Memo to Herald: Industrial Relations 101

This morning the Herald reports:

“District health boards have announced a settlement to the long-running and bitter employment dispute with junior doctors, but the doctors’ union says they are only considering an offer.
… Deborah Powell, for the doctors, said the boards had simply made an offer which had been taken back to union members.”

Powell is right. It’s the law:

Section 51 Ratification of collective agreement

(1) A union must not sign a collective agreement or a variation of it unless the agreement or variation has been ratified in accordance with the ratification procedure notified under subsection (2).

(2) At the beginning of bargaining for a collective agreement or a variation of it, a union must notify the other intended party or parties to the collective agreement of the procedure for ratification by the employees to be bound by it that must be complied with before the union may sign the collective agreement or variation of it.

It is not uncommon for the members to reject a crappy pay deal, even with the unions’ endorsement (and from memory the Herald has reported such a case in the health sector in living memory), or for unions to take back to their members settlements where they are uncertain of their members’ response (say, because the management representatives are adamant that the workers will accept).

It is not clear here whether the RDA is recommending acceptance, or whether it will simply say “this is the best offer to date, if you want more than this you’ll have to take strike action again.” From what Powell says, it sounds like the latter. In which case the DHB’s representative is being previous, and possibly mischievous.

The point that the Herald seems to be missing is that the union is, at the end of the day, governed by its members. Despite what some people think, union members are not puppets dangling on the ends of union officials’ strings. That charicature may arguably have had a modicum of truth thirty years ago, but it is time to lay it at rest.

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Striking times

More warnings of a summer of strikes in this morning’s Herald:

“A surge in workplace strikes could hit New Zealand because of tough economic conditions, an employment relations specialist says.”

Fred Adelhelm points to workers struggling with rising food and fuel costs and a few recent high-profile wage deals putting unions under pressure to seek increases of 5% or more. This may lead to strife he says:

“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.”

This analysis echoes Andrew Little’s warnings in April. I posted at the time on the gap between Little’s rhetoric and the reality of a quiescent workforce. Adelhelm has raised the issue again, and there is more justification to make such a prediction now.

But I’m still sceptical about a summer of discontent. Workers may be amenable to arguments about the bottom line if employers are willing to share financial infomation and do deals around job security, work/life balance and other important issues.

One point in passing. The Herald reporter implicitly makes a pitch for the Employment Contracts Act 1991 and gets things wrong:

“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.”

Take a look. Stoppages (as measured by NZ Statistics) started falling in 1977 and continued falling to historically very low levels before 1991. The ECA did not result in a marked decrease in industrial action. Them’s facts.

Compensation for Veitch?

Well, turns out that TVNZ executives were told last December of Veitch’s “assault”.

That word “assault” comes from this morning’s HoS headline, although it is not supported by anything in the story. It raises an important point. What did Veitch tell his bosses (four of them were told)? Why is this so important?

First, if an employer condones a particular behaviour, then it can’t reasonably expect to be able to dismiss at some later point for that behaviour. By ignoring the behaviour, the employer is accepting that it’s okay.

Underlying dismissal with cause for misconduct, non-performance or dishonesty is that the employer can no longer trust the employee, and rely on them to do their job honestly and competently.

Further, if it was an assault, they arguably became complicit in covering up a criminal offence.

Assuming that the TVNZ executives knew something like the full extent of the matter, but proceded to sack Veitch anyway, MacDoc raises the question of whether Veitch might be awarded compensation (and reimbursed for lost wages) should any dismissal by TVNZ be found to be unjustified.

This is technically possible. But note that the courts are required by the Employment Relations Act to take into account the extent to which the claimant contributed to the situation which led to their dismissal. And, as a practical matter, I wouldn’t want to be the one determining how much of the humiliation, loss of dignity and injury to feelings Veitch might suffer was the result of any dismissal.

Why does there not appear to have been a clause in the contract of this high profile “personality”, whose value to TVNZ depends on public popularity, for just this sort of situation? There should be, and if there is, then dismissal ought not to be a problem.

In any event, it is clear that at the very least there needs to be an enquiry into the response of TVNZ last year. Ideally, we might see some resignations before then.

Memo to TVNZ: Removing Veitch from the Olympic coverage team is not  enough.

