Compulsory employer groups?

Press, 19 April 1986, Page 1

Compulsory employer groups?

By

PATRICIA HERBERT

in Wellington

Compulsory union membership may be extended to employer groups in the Government’s reform of industrial relations.

The Minister of Labour, Mr Rodger, hinted at this possibility yesterday in an address to a seminar in Auckland on the Green Paper review. The hint was slight, but sufficient to strengthen speculation that this is one of the options he is considering. Mr Rodger simply suggested that the voluntary nature of employer associations meant there were no constraints on who could negotiate an award or a collective agreement, but he mentioned it in a catalogue of “quite serious weaknesses” plaguing the present structure. These, he. said, were contributing “in no small measure” to the problems both unions and the em-

ployers saw in wage bargaining and he indicated that changes must be made. “For the Government’s part, it will be looking seriously at the law relating to employer and worker organisations with an eye to changes which might provide greater effectiveness on both sides,”, he said.

Any attempt to make membership of the Employers’ Federation compulsory would be fiercely opposed not only by employers but also by the federation because, although it would stand to benefit financially, consistency would demand a fight on philosophical grounds.

This is because the federation, with other employer groups, fought against the restoration of compulsory unionism for workers.

But the price of voluntarism for the federation is that it has limited pene-

tration with only about 12,000 employers affiliated directly to it, at most 33 per cent of the total. Many others, however, have indirect links as members of the Manufacturers’ Federation, the Retailers’ Federation, and the Chambers of Commerce.

That the Minister might move to strengthen the employer bodies is consistent with his analysis that the “perceived rigidities” in the present system are caused less by structural flaws than by the behaviour of the parties involved. He returned to this theme yesterday, saying that labour market inflexibility was an issue in countries with quite different wage-fixing arrangements.

It existed in France, for example, where only 20 per cent of the workforce was unionised, and in Germany which had enterprise-based bargain-

ing. “The conclusion I have come to is that the outcome of union and employer negotiations probably has more to do with the effectiveness of union and employer organisations than with the overall structure of the system,” Mr Rodger said.

He then addressed the problems both sides experience from this perspective. Among the unions, he said, there was mounting frustration with their inability to improve substantially the relative position of the low-paid and the disadvantaged. On the employers’ side, there was increasing concern about the sanctity of agreements — the fact that they often did not stick and that strikes were frequently resorted to to secure further concessions during the term of the document.

Looking first at the unions, Mr Rodger indi-

cated that moves might be made to further encourage union amalgamation and industry unions and that more resources might be pumped into the trade union movement. Of New Zealand’s 248 ' unions, half had fewer than 500 members, he said, and there was considerable variation in size and nature. Some were multi-indus-try’, others industry-speci-fic; some national, others single-district, he said. Also, he said, unions were by and large poorly resourced — a vulnerability evident in the period of voluntary unionism when some, unable to cope with the reduction in income from losing members, had been forced to lay off staff.

Another weakness was that unions offered only a limited range of services to members and had little input into many of the important decisions made in industries where they

had representation, instead being confined to negotiating wages and working conditions. Mr Rodger also criticised the tendency of weak unions to “coat-tail” on the strong, a tendency which he said was reflected in the obsession with relativities and “the going-rate.” Turning to the employer organisations, he noted “a considerable variation in their role and strength.” Some, he said, were strong and active and had developed an industry approach to wage-fixing, while others existed only “on paper.” Many employers, Mr Rodger said, were ignorant of the process of making awards and of the obligations those awards placed on them and, even among larger companies, industrial relations rarely formed part of the overall management strategy. Reaction, page 9