The ERA: High hopes, deep fears

KARYN SCHERER studies workplace legislation in force today.

Employers are bracing themselves for a new era of workplace relations, with one of the Labour-Alliance Government's most significant pieces of legislation coming into effect today.

The Employment Relations Act (ERA) - championed by unions as a long-overdue measure to restore fairness in the workplace but slated by many employers as a giant leap backwards - is expected to affect negotiations at several large businesses before Christmas as expired contracts come up for renewal.

While many employers remain nervous about the new law, the union movement is making no secret of its glee. It hired a plane to fly a giant banner across central Auckland yesterday, proclaiming "Fairness At Work Starts Tomorrow." It was also planning celebrations across the country today.

Lawyers contacted by the Business Herald said that they were aware of several significant agreements that were due to be negotiated in the next few weeks.

"It will bite immediately," said Bell Gully Buddle Weir partner Christine Meechan. "We've had clients who have had unions say, 'We want to meet with your staff on October 2. We'll be there at 10 am.' They're in like Flynn."

Lawyers have warned that several concepts in the new law remain unclear and will almost certainly need to be tested in the courts.

Their biggest concern is the ERA's insistence on "good faith" bargaining. "Good faith" will also be required when selling a business, contracting out work, closing a business or business unit, and making staff redundant.

While fair employers have been told they have nothing to fear, the Employers Federation is concerned that many are not yet up to speed with the changes.

"There is a lack of understanding of the complexity involved and the level of personnel management that's going to be required," said spokesman Murray French. "That's going to be quite a change and quite a challenge for many companies."

Despite an extensive information campaign, both employer and worker organisations expect to be bombarded with queries over the next few months. Many have already anticipated the increase by putting in extra phone lines and hiring staff.

While the Department of Labour's new mediation service is up and running, the next stage in the new disputes process, the Employment Relations Authority, has yet to be set up.

But concern about this is not wide, because the new law allows for the Employment Tribunal to continue hearing cases until the end of January.

Some lawyers remain sceptical about the new disputes process, which is intended to reduce the number of disputes being referred to the courts. They fear that a focus on practical solutions could frustrate some employers determined to fight on principle.

But Phillips Fox employment law specialist John Hannan conceded that some aspects were an improvement.

"I have no doubt that in some employment sectors there will be a beneficial effect. In others, I don't think things will change in any significant way."

One of the law's most vocal opponents, Eagle Technology managing director Trevor Eagle, said he remained unimpressed by last-minute changes.

Mr Eagle, who is also head of the HighTech Council, has predicted that the new law will strangle the fledgling technology sector.

Other employers appear to be taking a more pragmatic approach.

The Restaurant Association is one of several organisations that have urged their members to develop a constructive relationship with unions.

The Service & Food Workers Union has struggled over the past decade to penetrate a large number of small workplaces but is already claiming a 20 per cent increase in membership this year.

Restaurant Association spokesman Neville Waldren said he was personally concerned about the new law but did not see the point in continuing to fight it.

"We've suggested the bigger employers invite the union in and get alongside them. There's no use being antagonistic."

The Retail Merchants Association said it had also detected more acceptance from retailers, after an extensive education campaign.

"The way the whole thing was debated by various political parties putting their spin on things created a lot of fear out there. A lot of it was unfounded," said association chief executive John Albertson.

The union movement is also concerned the law may have been overhyped. While the Council of Trade Unions has opened a new office in Auckland as part of a recruitment drive, it acknowledges its resources are limited.

"There is a level of expectation about what it can actually deliver and I suppose to some extent we're trying to put that into perspective," said CTU president Ross Wilson.

"There has been a lot of rhetoric around, particularly against the bill, which claims it will turn the workplace into nirvana overnight. It's not true, of course."

Need more help? Try these.

Employment Relations Infoline

Or phone 0800 800-863

Employers and Manufacturers Association (Northern)
(09) 367-0900

Employers and Manufacturers Association (Central)
(04) 473-7224

Retail Merchants Association
0800 472-472

Restaurant Association
0800 737-827

Council of Trade Unions

Or phone (04) 385-1334

Risk management advice
Lawlink

www.raas.co.nz


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