Secret changes to labour rules

Prime Minister John Key has downplayed the impact of changes to labour laws.
Prime Minister John Key has downplayed the impact of changes to labour laws.

Confidential Cabinet papers show the Government intends changes to industrial relations laws beyond those outlined in National's election policy.

Two papers, obtained by Labour, show the Government intends to allow employers to set the agenda for collective contract negotiations.

It has raised concerns that employers will be able to walk away from wage bargaining if unions reject unreasonable demands.

The papers also show the Government will allow employees to be paid under the minimum wage if they are participating in a partial strike.

One paper by Labour Minister Kate Wilkinson outlines changes which will be made in three stages; she has already sought Cabinet's approval for the first tranche.

The second paper is a regulatory impact statement by the Labour Department and suggests the changes – particularly plans to let employers opt out of multi-employer bargaining – could breach international labour laws.

Council of Trade Unions president Helen Kelly said labour laws were working well, strike action was declining and there was no need for changes.

"If anything there is a need to improve employment law. People are now working whole weeks and not able to pay their bills. There is a crisis of wages in this country.

"The combination of the Government's changes will drive wages down in New Zealand and that is their intention because collective bargaining has shown to lift wages."

However, Business New Zealand chief executive Phil O'Reilly said some employers faced endless bargaining which made businesses less productive.

"Increasingly we find workers are paid for the skills they have and their contribution to the workplace, rather than what someone might bargain on their behalf."

Labour's industrial relations spokeswoman Darien Fenton said the Ports of Auckland wharfies and Affco meat workers would have been replaced with lower-paid contractors if the changes had been in place.

In a change not signalled before the election, the Government was now planning to give unions and employers the same time frame to start the process of bargaining before a collective contract expired, she said.

Who initiated the bargaining was important because it set the terms for negotiation and who was covered.

"The first thing unions will have to deal with is an initiation notice from an employer which perhaps excludes half of their members."

The change would create "all sorts of mayhem" with a "midnight race" between employers and unions to be the first to launch the process.

"That's going to create far more disputes than there are already."

Mr O'Reilly said the change would make bargaining more efficient. "It is logical that employers should be able to initiate bargaining."

The papers also reveal unions would have to give notice of partial strike action. Pay deductions could result in workers being paid less than the minimum wage.

Ms Fenton said the "silly provision" would result in employers spending a lot of time calculating how to deduct a "couple of dollars" from workers' pay.

Ms Wilkinson has refused to comment on the changes and has suggested the papers are made up.

"I haven't seen the paper that Darien Fenton claims she has and cannot confirm its authenticity."

Ms Wilkinson's office declined to accept copies of the papers.

Ms Fenton said she had no doubt they were authentic as they included changes the minister had already signalled.

The Changes

Employers will no longer have to conclude collective bargaining and will be required only to negotiate in good faith.

Non-union employees will no longer have to be employed on a collective contract for the first 30 days of their employment.

Employers will be able to opt out of multi-employer bargaining.

Employers will be able to deduct the pay of workers who undertake partial strikes.

Workers will be able to ask for flexible work arrangements without having to wait until they have been employed for six months.

Employers will be able to initiate collective bargaining.

Fairfax Media