Opinion: Employment relations policies from the 'poster boys' will polarise voters

by Associate Professor Jane Parker

There is already something of a political scrum over the appearance of John Key on all of his party’s election posters, and the absence of Phil Goff from Labour’s. National is keen to stress the integral link between party leadership and policies while Goff’s team are training attention on the "gulf" between Labour and National pledges (a leadership/policy distinction that is blurred in televised political arenas). Nonetheless, the major parties’ election strategies are shaping up to show some significant differences between their priorities, not least with regard to employment relations policy. As we emerge from a tough economic period, this could help to polarise opinion and stimulate the electorate to vote in larger numbers than usual on November 26.

As part of its election campaign strategy, Labour is proposing to amend the cornerstone Employment Relations Act 2000 (ERA) so as to set up Industry Standard Agreements (ISAs), where appropriate, which will apply a statutory minimum across an industry. The standards will draw on collective agreements already in place in an industry and be determined by a Workplace Commission (as part of the Employment Relations Authority), somewhat like Fair Work Australia, that country’s national independent arbiter. The policy will allow different minima for different industries, in recognition of varying industry circumstances. Employers and unions will still be able to bargain a collective agreement in their workplace as an alternative to an ISA if that suits them better, but workers will not be able to strike over ISAs.

National is contemplating further changes to the employment framework, including collective bargaining provisions (with the removal of the requirement to conclude collective bargaining, and of the requirement that non-union members are employed under a collective agreement for their first 30 days), and will continue to stress flexible working and employee choice. It is concerned to prevent the development of a regulatory architecture that will increase red tape, cost jobs and hurt small business owners whose numbers form the bulk of our workplaces. National has increased the minimum wage each year but wants to see further raises linked to wider economic conditions. Labour, like the Green Party, wants to see the minimum wage increase to $15 an hour. This and the ISA initiative stress that particular worker groups are disproportionately represented amongst the lower paid (such as women, Māori, Pasifika) and workers vary in their capacity to negotiate a fair deal.

National’s proposed incrementalism builds on employment relations changes introduced since the party gained office in November 2008. ERA amendments include alterations to the personal grievance system; the introduction and extension of 90-day trial periods; mandated provision for flexible working for workers with dependants, break periods and breast-feeding facilities at work; restrictions on unions’ workplace access and, under the Holidays Act 2003, an opportunity to cash in a week of annual leave. An emphasis on voluntarism, good faith and workplace-level arrangements has been apparent in statute; on the ground, Department of Labour research reports suggest that the relative impact of the above initiatives has been varied. National’s disestablishment of the predecessor Government’s Pay and Employment Equity Unit and pay equity reviews prompted a wide church of reaction, raising questions about the meaning of increased flexibility in workplace conditions and pay for workers in different vertical and horizontal industry and sector locations.

By contrast, some of the political parties stress a (re)regulatory approach. For instance, the Greens are seeking the establishment of a Pay and Employment Equity Commission to address gender, ethnicity and disability related pay gaps. Both Labour and the Greens have also pledged to repeal a number of National’s extant initiatives such as reviewing the ERA to improve union access rights to workplace, repealing the 90-day probationary period provisions. Othere Labour Party election proposals include the call for strengthened collective bargaining at enterprise and multi-employer level.

All of the political parties are also well aware that the ways in which their future employment relations policies are received will depend in part of what they mean for New Zealand’s youth. Young people in this country bear a greater share of the unemployment burden than youth in any other OECD country, representing 43 per cent of all unemployed. Youth unemployment is also particularly affected by recession. The Human Rights Commissioner has warned that without urgent action the situation will become "unsustainable, representing a threat to social cohesion". Recent Equal Employment Opportunities Trust research finds that there is also a divide between highly skilled and qualified youth, who are in demand in the global marketplace, and those with low or no skills and qualifications, who are disengaged from work, education and training. The first group is mostly European and Asian; Māori and Pacific youth are over-represented in the second group. Significantly, Māori, Pacific and Asian youth will continue to form an increasing proportion of the youth workforce.

Labour is seeking to deal with youth unemployment as well as tackling the up-skilling of the workforce with a policy that aims by the end of its first term to have every at-risk 15- to 19-year-old either learning or earning. It estimates that 24,000 young people will be assisted by this package. Since the high youth unemployment resulting from New Zealand’s economic restructuring in the 1990s, there has been a concerted effort to lift skills through school-to-work transition programmes and apprenticeships. National cites independent research which suggest that the abolition of youth rates under the previous government is linked to the potential loss of many largely part-time jobs for 16- and 17-year-olds, as employers opted to take on older (and more experienced) workers instead. It has sought to provide young people with opportunities to get the work experience they need with initiatives such as Job Ops, Community Max and Youth Guarantee. It is now proposing a Starting-Out Wage, set at 80 per cent of the minimum wage, for 16- and 17-year-olds in their first six months of work with a new employer as well as for 18- and 19-year-olds who have come off a designated benefit which they had been on for more than six months before starting work. Labour's response has been to launch a petition against youth pay rates, arguing that jobs, not pay cuts, will help to combat youth unemployment. The Māori Party is keen to see training and apprenticeship developed and delivered in conjunction with key industry sectors, and supports a retraining allowance. It also wants to see investment in strategic alliances to incentivise Māori skills and qualifications, increase Māori participation in the labour market and augment Māori-owned business growth.

Further, the age profile and education levels of many of those who have left New Zealand on a long term basis is relatively youthful and higher-level respectively. "Brain drain" looks far from over, providing further challenges for future workplace productivity and innovation. A recent report card from the New Zealand Institute, an independent think tank, concluded that "there is no convincing evidence yet that New Zealand is on a path to catch up with Australia, nor is there a convincing plan explaining how New Zealand will be able to grow its economy faster than other OECD countries". Concern with industry competitiveness and labour market youth may be key issues on which the political parties’ employment relations manifestos are adjudged, but the situation will be complicated by areas of battle on many other, related fronts (such as raising of the superannuation age, whether KiwiSaver should be compulsory, capital gains tax, asset sales, handling of environmental problems, balancing the directing of resources from the domestic economy into the export sector) – all in the context of a potential change in our system of political representation.

Associate Professor Jane Parker is an employment relations specialist in the Massey University College of Business’ School of Management.