Furture Challenges: Ross Wilson speech to NDU. Oct, 2004

Future Challenges: The economy, China and the role of unions.

 

Greetings from the Council of Trade Unions.

Can I start by acknowledging the very important contribution your union makes to the work of the CTU. I was very keen for the National Distribution Union to re-affiliate when I became president five years ago, and I continue to value the representation which you provide on behalf of a very diverse, and important, group of workers in the private sector.

The NDU has been a consistent advocate for regional and political activity and can, I think, take considerable credit for the very successful CTU-Government forums we have held over the past year or so in Palmerston North, Hamilton, Auckland, Christchurch and Dunedin.

Similar determination was shown with your campaign against the shop trading hours legislation, and you can take pride in your success here.

But there are many other areas where the NDU has led the way; the work at Government and industry level to protect jobs in TCF, the Progressive supermarkets campaign, the work on behalf ambulance officers, and the continuing work on superannuation with IRIS. The work on our CTU industry sector groups is also getting those initiatives off to a good start; particularly in the wood, food, and transport sectors, and with those high profile community events in Northland and Gisborne.

So my congratulations to the NDU leaders for providing that leadership. And congratulations and thanks to others in the union at all levels who have continued to make a real contribution to the work of the CTU.

Conference is a time to reflect on the past and plan for the future, and I will also take the opportunity to reflect on a few issues which relate to the NDU in your wider role in the union movement and society.

We have some huge challenges facing us as a union movement, and as a country. I just want to share some of my thoughts about that with you.

Next year we have to decide whether we go forward with the current Government's agenda, or whether we go back to the 1990s policies with Don Brash. When you cut through the political bullshit the choice will be as stark as that.

We saw earlier this year, with Brash's Orewa speech, how easily we as voters can be mislead by our own fears and prejudices. They will try to do the same again next year, and our objective between now and then will be to provide unions, and union members, with facts so that whatever decision you and your workmates and families make regarding the vote you exercise, you will have had the opportunity to take those facts into account.

On the Foreshore and Seabed issue we arrived at a consensus submission at the CTU. In simple terms it can be summarised as:

- Supporting the part of the Bill which legislates access to the foreshore and seabed for all New Zealanders. In doing so the CTU does not suggest that access would be denied by Maori owners, but is acknowledging the prime importance of this as an outcome for New Zealanders most of whom have always believed that the foreshore and seabed were in public ownership and legally accessible to all. We also say that the right should apply to all foreshore and seabed with few exceptions.

- Supporting the part of the Bill which codifies the Common Law rights which the Court of Appeal decision identified as developing aboriginal law from Canada and Australia. We think that by doing so, recognition of customary rights will be strengthened not weakened.

- But we have serious concerns about the fairness of the parts of the Bill relating to compulsory acquisition and redress.

My special thanks to Syd Keepa for fronting up to the Select Committee and jointly presenting our submission with me. The opposition MPs questions were all directed at creating division and we maintained a united front.

This is an important constitutional debate and one we have to engage in patiently and fairly.

But we must also focus on other issues in making our election year decisions.

We must think carefully about the impact on ourselves and our families if we return to the 1990s policies with a Brash Government.

An Index of Labour Market Well-being for OECD countries produced by the Canadian Centre for the Study of Living Standards provides striking evidence of how much damage New Zealand workers suffered during the 1980s and 1990s.

The report reveals that New Zealand workers suffered a drop of 6.5% in real hourly earnings during the 20 years from 1980 to 2001, the worst performance of the 16 OECD countries in the study.

By contrast workers Japanese workers were up 69.4%, UK workers 46.9%, Canadian 39.5%, and Australian 28.8%.

New Zealand also ranked the lowest of all 16 OECD countries in the rate of increase in the index over the 20 year period, as well as having the lowest level of labour market well-being in 2001.

It should therefore be no surprise to anyone that the negative social impacts linger with us from the 1990's, and are still reflected in social institutions like schools.