Update: The Government has started asking questions. PM Clark says that there is a “moral crisis” at TVNZ, and Mallard is refusing to be fobbed off with a whitewash. Looks like some heads may roll at TVNZ, after all.]

One reason why National would be a calamity

A couple of years ago I met a university student who’d been working in an airport down country. As she told her story, we uncovered numerous breaches of various pieces of employment law by her employer, who ran the airport cafes and bar. I was amazed at the arbitrary behaviour of her managers and their blatant disregard for the law.

National’s sack race

National’s policy to let small businesses sack their staff on a whim will come as no great surprise to readers of this blog.

Undoubtedly, having to justify sacking workers could be hard on small employers who hire a non-performer or someone who really doesn’t fit in. But sack them they can. If the job is a relatively simple one, then should performance problems arise, the period given for improvement is relatively short — weeks rather than months.

And it’s not difficult to sack someone fairly. The rules of “natural justice” are not complicated. There are handy little books (wrote one myself) available, and local polytechnics, employers associations, etc, run short courses explaining these matters.

Actually, anybody hiring other people really ought to do such a course and learn about the pitfalls of being an employer, and the ways to get the most for all parties out of the empoyment relationship. Note that National’s policy doesn’t do that. Quite the reverse — it seeks to make employers less accountable.

So, what’s the problem?

Lifting the veil on National’s IR policy

National may be acting coy over their policies, but they’ve said enough in recent times that we can predict the basic shape of their industrial relations policy.

In broad terms, I don’t expect radical change. For sure they’re under intense pressure from their corporate paymasters to change things in the bosses’ favour, but there are two good reasons why they won’t go the whole way and re-enact the ECA (even under the guise of amending the current Employment Relations Act, which was the ruse they had planned in 2002 and 2005).

First, they appear finally to have learnt the lesson that NZers don’t want radical neo-liberal reform. The then IR spokesman, Wayne Mapp, was at pains to assure a conference of IR academics at the beginning of last year that this was the case. Since then they have the sobering example of Howard’s defeat, in which the notorious “Workchoices” law played a major part. (Not to mention ACT’s polling.)

Secondly, they don’t need to make major changes in favour of the bosses. The ERA wasn’t a return to compulsory unionism, union monopolies, and extension of awards across industries and occupations. You only have to look at the union membership figures — hovering around 21-22% these last 8 years — and the lack of large pay increases in the face of record low unemployment to see that the ERA hasn’t made a big difference.

So, what will the Nats offer their major sponsors in return for their support?

Give them a break

A couple of years ago my brother rang up, asking indignantly whether or not workers are entitled to tea breaks. His partner worked (standing) in a food bar in a large shopping mall and had been told she didn’t work hard enough to justify a break between starting work at 6am and a very short lunch break around 1pm.

It comes as a shock for many to learn that NZers are not entitled to breaks at work (except for pilots, truckies, and the like). Since the Employment Contracts Act 1991 swept away awards, breaks must be negotiated.

Remember Bill Birch’s assurances at the time that such conditions were “protected”? This was never going to be the case for the most vulnerable workers — cleaners, hospitality workers, petrol station attendants, etc — and so these conditions were lost.

Surprisingly, the Labour-led governments have not sought to restore tea breaks until this year. There was a view in 1999 that the new Employment Relations Act would fix these problems.

Protecting vulnerable workers: still work to do

Overshadowed by the Budget, the Minimum Wage and Remuneration Amendment Bill passed its second reading last week. I missed it amongst the Budget excitment, but Stargazer picked it up. It’s important.

The Bill provides minimum wage rights to workers employed as independent or dependent contractors. (The latter depend on their employer for work, as many truck drivers do, for example.) These workers are not covered by most of the laws that give employed workers rights to paid holidays, paid parental leave, wages protection, personal grievances and so on. The Health & Safety in Employment Act is a rare exception.

This is not a problem for those workers who are truly in business in their own right. IT specialists, graphic artists and the like. They tend to have sought-after skills and can look after themselves. They choose to work as contractors for the flexibility, freedom from dopey bosses, etc.

It is a problem where the legal distinction is used as a loophole by unscrupulous employers to avoid their obligations to their employees. Too often the contractual relationship is a facade for exploitation.

A timely warning about workers’ rights

The Standard reports a warning on Morning Report this a.m. from Australia’s ACTU president (and kindly provided a transcript):

“We say to your workers here, be very careful, you don’t want to go backwards to the early 90s, it’s a world that is not good for working people. Rights at work are fundamental and I would urge all of your workers to make sure that political parties here, if they want to change the government, actually, do the right thing by workers.

