National's youth wage plan

Prime Minister John Key. A youth minimum wage will be reinstated under a National government. Photo / Herald on Sunday

Prime Minister John Key has told employers that new National policies including lower wages for many teenagers and a weakening of the influence of unions would provide more jobs and given businesses the flexibility to expand.

Announcing National's employment relations policy at a Employers' and Manufacturers Association breakfast, Mr Key said a new 'starting-out' wage would give some of the youngest, most inexperienced workers a greater chance of employment.

Similar to the existing 'new entrants wage', it would be set at 80 per cent of the minimum wage - currently $13 an hour.

However, it will apply for longer and to a wider group of people.

Under the change, employers can keep 16 and 17 year old workers on the lower wage for their first six months in a new job.

Eighteen and 19 year olds can be put on the lower wage if they are given jobs after having been on a benefit - such as the dole or independent youth benefit - for more than six months, or if they are also in training.

Mr Key also announced a weakening of the collective bargaining provisions in employment law, removing the current requirement for a collective agreement to be reached once negotiations begin unless there was good reason not to.

Employers would still have to negotiate in good faith.

Employers could also opt out of multi-employer collective bargaining and employers whose staff undertook limited strike action - such as refusing to perform some tasks - would be able to partially dock their wages.

He promised that National would also review the process around constructive dismissal to stop the claim being used too easily in employment disputes, saying such cases were costly and tied up the Employment Tribunal.

The ability to negotiate flexible working arrangements will also be extended to all workers, rather than only carers. Mr Key said it would help create a more flexible workforce that would benefit both workers and employers. Mr Key is visiting the Hobbiton set this afternoon - and said at this morning's launch that if Labour's policies were in place, the movie would not be made here.

Mr Key also attacked the Labour Party's policies including the $15 minimum wage, the capital gains tax, the emissions trading scheme and "a 1970s industrial relations policy, written by the unions."

"All of those will cost New Zealand productivity and jobs."

He said the only way New Zealand businesses could pay for the increase to pay for Labour's proposed increase in KiwiSaver employer contributions was to cut wages, cut jobs, put up prices or "shut up shop altogether."

"If you are the small panel-beating shop in Waitakere and have to take your employer contribution from 3 per cent to 7 per cent, pay a higher minimum wage, and electricity is going up because of the ETS, that will only add to the costs of businesses. It will cost jobs and business."

He said Labour was trying to frock itself up as making the tough decisions for the country, but would only cost the country money.