Fran O'Sullivan: No winners in workplace row

Helen Kelly said the Government had gone down a path which reduced fairness for NZ wage and salary earners. File Photo / Mark Mitchell

Prime Minister John Key and Council of Trade Unions boss Helen Kelly are both experienced brinksmanship players.

But the high stakes row between Key and Kelly over the Government's plan to toughen up on union access to the workplace is resulting in perverse outcomes to the detriment of New Zealand's international standing and a return to the days of class struggles.

Already Kelly has successfully persuaded top American trade union leader Richard Trumka to spurn the Government's invitation and cancel his visit to New Zealand in February, which was part of a drive to build support for the Trans-Pacific Partnership (TPP) trade negotiations.

The partnership is enormously important to New Zealand. It will link seven Asia Pacific economies and is seen as a backdoor avenue for New Zealand to finally forge a free trade agreement with the United States.

The union camp's reasons for trying to sabotage New Zealand's international trade linkages are frankly spurious and self-interested.

Key and his Trade Minister Tim Groser will downplay the CTU's ability to influence the partnership talks. But it is clear that neither Key nor Groser thought the CTU would break with the broad domestic convention that has been forged on trade agreements and openly campaign against New Zealand's position.

I'm talking out of school here, but I found it fascinating to have a drink with Kelly at the Waldorf Hotel in New York last year while on the way home after the United States-New Zealand Partnership Forum where the Trans-Pacific Partnership was a key focus.

I couldn't help thinking then that Helen Kelly's father, the late trade unionist Pat Kelly, would have rolled in his grave at the thought of his daughter even visiting the citadel of capitalism, let alone sharing a drink with a "right-wing columnist" at the Waldorf, shopping for a well-priced trouser suit at Bloomingdales sale or visiting former Prime Minister Helen Clark at her ritzy apartment high up in the Trump Towers.

But Helen Kelly had, after all, also been paired by the Prime Minister with Air New Zealand chief Rob Fyfe to co-chair a critical employment session at the Jobs Summit.

It seemed then a typical John Key masterstroke. And at a time when New Zealand faced huge difficulties from the global financial crisis, Fyfe and Kelly rose to the challenge and developed a pragmatic response to ensure that as many Kiwis as possible were staying in work at a time when companies were facing enormous pressures.

The parties to the "social partnership" - Government, CTU and BusinessNZ - basically rubbed along until Key decided to ramp up the next phase of employment reform by foreshadowing to the National Party's annual conference that the Government would expand the 90-day trial period for employees to all companies and allow workers to trade in their fourth week of holiday leave.

My soundings indicate the CTU could have "agreed to disagree" on these measures. But Kelly warned Key on July 15 that if National toughened up on union access to the workplace, it would do irreparable damage to the working relations between the CTU and the Government and reduce the potential of good relationships between unions and employers in the workplace.

Letters obtained by this columnist show the CTU believed Key was "on record at our conference as saying this is not an issue people raise with you and you understand how important the issues of collective bargaining and access are to unions and workers in NZ and that you did not see them being progressed any time soon".

"You also gave Peter [Conway] and me a personal assurance that you had pulled the original paper on access (which we understand you did) and would come back to us if it were to come back on the agenda," wrote Kelly.

"It is not realistic to reduce access and expect unions to be able to operate effectively. Work places are the focus of union membership. I trust you now appreciate that many constructive relationships and projects between unions and employers have developed over the last nine years with the removal of the competition over access."

Key wrote to Kelly this week saying the employment reforms were "not a package of ideological fantasies ... but a package of pragmatic, moderate measures to improve productivity and provide opportunity".

But the pair have now publicly backed themselves into a corner. Each seems too proud to want to back down.

There's more to come: A country potentially crippled by a series of nationwide strike actions.

Frankly, it's in New Zealand's interests that both Key and Kelly climb down off their high horses. Drink at the Waldorf, anyone?