collective agreements

The National Distribution Union says new figures show workers who are unionised receive greater pay rises.

Research from Victoria University shows more than 100,000 workers, who were part of collective bargaining, received an average wage increase of 4.2% in the year to June.

That compares to an average wage increase of 1.6% for all workers in the same period.

NDU General Secretary Robert Reid says the unions are helping to narrow the wage gap with Australia, which is a priority for the Government.

But the Employers and Manufacturers Association says that claim is too good to be true.

Spokesperson David Lowe told Morning Report there are problems with the information gathered, including that some of the agreements cover several years.

Mr Reid says it makes no sense for the Government to place limitations on unions, like restricting their access to work places.

Union access to work places is being considered by the Government along with other labour law reforms.

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LISTEN ONLINE: Click here to listen to Robert Reid being interviewed on Radio NZ.

Union Relevance in Aotearoa in the 21st Century

Laila Harré
National Secretary
National Distribution Union

PEOPLE on Australian Workplace Agreements earn an average of $106 ($NZ123) a week less than their counterparts on collective agreements, the biggest study of the new workplace laws has found.

The study of 8343 people, half-funded by the Federal Government, shows workers on AWAs earned an average $1069.57 a week, compared with $1175.97 by workers on collective agreements, with both groups working an average 44 hours a week.

The Australia@Work report, by the University of Sydney's Workplace Research Centre, shows why the debate over wages and working conditions has been ranked by voters as a major election issue since the March 2006 Work Choices law began to take effect.

The most recent Bureau of Statistics figures suggest workers on AWAs are earning 9 per cent more than those on collective agreements. But the bureau only measured the first eight weeks of Work Choices, up to May 2006, while this new study is based on data gathered until July this year. The study found collective bargaining has been disappearing for many years and that the trend is accelerating, helped by Work Choices and AWAs.

Common law contracts are also growing in popularity. Employees on these contacts are overwhelmingly managers and executives, and their average salary is $1584.29 a week.

The report also reveals Australians have some of the longest working hours in the world. More than a fifth work 50 hours or more a week. Miners work an average 55-hour week, and 21 per cent of all workers wished they could work fewer hours.

The Howard Government introduced AWAs in 1996 to encourage employers and staff to directly negotiate pay and conditions, but the report finds that direct bargaining is increasingly uncommon. Forty-six per cent of all people on AWAs say they had no opportunity to negotiate their contents. Of 177,000 people who moved onto AWAs this year, 56 per cent said there was no negotiation. The authors suspect employers are using "non-negotiated AWAs" to move workers from award entitlements to the cheaper minimum legal standards.

As this trend emerged early this year, the Government introduced a fairness test in May to stop employees trading away entitlements like overtime and shift penalties without fair compensation. The report is the first instalment of a five-year study in which the same people will be interviewed each year. It was jointly funded by the NSW Labor Council and the Federal Government through the Australia Research Council. The report also found high-skill employees on
non-negotiated AWAs are working more paid and unpaid hours than those on individual contracts. Staff on these take-it-or leave-it AWAs "earn the lowest hourly rate regardless of skill level," the report says.

James Chessell, a spokesman for the Minister for the Minister for Workplace Relations, Joe Hockey, challenged the conclusions of the study. "We think the ABS figures are a more reliable guide than a study cooked up by [Research Centre director] John Buchanan and his cronies," Mr Chessell said.

Dozens of workers about to be laid off from a Southland timber mill have no collective employment agreement and face no relief in terms of redundancies.

Milling company Bright Wood, at Otautau about 40km northwest of Invercargill, has announced it is closing the mill and 99 jobs will be lost as a result.

Otautau, a township of about 750 people is expected to suffer as a result of the closure and the Engineering, Printing and Manufacturing Union (EPMU) said there would be no relief in terms of redundancy payouts.

EPMU national industry organiser for timber, Alan Clarence, said the staff, half of whom were union members, were given four weeks' notice.

They would be paid for those weeks if laid off immediately, but otherwise would stay until the remaining work ran out, meaning there could effectively be no severance pay at all.

Another EPMU representative said the union had fought in the past to get members on to a collective agreement but the company had made it as difficult as possible.

