National ensures industrial relations remains big point of difference

THE DOMINION POST - FRIDAY, 30 JULY 2010

Helen Kelly, the president of the Council of Trade Unions, wrote to the prime minister this week announcing what The Dominion Post called "a divorce between unions and the government". The letter was prompted by the announcement of legislative change by the National Government in the employment law area.

It seems that industrial relations will once again be a key issue in the divide between National and Labour. In fact, there are almost 40 proposed changes to employment law as it stands in the Government's various announcements. Overall, the changes clearly favour employers, as one would expect from a National government.

A number of the changes are of a tidy-up nature but some are significant. With many of the changes, the devil, if indeed there is one, will be in the detail.

The test applied in personal grievances has swung gently the employer's way. What a fair and reasonable employer could have done in all the circumstances, rather than what they would have done, is now to be the judicial focus. The employer's specific circumstances and the options available to them at the time will now be considered. The Employment Relations Authority or Employment Court must not substitute their judgment for that of the employer. In the personal grievance context, procedural errors will take on less significance.

Much has already been said about extending the 90-day trial period to all employers rather than just those with fewer than 20 staff. Trial periods of three months and longer are common in many other countries.

Unquestionably, workers' rights to raise a dismissal grievance are largely removed during the so-called 90-day trial period. The thinking behind this is that more people will be taken on by employers if employers are aware they can get rid of people, without challenge, if they don't work out, within the first 90 days.

My view is that this will create a few more jobs but the change won't have any significant effect on unemployment. Most employers are not going to get rid of someone who is good after 80 odd days merely because they are able to do so. They won't want to waste a good resource and/or training invested. However, some will not be so scrupulous.

The Government has proposed many other changes, including to the operation of the Employment Relations Authority, which hears most employment claims that arise in New Zealand. The proposed change to the authority is from an investigatory body to something more in the nature of a traditional court, with cross- examination as of right. It will be less of the quick and inexpensive forum that it is sometimes described as.

Workers' holiday entitlements will also change. They will be able to cash up one of their full week's annual leave. My view is that annual leave is to give people a paid holiday. Cashing it up seems to defeat that. Employers do not have to agree to a request to cash up leave, but if they do so they will be paying 53 weeks of wages (rather than the 52 weeks that they do now).

The only change in the proposal that appears clearly wrong is allowing employers to ask for proof of sickness or injury after sick leave, within three days, without a basis.

Even if an employee is sick for one day they may be required to provide medical evidence. Sure, the employer has to pay the cost of the doctor. The justification is to prevent abuse in case of the worker who, say, is always sick on a Monday.

That, however, is already the present law. The only difference is that currently employers need to have reasonable grounds to believe there is abuse occurring. That seems a sensible safeguard, all the more so given the difficulty in seeing a doctor with a few hours' notice. And if the worker doesn't get a medical certificate, is that a disciplinary issue or does it mean that they won't get paid sick pay? The proposal does not say.

One interesting change, in an emotive area, relates to collective bargaining. Should employers be allowed to freely communicate directly with their employees during collective bargaining or should they have to direct their arguments to the union and union delegates at the negotiation.

Should the union be the principal source of information to the workforce?

And should the employer be allowed to effectively undermine the union's position with its information packs? The proposed law swings these matters the employers' way.

The change that will have the most impact for unions as institutions is the proposed limitation of their right of access to workplaces. I'm sure that is a lightning rod for the union movement, and the feisty letter written by Helen Kelly to the prime minister illustrates this. It will cut the money supply!

The current right of access for unions was legislated by the old Labour government. It gave union representatives the right to enter a workplace at reasonable times having regard to the normal business operations of the workplace.

National's new law reverses that. It goes back to the law that we had under the Employment Contracts Act, which came into force in the early 1990s. The new law says that union representatives can enter the workplace only with the consent of the employer but that consent must not unreasonably be withheld.

Access to workplaces is an emotional issue for many employers and unions.

Many employers will see the union as potentially disruptive. The unions will see (potential) members entitled to proper representation and protection become harder to reach.

If National wanted to galvanise trade unions as an organisation, it has guaranteed that with its change to the right of access.