Working to rules: Twin hurdles on the road to reform

By PAULA OLIVER

Both opponents and supporters of the Government's proposed labour law changes plan to fight to "improve" them.

Unions and employer groups face a crunch time in March when they front up to a select committee to argue that the changes should either be strengthened or, in the employers' case, weakened.

The Employment Relations Law Reform Bill, unveiled last month after weeks of internal wrangling among Cabinet ministers, was hailed by the Government as a fine-tuning of the three-year-old Employment Relations Act.

It contains wide-ranging changes that include the strengthening of good-faith provisions, the promotion of collective bargaining, and moves to encourage multi-employer agreements.

But despite Labour Minister Margaret Wilson stressing that the bill was "not a rewriting" of existing law, at least two Government departments have expressed concern about the combined effect of the changes.

Cabinet papers reveal that the Treasury advised that many of the changes were not major if taken singularly, but "others appear to go beyond 'fine-tuning', and raise significant issues".

Similarly, the Ministry of Economic Development warned that the cumulative impact would increase the regulatory burden on employers and may lead some to question the Government's overall commitment to lowering compliance costs.

Margaret Wilson said the changes were needed to clarify the original intent of the ERA.

She pointed out that the ERA had not been the disaster for business that many employers had predicted, and said the latest changes would not be either.

One change attracting the attention of employer representatives is the requirement that collective bargaining talks end in an agreement unless there is a genuine reason not to.

Business New Zealand executive director Anne Knowles said that took New Zealand into a new area of what constituted good faith.

"Good faith in other countries does not require you to reach agreement.

"It's a process thing - good faith is common sense and courtesy. If somebody has something to put to you, you at least do them the courtesy of listening, thinking about it and replying.

"This changes the rules to say that you have to conclude an agreement."

Knowles said the change would be a boon for lawyers and lead to crucial test cases.

"There might be areas where it is not feasible to take on what the other party is suggesting. You've got real contradictions with legislation telling you one thing, and common sense and reality telling you quite another."

But the Government, and union, point of view is that collective bargaining has been undermined and stalled by some employers, and there has been little to help workers in their cause.

"A large number of these changes result from bad behaviour - they're needed," said Council of Trade Unions president Ross Wilson.

The requirement to conclude an agreement could also stretch to cover a move to promote multi-employer collective agreements.

The proposed laws require an employer to attend at least one meeting to discuss a multi-employer contract if staff or a union want one.

After that, legal experts say the way the bill is written could mean that an employer is required to settle such an agreement unless there is a good reason not to.

But the Engineering, Printing and Manufacturing Union told the Business Herald that it did not think the clauses would work that way in practice - and that it would lobby hard to strengthen multi-employer contract provisions.

National secretary Andrew Little argued that employer attitudes towards multi-employer contract agreements needed to change and become more modern.

Existing agreements in the metal and plastics industries worked well. They encouraged workers to gain more skills and rewarded them on the pay scale if they did.

Little said agreements could be run in a flexible way: core conditions such as base rates might be set but then other areas could be tailored for a particular business.

"People forget that after 10 years of the Employment Contracts Act, the industrial judgment of most union officials about what's achievable and what's not is pretty good."

Little said an army of employment lawyers would advise businesses on how to get around the latest multi-employer contract provisions.

The CTU indicated that it would also seek to have stronger promotion of multi-employer agreements in the new laws.

The other area that the CTU will target is proposals to stop so-called free-riding.

The new provisions will make it a breach of good faith if an employer seeks to undermine collective bargaining by passing on terms and conditions to an individual.

They stop short of a union proposal that would make it legal for non-union members to pay a fee to the union to take on terms and conditions.

Margaret Wilson conceded that unions might be disappointed with the free-riding provision, but said it stayed within the framework of the whole bill.

The change meant that employers had to genuinely negotiate with individuals as well.

Business groups are concerned that the provision will raise suspicion if an employer genuinely does negotiate an individual agreement that is similar to a collective.

If an individual was paid more, it might also raise questions about whether this meant the employer was undermining the collective agreement.

The Treasury warned the Government that its free-riding proposal would be difficult to apply and "may have unintended consequences".

Business New Zealand is hopeful that the amount of time the Government took to decide on the changes indicates that there is some awareness that employers will suffer.

But Margaret Wilson said the changes were simply good law-making.

The ERA had not proved to be the major anti-business piece of legislation that many had claimed it would be, she said.

"The spinners of doom have been there for quite some time, and their rhetoric doesn't change.

"They're perfectly entitled to say that. All I'm saying is look at the reality."

She said collective bargaining could be good for employers because it reduced their costs and meant they did not have to negotiate many separate agreements.

Anne Knowles said it was not the natural reaction of business to complain about the changes.

"It's too simplistic to say that. The natural reaction of business is to get on and do stuff; to work within the law.

"But when the law gets too hard, that's when business starts to say, 'We can't operate like that. It's too hard to employ people'."

The changes

* Good-faith provisions are strengthened. "Serious and sustained" breaches mean fines of $5000 (individuals), $10,000 (organisations).

* The Employment Relations Authority can resolve disputes and set the terms of a collective agreement if a "serious and sustained" undermining of collective bargaining is found.

* Free-riding - or passing on the terms and conditions of collective bargaining to a person on an individual agreement - becomes a breach of good faith.

* Employers must attend at least one meeting if workers or their union want a multi-employer collective agreement.

* Collective negotiations should end in an agreement unless there is a good reason not to.