Fran O'Sullivan: Business returns to fighting the same old fight

Teachers, IRD staffers, and more, are again threatening strikes to get a better deal. Photo / Paul Taylor

It took Australian-born CEO Ralph Waters to prick the self-interest of the local business sector when he said "I think New Zealand's got a bit of a serf mentality where they think low wage costs are a comparative advantage."

This was in March 2004 when — surprise not — warnings were yet again growing of another "winter of discontent" between the then Labour Government and the business sector over controversial employment legislation.

As Waters, then Fletcher Building CEO, told me, "We've had high wage growth for years in Australia and high productivity and I think it makes the cake bigger because at the bottom of the pyramid all those people are earning more."

Waters' observation gets to the guts of why teachers, IRD staffers, and more, are again threatening strikes to get a better deal. They want to be paid more. And who can blame them?

And yet again "business" is restive about new employment legislation which their representatives argue introduces a "them and us" mentality.

But it was one thing to have a low-wage economy in the early 2000s when the cost of living in New Zealand's major commercial centres like Auckland was not prohibitive.

It suited employers. They did not have to pay employees a great deal and if their staff wanted more they could easily go across the Tasman to Australia for higher paying work.

It also suited the then Government as unemployment was more easily mopped up in a low-wage economy.

Less talked about is the unpalatable fact that the taxpayer in the end took the pressure off employers' wages bills by subsidising pay packets through the Working for Families tax credits system.

This was introduced by the Clark Government as the result of a 2005 election campaign promise. And despite claims it was "communism by stealth", it was left in place by John Key's Government.

Things have changed since 2004. Australia is not the economic safety valve it once was.

New Zealanders have stayed home, contributing to the increased net immigration which has sent house prices skyrocketing.

At the time Waters broke ranks publicly with the corporate group-think, Clark had already mounted her infamous "smoked salmon offensive" to persuade business to stop dissing her Government and focus on their own companies instead of getting into the type of group funk that would jeopardise the broader economy.

In 2003 and 2004, the business sector — as it is doing now through its proxy employer groups — exerted maximum pressure on the Government to modify its employment legislation (the upshot of which is that Margaret Wilson lost her Labour portfolio in a Cabinet reshuffle).

In a press statement this week, employer groups confirmed they are launching an advertising campaign which will include billboards, newspaper and digital advertising.

The "Please Fix the Bill" campaign is funded by BusinessNZ's member groups — the Auckland-based EMA, Wellington-based Business Central, the Canterbury Employers Chamber of Commerce and the Otago-Southland Employers Association.

Said Employers and Manufacturers Association (EMA) boss Kim Campbell: "We wholeheartedly agree with the Government's goal of developing a modern, nimble and high-performing economy, however we would like to understand how labour laws of yesteryear will enable this to happen."

The employers argue they support "forward thinking about the future of work" and are "genuinely puzzled" by the contents of the Employment Relations Amendment Bill.

BusinessNZ reckons the bill would stop larger businesses from using trial periods in employment agreements, require all employees to take meal and tea breaks at the same time, and allow union reps to enter any workplace at any time without permission.

It also argues that employers would be required to provide paid time off work for union delegates, and union delegates would have the right to decide how long they would take off and when.

Employers would be required to give details of new and prospective employees to a union in a breach of their privacy. Employers would be forced to agree to collective agreements, even if they did not agree with the terms being asked for (this would be a breach of International Labour Organisation conventions that say bargaining should always be voluntary) and that employers would be forbidden from opting out of negotiations towards a multi-employer collective agreement (MECA).

Finally, they say the bill also contains the risk that individual employment agreements would not be allowed to include better pay or conditions than a collective agreement at the same workplace.

Minister of Workplace Relations and Safety, Iain Lees-Galloway, says the aim of the legislation is to design a collective bargaining system to lift wages and productivity.

The underlying issue is who is going to deliver a saner employment environment where wage levels are lifted and productivity gains are made. Is it government? Is it unions? Or, is it business?

Make no mistake the Coalition is challenging business to deliver where it counts.

But which high-ranking New Zealand chief executive is going to stand up to his or her peers and say "get a grip" rather than fulfil the prophecy of another winter of discontent which ultimately is not in business' interest?