KEY POINTS:
Most employers and employees have only just shaken off the holiday feeling - and we are already in February. The Prime Minister, John Key, has announced an urgent Job/Employment Summit is to take place on February 27.
Chaired by NZX chief executive Mark Weldon, the purpose of the summit is to come up with a clear and practical plan to minimise job losses during the recession. What can employers, unions and government do to ensure maximum employment during these difficult economic times?
The Government has already committed to speeding up infrastructure projects and reducing income tax in April. Employers are cutting costs and, as a last resort, laying off employees so the monthly job-loss figures are growing as the recession intensifies.
It is unlikely that companies will be handing out generous wage increases with some large prominent employers leading by example by announcing "no increases" for senior executives. This theme has now been adopted by the Prime Minister who has called for a zero increase for MPs and urged unions to moderate pay claims.
The unions, notably the EPMU, are understandably opposed to this call as their members battle to make ends meet. The unions' general call for increases above the rate of inflation will no doubt rile struggling organisations and manufacturers throughout the country.
The Job Summit should focus on keeping as many people as possible employed but the real issue is improving productivity to enable companies and their employees to weather the downturn and position them to take advantage when conditions improve.
This can only realistically happen if the costs are recoverable or employers receive some sort of subsidy over the short term to retain and improve the skills of staff.
Forging a consensus to deliver this outcome would be a positive outcome of the Job Summit. A bigger step would be the creation of a common vision for New Zealand by the Government, employers and unions.
If there was ever a case for a real partnership model at the highest level, now is such a time.
Rising unemployment creates personal hardship and negative flow-on effects across the economy with the potential for defaults, repossessions, diminished retail spending and a further twist of the downward spiral.
Over and above the Job Summit the Government has already acted and given notice of future employment relations initiatives. The 90-day trial period has been introduced.
Pending changes are likely to be around the format of collective bargaining, the fixing of the messy Holidays Act 2003, a reduction in KiwiSaver contributions and some changes to the process around dispute resolution.
Having looked at some bargaining trends in New Zealand in 2008, we have noted that industrial action has been subdued.
However, what should be of concern is the time taken to conclude collective employment agreements.
In a sample of mainly private sector employers who negotiated collectives last year, involving 17 different trade unions, the average time to reach agreement was just under 3 months. The shortest took one day and the longest, in excess of 11 months.
There has to be a more constructive and simpler mechanism for bargaining to follow. All essential services (health, transport, education and municipal) could follow a process of good faith bargaining of between four to six weeks.
If agreement is not reached, the process should revert to mediation and then to final and binding arbitration. This is similar to the process presently followed by the police.
This does not require wholesale changes to the present good faith bargaining process, as all parties are in agreement that it generally works well.
However, some of the larger organisations in the health, transport and education sectors would be more effective if their bargaining arrangements could be somewhat modified to shorten the time taken to reach agreement.
As a government, employer, union and individual we all need to strive for productive efficiency in everything we do - it creates employment and job security.
* Fred Adelhelm is a director of Adelhelm & Associates, which specialises in employment and industrial relations, management consulting and training.
