CTU critiques National’s employment policy

Last week the Council of Trade Unions issued a devastating point-by-point critique of National’s ACC policy. Now they’ve followed up with an excellent and surprisingly balanced critique of National’s employment policy.

When you compare the amount of detail the CTU has put into its critique with National’s policy bullet-points that barely even fill a page it’s just embarrassing.

One side’s across the issues and arguing on the basis of evidence, the other’s slipping out policy under the radar and with as little detail as possible, as if they’re ashamed to tell people what they really stand for.

You can read the full report over the break or on the CTU’s website here.

A glass third full
National’s employment policy is at least a step back from the extremes of the 1990s work rights framework, and the Employment Relations Act with its emphasis on workers and employers bargaining in good faith will remain. National has dropped their previous policy of removing the ability for workers experiencing stress to have protections under Health and Safety law. They have not foreshadowed a repeal of the youth rates gains (which they voted against) or recent flexible working arrangements provisions (which again they voted against, but perhaps John Key has noted that UK Tory leader David Cameron is such a fan of their comparable legislation, and wants to extend it!) The CTU has called for cross party support for the social partnership model, which, with its problem-solving culture, is acknowledged as a big contributor to the economic success of several comparable small countries, and National’s support for this is welcomed.

But two thirds empty
However, genuine social partners don’t take the ground out from each other. Social partnership cannot exist without basic human rights protections, including the right of workers to join independent trade unions and bargain collectively. Workers reacted negatively to National’s plan last time to remove the right of new workers to a fair hearing from their employer, and will do so again. And, critically, National has no plan on how to lift wages in New Zealand; rather their policies will do the exact opposite. In the 1990s, it was low paid workers who bore the brunt of National’s workplace reforms, and history looks set to repeat if they are elected.

Specifically, National’s policy (24 July 2008) says:

National: “National believes employment law should treat employees and employers fairly, expand opportunities for those having difficulty getting work, increase flexibility, and let businesses grow.’

We say:
National’s rhetoric on workplaces doesn’t match the reality. The World Bank this year rated New Zealand second highest of 178 nations for its ‘Ease of Doing Business’ report, second only to Singapore. And further breakdowns of their data show New Zealand employers face some of the least restrictions on the hiring and firing of workers.

Taking away rights does not create job opportunities. Our employment law already does treat employers and employees fairly, and there is a job vacancy because there is work to do, not because the worker asked to do it is easy to fire.

And there are much better ways to promote employment opportunities for long-term unemployed or disadvantaged groups of workers, by investing in skills development. A strong economy with active labour market arrangements is the best way to ensure there are good employment opportunities rather than the removal of fundamental employment rights.

National: “We will introduce a 90-day trial period for new staff, by agreement between the employer and employee, in businesses with fewer than 20 people. This will give those having difficulty getting work – like young, inexperienced people or new immigrants – a better chance at a job.’

We say:
The Employment Relations Act already allows for probationary employment, what it doesn’t allow for is probationary employment where you have no rights as an employee. National is proposing to specifically legalise unfair behaviour for small businesses. Their new second class of worker with less rights that those in larger firms would cover the 30 per cent of workers work in small businesses (1), and could effect up to 200,000 workers annually (2).

Currently case law requires an employer to do just three things for a probationary employee: tell the employee about their concerns, hear the employee’s point of view and consider it in a fair manner. That isn’t hard. And research by the Department of Labour from 2007 (3) shows that, in practice, there is very little real problem to address.

You wouldn’t see small shops be given the right to opt out of consumer protection laws, or small property owners opting out of tenant protection laws, so why would any government legislate to allow small businesses to opt out of fairness in employment? A comment from an interviewee in a 2006 Massey University research report into employment practices of SMEs is telling: ‘the trial period is just really a means of me being able to dismiss them if I don’t like them, or if they’re not fitting in. (4)’

Most employers don’t set out to exploit new workers. Fair employers don’t need the law changed. For those that won’t or can’t be bothered acting fairly, it is vital we keep rules that protect the people who start working for them.

We do not oppose employers having the right to dismiss poor performing workers. But we do oppose the removal of the right for a worker to appeal against unjustified dismissal.

