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Archive of Communist Workers Group of Aoteaora/New Zealand up to 2006

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Aotearoa: New Employment Relations Reforms

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The ERA (Employment Relations Act) is a failure in the eyes of both union and bosses. It failed to rectify the damage done to unions by the Employment Contracts Act of 1991 which decimated the unions. But it was also an irritant to employers who saw it as a shift back towards union domination of the economy. The new reform Bill has revived these antagonisms on both sides. But is it really such a big deal? Class Struggle does its analysis of the Reform Bill and puts the case for workers taking the law into their own hands.

ERA weak

The Government is making some minor changes to the Employment Relations Act (ERA) to strengthen the role of unions. The ERA was designed to restore a balance to industrial relations after the ECA had almost destroyed the unions. Labour’s Blairite approach is to make the unions ‘partners’ with business so as to regulate the labour force and encourage increased labour productivity. But to do that unions have to first get coverage of workers. The ERA failed to give the unions sufficient strength to significantly increase their bargaining power with business. Bosses could refuse to agree to collective agreements and workers did not see the advantages of joining unions. After 3 years, union membership has recovered slightly from being around 18% of the workforce to about 20%. But today only 12% of workers in private industry are unionised compared with 50% in the public sector.

The CTU lobbied Government to improve conditions for unions. They wanted to make it harder for bosses to avoid participating in MECAS (multi-employer collective agreements), to promote collective bargaining, to make the good faith requirements stronger so bosses could not ignore them, to protect vulnerable workers when businesses are sold and to stop free-loading by non-members. The Government took these issues on board:

The Changes

  • Fines up to $10,000 if employers do not act in ‘good faith’
  • Vulnerable workers get more protections when businesses are sold
  • Employers could be fined if they pass union-negotiated wages and conditions to non-union workers
  • If MECAS (Multi employer agreements) are sought, employers must attend at least one meeting
  • A new system of non-binding 3rd party facilitation when parties can’t reach a settlement,
  • If the facilitation fails and a collective agreement can’t be reached, a settlement could be imposed by the Employment Relations Authority
  • Labour Dept inspectors investigate complaints over equal pay

Bosses’ offensive

The employers are objecting to the changes in the Bill. While Labour Minister Margaret Wilson says that stronger unions will actually contribute to economic growth in the whole country, bosses want weaker unions and more control over their worksites. They strongly opposed the ERA when it was first promoted in 2000 and Labour made concessions to them. Even Roger Kerr of the Business Round Table admits that the original ERA was “watered down” and “remained enterprise focused”. Despite Kerr’s plain talking, most capitalists running businesses and employing workers, still hate the ERA and don’t want a bar of the new Bill. They miss the freedom of the ECA to hire and fire at will. So they are running a scare campaign to frighten Labour into submission.

The bosses’ offensive against the Bill has been coordinated by the New Zealand Herald. The ‘business section’ of NZH has run a campaign against the Bill. It reported 3 surveys they conducted of small, medium and large businesses on their negative reactions to the Bill. The alarmist reactions are captured in the headlines in the series of anti-worker stories called ‘Working to Rules’. One headline said ‘More rights, less work’, another ‘Recipe for Ruin’ and another ‘Businesses must rise in Protest”.

For bosses, the most unpopular aspect of the reforms is strengthening the provisions for MECAS. They say that large groups of organised workers across several enterprises is a move back towards national awards and a restriction to right of each employer to hire and fire. They also object to the provisions which protect workers when businesses are sold or transferred. Neither do bosses like the restrictions on freeloading. They claim mediation is not working for them. They object to being forced into an Agreement by the Employment Relations Authority.

Prominent critic Simon Carlaw of Business New Zealand says the Bill is anti-enterprise and anti-growth. The penalty for breaching good faith is too draconian and signals a return to compulsory arbitration and loss of freedom for bosses. Transfer of provisions is yet another compliance cost. Stopping bosses advising workers not to join unions restricts their freedom of speech! Kerr ups the anti, claiming the new Bill aims to return to compulsory unionism, to compulsory arbitration and that multi employer contracts will create class warfare, which will be news to that rabid socialist Margaret Wilson.

