policy

The Government is considering a revamp of personal grievance laws. The moves include a crackdown on frivolous claims and new rules to control "no win, no fee" advocates who have been seen as ramping up claims against employers.

But unions are concerned that the Government is using the review to reduce employees' rights when they are sacked, including claims based on unfair process.

Labour Minister Kate Wilkinson said she had an open mind on whether changes were needed but a discussion document and questionnaire, yet to be approved by the Cabinet, would canvass what changes were needed. In some areas the law had tilted too far against employers.

Prime Minister John Key has said the Government "shares concern from many quarters about the fairness and consistency of personal grievance claims".

Ms Wilkinson said she wanted to ensure the regime was fair to both sides. "You hear stories anecdotally from employers who say, `Oh well, it's just too hard we will just pay some money to make it go away.' And that's not justice." She had also heard that some of the "no win, no fee" industrial law advocates "know their way around the procedures so well that, whatever the merits of the case, the employer might pay out".

Some employers who had a poorly performing employee, or one who was not working out, did not know how to resolve the issue. It was difficult to judge, because many cases were settled, paid out or withdrawn before they reached the Employment Relations Authority.

Of 2500 applications lodged with the ERA each year, only about 1000 go on to the first-stage investigative meeting.

She was also concerned that some cases might be "frivolous" and were clogging up the system.

She had consulted the Council of Trade Unions and Business New Zealand on the review. She said industrial relations law was generally working well, and did not need wholesale changes.

CTU president Helen Kelly said "no win, no fee" advocates tended to operate among non-unionised workers and moves to regulate them would not concern the CTU. But it had major concerns about other elements of the document. She said the Government saw procedural fairness and natural justice as an impediment when an employee was dismissed.

The remedies won through personal grievances were too low, she said. Surveys had found the average cost to employers was $5000, of which compensation paid to workers averaged $2800.

Thousands of employment relationships ended unfairly and employees did nothing about it, so a lot of employers got off lightly. The number of grievance cases was low, considering that about 600,000 people left their jobs each year.

Business NZ chief executive Phil O'Reilly said businesses had complained for years that the system was too bureaucratic and seemed to "emphasise form over substance". They were also concerned about "ambulance-chasing lawyers" that lodged claims with no real justification to pressure employers.

The Government is also reviewing the law covering vulnerable workers, mostly in cleaning, catering and laundry companies, whose jobs are protected if a contract changes hands.

Waikato supermarket owners are "blown away" by figures showing a 42.5 per cent rise in food prices since 2000.

The news has prompted Labour consumer spokeswoman Carol Beaumont to call for the Government to encourage more competition in the supermarket sector.

New Zealand grocery prices have risen 42.5 per cent between 2000 and 2009, followed by Australia which pays 41.3 per cent more, Britain's prices rose 32.9 per cent and America's were up 28.4 per cent, according to a study out yesterday.

Pak `n Save Mill St owner Glenn Miller said he was trying to obtain a grocery bill from nine years ago as he and his staff doubted the cost of many grocery items had risen to that extent.

He said a can of spaghetti cost 90c in 2000 and now customers would pay $1.09 for the same can. "At Pak n Save the margin we enjoy is lower than many other countries in the world and we think we are still very competitive given manufacturing cost and we try and keep our overheads down," said Mr Miller, who believes Pak `n Save is extremely competitive.

Vege King owner Swaran Singh said prices at his Fairfield fruit and vegetable shop would have risen by up to 10 per cent at the most. In some cases prices had not changed. He said the price tag on asparagus had stayed at $3.99 since 2000.

Progressive Enterprises, which owns Countdown, Woolworths and Foodtown, blamed international events such as drought as the main drivers of food inflation. Progressive spokesman Bill Moore said the group was consistently striving to offer the best prices and its profitability had remained at between 3 and 4 per cent since Australian-owned Woolworths Limited purchased Progressive four years ago. The group said there was plenty of competition between supermarkets, delis, butchers, green grocers and bakeries.

But Ms Beaumont has questioned why New Zealand is not following the example of Australia's Competition Minister, Craig Emerson, whose government was taking "hard measures" and lowering the barriers to other retailers competing with Coles and Woolworths on that side of the Tasman.

She was critical of Consumer Affairs Minister Heather Roy's suggestion that New Zealanders "shop around" to combat some of the fastest-rising food prices in the developed world, saying it had attracted widespread criticism. It was "poor advice" to families struggling with soaring food bills, Ms Beaumont said.

Public comments on news websites and on talkback radio produced a stream of consumers critical of grocery pricing, with many calling for overseas chains such as Aldi and Costco to compete against New Zealand's Foodstuffs (which owns Pak `n Save and New World) and Progressive Enterprises.

