Dialogue: Bill puts unions back in industrial driving seat

By MAX BRADFORD*

The skirmishing is over. The public submission process has ended and the public judgment is documented.

In essence, the public has given the Employment Relations Bill the thumbs down. Of the 2279 substantive written and oral submissions considered by the select committee on the bill, 75 per cent said they opposed it. The bill attracted considerably more submissions than did the Employment Contracts Act in 1990-91, and certainly more opposition.

So it is hardly surprising that business confidence has collapsed. The far-reaching legislation comes on top of the ACC renationalisation, broken contracts and broken promises (for example, West Coast logging, non-deductibility of research and development costs, no export-financing guarantees) and confused messages from ministers.

The Government cannot hide behind the accusations of "untruths and exaggerations" it is making against National, Act and unnamed "political enemies" in the business sector. The simple fact is that the bill scares a lot of employers because it puts unions back in the driving seat of industrial relations.

Too often, submissions to the select committee told of real fears of what the bill would do. Although it is designed to deal to the 1 or 2 per cent of bad employers, the bill penalises everyone who employs or is employed in workplaces.

The irony is that the bill will do little to deal with the bad employers any more effectively than did the Employment Contracts Act or its predecessors. On the other hand, good employers, the vast bulk, will be penalised by third-party (union and state institutions) intervention between employer and employee, by highly legalistic and prescriptive (rather than flexible) processes in bargaining and dispute resolution and by considerable uncertainty because the bill will force the courts to interpret the fuzzy language in Margaret Wilson's law.

The effect of the proposed legislation, which goes much further than Labour's election manifesto, has been to encourage employers to put on hold expansion and investment plans, and to put off employing more staff. Indeed, many companies are quietly putting off staff in advance of the bill becoming an act.

In the face of such widespread opposition, the Government has signalled it will make changes to the bill.

As a member of the select committee, I'm still in the dark about precisely what is proposed, as it seems the Government will instruct its MPs on the committee about what to change and not change.

One thing is clear: if this bill is to be relevant to the needs of our economy, it will need a major transplant.

Forcing self-employed people operating as independent contractors to become employees, extending the powers to strike, enforcing multi-employer bargaining, removing the right of employees to freely negotiate their own collective agreements without statutorily enforced union involvement, forcing workers to join a union if they want to be covered by a collective agreement, eliminating freely negotiated fixed-term contracts to be reached between an employer and an employee, and restricting the right of employers to communicate with their employees at any time are principles the National Party will never agree to.

Common sense should have suggested that the Government start with the structure of the Employment Contracts Act and change it to reflect the mandate Labour has set out in its industrial relations manifesto. Then we would at least have avoided the pitfalls of the radical and backward-looking labour-market system we appear to be heading towards.

National will propose a number of key changes to the bill to make it reasonably workable. There's a bottom line of 25 of these. They include dropping the far-reaching coverage of independent contractors and provisions for director liability, severely limiting access to confidential information, removing constraints on employers talking to staff, removing the ban on use of staff during strikes and removing the multi-employer bargaining provisions.

Then there are specific measures for employees, such as reinstating clause 11 from the Employment Contracts Act so they can ban serious criminals from acting as their bargaining agents, making good faith bargaining clearer and more transparent, removing the ban on collective agreements if you are not a union and dropping the far-reaching rights for unions to enter the workplace If the 25 changes are accepted by the Government, the palpable damage of the bill may be avoided. Without them, the Government can expect business confidence to stay down and investment and jobs to decline as business chases its opportunities elsewhere.

Nothing in Jim Anderton's jobs machine or the interventionist policies of the Government will be able to offset these events. It will be against this performance that Labour's stewardship of the economy will be judged in two years.

* Max Bradford is the Opposition spokesman on industrial relations.