National’s IR policy is bollocks, but could be worse

National have released their “full” industrial relations policy. There’s nothing much there of surprise to readers to my earlier post. Here’s my take on the not-so-bad and the ugly…

The worst bit National confirms its 90-day probation period for new employees of small businesses (and franchisees of large businesses?). But, unlike Wayne Mapp’s private member’s bill, the Nats say there will be:

“… safeguards for workers. Good-faith provisions will still apply, as will rights to sick leave, holidays, and health and safety provisions. Rules of natural justice and human rights legislation will apply. Mediation will be available in disputes, and employers won’t be able to hire and fire the same employee every 90 days.”

Should the worst come to the worst, and National be in a position to proceed with this proposal, then there is something here to build on in the drafting and select committee processes. Will dismissal be prevented where a worker is seeking mediation over their statutory conditions such as holidays, sick leave, etc? what about a provision preventing employers from hiring and firing a succession of workers?

Nonetheless, the need for this measure is overstated by the Nats as I have discussed in a recent post. In brief it’s unnecessary and unfair:

  • It’s not that difficult to sack non-performing workers.
  • There is not the need to involve lawyers anyway.
  • There is no hard evidence of any problem with smaller employers being reluctant to hire new staff — the problem has been skill shortages for some years; what, with unemployment rates around 3.5%.
  • It impacts in particular on the low-paid and most vulnerable workers with the lowest protections from union membership.
  • It allows small employers to opt out of fairness in employment, just when we need higher levels of trust and cooperation in our workplace relations to underpin the workplace reforms necessary to allow high productivity.

The other bad bit The Nats also want to reintroduce Max Bradford’s proposal allowing workers to cash in a week of their annual leave. But, unlike Bradford’s attempt — which may have played a part in his ignominious electoral defeat — “This can be only at the employee’s request and cannot be raised in negotiations for an agreement.”

It might just be okay for the highly skilled IT specialist, say, who is saving to travel the world next year. But I can see a lot of low-paid workers finding their bosses refusing pay rises — and these workers tend to be the ones without union coverage, remember — and subtly or unsubtly suggesting that they (the workers) have other ways of getting a pay rise. Like selling their hols.

On the brighter side(?), National promises to:

  • Continue to allow union access to workplaces with an employer’s consent, which cannot be unreasonably withheld.

Does this mean access for recruitment, etc? The word “continue” suggests that it does, but I’d like this clarified. If it does, it’s an important improvement over the ECA.

  • Continue to support the social partnership with Business NZ and the Council of Trade Unions to work together on issues of mutual interest.

Nice. Let’s hope this happens.

  • Restore workers’ rights to bargain collectively without having to belong to a union

Predicted, and not likely to make much difference in practice, whatever trade unionists say. Unless, that is employers are allowed to set up bogus collective agreements in order to prevent unions from organising and negotiating genuine collective agreements. This also needs clarifying.

  • Retain the Mediation Service but ensure it is properly resourced with properly qualified mediators

Everybody is agreed that the mediation services have been the outstanding success of the ERA. Not sure that there is that much of a problem here, so it’s a little unsettling that National should go to the trouble of putting this in its policy. What do they mean?

  • Require the Employment Relations Authority to act judicially in accordance with the principles of natural justice, including the right to be heard, and the right to cross examine before an impartial referee.

On the face of it shouldn’t cause too many problems. Are they going to provide more resource here?

  • Allow injunctions and important legal questions to be heard in the first instance in the Employment Court, and allow a general right of appeal to the Court of Appeal

Ditto.

  • Appoint a working party to review the Holidays Act, especially the issue of ‘relevant daily pay’.

This disadvantages those workers who earn a large part of their pay through regular overtime. Again, we’re not talking IT professionals here.

To sum up. National says it “believes employment law should treat employees and employers fairly, expand opportunities for those having difficulty getting work, increase flexibility, and let businesses grow.” In practice, its policy is unfair to lower paid workers, will do little if anything to expand job opportunities, increases flexiblity only a little and at the expense of the lowest paid workers in particular, and contains nothing meaningful that will help businesses grow anything except their profits.

