Union move for wage deal developing

Press, 16 April 1986, Page 9

Union move for wage deal developing

By

PATRICIA HERBERT

in Wellington

A move is developing in the trade union movement for a wages deal with the Government to manage this year’s award round. The proposal has not yet been formally adopted by the Federation of Labour executive. Indeed opinion is divided about it and the F.O.L. president, Mr Jim Knox, has spoken out against it. His view may not, however, be the one that prevails. An agreement may be reached away from the tripartite conference, set to begin on April 30.

It may be forged outside any forum, or in the Joint Council of Labour — a body comprising representatives of the Labour Party’s political and industrial wings. Already the party president, Ms Margaret Wilson, has indicated support for some form of accommodation.

She sees it as the first step toward securing an agreed incomes policy and was also opposed to the "hands-off” approach the Government adopted for the round just ending. “Just because last time, under free wage bargaining, we proved to be fitter than they (the employers) were, does not make it a good idea,” she said yesterday. The secretary of the powerful Distribution Workers’ Federation, Mr Rob Campbell, is pursuing a similar agenda to Ms Wilson.

He also wants a broad incomes package, covering earnings from all sources, and is talking of a trade-off; union acceptance of the deregulatory economic reforms already in place in exchange for the continued maintenance of the national award system and other measures to protect living standards. Mr Campbell recognises

that such an accord would take time to set up and must be treated as a longer-term objective, but he said it could be put together with "a high level of generality” within a shorter period and used as a guide for the round. Capacity exists within the wage-fixing legislation for wage management in the form of guidelines, either agreed by the parties or declared by the Government.

This option was rejected last year, but the Prime Minister, Mr Lange, has signalled that it may be used this year to keep a lid on wages. Certainly there was a cost attached to the refusal to set a path last time. It has been variously reported that the unions would have been prepared to accept 12 per cent or 14 per cent as the going rate, but, sent into the ring with their gloves off, they got 15.5. Much will depend on the inflation rate as the unions will want either a corresponding wage movement or a “top-up” later in the year. The practice has been to “annualise” the June

consumers’ price index result by spreading it over 12 months. The C.P.I. has dropped steadily in the last nine months and, in the latest March quarter, was running at only 2.3 per cent. Should this continue through June, the inflation estimate may be as low as 10 per cent — at least that is the figure now being bounced about in Wellington. Another sticking point, if the unions agree to push for a managed round with a guideline as the mechanism, is whether it would be acceptable to the Government. It is still committed to greater flexibility with settlements reflecting ability to pay and productivity and guidelines would tend to cut across this.

Another consideration is the inconsistency involved in seeming to limit wages while freeing up other areas in the economy.

Only this week, Mr Lange reaffirmed his commitment to free bargaining in relation to redundancy payments. Also, it seems that em-

ployers are absorbing the increased wage costs they picked up from the last round rather than passing them on to the consumer in raised prices. The upshot is that the Government may be more relaxed than it was about the size of wage settlements and less inclined to intervene to contain them.

The main argument for some kind of management must be to avoid industrial disruption, particularly in the run-up to the next General Election. There is doubt, however, that the unions could generate the same level of activity from members this year in support of their claims.

The motives of the unions in wanting an accord would also have to be held up to close examination. The round will take place as the Green Paper review of industrial relations is being conducted and they want to hang on to the award structure.

Their case for its preservation would obviously be enhanced if they could demonstrate that it was capable of delivering stability and predictability.