Wage round under new rules may be stormy

Press, 5 September 1987, Page 20

Wage round under new rules may be stormy

Peter Luke, in Wellington, reports on the effects of the new Labour Relations Act

FOR PRIVATE sector workers and their employers, Monday marks the formal kick-off of that grand institution — the annual wage round.

First up for negotiation is the Metal Trades Award, a traditional lead award, for which the Engineers’ Union is claiming a 12 per cent increase, plus a passon agreement. If the pre-round rhetoric has much meaning, though most New Zealand workers will end up with a single, not double, figure increase, little different to the 6 or 7 per cent most got last year. Between this year’s wage round and last year’s, two important events have taken place. Labour has been returned to power, promising to continue the thrusts of its first-term policies; and the ground rules of the wage round have been altered. The Labour Relations Act, which governs what used to be known as “industrial relations,” came into effect on August 1, giving this wage round an experimental flavour.

The act’s requirement that trade unions have a minimum membership of 1000 is wellknown. Less so, are the provisions relating to strikes, award coverage, and the costs of the conciliation process. The act has left one aspect of the past three award rounds intact — the Minister of Labour, Mr Rodger, has recommitted his Government to not intervening. Mr Rodger clearly believes that industrial settlements must be made by the parties, not imposed by the Government, if they are to be effective. Just this

week he released what he described as proof of the effectiveness of this policy — figures showing a dramatic drop in the number, scale, and cost of industrial stoppages. If Mr Rodger wished to be known as the Labour Minister who removed politics from the industrial realm, he would have been heartened by the election campaign. Industrial relations failed to emerge as an issue, aside from the applause guaranteed at National rallies when voluntary unionism or Labour’s trade-union candidates were referred to.

But if the Government will not intervene — and some would argue this to be intervention of an inverse kind — it has no qualms about commenting or throwing out broad hints. One prime forum for this is the annual tripartite wage conference which ended on Thursday “with a whimper rather than a bang,” according to Mr Rodger. By law, the Government must chair the conference between itself, employers, and tradeunion representatives. Apart from discussing the position of the low-paid, the conference is designed to set the wage round in its economic context. The Government has made it clear that the context for this round is a continuing non-accommodating monetary policy and regional variations in economic conditions.

Asked what the Employers’ Federation had gained from the conference continuing beyond the election, the director of advocacy, Mr Steve Marshall, replied that confirmation of the

continued economic direction had been valuable. Both Mr Marshall and the Government have warned that unrealistic wage settlements will run the risk of increasing the already high unemployment level. The Government has given a clear indication it wants to see regional economic variations and the ability to pay taken into account.

For its part, the Federation of Labour has recognised that the economic climate today is different from a year ago, and a different strategy is warranted. At this time last year a centralised wage push was called for across the awards. The strategy of a managed wage round has been replaced with a decentralised industry-specific approach.

The F.O.L. secretary, Mr Ken Douglas, said on Thursday that the settlement variations within industries will be the greatest for more than a decade. Aside from economic hints and comments, the Government has effectively already intervened in

this wage round by changing the ground-rules through the Labour Relations Act.

In past years second-tier bargaining led to various localised agreements being made on top of award settlements. The new Act has separated the two. This clear threat to the national system could be circumvented by the use of "pass-on” settlements, where employers agreed to translate award increases to those now outside the award. How readily this is agreed to will be one of the interesting aspects of the early stages of the wage round.

The Act’s treatment of strikes — the so-called 60 days rule — will also complicate union tactics. Strikes, which legally include virtually all forms of industrial action, are “not lawful" within 60 days of the expiry of an award. The major awards, however, expire over a wide period between October and December, making concerted industrial action between unions more difficult. A third important change is a

move towards "user pays” in the conciliation process. The Government still provides the venue and the mediator, but other costs, including travel and accommodation, must be met by the respective parties. The move was clearly designed to avoid drawnout negotiations. It will place a heavy toll on many of the smaller unions. * These changes and the mic climate will come around the award claims and negotiating tables from Monday. Everyone from the Prime Minister, Mr Lange, down have predicted a “bruising” wage round. Reacting recently to the doublefigure claims for most lead awards, Mr Rodger predicted a range of settlements below 10 per cent Mr Marshall has suggested that the employers will be looking for award settlements in the “very low” single figures. One way or another it seems certain that the combination of a new act and difficult economic conditions will make the round, unlike the conference, go with a bang rather than a whimper.