Speech Notes: Minister of Labour Hon Margaret Wilson
Biennial Conference New Zealand Engineers Union
Wednesday, July 17 2002

Before this Labour Government was elected in 1999 we promised a more balanced approach to employment law and that is what we have delivered. On October 2 2000, the Employment Relations Act (ERA) came into effect, changing the focus of the employment relationship from one based on purely contractual principles to one where the human relationship is at the forefront.

There is a general approval of the Act from the public, business and unions. Even the National Party has now indicated support for the concept of good faith and the institutions set up under the Act.

This Labour Government's aim has always been to restore balance in employment relations and progress has been steady. It will continue in the same vein over a second term. There is still work to be done in several key areas such as holidays, pay equity and health and safety. We will also take further steps to improve New Zealand workplace/family life balance.

Good faith

The overarching objective of the Employment Relations Act, as you know, is to build productive employment relationships through the promotion of mutual trust and confidence in all aspects of the employment environment.

The ERA strikes a balance between the need to redress the imbalance of power which is inherent in many employment relationships and the need for flexibility which enables firms to be competitive and efficient in our open economy.

Collective bargaining is a recognised means of redressing the imbalance of power in a systematic way. The Act encourages employers, managers, unions and employees to deal with each other in good faith. This promotes responsible unionism as well as requiring all employers to respond in good faith. While employers and employees may have a range of different interests, they have a common interest in the viability and success of the business.

As you know, the requirement to act in good faith applies to all parties in an employment relationship. It is not just a requirement on employers. Employees and unions must also act in good faith towards employers. Unions and their members have to deal with one another in good faith. When bargaining for a collective agreement, employers and unions must meet. They must seriously consider each other's proposals. Where relevant, quality information should be provided to back up claims. At the same time, neither party should keep raising the same issues over and over again even though they have already been considered and rejected by the other side.

The requirement to deal with one another in good faith is not restricted to the bargaining table. The requirement applies when any matter under a collective or individual agreement arises. It applies at all times between an employer and employee. It applies when unions consult their members, seek to visit a workplace or hold a secret ballot. It applies when employers consider proposals that may affect employees or make them redundant.

Good faith is simply maintaining good relations and mutual respect. Good faith is not about always saying "yes". Nor does it stop the parties from expressing facts or reasonable opinions about the other side. It is about process.

Mediation services

The mediation services offered by the Department of Labour under the Employment Relations Act are one of the great successes of the legislation. They are about efficient, flexible and innovative problem solving. In the first 18 months under the ERA, mediators have been asked to help more than 10,000 times. When parties to an employment relationship ask for mediation assistance, over half are dealt with within three weeks, and 92 per cent within three months. Only 13 per cent of completed mediation applications were recorded as "not settled".

Early intervention has helped in delineating the issues, to enable a continuing dialogue beyond the mediation. The end result in many instances has been a salvaged employment relationship that, without early intervention, might have deteriorated.

Employment Relations Authority

In situations where mediation has not been able to solve the problem and legal intervention cannot be avoided, the Employment Relations Authority has been able to act in a fast and effective manner.

Half of the Authority's cases are dealt with within three months, and nine out of 10 within seven months. Those figures are a vast contrast to the situation that festered under the previous government, roughly halving the wait people faced in the Employment Tribunal under the ECA. The backlog of Employment Tribunal cases has almost been dealt with, at the end of May just 207 of the 2,680 inherited with the ECA remained.

Employer associations are supportive of the performance of the Act and its institutions. The Employer, Manufacturers Association (Northern), in a first year report on the Act, said the Act has had a promising start and it is working well in some key areas. These sentiments have recently been repeated by the EMA - with mediation and Employment Relations attracting high praise.

Case Law

When it comes to the application and interpretation of the Act, case law is reinforcing what good faith requires of the parties to an employment relationship.

The 'rules' around bargaining - in particular, rights of union access and representation and the application of good faith bargaining - have been subject to some judicial interpretation. For example, the Independent Newspapers Ltd case provided the first substantive decision on good faith bargaining.

