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Home / Business

Pattrick Smellie: Fresh, unified thinking emerging around future of work

By Pattrick Smellie
BusinessDesk·
4 Dec, 2019 04:00 PM5 mins to read

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The Productivity Commission's report suggests it's time New Zealand had a system of unemployment insurance. Photo / 123RF

The Productivity Commission's report suggests it's time New Zealand had a system of unemployment insurance. Photo / 123RF

COMMENT:

The past few weeks have produced three important contributions in the endless trudge that is labour market policy reform.

Perhaps the most important is the Productivity Commission's report suggesting that it's time New Zealand had a system of unemployment insurance.

READ MORE:
• Brian Fallow: Want to improve
productivity? Try some Danish

The second is the "Better Conditions for Contractors" discussion document, published this week by the Ministry of Business, Innovation and Employment. Its purpose is to guide thinking on protections that should be available to a "third category of worker": people who work for one or more employers in various ways, whether as contractors or employees.

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The third is the Government's Future of Work Tripartite Forum Strategic Assessment, the product of a three-way process involving employers, trade unions and the Government, published last week.

The tripartite report makes all the right noises about the challenges ahead. Disruptive technologies will change traditional employment, higher paying, more productive work is an essential part of the mix, as is protecting vulnerable workers and "advising on options for protecting non-standard workers".

The Productivity Commission's thinking on unemployment insurance looks especially worth watching. It goes further than any other government-induced research into the future of work by advocating for something better than the dole for workers facing redundancy or technological disruption.

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It points particularly to the Danish "flexicurity" model, which promotes more flexible rules for hiring and firing than in New Zealand, backed by a KiwiSaver-style worker insurance scheme that is intended to give people security in their transition to new work.

The model is the result, at least in part, of the kind of pact the Labour-led Government here seeks, stitched together between Danish employers, unions and political leaders.

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Danish national wealth, growth and productivity statistics suggest they're getting something right and there is some consensus among New Zealand business and union leaders about parts of the Danish labour market settings.

That consensus is important. The power of this idea is not just wrapped up in the rose-tinted view of Scandinavian social policy that still animates parts of the liberal left.

This system and its practical impacts were a major focus for more than 36 New Zealand chief executives from companies of scale when they spent six days together in Denmark in June.

Conducted under the auspices of corporate think-tank the New Zealand Initiative, the delegation was led by outgoing Mercury CEO Fraser Whineray. An activist CEO on NZ Inc issues, Whineray has the Prime Minister's ear, having replaced Air NZ's Chris Luxon as chair of the PM's Business Advisory Group.

This sort of political congruence doesn't come along every day. Employers and unions may readily unite over a fresh approach to the scariest part of the future of work challenge: how to survive if your job disappears. There's also precedent for such NZ Initiative trips having some impact on the domestic political agenda.

A very similar tour en masse by Kiwi CEOs to Switzerland in 2017 powerfully boosted the Initiative's advocacy of the Swiss system of "localism" in local government funding.

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Appeals to the Swiss model, which incentivises rather than discourages urban growth, have at the very least shifted the debate in New Zealand. There are still big hurdles and contradictions in the wider labour market reform debate.

The New Zealand Initiative delegation was led by outgoing Mercury CEO Fraser Whineray. Photo / Supplied
The New Zealand Initiative delegation was led by outgoing Mercury CEO Fraser Whineray. Photo / Supplied

MBIE's work on a hybrid category of workers, somewhere between employees and independent contractors, is at the heart of the tension between employers and unions over the Government's Fair Pay Agreements proposals.

FPAs are on a slow track now, with very little prospect of legislation, let alone final decisions, emerging before the 2020 general election.

However, they remain a powder-keg issue for employers, who fear elements of de facto compulsory unionism are wrapped up in the FPA concept. Current proposals envisage that anyone working in an industry that enters FPA negotiations will be covered by the negotiations and the outcome, whether they want that or not.

Employees could choose to opt out for better terms and conditions once an FPA was concluded, but their independent status is effectively suspended when an FPA is created.

There are plenty of workers who this won't suit, although most are outside the first occupations to be targeted for FPAs: supermarket workers, security guards and cleaners.

The MBIE paper acknowledges that workers in this grey area may not be entitled to minimum employment standards, but they may "also not have realised the full benefits of being a contractor, such as the ability to exercise true freedom and control over their work activities".

The Tripartite Forum notes the policy goal that "any FPA system introduced for employees should be extended to contractors" or whether "some other process/framework to support collective bargaining by contractors could be created".

It is not immediately clear where the policy balance will land out of this thicket of labour market reform ideas.

However, once ideological differences are stripped away, it does appear there is serious focus on all sides on creating a labour market system that encourages openness and support to change rather than defending jobs that are disappearing anyway.

It may not seem like much, but that's a big shift in thinking on all sides from a generation ago.

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