Friday 12 March 2010

Grievance Mode

Kate Wilkinson, Minister of Labour.

KATE WILKINSON’S cautious dismantling of the Employment Relations Act continues. Her latest move, a review of the Personal Grievance (PG) provisions of the Act, would seem to confirm the Council of Trade Unions’ suspicions that the National-led Government intends to implement its employer-driven agenda incrementally – rather than with an Employment Contracts Act (ECA) style "king-hit".

It’s a short-sighted policy. Wilkinson and the employers’ representatives both appear to have forgotten the crucial role which universal PG mediation played in bedding the ECA in and making it work.

In most workplaces the tone of industrial relations is set by just two or three employees. Back in 1991, the ECA reassured these – the most assertive and self-reliant members of the workforce – that PG mediation would always be there to protect them against unjustified dismissal. If it hadn’t, they almost certainly would’ve stuck with the unions. And to give this union-based "insurance" teeth, they’d have made damn sure all their workmates did too.

The universal availability of PG mediation thus played a vital role in the de-unionisation of the New Zealand workforce. First, it persuaded the more individualistic and self-confident workers that they didn’t need to join a union to be protected against an incompetent and/or vindictive boss – thereby robbing the union movement of its most effective recruiters. Second, it gave employers a powerful financial incentive to behave decently towards their employees – thereby denying the unions’ the steady stream of horror stories required to keep union members paying their dues. As Jock Barnes, the militant hero/villain of the 1951 Waterfront Dispute, was fond of saying: "The boss is always the worker’s greatest organiser."

Viewed objectively, the employers’ demands to weaken the legislative guarantees surrounding PG mediation would appear to be self-defeating. Perhaps Bill Birch, the author of the ECA, should take Alastair Thompson of the Northern Employers and Manufacturers Association, and Business New Zealand’s Phil O’Rielly to one side and remind them why clauses mandating a 90-day probationary period for new employees, and the elimination of PG mediation, were never included in the original legislation.

After all, it’s not as if Birch was under any pressure from the trade union movement to step away from such extreme measures. While the legislation was still making its way through Parliament in the summer of 1991, the then President of the CTU, Ken Douglas, made it crystal clear to New Zealand’s trade unionists that he would neither counsel, nor lead, any form of mass struggle against the Bill’s passage.

This supine response from the country’s most prominent communist caught the National Government off-balance. They’d anticipated a major stoush over the bill and had been ready to offer concessions. As it turned out, they got everything they wanted – and could have got a lot more. But, as explained above, there were at least two very good reasons for not pushing their luck.

That the CEO of Business New Zealand, twenty years after the passage of the ECA, feels able to assert, without fear of serious professional embarrassment, that the elimination of what few legal protections remain for New Zealand’s workers will lead to an improvement in the country’s overall economic performance – is deeply troubling.

It suggests the business community has learned absolutely nothing from the experience of the ECA, and that many still believe that boosting profitability by slashing labour costs (especially the costs of hiring and firing) is the only way to go.

Where are the calls for more spending on research and development? For upgrading plant and equipment? For upskilling the workforce? They’re there. You’ll hear them in the employers’ submissions to parliamentary select committees and special taskforces. They’re in nearly all of Business NZ’s glossy reports. But, where you won’t hear them is at cocktail parties attended by Ms Wilkinson.

There, the talk is all about how dishonest and litigious their employees have become. How unfair it is that the law allows workers to punish poor employment practice with significant financial penalties. There, the Minister will be informed (anecdotally) how crucial it is (for New Zealand’s economic recovery) that those legal powers be taken from them.

That’s the employers’ preferred solution to this country’s sluggish productivity growth.

The employers’ attack on PG mediation also suggests something else – something much more disturbing than an inability to learn from their previous mistakes. It suggests that within the business community there exists a group of people perfectly willing, in the name of private and personal gain, to deprive their fellow citizens of their rights.

Viewed from a psychological perspective, this willingness to strip human-beings of their legal protections indicates, at best, an authoritarian and exploitative character-structure. At worst, it betokens an individual utterly incapable of experiencing empathy. Such people are called sociopaths: individuals who relate to other human-beings in exclusively instrumental terms – treating them as mere means to an end. In the eyes of these sociopathic employers, a worker is just something to be used up and then thrown away.

Does the National Party really want to become the political enabler for this ugly species of social pyschopathology? Is this the legacy John Key is content to leave behind him? And does the Minister of Labour actually believe this is the best way to boost New Zealand’s productivity?

If that is her conviction, then she’s badly advised. New Zealand’s labour productivity growth is broadly comparable with the growth levels of other mature economies in the OECD. Placed alongside the productivity statistics of countries like Sweden and France our own results simply reinforce the inherent difficulties in dramatically lifting productivity levels in already highly productive economies.

Short-term gains can certainly be made by making workers toil harder and longer for less, but an economic regime based on exerting continuous downward pressure on wages and conditions is unlikely to contribute positively to the present government’s stated objective of bringing New Zealand’s pay-rates into parity with Australia’s by 2025.

Besides, New Zealand already has one of the hardest-working workforces in the OECD. We are also blessed with a regulatory regime that, by international standards, is extraordinarily business-friendly.

What we are not blessed with, however, is a well-educated, dynamic and self-confident business class. If we had one, our Minister of Labour would not find herself constantly assailed by professionally inadequate employers hell-bent on freeing themselves from the costs of their own mismanagement.

This essay was originally published in The Independent of Thursday, 11 March 2010.


Olwyn said...

Well said, Chris. If anyone succeeds in running this country into the ground, it is far less likely to be the poor layabout who thinks the world owes him subsistence than the passive, incompetent businessman who thinks the world owes him status and all that goes with it regardless of his actual contribution.

Victor said...

New Zealand's business class is like a George Grosz caricature of capitalism; myopic, vulgar, mentally-lazy, arrogant, pompous, ignorant, brimming with faux machismo and fixated on the fast buck.

Why are they like that? I used to think it had something to do with the pre-1984 concordat between the state and business, which may have discouraged innovation and encouraged sycophantic conformity.

But 26 years down the track, that line of reasoning no longer holds water. Our economy has been turned inside out but the old faults remain, with brass nobs on.

Apart from the generic evils of capitalism, do you have a theory about this, Chris?

Anonymous said...

Few in the New Zealand business community are involved in the instructive activity of exporting things, unlike their less insular counterparts overseas. The role of supporting the country is left to the farmers.

Victor said...

Anonymous, I think you have at least half the answer here. We continue to have a 'business culture' without much in the way of a real economy, at least outside the rural sector.

The business class is therefore focussed even more exclusively than in more successful economies on extracting short term profit at the margins.

It does this, for example, by ripping-off consumers or financial legerdemain. Given half the chance, it will also seek to reduce labour costs, even at the expense of depriving itself of a competent skills base.

The object of the exercise is not to build successful companies or industries but to shut the door of the office on a Friday afternoon for a weekend of conspicuous and ego-expanding consumption, whilst funding one or more excessively-large mortgages.

It's an approach that appeals to hollow men and women. No wonder, then, that they proliferate. And no wonder that we have a business culture of non-accountable mediocrity.