Trade unions respond

Trade union leaders predicted businesses would complain and generate panic like they did over the original ERA. So how are unionists reacting to the hysteria? Although the Bill refers to the “inherent inequality of power” in the workplace the unions are treading softly on this argument. Instead, unionists are appealing to the ‘good business sense’ of the bosses. Bill Andersen, president of the National Distribution Union, in an article headlined “Only bad bosses need fear law change”, claimed that if a business was run on a sound investment plan, was informed by market research and had good labour relations, then the new law would be great for them. This echoes former union leader Ken Douglas who stated some years back that the bosses need unions to get the most productivity from workers! That’s presumably why on retirement from the union job Douglas offered his services to business.

Margaret Wilson defended her Bill by restating her philosophy that workers and bosses have interests in common – suggesting that good profits and improved working conditions go together. She appeals to bosses by arguing that the Bill will benefit business. She sees that improved working conditions for workers will be good for business and anyway, good employers are already practicing good faith in their dealings with their workers. She points out that the Bill brings NZ in line with the working conditions in most OECD countries. One lone CEO responding to a NZH survey thought the negative reactions to the Bill were alarmist, and said the worker protections matched those in OECD countries.

Carol Beaumont, CTU secretary, echoes Wilson’s arguments, claiming “good employers won’t worry”. According to CTU president Ross Wilson, the CTU position is that unions will work with businesses to manage the economy by helping plan and organise work, to increase productivity and develop economic strategies. The Douglas line lives!

Class Struggle perspective

Will these arguments change bosses minds? While Labour and the unions are taking a soft line stressing partnership and mutual benefits, business is facing an increasingly tough environment with a high dollar and uncertain world economy. The unions are weak, facing further damage in the year ahead unless we can rebuild them on the basis of a strong rank and file. On top of that National has revived its fortunes on the back of a racist anti-Maori campaign. But its new leader Don Brash has a rightwing neo-liberal economic package lined up to follow the racist campaign. We predict that the bosses’ offensive will force another backdown from Labour on the reforms in this Bill that are most helpful to workers.

We say that no labour law can protect workers, unless workers organize and defend these rights on the job. The weakness of the current ERA is that it gave unions more rights on paper – we called it a ‘charter for union bureaucrats’ when it was passed – but it could not strengthen t he rank and file base of the unions. On top of that the Bill has nasty anti-secondary strike provisions that have to be broken if any strike is going to succeed. It cannot stop employers from using scabs as the waterfront dispute in 2002 showed. We also object to union negotiators being able to sign off on deals without the members ratifying them. Workers are the union, not the union bureaucrats.

Despite its inherent failings we support rank and file union campaigns to get the Bill strengthened. So long as workers think that Labour is on their side we have to demand that they prove it. That way we show that Labour’s Blairite policies are really the old new right policies in drag. After the new right smashed the unions, the Blairites came along with a sedative. Today it’s the Labour Minister and her cronies in the union leadership that dose us with the ‘partnership’ class A drug. Let’s demand the things we know that neither Labour nor the union bureaucrats can deliver without pissing off the bosses. In doing so we prove to workers yet again that the only rights they can be sure of are the ones they fought to win and fight to defend!

For the right to strike! For secondary strikes! For national awards! For the closed shop! 

From Class Struggle 54 Feb-March 04

Written by raved

December 27, 2009 at 10:04 pm


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Carter Holt Harvey is now NZ’s No 2 company after the sale of Fletcher Energy, behind only Telecom. It is owned by International Paper one of the world’s biggest and most technologically advanced producers of pulp and paper. CHH has aggressively restructured its NZ operations over the last three years, cutting costs and streamlining operations. This has led to an improvement in its profits at the expense of jobs and working conditions. But it is now faced with a slowdown in the world economy and all time low prices for logs and a world slump in paper pulp prices. CHH has already shown itself willing to attack its workforce and now it has no option but to continue these attacks to stay competitive. Workers on guard!

