Friday 1 April 2022

Unmistakably Labour Legislation.

The Age-Old Question: The idea of laying a solid floor of wages and conditions beneath the feet of workers in industries notorious for engaging in exploitative “races to the bottom”, but keeping the way clear for improving upon these base “Free Pay Agreement rates” in case-by-case collective bargaining, will act as a highly effective recruiting sergeant for the unions.

AT LAST! The Sixth Labour Government has finally introduced legislation the First Labour Government might recognise. Labour Minister Michael Wood’s “Fair Pay Agreements Bill” is the first real effort since the Labour Relations Act of 1987 to materially strengthen the hand of New Zealand’s beleaguered trade union movement. If the Bill’s intent is not watered-down in the process of making its way through Parliament, and if the Labour Government is re-elected, then trade unionism in this country is likely to expand rapidly.

The reason for this is simple: the Bill not only makes joining a trade union look like a good bet; it makes it look like a safe bet. The idea of laying a solid floor of wages and conditions beneath the feet of workers in industries notorious for engaging in exploitative “races to the bottom”, but keeping the way clear for improving upon these base “FPA rates” in case-by-case collective bargaining, will act as a highly effective recruiting sergeant for the unions.

Something very similar happened when the First Labour Government made membership of a trade union a legal prerequisite for enjoying the fruits of compulsorily arbitrated “awards” – the model for Wood’s FPAs.

Following the legislation’s passage in 1936, vast, hitherto unorganised, swathes of the workforce were swiftly enrolled in a clutch of new trade unions. The largest of these was the Clerical Workers Union which, for the first time, allowed the overwhelmingly female workforce of office clerks to join the ranks of the industrial army. In the years that followed, workers as varied as journalists and law-clerks were enrolled. There was even a Musicians’ Union.

The “Awards” negotiated by these unions were the brainchild of the Labour Party’s predecessor in progressive social reform, the Liberal Government of 1890-1912. Its 1894 innovation, the Industrial Conciliation and Arbitration Act, was hailed across the world for its enlightened approach to labour relations.

The IC&A Act empowered an Arbitration Court, composed of judges representing the employers, the unions, and the state, to issue legally binding sets of minimum wages and conditions, negotiated by the representatives of workers and employers from across entire industries. The Arbitration Court could also issue “General Wage Orders” lifting the incomes of workers across the entire economy.

The problem, of course, was that if an industry remained unorganised, then the Court was unable to “award” its workers and employers wages and conditions minima. Caring and responsible employers soon found their less scrupulous competitors undercutting them on price by requiring their employees to work harder and longer for less.

Such were the tactics that set off the aforementioned “race to the bottom”: a business model predicated on the maximum exploitation of an industry’s workforce. Putting it bluntly: the lower the wages, the higher the profits.

This was the problem the First Labour Government’s introduction of universal union membership was designed to remedy – and it worked.

The National Party’s spokesperson on “Workplace Relations & Safety”, Paul Goldsmith, was quick to respond to Minister Wood’s introduction of the Fair Pay Agreements Bill, promising to oppose it “stridently”. It was, he said: “an ideological overreach, deliberately going to war with employers at a time when we’re facing huge economic challenges”.

One can only admire Mr Goldsmith’s cheek. The political party guilty of “ideological overreach”; the party guilty of “going to war” against its fellow New Zealanders; is not the Labour Party, but the National Party.

The Employment Contracts Act 1991, introduced by Mr Goldsmith’s predecessor, Sir William Birch, stripped New Zealand workers of workplace rights they had enjoyed for nearly a century. It set in motion the relentless shift of corporate surpluses from wage-earners to shareholders that has seen today’s workers earning thousands of dollars less per year than would have been the case had Mr Goldsmith’s “flexible labour market” not destroyed the inherent Kiwi fairness of the system it replaced.

The destruction of the trade union movement is the most important achievement of New Zealand’s Neoliberal Revolution. In 2022, fewer than 10 percent of the private sector workforce is unionised. In dramatic contrast to 1990, today’s typical union member is a tertiary-educated female, working in the public sector, and earning a salary well above the median New Zealand income of $59,000 per year.

Michael Woods Fair Pay Agreements Bill represents a first – and unmistakably Labour – step towards re-empowering all Kiwi workers.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 1 April 2022.


Guerilla Surgeon said...

