Employers Fed. Speech On Employment

EMPLOYMENT DO WE REALLY WANT IT?
A SPEECH BY
STEVE MARSHALL
CHIEF EXECUTIVE
NEW ZEALAND EMPLOYERS’ FEDERATION

TO THE
ROTARY CLUB OF PORT NICHOLSON
PARKROYAL HOTEL, WELLINGTON
WEDNESDAY 8 SEPTEMBER 1999

All of the polls taking place in the run-up to the election tell us that employment is clearly the most pressing concern of the electorate.

This surprised a lot of people who expected health, education or law and order – the issues which have been the subject of most political and media debate – to top the list.

This raises an interesting question. If employment is the most important top-of-mind issue for New Zealanders, why do we see the political parties and media playing it down? I suppose it’s not dreadfully sexy and it’s not as easy to trivialise as those other more emotive issues – but, more importantly, neither their policies nor track records can stand too much scrutiny, so it’s not too clever for most to raise a profile in the employment stakes.

The general population has got it right – productive, sustainable employment is a major, if not the major, key to our achievement of the lifestyle we all aspire to, the social support mechanisms we all demand, and the infrastructural framework we expect.

Employment is a huge subject. Most areas of government policy impact on an employer’s confidence and ability to keep on employing or to employ more.

Nowhere do I see any politician talking about the employment effects of welfare policy, of tax policy, of environmental policy, of accident compensation policy etc. Surely it’s time that we did.

If you talk to business people and ask them why they are not growing their business and employing more staff, the responses are pretty standard.

Sensibly, businesses will not create jobs which aren’t there. They also won’t take the risk of creating a new job which might be there if the cost of doing so is greater than the potential return, if it creates major additional compliance burdens or if the potential cost and disruption of it not working out are too high.

Over the past 10 years we have seen some quite big moves in the right direction on employment policy – with some very impressive results. No, things are not all perfect and yes, we could be doing better – but, be assured, if we had not been given the Employment Contracts Act as a new industrial relations framework in 1991 we would be in a much worse position than we are today.

I don’t want to bombard you with statistics but it is important that we deal in facts now. As campaigns progress, such facts may be useful to keep things in perspective.

1. Since 1991 over 270,00 new additional jobs have been created.

2. 66% of those jobs are full-time.

3. Average wages have increased 5% ahead of inflation.

4. Lost time through strike action has reduced from a norm of 300,000+ days lost to some 11,000 last year.

5. We have more people involved in structured training for skills and qualifications than ever before – 47,300 people.

6. The number of workplace accidents has reduced and the duration of absence shortened.

7. The annual cost on business of workplace accident insurance has reduced by some $300m+ with the introduction of competition.

8. Some 49,600 net new small businesses are working in our economy.

And the list goes on.

It can’t be all bad, can it?

Of course we can all point to the odd example of bad behaviour. What’s new? We have always had a number of rat-bag employers and employees, and we always will. The after-school jobs I used to do as a kid weren’t that flash, but they helped me learn a lot, develop skills and motivated me to do well. Changing laws will never make those bad eggs good. Trying to make the world perfect is naïve and attempts to control everything simply brings everyone down to the lowest common denominator.

So how are people feeling about their lot? Beneficiaries, and unfortunately many of the elderly, continue to be pretty negative. In many areas the victim mentality is alive and well. But for those in employment, which is still the majority of the adult population, it’s a very different picture.

84% tell research company A C Nielsen that they like their job, 75% are satisfied with their conditions of employment, 74% think their employer is ok, and 70% are feeling pretty positive about their job security.

This does not suggest a crying need for the repeal of employment legislation.

Employees also tell us that they are happy in their ability to deal direct with their employer and that they do have the competence to appoint a bargaining agent of their choice. Indeed, 86% are adamant that they must be allowed to keep that right to choose.

As I suggested earlier, no political party can be absolved from responsibility in our not achieving an optimal position. The centre and centre-right parties, both inside and outside the government, have had the opportunity to remove the barriers to employment in compliance cost, ridiculous personal grievance costs and procedures, and unworkable holiday legislation. Although some efforts were made to address these issues, they simply didn’t get their act together well enough.

They are all now saying that if they have the ability to do something about it post-election, they will – but that is cold comfort to today’s potential employers and employees.

That is bad enough but we now have the centre-left grouping of Labour, the Alliance and the Greens – serious contenders for government – undertaking that they will repeal the ECA and replace it, at the very best, with legislation based on the CTU-sponsored Workplace Relations Bill. At the release of Labour’s policy yesterday, their labour relations spokesperson, Pete Hodgson, could only identify “one, perhaps two” areas of difference.

At the worst we have the Alliance talking about returning us to the old blanket coverage structures - that is, national type awards that apply to everyone.

We can only hope that if that grouping is given the opportunity to form a government, common sense will overcome political ambition to achieve power and that Labour’s formula will be as far as they go.

So what is in that package? An awful lot, and I cannot pretend to do it justice in the time we have today. But let’s look at the core issues.

It appears to be based on the philosophy that employers and employees cannot be trusted to manage their own affairs and make decisions in their own interests, that employers particularly need their behaviour controlled, that somehow trade unions, who apparently can be trusted, should be given the rights and responsibility of managing collective workplace relationships, and that collectivism, including multi-employer bargaining (i.e. forcing competitors into the same agreements), should be encouraged.

In the detail, their policy proposes:

 giving unions the monopoly right to negotiate and gain collective contracts. “Join the union – join the contract.”

 that unions, not the employees, would be the party to (i.e. would own) the contract and would have to agree to any change affecting an individual or group covered by it during its term.

 that if a group of employees negotiated together without union involvement the result would be a series of individual contracts which do not carry the same rights as a collective.

 that individual contracts “not be inconsistent with” a relevant collective - wording which already exists but without the current qualifications that allows new employees to be engaged on different conditions and which allows individuals or groups to remain covered by the collective whilst agreeing to differences in some areas.

 the introduction of “unfair contracts” to replace the current position on harsh and oppressive provisions – leaving well defined case law behind and inviting interpretation as to what is fair.

 the introduction of “good faith bargaining” which means, amongst other things, sharing financial, marketing and operational information, not only with the union but if you are unfortunate enough to be in a multi-employer environment, with your competition.

 that the majority of union members in a workplace can initiate strike action for a multiple employer contract, notwithstanding the views of their non-union workmates.

 and that self-employed contractors working predominantly for or dependent on one client will be classified as employees of that company including being given the right to bargain collectively.

In all, this is a recipe for institutionalised rigidity – and reintroducing a host of rules to govern relationships moving against the requirements of flexibility in an increasingly competitive economy.

Then add to this the guarantee that all of the savings and health and safety benefits achieved in the introduction of competitive workplace accident insurance are lost with the renationalisation of ACC and the promise of an increase in the top rate of income tax, means you don’t exactly have a recipe for employment.

In fact notwithstanding all of the heart-felt statements as to the desire to be supportive of business and to foster growth and employment, we are looking at policies which will inevitably impact heavily on any employer’s confidence to employ.

Labour has accused my organisation of being partisan in our approach to their policy. We are not. We are driven by our own policy, developed by the business community, and are seriously concerned to ensure that all New Zealanders understand business’s position in the pursuit of economic and social growth.

We have a responsibility to be active in policy debate and will continue to be so.

For their part employers have a responsibility to consider the impact of all parties’ policy on their business and to discuss these issues with their staff.

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