But at a political level there is no real acknowledgement of this and it has struck me recently that there is more than the usual level of mismatch between rhetoric and reality in some of the current debates about employment relations issues. We have had:

- Don Brash bemoaning the fact that Australian workers get paid on average 25 per cent more than their Kiwi counterparts but stridently opposing changes to the Employment Relations Act which might help collective bargaining to close the gap, let alone acknowledging that it was the policies of the 1980s and 90s that created the gap.

- Business leaders pressing the panic button about skill shortages, but adamantly opposing improvements in wages and conditions here which might attract some of the tens of thousands of skilled Kiwis in Australia to come back home.

- Business executives appearing before Select Committees to argue against Holidays Act changes which give wage workers the right to sick, bereavement or public holiday leave based on their usual earnings when those executives already enjoy the benefits themselves.

- And the continuing chorus of complaint that workplace health and safety laws are unjustified "compliance costs", during a period when we saw the tragedy of six work accident fatalities in as many days.

But the most fundamental contradiction is that despite the business organisation public rhetoric there is, privately, a developing consensus that the low wage path of the 1990s is not the future for a New Zealand facing the reality of competition from a rapidly growing China.

Our future lies in building a high value, high skill economy which recognises the value of skills and knowledge and treats labour as a valuable asset.

And that is why unions are actively involved in industry training, and regional and industry development initiatives. That is why we have to use our organised strength at every opportunity and engage with Government and employers.

Some call that partnership. Quite frankly, I don't care what it is called as long as it is based on strong, active, union organisation, and the union doesn't compromise its independence in the process.

It is also a fundamental condition of our union support is that the benefits of growth are shared.

It is important that our members understand the importance of acquiring skills and that is why the chorus of overblown rhetoric from business organisations when the Employment Relations Law Reform Bill was reported back to Parliament sends exactly the wrong message to workers.

Workers won't be easily motivated to buy into the urgently needed skills and industry development strategies if the prevailing message from employers is that they will oppose any move to share the wealth we all help to create.

A survey out last week shows the annual median growth rate for CEO's salaries was 7.1% between 1997 and 2002. The increases in their workers wages and salaries were less than half that.

The hypocrisy of these high-salaried bosses, also enjoying at least five weeks leave a year, trudging up to Parliament to argue against laws which set fair minimum standards for workers at the coalface is not lost on the "smoko room" cynics.

Columnist Rod Oram in the Sunday Star Times has accused business lobby groups of "grabbing their shovels and digging themselves deeper into a dark hole of diminishing credibility".

Time after time the business organisations predictions of gloom and doom have proved wrong.

We first heard them in 1999 with the prediction that the reversal of the ACC privatisation would be a disaster.

Then again with the ERA the following year. This time the the economic sky would definitely fall in. Well, it not only didn't but instead we witnessed the dawning of a period of strong economic growth.

Following that we have had:
- Paid Parental leave
- Regular minimum wage increases
- The HSE Act amendments
- The new Holidays Act

And the CTU takes pride in the fact that these were all our initiatives, none of which would have been initiated without CTU advocacy.

Following each measure, and following the ritual dire predictions from business leaders, we have seen a surge of economic growth. The past two years have seen the strongest economic growth in the OECD and the lowest unemployment in almost 20 years.

And now we have the same dire predictions about the ERA amendments.

So what did unions win from the ER Law Reform Bill which Peter Tritt in this week's NBR described as "a major victory for unions"?

