KEY POINTS:
A surge in workplace strikes could hit New Zealand because of tough economic conditions, an employment relations specialist says.
Fred Adelhelm, who has worked with global giants like Volkswagen, Daimler Chrysler, Levi Strauss, Rio Tinto and BP, said various economic factors were pointing towards a rise in industrial action.
The employment relations consultant, a director at Auckland-based Adelhelm & Associates, said the trade unions would be under pressure to seek 5 per cent plus pay rises for members struggling with rising food and fuel costs.
Large high-profile wage settlements for a few key groups further adds to that pressure.
"High-profile unions such as the PSA and EPMU have few options but to attend to the needs of their members whose expectations may be unrealistic in the current climate."
The difficult economic climate meant employers were in belt-tightening mode.
"The gaps between what employers are prepared to pay and union demands are unusually wide and are unlikely to be bridged by negotiations alone.
"These opposing forces are going to make wage negotiations fairly robust for the rest of the year. A spike in strike activity for the remainder of 2008 is a distinct possibility."
Employers may be counting on weakening job security and redundancies to temper union claims. Redundancy, although on the increase, is not expected to be a major factor this year as the labour market remains tight.
"The bad news is the galloping inflation rate. This will ensure that the pressure on collective bargaining will continue and may even increase in the short and medium term.
"Mishandled, the current pay round has the potential to destroy the good working relationships that employers have built with their workers if negotiations are conducted in a manner that leaves bitterness and dissatisfaction." The best option was for employers to keep staff in the loop. The lack of communication was most rife in larger organisations, he said.
"People tend to scrimp on that effort. Unfortunately then when you have a meeting with the union just pre-negotiation, a lot of things just come as a surprise. And that's the real issue - it should be a no surprises policy."
David Lowe, advisory services manager for the Employers and Manufacturers Association (Northern), agreed somewhat with Adelhelm.
"But I certainly wouldn't go so far as to say it's going to bring in a summer of industrial action. I think everybody is more responsible than that."
Work stoppage statistics from Statistics New Zealand bear this out. For the year ended March, there were 26 work stoppages, down from 40 over the same period last year, reflecting an overall downward trend since the early 90s.
"The conditions at the moment make the settling of wages a very tricky balancing act," said Lowe.
"It's a joint issue - if you look at it from an employer's perspective, we know that prices are going up ... and I think most employers would love to be able to give wage increases to assist with that. And likewise, the employees know we're in very difficult business trading conditions at the moment."
A July EMA survey of 932 members found 81 per cent of employers intending to increase staff wages. The most common increase band was 2 to 3 per cent (36 per cent), followed by 4 to 5 per cent (26 per cent). Twelve per cent were planning an increase of 1 to 2 per cent, while 7 per cent intended a more than 5 per cent pay rise.
Council of Trade Unions economist Peter Conway echoed Lowe's sentiment. "I'm reluctant to buy into major conflict because the reality check for workers and unions is that you don't award yourself a pay increase, you bargain for it - and all factors get considered."
