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16/5/2018 — Economics, Politics and Government
Employers at odds with minister
By Dene Mackenzie

Workplace Relations Minister Ian Lees-Galloway has been taken to task by the Otago-Southland Employers Association for comments he made on television on Sunday.

Reviewing Lees-Galloway's transcript from TVNZ 1's Q+A, Otago-Southland Employers Association chief executive Virginia Nicholls said several of the claims the minister made were incorrect.

One of them was: “People who are on collective agreements are twice as likely to get a pay rise,” she said.

The statement only applied to Government employees, not to people employed in the private sector.

About two-thirds of people on a collective agreement were Government employees and public service employees could use to collective agreements to push up wages because their employer, the Government, was able to borrow to fund higher wages, Mrs Nicholls said.

“Private sector businesses would not be sustainable if they had to borrow pay for wage increases. In the private sector, it is not true to say people on a collective agreement are twice as likely to get a pay rise.”

She also took odds with claims Australian wages were higher because the collective bargaining framework was not dismantled. The difference in wages between Australia and New Zealand was not because of collective bargaining but because the economies of the two countries were different.

Australia's economy was based on mining and large-scale capital investment by multinational companies. New Zealand's economy was on a smaller scale, agricultural-based, and had less capital investment in technology, Mrs Nicholls said.

“This is the key reason for the differences in wages, not the bargaining framework.”

Flexibility had been lost as a result of the Employment Relations Amendment Bill, she said. There was a compulsion for employers to bargain and to reach an agreement regardless of the claims being bargained.

Employers were required to perform administration for unions and it was compulsory for all meal and rest breaks to be taken at the same time. Also, larger companies could no longer use the 90-day trial period.

“And the Bill clearly says union officials may enter the workplace without having to notify the employer of seek their consent,” Mrs Nicholls said.

Speaking on TVNZ 1's Q+A, Lees-Galloway said he wanted to see union membership among workers increase but the Government would not opt for compulsory membership.

“The evidence is very strong around the world where industries have high union density, where people are covered by collective agreements, their wages rise much faster than the rate of inflation.”

He accepted some businesses would not be able to operate under its plans and said the change would be implemented with enough time for businesses to choose whether they could continue.

Operating in a global market meant businesses needed to be resilient. They needed to be able to work with different market forces.

“What we as a Government have to do is make sure there is an environment in which new businesses can develop, new jobs can be created and, as thing change for people, new opportunities become available for them,” the minister added.

*Dene Mackenzie is business and political editor of the Otago Daily Times.

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