National say this policy will give people out of work a better chance to find jobs. But when they were last in government in 1999 there were 161,128 people on unemployment benefit. In May this year there were 17,465.

National: “We will have safeguards for workers. Good-faith provisions will still apply, as will rights to sick leave, holidays, and health and safety provisions. Rules of natural justice and human rights legislation will apply. Mediation will be available in disputes, and employers won’t be able to hire and fire the same employee every 90 days.”

We say:
Recourse to the Human Rights Commission (an institution which National floated abolishing in 2006) does not give a worker grounds for reinstatement or recovering lost wages. A personal grievance does, with reinstatement being the primary remedy. Under National’s proposal, an employer need give no reason for firing a worker. Cases to the Human Rights Commission are likely to increase in order to get a fair hearing. And it appears as if a worker who complains of sexual harassment could take forward such a complaint but if dismissed after that and within 90 days of starting the job would have no right of appeal against the dismissal.

It is unclear how rules of natural justice will apply; personal grievances include consideration of natural justice if the right to these is removed how are natural justice tests put before the courts?

National’s proposal may also cause problems for people accessing income support. When employees are dismissed, Work and Income use the odds of a successful personal grievance to help decide whether someone should face a 13 week stand down for a benefit. If it’s impossible to take a personal grievance, they won’t be able to avoid a stand down. Workers may also have a difficult time when going for a new job – if you were dismissed during the first 90 days, whether the dismissal was fair or not, you could have to declare that when you apply for your next job. No matter how unfair, you wouldn’t be able to clear your name.

National: ‘Continue to allow union access to workplaces with an employer’s consent, which cannot be unreasonably withheld.”

We say:
Currently a union has access provided they exercise it reasonably. It is for the employer to challenge access rather than the union get permission for it. Employers will use this provision to control union access and bully employees seeking to talk to the union at work. This provision is likely to breach International Labour Organisation conventions.

National: ‘Restore workers’ rights to bargain collectively without having to belong to a union.’

We say:
It is unclear how workers bargain collectively without a collective? A union is simply a collective (of 15 or more) governed by certain legal requirements (e.g. the requirement to be at arm’s length from the employer). Collective bargaining without a collective was a fundamental component of the Employment Contracts Act and allowed in-house or bosses’ unions to put in place non-union collective agreements that didn’t help lift wages at all, but instead locked workers out of genuine collective bargaining to lift wages. In the Employment Contracts Act period, employers would simply employ workers on the non-union collective agreement (contract). There was no negotiation.

Collective bargaining is a critical way of addressing wages, training, and standards across industries, and rights for workers to be covered by genuine collective agreements need strengthening, not watering down.

There is no substitute for independent trade unions, who both work with employers on skills, productivity and modernisation, and campaign to lift workers’ pay across industries. Unions are part of the solution, not part of the problem, and that’s why we are growing (up 80,000 members since 1999).

National: Appoint a working party to review the Holidays Act, especially the issue of ‘relevant daily pay’.

We say:
The purpose of National’s review appears just to be a chance to reduce the amount of pay workers get for a statutory holiday. The principle behind the current arrangement is that a worker would get paid what they would normally be had they been at work; if you have a bereavement, get sick or are on a public holiday you would not be penalised.

National are threatening to turn the clock back to the days when, in the meat industry for example, employers set a very low rate for public holidays or when a worker was sick, a basic rate close to the minimum wage. This created a perverse incentive for people who were sick to struggle into work, as it was costing them too much to be sick. In export and health and safety conscious industries such as the meat industry, that is that last sort of an incentive you want to be giving.

National: ‘Keep four weeks annual leave, but allow employees to request trade of the fourth week for cash. This can be only at the employee’s request and cannot be raised in negotiations for an agreement.’

We say:
National opposed the fourth week of annual leave for all workers. Rather than having a plan to lift wages and holidays, National’s approach is to force low paid workers to choose between a minimum wage job and 4 weeks leave, or a minimum wage job with three weeks leave plus a payment which may or may not be the equivalent value of the additional week. Three weeks leave will again become the norm under National. Everyone deserves the right to four weeks of annual leave, and it shouldn’t be taken away.