“Certainly when we look across the ditch…we see you with a rights base that’s been reconstructed after the era of the early 90s that does much better things with collective bargaining, much more respectful of workers. And we were so envious of that in the last eleven years. So be careful, don’t go backwards, that’s our message.”

Well, yes, we had noticed ourselves how bad things got here in the early 1990s. But, given that NZers currently seem amenable to trusting National not to undo the goods things the Labour-led governments since 1999 have done, it is a timely and welcome warning.

I’d query whether there was that much to choose between the NZ & Australian employment legislation between 1999 and 2005, when the infamous “Workchoices” amendment came into affect.

I’m much of Matt McCarten’s view that the Employment Relations Act 2000 is really just the ECA with access. I don’t think that the good faith provisions have made much difference to the vast majority of workers — that’s what the government’s review of the ERA showed — and the 2004 provisions to deal with “passing on” haven’t impacted outside of a small number of workplaces.

That said, access is very important. It seems to have been a major factor in unions being able to keep up with the unprecedented growth in the workforce under Labour — while replacing members who emigrate, die, retire, etc. This is no mean feat.

But at the end of the day, that’s all the unions have managed. That’s because the ERA does little more than provide unions with a platform from which to make a pitch for members. And with wage increases generally at or above the level of inflation this past decade, it’s been a difficult pitch. Most workers in non-union workplaces have yet to be convinced that the union would make much difference, according the only survey to ask them.

Things might change now that the economy is entering a rocky patch, but that remains to be seen. We do know that the ERA has not provided many low paid workers with access to unions; levels of unionisation remain at around 10% in this sector, and that’s where unmet demand for unions is greatest.

Can we trust National not to thrust us back into the dark days of the ECA? It does seem that they have cottoned on to how unpopular anti-worker laws are. Certainly, the fate of Howard and his Workchoices law provides National with a sobering reminder.

Since Key took over, the hysterical attacks on the ERA by Wayne Mapp have diminished, and noises have been made about no substantial changes being made to the current settings. We await the release of their policy with optimism, tempered with fear of backsliding after the election (should they win).

Industrial unrest: Chicken Little?

Today’s SST includes a warning from Engineers Union Secretary Andrew Little of industrial action over wages claims: “I think that’s without doubt. The scale of it I couldn’t predict, but I’m detecting among our members a real determination and good on them.”

Coincidentally, Statistics NZ released the latest statistics on industrial action (lockouts included) last Tuesday: “Twenty-nine work stoppages ended in the December 2007 year… This compares with 42 stoppages for the December 2006 year. Stoppages in the December 2007 year involved 3,980 employees, and losses of 11,035 person-days of work and $1.9 million in wages and salaries. In comparison, the 42 stoppages in the December 2006 year involved 10,079 employees, and losses of 27,983 person-days of work and an estimated $5.2 million in wages and salaries.”

Why the gap between Little’s warning and reality? Why, over the 7 1/2 years that the Employment Relations Act 2000 has been in force — during which we’ve seen an unprecedented tightening of the labour market — has there been so little industrial disruption? Since 2000, stoppages have ranged between 53 and 29 annually, well down from the peak of 567 in 1977.

After all, remember the doomsayers on the right, led by Prebble predicting unionist “jackboots” in our workplaces? Remember the desperate attempts of Wayne Mapp, National’s hapless IR spokesperson, to seize any hint of increased industrial action to prove that the sky was falling on our heads?

It seems that, with wage increases at or around the rate of inflation, NZ workers have been happy enough at work (the lower paid excepted). In a tight labour market, unhappy workers or those looking to improve their pay and conditions, have been able to switch jobs relatively easily.

There is very real pressure on the lower paid, on whom the price rises on household necessities impact greatest. But they were left without union representation in the first months of the Employment Contracts Act, and with 90% or so still left to their own devices, there’s not much likelihood of industrial action there. (Matt McCarten’s Unite aside.)

We are entering a new era for the ERA; it has never been tested on rough roads before. My pick is that industrial disputation will increase, and may very well surpass the 53 stoppages recorded in 2005. But the sky won’t fall on our heads. Andrew Little might finish up looking like Chicken Little.