The problems that it purports to attack are not the problems that NZ needs to tackle, and it hits the lowest paid and most vulnerable workers hardest. It’s bollocks. But it could be worse.

Update: The Standard comes to not dissimilar conclusions, but Gordon Campbell is closer. The Herald sees National as “largely retaining” the ERA.

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13 Responses to “National’s IR policy is bollocks, but could be worse”

  1. The Standard 2.01: Between the lines: Nats’ work rights policy Says:

    […] UPDATE: Jafapete has some good analysis here. […]

  2. roger nome Says:

    Nice work pete- I’ve had a go at it over at my blog. Look forward to discussing this more. There’s a lot of things that need clarifying

  3. MacDoctor Says:

    As we’ve discussed before, JP, the 90-day probation is aimed squarely at “misfits” rather than non-performers. The non-performers are, as you point out, relatively easy to dismiss (although sometimes quite expensive). Where the problems lie is with the abrasive and the divisive. People who perform their work, but seriously damage the functioning of a small business community. Under the current ERA, these people are practically impossible to remove until the damage they cause spills over into their work. By then the damage is often irreparable, with good staff resigning and contracts lost. It is also not good for the employee, who often has to endure excessive criticism and very confrontational encounters with their employee – sometimes for many months.

    I agree with you that the implementation needs to be well defined. I especially agree that some limitations need to be placed on franchises, specifically those that use unskilled labour with naturally high turnovers. I remain unconvinced that you need a whole 90 days to determine whether someone is truly unsuitable in a small business environment. My experience is that 30 days is usually ample (though it may take up to 18 months to dismiss the person). Reducing the probation to 30 days would go some way to alleviating concerns of abuse. Even a high-turnover business such as a cafe would have enormous problems attempting to rotate its staff every 30 days!

    I find your concerns about converting holidays to cash to be doubtful. You seem to think that un-unionized low-wage workers might be exploited. My experience with said people is they are sharp as tacks when it comes to wage negotiations and often do better for themselves than unionized workers! I can’t imagine them being conned into thinking that they don’t need a pay rise because they can convert their fourth week into cash.

  4. roger nome Says:

    MacDoctor:

    “Under the current ERA, these people are practically impossible to remove until the damage they cause spills over into their work. By then the damage is often irreparable, with good staff resigning and contracts lost.”

    You want to use a nuke for a problem that barely exists. You’ve got no justification.

    Secondly, a study shows there are 1.5 employment related problems per 100 workers a year in the private sector (2.9 for small businesses). The median cost was $5000 ($3,900 for small businesses). Of these ERPs, most were handled quickly and cheaply by agreements between the employer and the employee; only 5% went on to become personal grievance cases. Only 10% of disputes involved employees who had been employed for less than 3 months.

    http://www.thestandard.org.nz/?p=2505

  5. MacDoctor Says:

    Roger nome: You want to use a nuke for a problem that barely exists.

    Ahh, don’t you just love statistics? So easy to hide things in them.

    It only takes one bad employee to cause enormous problems, as you would know if you had ever been in business, Roger. 2.9 problems per 100 just means that you have a 29% chance of having a crap employee if you assume an average of 10 people per small business. Now, granted, most of these are just poor at their job and the ERA makes it relatively easy to remove these people. The 5% personal grievance rate probably indicates the type of employee I am talking about – reasonable at his job but unable to work with others. I suspect this rate is substantially higher in small business which have far less ability to shuffle an abrasive employee into a less sensitive position. And the $3900 the ERA will cost you is the tip of the iceberg in terms of lost revenue and good employees resigning to get away from the twit you employed.

    And I love the statistic about only 10% involving employees who have been there for less than 3 months. It obviously does not occur to you that a divisive employee can take 18 months to get rid of under the ERA because you can’t fire him for being a prat. You have to wait until his pratishness involves his work, which usually takes a great deal more than 90 days. In the meantime, your business is substantially damaged by the rogue employee and you can do nothing about it.

