-Dieter Adam, CE, The Manufacturers Network

The Government has launched a couple of working groups which will be critical over the coming years in the area of employment law and regulation. We already have the Employment Relations Amendment Bill, to which we submitted and presented our comments to the Select Committee, and now there is a review of the Holiday Act 2003, as well as a Fair Pay working group.

After a number of high profile cases of underpayment of holiday entitlements by some employers (both private and public sector), the Government is reviewing the Holiday Act 2003.

The review group will include representatives from Business NZ, Unions and Government, and will be chaired by Gordon Anderson, law professor at Victoria University. The group is set to report back in 12 months, though any legislation changes will likely be two or three years away, depending on political movements.

In terms of detail, so far, we have a Cabinet Paper outlining the terms of reference, which include key objectives of the review to develop options that:  

• make the provision of, and payment for, entitlements to holidays and leave simpler and more readily applicable to the range of working arrangements in the labour market
• provide clarity and certainty to employers and employees so that employees receive their correct entitlements and employers’ indirect compliance costs are reduced
• aim to protect the overall entitlements to employees
• are easy to systematise and implement in payroll systems

One example of the issues in the current act described in the Cabinet Paper is the definition of a working week, when hours may be variable, or a company’s roster and production cycle does fit into a weekly cycle – the act does not provide clear guidance and simple rules for how to deal with such a situation.

On the surface, some of these aims could result in useful change – a system which is simpler and easier to implement for businesses would be helpful.

The review needs to focus on reducing compliance costs for businesses and working effectively with existing payroll systems to correctly meet requirements – it can’t be an exercise of drastically increasing such compliance costs on manufacturers, who already face challenges in remaining competitive in a relatively high-wage country.

The second is the Fair Pay Agreements Working Group, chaired by the Rt Hn Jim Bolger:

“The Group has been established to make independent recommendations to the Government on the scope and design of a system of bargaining to set minimum terms and conditions of employment across industries or occupations.”  It is set to report back by the end of 2018 and its core scope is defined as:

• the criteria and process to initiate bargaining on a Fair Pay Agreement
• how bargaining participants will be identified and selected – by industries, occupations, or both
• what Fair Pay Agreements should cover in terms of scope
• bargaining rules and dispute resolution processes, and ratification and enforcement of Fair Pay Agreements

It is not yet clear how “industry-wide” might be defined in such Fair Pay Agreements, but we are fundamentally opposed to this government’s drive to keep using a steamroller to ‘level the playing field’ for pay agreements.

As if the collective bargaining provisions in the proposed Employment Law reform weren’t bad enough, these moves completely ignore the commercial reality our members operate in.

As manufacturers we know that two manufacturers across the country may appear to be in the same industry, either through what they produce or through employing similarly qualified workers, however, they may have greatly different abilities to pay their workers.

A fair pay agreement which required the same wage standards across such similar, but very different businesses, would undoubtedly jeopardise the global
competitiveness of our manufacturing sector.

This Government is wasting time and effort on trying to turn the clock back and shape the labour market in a way that is completely out of step with the way our economy will and needs to develop.

Our economy, and that of our peers, is changing to become more variable, flexible and dynamic every day – from consumer demands to production processes to workers’ expectations on how they are being treated.

And on the other hand, we still are waiting to see any significant work to address the long-term challenges to our economy and manufacturing sector – how do we move to a higher value and productive economy which then can afford to pay the improved wage rates we want for our people?

The Future of Work Commission holds some promise, but that is only part of the picture.

It is still very early days, but the best thing to do is to get involved and support us in pushing back on these efforts. We will send a request out to our manufacturing members when discussion documents are available for feedback.