First shots fired as business lobbyists fight proposed labour law reforms

The government’s proposed labour law reforms re-establish a kind of “compulsory unionism”, and many provisions of the Employment Relations Reform Bill conflict with its objective of promoting “a high performing, high wage economy,” says peak business lobby group Business New Zealand.

Submissions on Workplace Relations Minister Iain Lees-Galloway’s bill, a key plank of Labour Party policy, closed formally on Good Friday and will appear on Parliament’s website in coming days.

Already publishing their submissions are Business NZ and Horticulture New Zealand, the latter representing some 5,000 small to medium-scale seasonal employers. Both are warning about an increased likelihood of industrial action, in conflict with another the bill’s aims: “to build productive workplace relationships founded on good faith”.

Instead, both argue the new environment would tip the balance too far in unions’ favour and that some of its proposed mechanisms were bound to create unnecessary conflict in the workplace.


Of particular concern is a requirement to continue bargaining “until all matters have been exhausted”, which could “unnecessarily prolong collective bargaining and increase prospects of industrial action”.

Business NZ also argues the bill breaches International Labour Organisation conventions on the right to voluntary participation in collective bargaining and suggests the bill’s provisions allowing unions to collect membership fees for every employee in a business, irrespective of whether they have chosen to join the union, “effectively constitute(s) compulsory unionism”. It also pre-empts policy on issues said to be out of scope for the current phase of reform.

As drafted, the submission says it is “arguable that no employee, despite the fact they may have chosen not to join the relevant union, may be employed on an individual agreement that is inconsistent with an applicable collective agreement” and “will almost certainly act as an inhibiting factor to the recruitment and retention of skilled employees who choose not to join a union”.

There were concerns also that for businesses facing an urgent need to restructure, “often for reasons of economic survival … the requirement to settle a collective agreement will become a tactical tool in any attempt to resist change”.

Horticulture NZ’s concerns related especially to the compliance costs, complexity and in some cases impracticality of applying the Bill’s requirements to the sector.

“The horticulture industry is made up of a number of small, inter-generational family businesses totalling around 5,000 spread around the country. The ability for all 5,000 businesses to be involved in collective bargaining is practically impossible,” its submission says.

Also relevant to horticultural businesses are the 90-day trial provisions, which will only remain in place for new employees in firms with fewer than 20 staff. Seasonal workforce fluctuations created definition and compliance issues for horticulturists. Business NZ proposed increasing the minimum employee number to 50 staff before losing the ability to make 90-day trial hires.

Meanwhile, Business NZ said the clause repealing employers’ right to opt out of a multi-employer collective agreement (MECA) “strengthens the probability of fractious bargaining and increased industrial tension”.

“Compulsory MECA bargaining fails to recognise such matters as differences in employer size, profitability and ability to pay, or the need for commercial sensitivity. That commercial confidentiality can by no means be guaranteed has long been an employer concern.”

Other parts of the submission raise concerns about whether union delegates will be “asking” or “telling” their employers when they would be taking paid time to attend to union matters. Business NZ would rather see mutual agreement required.

Provisions requiring employers to give details of all new employees to the union, irrespective of joining it, were also opposed, along with restoring the “all or nothing” approach to dealing with employees taking low-level industrial action.

“Given that strike action is restricted to supporting collective bargaining, the proposal also strengthens the ability of workers and unions to conclude collective agreements, particularly new ones at an industry level,” the Business NZ submission says.

The education and workforce select committee has until August 1 to report the bill back to Parliament. The government has been acutely aware of not wanting to repeat the ‘winter of discontent’ with the business community experienced by the newly elected Labour government of Helen Clark, in winter 2000.

Timings for oral submissions on the bill have yet to be posted.

Not all objections from employers look too difficult to solve, the question of staggered meal breaks being one. The Bill requires all employees, bar essential services, to take simultaneous breaks. Employers say they’re all for breaks, but want to be able to keep operations running rather than the productivity loss of a full stop and start.


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