God help us, you should see the comments on MSN. I haven't heard the word dole bludgers for years, but there it is. And I'm sure they'll probably manage to work a couple of "Maoris" in there somewhere – give them time. The comments section over there sounds like everyone watches nothing but Fox News. I'm too scared to say anything. :)

Anonymous said...

Benefits increased by up to $42

Ray said...

Great historically perspective article here, a timely reminder of what can be.

Legislation of this political bent is what I want to see from a Labour Government.
The only initiate from the Ardern administration so far that is truly pro-worker.

CXH said...

Having grown up in the days of the wharfies,seaman and boilermakers unions the reality of strong unions is not the nirvana talked of here.

I do agree there is a need for unions, however keeping the power away from the extremes of either side, is the problem.

Wayne Mapp said...

When National is next in office, it will repeal virtually all of Labour's new employment legislation. Though not the new sick leave entitlements.

For the last two decades employment law has been relatively settled. National broadly accepted Helen Clark's reforms of 2001. Yes, they were tinkered with, but nothing significant. The major change was the 90 day trail periods (my initiative) which Labour seems to be retaining for small employers. Perhaps.

However, industry wide awards, as now being proposed by Labour, will bring back the rules that prevailed in the the 1970's. It is also compulsory unionism by stealth. All this being imposed on a workforce that is far more decentralised and more flexible than 50 years ago. More than anything that has been proposed in employment law in the last 20 years, this is right at the heart of the ideological conflict between left and right. Industry wide awards will force all workers and and employers into a legal straight jacket that will not suit many of them. One outcome I expect there will be a a drive toward independent contractor relationships where that is possible.

These "reforms" will certainly fire up Nationals efforts to regain the Treasury benches.

Guerilla Surgeon said...

"flexible" = few protections
"decentralised" = no union coverage
"not suit many of them" = will not suit employers. Which I suppose are at least some of them.
"drive toward independent contractor relationships" = take away worker protections.

Chris Trotter said...

To: Sumsuch

Please make every effort to state your views clearly.

This applies to all commenters.

I do try to publish every comment, but if I cannot discern any coherent content in your contributions, I won't bother.

sumsuch said...

The great cause of reason and the people's rule comes before any individual.

I don't discount incomprehensibility. The pronouns and everything. But why would it matter? On a flippin letters' page? Free speech is as much for idiots as anyone. Let, as you wisely say, the people judge.

rave dout said...

Employment contract act treats labour as a supply and demand commodity with regard s to wages.To keep the supply up govt imports labour,We have a shortage of nurses. Solution, pay more i e. the international rate. C,E.O's get paid the international rate, why not nurse's.?

Terry Coggan said...

In his enthusiasm for Labour's Fair Pay Agreements Chris Trotter fails to mention a key element of the proposal - the removal of the right to strike. Any union going into negotiations for one of these agreements will do so with one hand, actually both hands, tied behind its back. FPAs are totally in the class-collaboranist historical tradition of arbitration systems and tripartite agreements that Mr. Trotter eulogises. In this regard they are indeed "unmistakably Labour legislation". The employer class is resisting FPAs at present because it has become accustomed to easy victories over the last four decades. Faced with an upsurge in workers militancy, it will be ready enough to embrace them.
It will be remembered that Harry Holland, the only socialist ever to lead the NZLP, called the Arbitration Court "labour's leg iron." He wrote "...the workers under Arbitration go to a member of the capitalist class for justice, and are thus dependent on capitalist ideas of justice. They have been taught to do this, rather than trust to their own pristine might and right, and doing it they have not only gained nothing, but lost much they won in the days they were ready to fight."

Guerilla Surgeon said...

"C,E.O's get paid the international rate, why not nurse's.?"

I have often asked this question, never received an answer from a CEO – but I suspect that nurses would get the international rate of the Philippines. It would be nice if our CEOs got the same type of ratio to the average wage as those in Japan, but of course they get a very similar one to the UK and the US. Greed is good remember, unless it's working class greed.

sumsuch said...

Happy to receive my incoherent comment at my email address. I'm 50 % you're right. I often 'attack' Left Blog operators 'personally'. The only one who has banned me is Lyn Prentice, and I like him despite. Wouldn't say the same if you and Martyn did the same, despite our more similar politics. Apart from your two's fishhooks.