Professional Skipper – April 2000 issue          back to articles menu

"The Employment Relations Bill"
In NZ's parliamentary system, a Bill is a proposed (draft) new Act which, when passed by Parliament, becomes the new Law. After 9 years, the Employment Contracts Act is going to be drastically remodelled - as promised in the Governments' election campaign. How will it effect you? If you're not an employer, you may think 'this has nothing to do with me'. And you'd be wrong - perhaps expensively so.

The Employment Relations Bill will, in July, progress through Parliament and become the Employment Relations Act, replacing the Employment Contracts Act.

Even the most reclusive Charter operator living in the remotest area must have heard or read something about the up-coming changes in Employment Law. If you don’t employ any staff then I guess you’re forgiven for thinking that you don’t have to worry about it. In principle I agree with you, but just remember that when you have steerageway on a vessel and you swing the wheel to Port, no matter how far away the bow is from you – even on a Supertanker, sooner or later the bow will pay off to Port. It’s a simple scientific principle called ‘cause and effect’. You may not currently employ staff, but anything that effects or changes profitability in the industry will sooner or later have an effect on you too.

For those of you who do employ staff, what then are the changes and how will they affect you? Not in any order, and this is just the main ones, here we go:

Collective agreements

Currently, a group of workers can unite together if they want and negotiate a Collective agreement with you, without using a Union to negotiate it for them and without having to join a Union. It was called ‘Freedom of Association’. From July, that right will cease to exist. Only a Union will be able to negotiate a Collective agreement. Which means that if your employees want a Collective agreement, they’re going to have to join ‘a’ Union. It might be the Seafarers Union or it could be the Pastry makers Union – as long as it’s a Union. They could, of course, register themselves as a Union and then negotiate it themselves. Realistically, that’s not going to happen. If your workers are currently on Individual contracts and wish to stay with that, they can do so without having to join a Union. Let’s look at a possible scenario.

Let’s say you have three deckhands on Individual contracts. One leaves, and you replace him with a new deckhand, who just happens to be a member of the Seafarers Union. He signs the Individual contract, but 8 months later when the contracts come up for renewal, he convinces the other two that a Collective is the way to go. Since he’s already a member of the Seafarers Union, suddenly you are no longer dealing with three individual deckhands – you’re now negotiating with the Union. At the first meeting, the Union negotiator plops on the desk a copy of the Collective covering deckhands employed by a major Ferry operator in Auckland and says ‘we want your guys on the same Collective’.  Welcome to ‘multi-enterprise bargaining’, folks. Now you’re being asked to front the same wages, terms & conditions as are paid by a much larger operation. In Auckland. And you’re in Taupo. Oh dear… This means of course that if the Auckland workers go on strike, yours will too. Labour assures us that this doesn’t lead to strike action on a nationwide front, but if you follow the logic of multi-enterprise bargaining, then the weapon is there for the using.

So, in the meeting you protest that you can’t afford to pay the rates that the large operator does. ‘Show us your books’, says the Union, and here’s the next bit:

Requirement for fair dealing:

Mischief and deceit are possible and occur on either side of the negotiating table. If someone deliberately sets out to deceive, then they will be successful some of the time no matter how Draconian your legislation is. And as a small employer myself, this next bit is pretty Draconian…

In explanation of the expression ‘Fair Dealing’, the new Bill goes on to state that both parties must deal fairly with each other – and in this they include that the employer must, if asked, show the financial position of the company and any and all future plans and strategies. It means opening the books to the Union (the real set, not the ones you keep for IRD). Taken literally, this means that if I had in my planning for this year the acquisition of another training company, I have to tell my employee at the time we negotiate the contract. So in other words, if I want to find out what Fuller’s strategies might be over the next 12 months, and see their financial position, all I have to do is get a job there as a deckhand, worm my way into Union Delegate position, wait for the next negotiation and then agitate to see the books and plans. Mind you, that would take a while. Probably easier to wait until nearer the time, and bribe the existing Union delegate.

If you do get into strife with an employee, and they decide to take a Personal Grievance against you, at the moment they have 90 days to effect a Submission of Grievance, formally advising you of the grievance. It could be done verbally but usually it is by way of a letter or notice. This is intended to show you the matter is serious, give you a chance to fix the problem without legal action and costs, and (failing that) gives a legal start point & date to the ensuing proceedings. If they don’t do this within 90 days, except in rare circumstances, there is no Grievance (‘out of time’). The Employee Relations Bill will, in one sweep, confer instant clairvoyancy on us all, since it now says that the 90-day period exists ‘from the time that an employer ought reasonably to have become aware that a Grievance exists’. Wow. Wonder which bright spark dreamed that one up. I can just see every Employer asking each staff member in turn every day ‘are you happy? Got a Grievance?’. Ridiculous. Imagine the announcement over the PA system: “All those intending to file Personal Grievances report to the Master in the wheelhouse by 0800”

Got a Union delegate on your staff? Better put some extra money in the budget for when he/she goes on a training course to learn how to file a Personal Grievance. Yes team, the employer is required to provide leave for Employment Relations Education. Oh, stick some more in the budget for four hours (all staff) per year for stop-work meetings.

And remember. If your staff has appointed a Union to represent them, from that moment on, you can’t talk directly with your staff about terms & conditions of employment or anything to do with the process or progress of any negotiation. Under the ERB, the employer must allow Unions access to your staff at reasonable times (‘reasonable’ is not defined) to recruit, discuss Union business and monitor compliance with the Act or any employment agreement…

Lastly, here’s one for those of you Skippers who think you are independent contractors – where you work mostly for one customer, and you give them a bill rather than receive wages. Self-employed, yes? And the customer thinks they can discontinue your services at a moments notice, right?

Er… maybe not. Under the ERB, if you spend most of your time working for one particular customer, you’re in danger of being considered an ‘employee’ and in return for receiving the protection of the ERB along with Holiday Pay and able to claim for Unjustified Dismissal (I kid you not) you would also presumably lose your ability to claim all those expenses and pay PAYE instead of provisional tax. AAARGH!!!

In my opinion, the ERB has been written with large employers in mind and forgetting that some 70% of businesses in NZ employ less than 10 people. Multi-enterprise bargaining (a cute name for possible national awards) fails to recognise that businesses are not equally profitable. For the small employer who’s staff want to join and work through a Union, we just have to hope that the Union will be act in a reasonable manner. From July, those who are irresponsible will certainly have the power to make life very miserable indeed. It’s two years and eight months to the next election, my friends.

My job is to teach (among other things) Employment Law, Contracts and Disciplinary & Termination procedures. What I’ve seen in the last 9 years is that the Employer perhaps had too much power in the negotiation process, but once employed, the employee was protected too darned well, necessitating much Employer time chewed up in procedural issues, and an epidemic unwillingness to deal with poor performance.

I support the concept of worker representation, for those workers who need it and want it. I support the concept of Unions helping to ensure that those workers are treated fairly, and maybe the ECA was weighted a bit too far in the employer’s favour. There is good stuff in the ERB too, by the way. It’s just that the bad totally outweighs the good, and the pendulum will swing too far back the other way. Unchecked, we’ll be back in the 70’s, with Marsden B, and the Freezing Works. Have we all forgotten the Hydrofoil, which sat on the hard stand for God knows how many years because the Union said ‘you’ll have 4 deckhands’ and the Employer could only afford two?

Carpe Diem

Steve Punter ANZIM, Dip Bus (PMER), FHRINZ
Staff Training Associates Ltd, Auckland, New Zealand.
© Steve Punter 2001 All rights reserved by the author.

steve@sta.co.nz                                                                                                                       back to articles menu