By failing to agree to venues for bargaining over a protracted period, then refusing to respond to specific proposals for an agreement, the employer was found to be in breach of good faith. The Authority also found the parties should wherever possible bargain over issues capable of resolution rather than allowing specific matters to frustrate the bargaining as a whole.

Another case involving the issue of the extent to which unions can use rights to enter workplaces was the National Distribution Union Incorporated v Carter Holt Harvey Limited case in December 2001.

Here, the Court found the company breached the Act and its good faith obligations by refusing the National Distribution Union access to the workplace - where its members normally worked - when the union was entitled to do so under the Act.

I am aware you will also be closely following the outcome of the current case in respect of Carter Holt Harvey at Kinleith, however as the matter is under appeal, I will not make any further comment on it.

Unions

In relation to unions and the Employment Relations Act, since the Act came in, union membership has increased by 12.4 per cent to more than 340,000. As at the end of June 2002, 170 unions were registered under the Act.

By legally recognising registered unions, the ERA provides unions with greater legitimacy in bargaining and gives employees greater ability to exercise their right to freedom of association.

After an initial bedding down process, it is clear employers and employees are now going about their business supported by sound legislation and strong support from the Department of Labour's Employment Relations Service. The relationship between business, unions and employees with the Employment Relations Service is an outstanding success of the new legislation.

Other areas for reform - Holidays Act

While the ERA is working well, the Labour government is committed to reform of other areas of employment law to provide balance and fairness, and employment law more in tune with modern business requirements.

One such change is the proposed new Holidays legislation. The new legislation aims to simplify what has been a complex and difficult area of employment law. It aims to clarify entitlements creating a regime that is much easier for businesses to apply, understand and plan for. Measures such as providing that payment and day in lieu entitlements for all statutory holidays will be treated in the same way, will give greater certainty in legislation.

We will also review the legislation to identify ways of promoting balance between home and work life. Work on drafting a new Holidays Act is being undertaken by officials from the Department of Labour in consultation with the New Zealand Council of Trade Unions and Business New Zealand. We intend to introduce a new Holidays Bill into the House shortly after the election.

Pay Equity

Another area the Labour Government is committed to is introducing measures to address the gap between male and female wage rates.

The Ministry of Women's Affairs, the State Services Commission and the Department of Labour are currently involved in researching options for promoting pay equity with the aim of closing gaps in pay.

Health and Safety

A third area the Labour Government is committed to reforming is that of health and safety in employment with the Health and Safety in Employment Amendment Bill almost ready to pass.

The Bill provides for shared employer and employee responsibilities by improved participation in the management of health and safety at work and ensuring greater incentives for compliance and for people at work to achieve positive health and safety outcomes in the workplace.

We will also be holding an inquiry into the management of hazardous substances in the workplace - particularly those in the health, printing and manufacturing sectors, and the general use of aldehydes and solvents.

Other areas

We also have further plans for action to make workplaces better including:

• A review of the effects of casualisation on the workforce
• A Ministerial Advisory Group to examine the adequacy of redundancy law and provision
• The introduction of a minimum code of practice for state sector contractors to ensure observance of fair and ethical employment practices

Conclusion

In conclusion the changes that have been made by the Labour government have resulted in a more productive and workable employment relations framework. The Employment Relations Act has changed the focus of the employment relationship from one based on purely contractual principles to one where the human relationship is at the forefront. The services offered to help in preserving this relationship through dealing with employment relationship problems are also being lauded as effective and a change for the better. The consensus is growing as the Act proves itself in New Zealand workplaces. The Act, and the Employment Relations Service which implements and administers the legislation are both in good shape.

This Labour government is committed to working with all sectors to create an innovative growing economy. Essential to this is a foundation of fair and productive workplace relationships. We have made steady progress in restoring balance over the past three years and will continue to build on this foundation in our next term.