20 August 2003

ERA Tinkering is Anti-Business and Anti-Growth

New Zealand Business Roundtable executive director Roger Kerr today warned that the government risks harming New Zealand's economy if it steamrolls ahead with reported changes to the Employment Relations Act (ERA).

"There have been consistent, worrying reports about changes to the ERA recently signed off by cabinet. They suggest the government plans to introduce:

- wider protection of terms and conditions when ownership of a business changes or activities are outsourced,

- further measures to promote multi-employer contracts,

- new personal grievance definitions,

- a return to a form of compulsory arbitration,

- measures to address so-called "free-riding' by non-union members,

- changes to the 30-day rule to promote union membership.

"Investors are very responsive to employment law. Bad legislation like this would affect productivity, growth and employment. New Zealand has already lost some of the competitive edge it achieved for labour market flexibility.

"Those who support such moves claim they "tilt the balance of employment law in favour of workers'. That is not true - these changes are not simply against the interests of employers but against the interests of workers and the unemployed as well. Workers stand to lose the most when the economy suffers, and the unemployed will find it harder to get into work. Only unions would benefit.

"There is no way that restrictions on business owners' rights to contract out or sell their businesses could ever be considered consistent with the government's growth targets.

"The main reason the ERA has not led to significant increases in collective bargaining or union membership is that this doesn't suit many firms and workers. There is no public policy justification for discriminating in favour of collective bargaining, or for rules designed to boost union membership.

"Union leaders have had months of backroom negotiating with politicians. It is now time for the real debate to be had in public. Business must speak out firmly. It is vital to maintain the strong unity that has developed between the organisations that want this country to grow. This will deliver the strongest message to the government that it is continuing to roll out initiatives that are inconsistent with its stated goals," Mr Kerr said.

ENDS

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