Bright Wood New Zealand is owned by Bright Wood US and all the timber processed at the mill is exported to the United States.

The news of the closure came as a directive from management in the US yesterday at 1pm.

"The company has no community stake-holding or responsibilities, they've basically plundered and bailed," Mr Clarence said.

"The fact that we were not consulted about this at all shows how little the company values its workers and their union."

Bright Wood president Kevin Stovall said the strong New Zealand dollar and "aggressive" tactics by the Reserve Bank to curb consumer spending were hurting the export sector.

Rapidly rising electricity costs and increased operating costs resulting from the introduction of a fourth week of compulsory leave this year were also cited as reasons for the demise of the mill.

BUSINESS FORUM - ROSS WILSON
I agree with Phil O'Reilly of Business New Zealand that we should not be legislating minimum wages. We should not have to. But this action is necessary because of the entrenched low-wage legacy from the Employment Contracts era of the 1990s.

Minimum wage increases are certainly good news for more than 100,000 working New Zealanders who rely on them for a wage increase. The minimum wage has gone up by 61 per cent since 1999. Not bad compared with the 14 per cent increase in the previous decade. And it looks almost certain to go to $12 in 2008.

The increase to $11.25 will mean the minimum wage is about 50 per cent of the average wage. It is often forgotten that there is still a trainee rate (currently $8.20 and by April $9) for a person of any age who is being trained in at least 60 credits on our qualifications framework.

And Sue Bradford's bill removing discrimination against 16 and 17-year-old workers on a lower minimum wage still maintains the trainee rate, recognising the investment employers make in skill development in those cases.

But low-paid workers should not have to rely on statutory minimum wage increases to lift them out of poverty.

Though it is true that we need major change to achieve the highly skilled, high-wage economy we aspire to, there are both equity and productivity reasons for lifting wages to close the 30 per cent gap with Australia in average pay.

We need to lift our investment in modern infrastructure, skills, new technology and improving workplace practices to provide a sustainable base for continuous improvements in labour productivity. But the benefits need to be shared.

Statistics New Zealand has noted that in the measured sector, which excludes the public sector, banking and some other areas, labour productivity went up by 56 per cent between 1998 and 2005. But real wages hardly increased in that period. This is totally unacceptable. We need productivity to lift but we also need the benefits to be distributed.

Part of the solution is much more widespread collective bargaining. Only 9 per cent of private sector workers are covered by collective agreements. This is not because there are few collective agreements. There are 1800 of them. But each covers an average of only 150 workers.

We need more industry-based and multi-employer agreements which can set base pay rates and conditions for large groups of workers while still retaining flexibility for individual conditions that are not inconsistent with industry standard.

We also need a change in employers' attitudes. The labour market has been tight for six years. We have constant pressures by employers for more migrants to be brought in and we know wages are 30 per cent higher in Australia.

We have had a golden period for most of the past six years in terms of profits, increases in directors' fees, executive pay rates, and yet wages are still lagging a long way behind.

The labour market experience is in sharp contrast with the housing market. Both are markets where there is high demand. But house prices have doubled in the past five years, whereas nominal wages went up by 23 per cent.

It should also be of concern that the amount of debt held by households also doubled, as have interest payments. On average, people are using 13.1 per cent of their income to service debt. We have a current account deficit of $14.4 billion for the last year – $11.7 billion of this deficit is from the effect of investment income leaving New Zealand rather than coming in.

The twin effect of bank borrowing to fund household mortgages and remittances of profits to the overseas owners of New Zealand-based companies is the largest part of our current account deficit and dwarfs the balances on exports and imports of goods and services.

This means we need more domestic savings. But it is hard for workers to save out of a low wage packet. KiwiSaver will help. But in our submission on the Business Tax Review, the CTU argued for one part of any cut in company tax to be offset against a compulsory employer contribution to KiwiSaver.

What we need for the new year is a formula to lift wages, productivity and savings. Multi-employer collective bargaining, a cooperative approach to industry standards, a more positive attitude from employers toward lifting pay, a lift in investment in people, technology and infrastructure, compulsory employer contributions to KiwiSaver, and more effort to create New Zealand- owned companies would be good places to start.

* Ross Wilson is the president of the Council of Trade Unions.