Aotearoa: New Employment Relations Reforms

The ERA (Employment Relations Act) is a failure in the eyes of both union and bosses. It failed to rectify the damage done to unions by the Employment Contracts Act of 1991 which decimated the unions. But it was also an irritant to employers who saw it as a shift back towards union domination of the economy. The new reform Bill has revived these antagonisms on both sides. But is it really such a big deal? Class Struggle does its analysis of the Reform Bill and puts the case for workers taking the law into their own hands.

ERA weak

The Government is making some minor changes to the Employment Relations Act (ERA) to strengthen the role of unions. The ERA was designed to restore a balance to industrial relations after the ECA had almost destroyed the unions. Labour’s Blairite approach is to make the unions ‘partners’ with business so as to regulate the labour force and encourage increased labour productivity. But to do that unions have to first get coverage of workers. The ERA failed to give the unions sufficient strength to significantly increase their bargaining power with business. Bosses could refuse to agree to collective agreements and workers did not see the advantages of joining unions. After 3 years, union membership has recovered slightly from being around 18% of the workforce to about 20%. But today only 12% of workers in private industry are unionised compared with 50% in the public sector.

The CTU lobbied Government to improve conditions for unions. They wanted to make it harder for bosses to avoid participating in MECAS (multi-employer collective agreements), to promote collective bargaining, to make the good faith requirements stronger so bosses could not ignore them, to protect vulnerable workers when businesses are sold and to stop free-loading by non-members. The Government took these issues on board:

The Changes

  • Fines up to $10,000 if employers do not act in ‘good faith’
  • Vulnerable workers get more protections when businesses are sold
  • Employers could be fined if they pass union-negotiated wages and conditions to non-union workers
  • If MECAS (Multi employer agreements) are sought, employers must attend at least one meeting
  • A new system of non-binding 3rd party facilitation when parties can't reach a settlement,
  • If the facilitation fails and a collective agreement can't be reached, a settlement could be imposed by the Employment Relations Authority
  • Labour Dept inspectors investigate complaints over equal pay

Bosses’ offensive

The employers are objecting to the changes in the Bill. While Labour Minister Margaret Wilson says that stronger unions will actually contribute to economic growth in the whole country, bosses want weaker unions and more control over their worksites. They strongly opposed the ERA when it was first promoted in 2000 and Labour made concessions to them. Even Roger Kerr of the Business Round Table admits that the original ERA was “watered down” and “remained enterprise focused”. Despite Kerr’s plain talking, most capitalists running businesses and employing workers, still hate the ERA and don’t want a bar of the new Bill. They miss the freedom of the ECA to hire and fire at will. So they are running a scare campaign to frighten Labour into submission.

The bosses’ offensive against the Bill has been coordinated by the New Zealand Herald. The ‘business section’ of NZH has run a campaign against the Bill. It reported 3 surveys they conducted of small, medium and large businesses on their negative reactions to the Bill. The alarmist reactions are captured in the headlines in the series of anti-worker stories called ‘Working to Rules’. One headline said ‘More rights, less work’, another ‘Recipe for Ruin’ and another ‘Businesses must rise in Protest”.

For bosses, the most unpopular aspect of the reforms is strengthening the provisions for MECAS. They say that large groups of organised workers across several enterprises is a move back towards national awards and a restriction to right of each employer to hire and fire. They also object to the provisions which protect workers when businesses are sold or transferred. Neither do bosses like the restrictions on freeloading. They claim mediation is not working for them. They object to being forced into an Agreement by the Employment Relations Authority.

Prominent critic Simon Carlaw of Business New Zealand says the Bill is anti-enterprise and anti-growth. The penalty for breaching good faith is too draconian and signals a return to compulsory arbitration and loss of freedom for bosses. Transfer of provisions is yet another compliance cost. Stopping bosses advising workers not to join unions restricts their freedom of speech! Kerr ups the anti, claiming the new Bill aims to return to compulsory unionism, to compulsory arbitration and that multi employer contracts will create class warfare, which will be news to that rabid socialist Margaret Wilson.

Trade unions respond

Trade union leaders predicted businesses would complain and generate panic like they did over the original ERA. So how are unionists reacting to the hysteria? Although the Bill refers to the “inherent inequality of power” in the workplace the unions are treading softly on this argument. Instead, unionists are appealing to the ‘good business sense’ of the bosses. Bill Andersen, president of the National Distribution Union, in an article headlined “Only bad bosses need fear law change”, claimed that if a business was run on a sound investment plan, was informed by market research and had good labour relations, then the new law would be great for them. This echoes former union leader Ken Douglas who stated some years back that the bosses need unions to get the most productivity from workers! That’s presumably why on retirement from the union job Douglas offered his services to business.

Margaret Wilson defended her Bill by restating her philosophy that workers and bosses have interests in common - suggesting that good profits and improved working conditions go together. She appeals to bosses by arguing that the Bill will benefit business. She sees that improved working conditions for workers will be good for business and anyway, good employers are already practicing good faith in their dealings with their workers. She points out that the Bill brings NZ in line with the working conditions in most OECD countries. One lone CEO responding to a NZH survey thought the negative reactions to the Bill were alarmist, and said the worker protections matched those in OECD countries.

Carol Beaumont, CTU secretary, echoes Wilson's arguments, claiming “good employers won’t worry”. According to CTU president Ross Wilson, the CTU position is that unions will work with businesses to manage the economy by helping plan and organise work, to increase productivity and develop economic strategies. The Douglas line lives!

Class Struggle perspective

Will these arguments change bosses minds? While Labour and the unions are taking a soft line stressing partnership and mutual benefits, business is facing an increasingly tough environment with a high dollar and uncertain world economy. The unions are weak, facing further damage in the year ahead unless we can rebuild them on the basis of a strong rank and file. On top of that National has revived its fortunes on the back of a racist anti-Maori campaign. But its new leader Don Brash has a rightwing neo-liberal economic package lined up to follow the racist campaign. We predict that the bosses’ offensive will force another backdown from Labour on the reforms in this Bill that are most helpful to workers.

We say that no labour law can protect workers, unless workers organize and defend these rights on the job. The weakness of the current ERA is that it gave unions more rights on paper – we called it a ‘charter for union bureaucrats’ when it was passed – but it could not strengthen t he rank and file base of the unions. On top of that the Bill has nasty anti-secondary strike provisions that have to be broken if any strike is going to succeed. It cannot stop employers from using scabs as the waterfront dispute in 2002 showed. We also object to union negotiators being able to sign off on deals without the members ratifying them. Workers are the union, not the union bureaucrats.

Despite its inherent failings we support rank and file union campaigns to get the Bill strengthened. So long as workers think that Labour is on their side we have to demand that they prove it. That way we show that Labour’s Blairite policies are really the old new right policies in drag. After the new right smashed the unions, the Blairites came along with a sedative. Today it’s the Labour Minister and her cronies in the union leadership that dose us with the ‘partnership’ class A drug. Let’s demand the things we know that neither Labour nor the union bureaucrats can deliver without pissing off the bosses. In doing so we prove to workers yet again that the only rights they can be sure of are the ones they fought to win and fight to defend!

For the right to strike! For secondary strikes! For national awards! For the closed shop! 

From Class Struggle 54 Feb-March 04

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