  6. roger nome Says:

    “2.9 problems per 100 just means that you have a 29% chance of having a crap employee if you assume an average of 10 people”

    Not at all. It means that one in 30 employees in small businesses are going have cause for taking an employment dispute to mediation. What’s the bet that in most instances that’s because the employer has been trying to screw them out of their statutory employment rights, because it suits their bottom line? Say one third of mediated employment disputes are due to an employee having difficulty getting rid of a “misfit/uncooperative” employee – then it becomes 1 in every hundred employees.

    In that case you will be taking away hundreds of thousands of people’s statutory employment rights, just so you can punish the very occasional “rouge employee”. That just isn’t fair on the vast majority of employees, who need to have their rights protected in these industries where “labour costs” make up a huge portion of operating costs (meaning there’s huge incentive for employers to try and gain a competitive advantage by reducing labour costs.

  7. ak Says:

    2.9 problems per 100 just means that you have a 29% chance of having a crap employee if you assume an average of 10 people per small business.

    Maths not essential for a medical degree any more? (wish I knew where you practise, Macca – you’d have a less than 0.0000000000029% chance of having me as a patient, that’s for sure……… )

  8. MacDoctor Says:

    Don’t work in mental health, AK. So relax, you have a 0% chance of seeing me 🙂

    I was being sarcastic about the 29%, but obviously too subtle for you. If you wish real statistics, you will find that a 2.9% rate of complaints will translate into a 74.5% chance of having no unsuitable employees in a pool of 10 people and a 2.2% chance of having one. But it still means that about one in every four business (with ten employees)will be affected.

    Roger: Your view of the evil nature of employers is laughable. I have never met an employer keen to remove employees in order to make more money. This makes no sense in the business world at all.
    PS. I have no problem with “rouge” employees (I don’t care what makeup they wear). It’s the rogue employees that cause problems… 🙂

  9. roger nome Says:

    “I have never met an employer keen to remove employees in order to make more money.”

    It’s the threat of arbitrary termination, and the denial of statutory law (getting around the wages act) that will allow labour cost cutting.

    Anyhow, you’re just not being imaginative enough.

  10. roger nome Says:

    or how about this one?

  11. MacDoctor Says:

    Roger: You’re right, I don’t have that much imagination… 😉

  12. Quoth the Raven Says:

    MacDoctor – As Mallard has pointed out if a female employee is sexually harassed by her boss and fired for complaining she has no recourse if she is under the probabtionary period as it is a personal grievance and sexual harassment is not assault. Probably mores the better with you aye Mac silly wimmin can’t take a joke. Maybe that’s not your opinion if so what do think about such a situation?
    Over at the standard on of the commenters showed this news article from Australia.
    Article from: The Daily Telegraph

    By Joe Hildebrand, Political Reporter

    July 24, 2008 12:00am

    AN ABUSED teenage apprentice was told by his boss that he wasn’t allowed to put fresh tomato on his sandwiches in his lunch break.

    He was also told he wasn’t allowed to make phone calls on his breaks, his mum wasn’t to drive him to work and he had to have a haircut once a week.

    In an extraordinary catalogue of alleged abuse, recorded by the young man in his diary, employer John Ryan also called trainee cabinetmaker Byron Nolan a “fag”, forced him to wash all the workers’ dishes and accused him of taking drugs.

    Byron was also forced to do unpaid work on the weekends and was not paid for the first two weeks of his employment.

    Mr Ryan then sacked him two days before his three-month probation ended.


    Maybe that kind of situation is alright with you too Mac – hardworking boss with a lout of an employee. Why should that employee have any rights? Why should he have any recourse if his liberal sensiblities are offended by his good ole boy boss?

  13. ak Says:

    Macquack: I was being sarcastic about the 29%, but obviously too subtle for you

    Mother Mary. I’ve heard more inventive excuses for blatantly ignorant bullshit from 5 year-olds

    I don’t have that much imagination….

    Damn straight . Get with my old mate LigherStandard over at the Standard – he’s another purported “doctor” who needs lessons in how to apologise for outright bullshit.

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