Monday, November 30, 2009

New bottle-same tired old message

While there will always be differences between National and Labour on employment law those differences have narrowed over the last half decade as National and its employer backers came to realise that not too much had changed since the Employment Contracts Act reshaped industrial relations in the early 1990s. Union membership density dropped to around 20% and has remained there, industrial stoppages rarely exceed 50 a year and collective bargaining now covers only about 10 percent or less of private sector workers. The coverage of collective bargaining dropped further under Labour in spite of the introduction of good faith bargining. The fairly restrained stance taken by National to labour relations since the elections reflects, as much as anything, that there are not many unions around worth bashing anymore. It might also have been thought to recognise that there is now a reasonable balance in the law between the need flexibility and protecting an employee's investment in their job - on which see my post "Serfdom and Employment".

Nevertheless there will always remain an element in National, especially in its small business and ACT end, that regards workers as something less than full citizens - as Roger Kerr once put it “While people are not commodities ..the labour services they provide … most certainly are”, a theoretical separation likely to appeal only to Chicago economists and Cartesian dualists. The categorisation of employees as commodities does however help to depersonalise employees - they cease to be citizens in the fullest sense and can be treated as ideally cheap and disposable: certainly they should not have legal rights to protect their employment status or to recognise their investment in it. One might have hoped that this attitude to workers, while unlikely to have fully vanished, might at least have given way to a more balanced approach. Productive economies in developed countries require a more stakeholder approach to employees, one which recognises the significant educational and training investment built up by employees and which protects both that investment and the economic security of employees from arbitrary employer actions - indeed that attitude seemed to have been ocurring over the last decade or so:-

And then along comes Dr Brash peddling the old snake-oil made from the corpse of new-right deregulation and the neoliberal economics that brought us the current financial crisis. All we need to do to bring our standard of living up to Australia's is to bash the workers-again. Dr Brash marvelous medicine is essentially the new right's unfinished business of the 1990s: get rid of the floor of employment rights, introduce employment-at-will (or as close to it as you can get away with) and slash the welfare state.

John Key has rightly rejected this prescription and in an MMP environment it is almost certainly not politically viable. The last time reforms of this type ocurred, under both Labour and National, they were driven through Parliament under the FPP system:- which we will have a chance to return to in a few years. While the Prime Minister may have reburied the new-right corpse for the present it should be kept in mind that zombies usually reappear and that their defeat is always messy.

In case you didn't read the whole report and get that sense of deja vu:
“Labour market:
a. Labour law should be amended to strengthen the freedom of negotiation between workers and their employers, including, for example, streamlining provisions governing dismissal of workers, and putting less emphasis on procedural matters.
b. Statutory provisions allowing enforceable mutually-agreed probationary periods for new employees should be extended, from the current maximum of 90 days for those working for small firms to a maximum of 12 months for employees of firms of any size.
c. For employees earning in excess of $100,000 per annum, employment relations should be governed by the standard provisions of contract law rather than by the Employment Relations Act.
d. The youth minimum wage should be reinstated as a matter of urgency, and minimum wage rates should be reduced to the same ratio to average wages that prevailed in 1999.”

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