30 October 2012
Employment Law Changes will Reduce Pay and Conditions
The CTU strongly condemns further proposed changes to the Employment Relations Act 2000 announced today.
Peter Conway, CTU Secretary, says that “These changes are designed to reduce the wages and conditions of workers in New
Zealand.”
The ability to negotiate collective agreements is reduced by making it easier for employers to walk away from
negotiations and harder for workers to take industrial action. The Government also wants to remove protections for new
employees (who can now be offered worse terms and conditions than the collective agreement) and some catering and
cleaning staff who will be offered a choice between worse terms and conditions and losing their jobs where their
employment is contracted out.”
Peter Conway says “The Government has not yet produced a Bill but has been making a series of announcements. We have
previously seen details of plans to allow employers to opt out of Multi-Employer Collective Agreement (‘MECA’)
bargaining and to restrict legitimate industrial action.”
The Minister of Labour has outlined a number of changes today including changes to what is known as Part 6a of the Act
which deals with protection of vulnerable workers in a transfer situation. Today’s announcement also confirms the
Government intention to introduce a Bill with other significant alterations to employment law.
Peter Conway says: “The dilution or removal of the duty to conclude a collective agreement undermines the purpose of the
Employment Relations Act 2000 “to build productive employment relationships [among other things] by promoting collective
bargaining” (section 3(a)(ii)). The Department of Labour has criticised this proposal in strong terms in their
Regulatory Impact Statement (at paras 53 and 54) where they stated ‘this proposal may encourage poor bargaining
behaviour (such as surface bargaining)… when one party has no intention of concluding an agreement and does no more than
going through the motions to avoid a breach of good faith complaint. Parties may abandon attempts to reach an agreement,
where it may have been possible to do so under the current framework. This change will have a signalling effect that
employers can walk away easily… This may cause disputes around when bargaining has ended. This may cause deterioration
of the employment relationship and see an increase in staff turnover, particularly where there is a strong union
presence and commitment to collective bargaining. There is also a risk that fewer collective agreements will be
concluded.’
Peter Conway said that currently employers are required to offer new employees the same terms as the collective
agreement that covers their work for the first 30 days of their employment. The Government proposes to remove this
requirement. In her first cabinet paper, Minister Wilkinson notes that removing this requirement “will enable employers
to offer individual terms and conditions [to the new employee] that are less than those in the collective agreement.”
In contracting out situations, the current law providers strong protection for workers that are particularly vulnerable
to exploitation those in cleaning and food services plus some caretaking, orderly and laundry services. Under Part 6A of
the Employment Relations Act, if these services are contracted out the workers can choose to transfer to the new
employer with the same terms and conditions of employment. The protections in part 6A were introduced in 2004 following
a review in 2001 that found certain employers were forcing vulnerable workers to either accept worse terms and
conditions when they took over a business or lose their jobs. 65% of these vulnerable workers are women and Maori and
Pasifika are over-represented. Many earn close to the minimum wage.
It is proposed that incoming employers with less than 20 employees (Small to Medium Enterprises or SMEs) should be
exempt from all of the Part 6A requirements. According to the Ministry of Economic Development, 31% of all employees are
currently employed by SMEs. SMEs will have a significant incentive to undercut other tenderers by cutting employees
terms and conditions. The CTU believes that this is a ‘race to the bottom’ that mistreats some of our most vulnerable
workers.
ENDS