Address to Employment Law Institute on Employment Relations Bill
Northern Club, Princes St, Auckland
Good morning, and thank you for the chance to speak to you in detail about the Employment Relations Bill.
Firstly, let me say that I appreciate the time and effort the Employment Law Institute put into its submission on the
Bill, which is being considered in detail by the select committee.
Your attention to detail indicates I'll be in line for some pretty thorough questions from the members here this
morning. I look forward to answering them.
In your invitation, you have asked me to speak on any changes that are proposed or envisaged to the Bill put forward in
March.
At this stage any changes that have been reported are highly speculative. I am not in a position to pre-empt the outcome
of the select committee process, which will determine the form of the Employment Relations Bill when it reports back to
Parliament.
I am sure all of you here today are all aware of the so-called "lightning rod issues" – the provisions of the Bill that
have come under the most attack from its opponents, and have been earmarked for change.
Depending on which sources you rely on, these vary.
The Evening Post reported last week on the "prickliest parts" of the Employment Relations Bill, which they claim include
employment status, directors' and managers liability for unpaid wages, disclosure of information, talks during wage
bargaining, and the definition of the working week.
In a letter to small businesses, the Prime Minister confirmed that there will be changes to the Bill, and paid
particular reference to the disclosure of information during bargaining and employment status.
Whichever source you rely on, it will be some time before you will get a categorical answer on the final shape of the
Bill.
Over the coming weeks the Bill will be before the select committee, during which time a Labour Department report,
incorporating the cabinet's recommendations, will be considered.
The bill then goes to the party caucuses for sign-off, then back to the committee for deliberation before its final run
through the House.
So rather than enter into speculation about what the final form of the Bill will take, I would like to take a step back
from the doom, gloom and apologies that for the past couple of months have characterised discussions around the proposed
legislation.
Backlash from the business sector and opposition parties has been predictable, although disappointingly misinformed.
One media statement issued by ACT in April, for example, contained 12 factual errors. Such inaccurate reports have
caused much unnecessary fear and pessimism over the proposed legislation.
Only yesterday a business leader was reported in the Dominion as threatening to move offshore because he wouldn't be
able to employ temporary staff to cover temporary work needs. As has always been patently clear, this is nonsense.
The Employment Relations Bill was not designed to make life difficult for employers or business owners. It is in many
ways a piece of legislation primarily designed to improve the social outcomes of employment relationships, and in turn
improve the standard of industrial relations in New Zealand.
Yes, the bill is pro-worker, for which I make no apologies. Since the introduction of the Employment Contracts Act the
best interests of workers, those driving production, have been sidelined in the name of workplace flexibility.
This so-called workplace flexibility was typified by take-it-or leave it contracts, casualisation, and contracting out
when negotiated agreements became inconvenient.
The ECA simultaneously routed the trade union movement and thus collective bargaining, the means by which sustainable
workplace relationships and agreements can be built.
Neither did it deliver the promised productivity gains. Reserve Bank estimates state that between 1991 and 1999 the
annual growth in labour productivity averaged just 0.36%.
What has increased since the introduction of the ECA is the average number of New Zealanders out of work and facing
uncertain employment.
Another cartload of misinformation has surrounded the public discussion on employment status. The decision of the
government that the content, and not the form of the contract, should be the determining factor is consistent with our
view that vulnerable workers should not be deprived of basic employment rights.
This provision is designed to protect those workers who are neither receiving the benefits of being an employee in terms
of holiday pay, sick leave, and so on, nor the benefits of being an independent contractor of being able to choose how
and for whom they work.
And as I said earlier, if the select committee finds that this intent is not clear to the public, it will respond by
making it so.
As practitioners, I know the new institutions that will come into force when the Act is passed will be of particular
interest. I will quickly run through the form and intent of these for you.
Short, sharp dispute resolution and reinstatement in the case of unjustified dismissal are the aims here.
The idea is to have quicker access to mediation when there is a problem rather than having people traipsing off to the
Employment Tribunal and waiting months to get a hearing.
It means the whole way in which the Employment Authority works will be changed quite substantially, with the result
being fewer delays and a less adversarial process. Some of us have found it difficult to understand why copious pages of
judgement after long periods of waiting are seen as helpful in settling employment disputes.
Criticisms of the dispute resolution process under the Employment Contracts Act were common to both employers and
employees. Many employers say they have felt pressured to buy their way out of a grievance even when they considered
themselves to be in the right.
Provisions in the Act will also make sure employees are better informed of their rights in the event of a workplace
dispute. Like the Code of Good Faith that will underpin the new legislation, the legal framework creates as many
incentives as possible for parties to negotiate effectively.
Rather than go over old ground, I will wrap up now and concentrate on answering the questions I'm sure you have on the
Employment Relations Bill.
Thank you.
Further comment contact Claire Hall, press sec, (04) 471-9902 or 025 270 9001