Best practice or worst practice?

CHH was one of the first to take advantage of the ECA to defeat its powerful timber union after a 13-week strike in 1992. Most of those workers who remained at Kinleith joined the EPMU which has a philosophy of working in ‘partnership’ with employers. To stay competitive CH’s CEO Chris Liddell is a fan of new business methods based on ‘best practice’. The EPMU tries to keep pace with these best practices which in the last analysis mean increasing worker exploitation as workers deliver more ‘value for money’.

This means the company adopts the most advanced methods in production, transport and supply, speeding up production and cutting costs. This is the knowledge economy in your face. According to Liddell the most successful global companies have fewer and fewer workers. The top ten US companies are today five times as big but employ fewer workers. Best practice for profits is worst practice for work conditions and job security.

Take “flexibility”. CHH has spent half a billion on new fibreboard plants in Australia and a veneer plant in Whangarei. But it closed down Mataura with 155 job losses and one shift at Kinleith with the loss 23 jobs. It upgraded its Kinleith plant during the day forcing the two remaining shifts to work nights from 4 pm and 12 pm.

After two accidents caused by fatigue, 60 workers occupied the plant and refused to work at night for 10 days before Christmas last year. When it had no work it closed the plant for a week. So “Flexibility” for CHH means workers losing their jobs and working under worse, dangerous conditions, or having week-long split shifts. This is preparation for the ultimate in ‘flexibility’ –the casualisation of work were the boss is free to dictate the terms and conditions of work.

CHH “picking winners”

Another principle favoured by CEO Liddell is “picking winners”. CH has invested in eCargo a NZ company that matches the freight needs of companies with transport companies on an Internet site to drive down costs. CHH has invested in an Aussie E-commerce company called Cyberlynx which streamlines “supply chain operations’. In plain language this is an internet “just in time” delivery system reducing both delays and stockpiling of goods and services.

CHH recently introduced what it calls the i2b programme where it held a competition among workers for new ideas to make more money for the company. One winner was chosen because he was seen selling Xmas trees on the street. CHH management did hand out prizes to the 750 workers laid off for a compulsory weeks holiday on January 26 for doing much more creative things to pay their bills.

Most daring, CHH has spun off a Human Relations company called ‘Mariner7″ to sell all its ideas on how to exploit workers more efficiently to other companies. One of these ideas is to create company unions to smash what remaining influence existing unions have in defending jobs and conditions. And where workers fight back it means using scab labour and company unions to enforce ‘best practice’ i.e. worst practice.

Mainland Stevedoring

Carter Holt Harvey saved its best move to contract an ‘independent’ union, Mainland Stevedoring, to load logs by using computers to pack more logs into the holds. This was a ‘best practice’ that directly challenged the WWU and threatened to casualise wharf labour practices even more than they already were. Even though this was a threat every bit as serious as in 1951, the WWU leadership has chosen to steer industrial action back into parliament. The best that the Labour-Alliance Government could offer was ‘mediation’, that old golden cow that the ‘class neutral’ state could try and negotiate a deal between CHH and WWU.

But that would have been a ‘bad practice’ for CHH since it would give in to union ‘monopoly’ and stand over tactics. The CTU President Ross Wilson chimed in saying that “we remain committed to the mediation process”. He complained that peaceful pickets had been undermined by “police over-reaction and the use of confrontational tactics”. Meanwhile while the CTU and the WWU appeal to the police, the government and the company to ‘be fair’, CHH gets its logs loaded on the cheap and workers lose their jobs.

CHH picking on losers?

So far CHH has been able to win what it wants by picking off sections of the workforce under separate union coverage. The occupation over night shift was a good move and succeeded in winning back a day shift. This should be the lesson – more industrial action at the point of production, to stop CHH where it hurts.

WWU has marshalled hundreds of supporters on their picket line, but no concerted union support has meant that cops and scabs got through every time. Worse, small groups and individuals were isolated and bashed by the cops. The defeat of these pickets was only because they were not mass pickets.

