Working to rules: Employers set for stoush on job law reform

JIM EAGLES and PAULA OLIVER begin a Herald series on regulation in the workplace.


Three surveys of business operators - covering small, medium and large enterprises - indicate that the Government is heading for an angry confrontation with business over the Employment Relations Law Reform Bill tabled just before Christmas.

All three surveys show overwhelming opposition to the bill, especially its efforts to promote multi-employer collective contracts and discourage individual contracts.

On a scale of 0 to 10 - where 5 is neutral - the overall impact of the bill on business rates a highly negative 2.7. Specific proposals were scored as low as 1.6.

The surveys of small and medium-sized businesses were carried out through the Auckland Chamber of Commerce and the results prompted chief executive Michael Barnett to comment that, "in all the years of chamber surveys there has never been this level of rejection of a Government measure".

Anger about the bill's provisions comes on top of a growing tide of dissatisfaction about the Government's agenda on workplace legislation generally. A Business New Zealand-KPMG compliance-costs survey last year found employment-related matters - safety, employment relations, ACC and holidays - to already be by far the fastest growing source of irritation about red tape.

Since then the Government has passed new holidays legislation and unveiled its latest plans for employment relations law.

To test business reaction, the Business Herald organised surveys on the three-year-old Employment Relations Act and the Employment Relations Law Reform Bill, the new rules on workplace safety, the recently passed Holidays Act and moves on the pay equity front.

All except the new safety rules were rated as overwhelmingly negative for business and bad for labour relations as well.

The Business Herald Business Leaders Survey - covering 50 of the country's most senior business leaders - recorded growing anger at the trend of Government legislation.

As the chief executive of one of the country's largest companies put it: "When economic growth eases, as it surely will, we will live to rue the day so much regulation was brought back into employer-employee relationships."

A similar survey of 609 small and medium-sized enterprises by the Chamber of Commerce received an equally strong reaction.

The opinion of most respondents was summed up by one small business operator with the comment that: "Almost all the proposed changes reduce both the competitiveness of New Zealand businesses and their ability to determine their response to competitive pressures.

"This contradicts the Government's stated goal of building export-based businesses."

The surveys found that businesses of all sizes consider the Employment Relations Act had a negative effect on both business and the industrial relations environment.

But the changes proposed in the reform bill are seen as potentially much worse.

The scale of opposition is indicated by the fact that more than a third of respondents scored the bill's proposals on multi-employer collective contracts, individual contracts, transfer of contracts or businesses and personal grievance rules as a 0.

The responses also indicate that the bigger the business, the more worried it is about the bill's effect if its provisions are passed intact.

There is across-the-board concern about the prospect of having to give all staff four weeks' annual leave in 2007, but in this area the feeling is strongest among the small and medium-sized firms.

The survey shows that businesses are also unimpressed by the new rules for holidays - such as the requirement to pay time-and-a-half plus a day in lieu for everyone, including those on salaries, working on a statutory holiday - measures passed into law just before Christmas.

The Government's initial move in the area of pay equity, which has taken the form of a taskforce to look at pay equity in the state sector, is viewed with mild suspicion.

But the surveys make it clear that any attempt to spread the concept into the private sector will be met with general hostility.

Overall the surveys confirmed that business is extremely unhappy at the the Government's direction.

The chief executive of one major company said: "Mad hatter Margaret [Wilson, Labour Minister] clearly has a collectivist-socialist pathology and deep hatred of business.

"In 10 years these misguided policies will be seen as 'the failed policies of the past' and she will be exposed for what she is."

Businesses are also resentful that the justification for bringing in many of the new rules appears to be the need to deal with a tiny minority of bad employers.

As one small business operator put it: "Wilson ... seems bent on saving the odd employee who has been taken advantage of by the odd employer and in the process is saddling the other 99 per cent of firms with rules and regulations which only make it more difficult and more costly to provide jobs."

Health and Safety in Employment Act