each union member covered by it.

- No obligation for collective agreements to contain a clause outlining the rights and obligations of employees and the employer in the event that work is contracted out or the business is transferred or sold.

- No obligation for union fees to be collected.

- No requirement for individual agreements to include an indication of where the work is to be performed.

- Non-continuance of employment at the end of a probationary period would not be grounds for an unjustified dismissal claim. This would mean that probationary employees could be sacked for any reason or no reason with no means of redress. This would be the first time since the 1890s that "at will" employment relations have been possible in New Zealand. Under National's policy, probationary periods could be set for any length of time, leading to the possibility of whole industries consisting entirely of "probationers".

Employment Related Education Leave

- No provision for employment related education leave – note Government's objectives for this leave is to improve relations between employers, unions and employees, and to promote good faith. It is designed to benefit employment relations for all parties. The absence of such leave and the extreme union control powers under National's policy would mean only professional union officials would be able to take part in informed discussions with employers.

Strikes and lockouts

- Striking employees would lose entitlement to annual leave under the Holidays Act on a pro-rata basis. This is a change from the Employment Contracts Act and is highly punitive.

- No restrictions on employers' ability to use alternative labour during a strike or lockout. No restriction on requiring other employees to do the work of striking or locked out employees, whatever the ethical beliefs of those workers. Workers who refuse could face disciplinary action.

Personal grievances, disputes and enforcement

- Reinstatement as a primary remedy is deleted. Under the Employment Contracts Act reinstatement is rarely used as a remedy; the effect of this policy and the structure of the legal institutions under National would be to ensure that reinstatement was, in effect, not a remedy at all.

- 30 days in which to raise a grievance. This compares to 90 days under the Employment Relations Bill and the Employment Contracts Act.

- Restrictions on use of 'exceptional circumstances' for extension of time limit in which to raise a personal grievance. This includes the provisions relating to where the employee has been so traumatised by the matter that he or she was unable to properly consider raising the grievance within the specified period.

- Absolute maximum time period for pursuing a personal grievance or other action would be 1 year after the grievance has been properly raised. This compares to 6 years under the Employment Contracts Act and 3 years under the Employment Relations Act.

- Employees only given 30 days after being dismissed in which to seek a statement of reasons for that dismissal (cf 60 days under ERB and the ECA).

- Limits on compensation payable to employees for humiliation (maximum of $25,000), and loss of any benefit (maximum of $50,000). This would have the effect of lowering all payments, since these maximums would be paid for the absolute worst cases imaginable.

- Employment Relations Tribunal created, with adjudication and mediation functions. The free, fast and fair mediation service would be abolished. The first step in grievances to be to a judicial body. All salaries of members of Tribunal to be determined by the Higher Salaries Commission, making significant cost increases likely.

General Provisions

- Demand notice has no effect for claims for money that was payable more than 3 years earlier than the date on which the demand notice is served (6 years under ERB).

- No directors' liability clause. This policy represents a significant restriction on the ability of labour inspectors to recover outstanding Holidays Act and Minimum Wage Act payments where an employer has deliberately avoided their responsibilities.


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