Hamish Wilson, of Consumer New Zealand, said there had been some attempts by other companies, such as The Warehouse, to break into the supermarket sector "but it's pretty difficult". The controversy arose in the wake of the Australian study which says the price of food in New Zealand has risen faster than in any other OECD country other than Korea.

- With NZPA

Transport company Mainfreight's first-quarter results out next month will reflect the tougher trading conditions the company is facing in the new financial year, Mainfreight's managing director Don Braid said.

He told the annual meeting in Auckland today that while the company continued to make steady gains in reducing costs and improving margins, sales volumes had been impacted by slowing economies. "Conversely our market share continues to increase as our sales strategies for growth find success," he said.

Mainfreight is never short of a forthright view of New Zealand's transport and infrastructure and this was the case again at today's meeting. "We need a government that is prepared to listen and understand the need for better rail, road and port infrastructure," Braid said. "We are a trading nation dependent on an efficient logistics strategy. New Zealand ports competing with each other will never deliver the necessary competencies to provide our exporters, importers and shipping lines the opportunity to improve.

"Our port system needs to be capable of handling larger vessels, and require an effective inland transport network that will interface with a super-port strategy. Not to do so will see New Zealand reduced to a trans-shipment destination, eroding our nation's world competitiveness. Attempting to achieve the right transport infrastructure with boards of directors made up of political appointees with little or no transport or infrastructure experience is just plain stupid," Braid said.

Earlier chairman Bruce Plested, in a rallying speech, told shareholders that Mainfreight was actually enjoying the tough global conditions. "The buy-in from our teams all around the world is invigorating and humbling," he said.

While New Zealand had not been hit as hard as many other countries, particularly in terms of job losses, our standard of living in comparison to other countries continued to slide. Solutions and actions seem few and far between, Plested said.

"It is our belief New Zealand must learn to act like the small country we are. We need to behave in the same way as do small schools, small businesses and small towns. We have to be lean, tough, generous of spirit, entrepreneurial, hard working and dedicated to seeing New Zealand improve its living standards and its place in the world. There is no better time than in a global recession to make some big changes. We must find our own destiny and forget about trying to follow the rules and ways of larger countries.

"Now is the time to fight poor laws, get rid of stultifying bureaucracy and the petty bureaucrats that suck us all dry, and certainly to become vocal when we see poor performance from our governments, both local and national," Plested said.
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The country needed to find "an entrepreneurial spirit", particularly within those industries that if developed further would provide wealth and employment for future generations, like health, education, tourism and agriculture, he said.

Braid said that Mainfreight's trading during July had seen improvements in volumes, particularly in Australia. "We would expect our operations in the bigger economies of Australia, the United States and China to improve more quickly and robustly than that of our operations in New Zealand," he said. Mainfreight was very well positioned to take advantage of the upside, "and we remain committed to global expansion", he said.

ACC minister Nick Smith is ruling out a return to the "right to sue" as the Government looks to curb accident compensation entitlements after a cost blowout. The Government has ordered a review of entitlements after the scheme's costs grew from $1.4 billion a year to $3.2 billion during the past eight years.

It says that to pay for the cost increases, charges such as motor vehicle registration and payroll levies, will have to rise to levels unacceptable to the average worker or vehicle owner.

The extra costs include entitlements added by the last government, including lump-sum compensation, allowing claims for mental stress and trauma, free physiotherapy and widening the grounds for compensation from medical misadventure. They are now all under review.

Dr Smith said yesterday that the Government was committed to a "24-7" scheme of universal accident compensation and he did not accept that taking a responsible approach to costs would undermine its basic principles. But he wanted a scheme that did better, including in its core task of rehabilitation. There had been a steady deterioration in success rates. "People who have had accidents are not being successfully rehabilitated back into the workforce."

Paul Jarvie, the Northern Employers and Manufacturers Association occupational health and safety manager, said yesterday that the Government would have to either keep a no-fault compensation scheme with entitlements about the present level "or we'll go back to a litigation free-for-all where the only winners are lawyers and doctors".

But he said the previous government was to blame for "slow socialisation" of the scheme and it should be opened up to competition.

Dr Smith said ACC had grown to the extent that it rivalled Telecom, Fletchers and Fonterra in terms of turnover. But it was unrealistic to expect to trim costs substantially. His priority would be to peg back further cost increases. "I want to bring the cost increases down to a level that's more acceptable. I'm realistic that it is unlikely there will be any reduction in the budget. Rather, it's about stopping increases."