National: ‘Retain the Mediation Service but ensure it is properly resourced with properly qualified mediators. Require the Employment Relations Authority to act judicially in accordance with the principles of natural justice, including the right to be heard, and the right to cross examine before an impartial referee. Allow injunctions and important legal questions to be heard in the first instance in the Employment Court, and allow a general right of appeal to the Court of Appeal.’

We say:
Ironically, National says they want to make things easier for small businesses through their 90 day no rights period, but yet they are proposing making the employment process more complex and legalised. The Employment Relations Act is working well, with the majority of workplace disputes being settled by use of mediation or at the workplace by unions – which costs workers and employers nothing. High lawyer’s fees for court hearings are a barrier for many workers not in unions, and the CTU would be concerned about a move to overly formalise the employment disputes process.

But what’s missing?

National is silent on any concrete strategies to lift wages.

We all agree wages are too low, National themselves highlighted the wage gap with Australia at the last election. Workers are feeling the pinch through high food prices, rents and mortgage payments and increased fuel prices, but as the economy slows and prices rise National has delivered an employment policy that reduces job security and allows workers to sell their holidays to help make ends meet. Leaving it to taxes alone is a joke. Rather than offer any ideas on how to lift wages, National will make it worse.

Statistics New Zealand’s last Census shows that around two thirds of New Zealand’s salary and income earners earn less than $35,000 a year. And Kiwi workers’ wages are, on average, 30 per cent lower than Australian workers.

The Employment Contracts Act (ECA) had a lot to answer for. In the 1990s workers saw a huge number of their terms and conditions at work stripped away: penal rates, collective bargaining obligations, recognition of unions and cuts in real wages. In the supermarket sector, for example, under the ECA real wages fell by 11.2% for Monday to Friday workers and 44.4% for part-time students (5).

A 2003 Canadian comparative study (6) provides striking evidence of how much damage New Zealand workers suffered during the 1980s and 1990s. The report reveals that New Zealand workers suffered a drop of 6.5% in real hourly earnings during the 20 years from 1980 to 2001, the worst performance of the 16 OECD countries in the study. New Zealand was the only country in the study where workers real hourly earnings fell – workers in every other country had an increase with the Japanese workers real hourly earnings rising 64%, UK workers earnings went up 46.9%, Canadian 39.5%, and Australian 28.8%. The wage gap with Australia grew by 50.4% in the 1990s and by 1.6% from 2000 to 2007.

The key point here is that New Zealand wages are too low, in order to lift wages we need to see more workers addressing their pay and conditions collectively across industries, not less. Any government with a serious plan to lift wages should strengthen the rights for workers to be covered by industry and multi-employer collective agreements to address wages on an industry basis, not dismantle collective bargaining provisions by allowing for collective agreements to be set up by employers with an interest in keeping wages down.

The CTU advocates the high road approach of regularly raising the minimum wage, increasing the numbers of workers addressing pay and conditions across industries, and modernising the workforce through investing in skills, plant and machinery and lifting productivity. We think this will benefit firms also, who should compete on the quality of their products, not on low wages, and having industry standard agreements will discourage a ‘race to the bottom’ on wages.

National have not addressed the following in their policy:

• Their plans for the paid parental leave scheme, which more than 100,000 parents have benefited from.
• Confirmation or otherwise of their 2005 policy of removing elected health and safety reps and the ability for workers to issue hazard notices in dangerous workplace situations.
• Their plans (if any) to address the gender pay gap, which persists at around 15 per cent.
• Their agenda to increase to the minimum wage, other than through non-committal statements to reviewing it regularly. As the graph on the next page shows, under National, the minimum wage has failed to keep up with the average wage.
• Whether they will continue employer contributions to KiwiSaver two of their spokespeople have suggested they won’t.
• Whether they would repeal protections for vulnerable workers when their job is transferred, so that they don’t face the loss of employment or the possible reduction in conditions every time their employer loses the contract in places like hospitals, schools or commercial buildings. Last year National said business owners have employment obligations to existing employees but those obligations should not have to be automatically transferred to a new owner of the business, and that it was ‘not up to the government of the day to arbitrarily decide who is vulnerable.