The MUA struggle in Australia in 1998 showed that mass pickets have the potential to win much wider support and prevent both police and scabs from access. Similarly, despite their limits, the Kinleith occupation and the WWU pickets have put pressure on the national CTU leadership to organise its own campaign against CHH to try to settle the disputes. We welcome this initiative but expect that left to the CTU leadership it will do no more than tie workers to the ERA legal framework of the so-called ‘partnership’ between labour and capital.

Mediation and ‘partnership’

The problem with mediation as practiced by the CTU and in particular the EPMU, is that it believes, like the Labour Government, that industrial disputes can be settled by good faith and compromise. But even the NZ Herald does not believe this. In an editorial on 27 January 2001 it said “…mediation is of little use, and may well be detrimental, when fundamental principles are in conflict.”

Of course the NZ Herald thinks that the principle at stake here is the right of CH to employ whatever union they like. The Herald’s owner Tony O’Reilly, like CHH, won’t compromise this principle. This is why all the negotiations between the CTU, CHH and government have failed already.

The ERA does not allow workers to stop scabs working unless agreements are being negotiated. And this Labour-Alliance Government is not going to amend the ERA to ban scab unions. That would be regarded by the bosses like Stephen Tindall of the Warehouse as an open attack on their class. After the rough ride it got on taking office, Labour will do anything to avoid upsetting the bosses again.

This means that to defend the principle of union labour against scab labour, workers have to break the law just like the Kinleith occupation and WWU picketers have done over the last weeks. But the key is to do it as a mass of thousands of workers so that workers organised might can win and become the basis of their labour right.

A Winning Workers’ Campaign

A successful campaign needs to mobilise all CHH workers to stop production. Just as CHH has deliberately streamlined its business internationally to minimise disruptions in the supply, production and marketing of logs and pulp, CHH workers need to organise internationally to interrupt this process at the most vital points.

  1. Stop work at the plants. Occupations are the best method since workers occupying the workplace makes it more difficult for bosses to run the plant. Kinleith workers have shown that they can take such action and win. On a larger scale which stops production completely, the boss has to make concessions. Workers in Australian and North American plants should be encouraged to take solidarity actions.
  2. Stop the flow of raw materials and finished products. CHH has attempted to reduce this risk by using non-contracted casualised carriers. But the organised drivers under the NDU would be able to stop the flow of logs and paper pulp. French truckies have shown that they can blockade the nation’s transport system and force Government’s to make concessions. International bans by dockers in Korea and the US played a big part in the MUA struggle.
  3. Mass pickets to prevent the use of scab labour. The WWU pickets have failed only because they were not supported by thousands of workers like the MUA pickets in Australia. It’s true that the MUA pickets were undermined by scab workers, but the mass pickets were not generalised because they were not under rank and file control. Any union policy that downplays pickets as publicity stunts designed to embarrass bosses or governments needs to be replaced by a policy of REAL, MASS, pickets.
  4. International union bans on CHH products. Because CH is a multinational, and has diversified into e-commerce operations such as eCargo, Cyberlynx and Mariner7, an important part of international solidarity with striking CHH workers is a ban on all CHH products and services. As well as providing solidarity this would have an important educational benefit as these goods and services are used to speed up production in order to increase the exploitation of workers.

To mount such a campaign, the rank and file members of the unions involved in dispute with CHH, including EPMU, NDU and WWU, must call an ‘all up’ meeting of the combined unions to plan a campaign and to elect delegates to a strike committee to organise and lead that campaign.

The issue of ‘breaking the law’

Picketers ‘breaking the law’ has been the constant refrain from the radical right like ACT. But from a workers’ perspective any law that is used to limit their freedom to organise to defend their basic rights and conditions has to be broken. The bosses rely upon workers observing the law to get what they want. They use labour law to impose ‘mediation’ only when they know that this is on their terms. When it’s not they do not hesitate to break the law! There is only one law and that is the bosses’ law.

Strike action to be effective is illegal under the ERA. But rather than isolating and exposing a few militants to the force of the law, mass action has the potential to build workers’ power in the workplace and challenge the law. For example the MUA pickets in 1998 were technically illegal, but because they were massive, workers forced the company and the Government onto the defensive.

The SWO call for a union ban on CHH products is tactically wrong. It is a tactic that should only be used to ban the handling of products already subject to strike action. By itself it interrupts the circulation of goods but it does not stop the production process. If a union ban is called in isolation of CHH workers taking strike action, at best it would be ineffective, but at worst it would isolate unions indirectly linked to the dispute and not backed up by mass strike action, exposing them to the forces of the state.

Rebuild the Unions!

We are opposed to moves by the CTU to limit the development of industrial action to the rule of law represented by the ERA. We are opposed to promoting illusions that present the interests of workers and employers as ‘harmonious’, or in ‘partnership’. This is a partnership where one partner is getting screwed, that is the workers who create the wealth including the boss’s profits.

We are for the rebuilding of the union movement from its present low ebb where less than 20% of workers are members and even fewer are covered by collective agreements. We are for workers reclaiming the right to strike by taking action independent of the state. The right to strike is the might to strike and it can only be won by strong, organised unions.

  1. Build Fighting, Democratic unions based on the rank and file membership.
  2. For the election of delegates by the rank and file, who are accountable to the rank and file and subject to immediate recall if they vote or act contrary to their mandate.
  3. For all-up meetings of the rank and file to decide strategy and tactics.
  4. For strike committees elected by the rank and file.
  5. For international solidarity among unions, and the election of international strike committees in disputes against multinational companies.

For an immediate all-up meeting of members of CHH unions to plan a campaign against CHH and to elect a strike committee of the combined unions to lead the campaign

CTU meeting to plan campaign against CHH

A combined meeting of the CTU and the unions associated with CHH was held in at Ngongotaha on 14 March. The unions represented included the Waterfront Workers, Engineers, NDU and Seafarers. The purpose of the meeting was to strategise a union approach to CHH moves against unions. Also present were some of the CHH site delegates from around the B.O.P/ Waikato region.

Because this correspondent was not a direct participant in the meeting and delegates were sworn to secrecy, the outcome of the meeting has yet to be verified. The promise of a short statement from the meeting did not eventuate.

Outside the conference venue was what could be loosely described as a united front action consisting mainly of SWO members and supporters. Also present were 3 members of the CWG. Both groups acting independently distributed leaflets and literature on the issue of CHH and the unions.

Of interest was the response of those participating in the meeting towards the leaflets. Because the tactics being advocated by the SWO called for union bans on CHH products, this was not taken favourably by the CHH workers who were present. They believed that bans would affect their jobs and livelihoods. It would have been better for the CHH workers themselves to decide on a course of action rather than have one imposed from the outside. “Bunch of students” was one of the comments passed on by one of the delegates during the lunch break, the only time when any indication of the mood of the meeting was made.

Also mentioned was the cool atmosphere between the NDU wood sector delegates and the engineers. Their cooperation was made possible only because both unions now came under the umbrella of the CTU for the common purpose of dealing with CHH.

As we predicted in our leaflet, a hint was let drop of a tripartite meeting to be held between the Government, CTU and CHH. CHH was not pleased with the CTU getting involved, but seems to have agreed that a meeting with Government was better than the spectre of militant union action.

On a positive note, the CWG leaflet “All Out to Stop Carter Holt” was welcomed. It reflected a rank and file perspective putting the initiative on the CHH workers themselves with a bit of prodding from a certain left-wing quarter. Arising out of this leaflet a CWG member was nominated for national vice president of the NDU wood sector by B.O.P/Waikato rank-and-file delegates at Kawerau on 25 March.

This at least gives recognition to the realistic program being promoted by the CWG although it is early days yet. The complete understanding of this program by the wood sector workers and others can only help to strengthen the level of consciousness among workers to take on the likes of CHH.

From Class Struggles No 38 April-May 2001

Written by raved

August 27, 2007 at 10:15 pm