The CTU identified four main objectives, by which we can measure our success. They were:
- real promotion of collective bargaining
- concrete and meaningful good faith provisions
- an end to freeloading by non-union members
- protection of vulnerable workers in transfer situations

1. Real Promotion of Collective Bargaining
The key aspect of the Bill is how it improves the good faith mechanisms and remedies to promote collective bargaining. The new provisions which will help this include:
- a new duty on employers not to advise or do anything that will induce workers not to be involved in collective bargaining or to be covered by a collective agreement.
- Parties bargaining have a duty to conclude a collective agreement unless there is a genuine reason based on reasonable grounds. ...and not wanting a collective is not one.
- If agreement cannot be reached on one matter, the parties are required to keep bargaining on other matters
- It will be legal to discriminate in favour of unionised employees by providing better conditions applicable only to those workers on the collective
- New "good faith" requirements on individual bargaining will make this less attractive to employers (hopefully)
- There are also some other minor changes which will help us:
o Education leave will be available to union members regardless of whether they are under a CA
o Time used for union access meetings cannot eb offset against union meeting entitlements

2. Concrete and Meaningful Good Faith Provisions
The good faith requirements in the ERA have been strengthened and given some teeth:
- There is a new definition of good faith that makes clear that it goes beyond mutual trust and confidence and includes a requirement for the parties to be active, constructive, responsive and communicative.
- There are now penalties for breaches of good faith if the failure to comply was either deliberate, serious and sustained, or if the failure was intended to undermine collective bargaining.
- The Authority will have the power to facilitate collective bargaining and, where there has been serious and sustained bad faith employer behaviour, to determine/arbitrate the terms of a collective agreement.

3. An End to Freeloading by Non-Union Members
The new anti free-loading measures in the Act will include:
- A breach of good faith to pass on a term or condition reached in bargaining to another non-union employee or another collective agreement if the employer does so with the intention or the effect of undermining collective bargaining.
- also a breach to pass on if the employer does so with the intention and the effect of undermining the collective agreement.

- The Act will introduce a bargaining fee clause which allows unions and employers to agree on such a fee, and allows non-union employees to opt out and do their own bargaining.

4. Protection of Vulnerable Workers in Transfer Situations
For the identified group of vulnerable workers (mainly cleaners and catering staff) the Act also includes a requirement for the new employer in a transfer, sale or contracting out (or in) situation to employ every worker on the same terms or conditions or pay redundancy compensation. If the compensation cannot be agreed it is decided by the Authority. A vulnerable worker is described as "having little bargaining power".

So the amendments are almost through Parliament after a process of more than two years work for us.

Some of you may have noticed that, after Paul Swain replaced Margaret Wilson as Minister of Labour a few months ago, John Tamihere announced that the ERA amendments would be watered down to appease business.

As Tamihere said in an unwise reference to Margaret Wilson. "We'll see what Swainey and the boys can get up to now that the girl's out of the way for a little while".

I understand that Tamihere's screams of pain have been heard from Parliament and the NBR conceded defeat last week with a headline "Swainey and the boys lose out to the left".

So much for "the boys". Luckily for us they are no match for the "girls" in Cabinet.

It is our intention to help unions to make good use of these amendments as we face up to the real challenges which face us as a country.

And this brings me to the issue of China.

The impact of China on all countries, including ours, is going to be immense over the coming years, whether or not we have a free trade agreement.

It is estimated that even developing countries like Bangladesh and Indonesia will each lose up to a million manufacturing jobs to China.

It is possible, I stress possible, that an FTA with China may open up large opportunities, in the primary production and processing sector in particular.

We are saying to Government that it is important not to just "talk up" those gains while "talking down" the manufacturing losses, and this is another important area of work for the CTU through our International Committee.

The CTU was successful in 2001 in negotiating with Government a Trade and Labour Framework which requires it to give effect in trade agreements to the core ILO labour standards which ensure::
- freedom of association and the effective recognition of the right to collective bargaining;
- the elimination of all forms of forced or compulsory labour;
- the effective abolition of child labour;
- the elimination of discrimination in employment.

These minimum international labour standards, negotiated by unions at the International Labour Conference which all international unions, including the CTU, send delegates to each year, is a good example of the work undertaken by the international union movement. The ICFTU, to which we are affiliated, represents about 150 million union members.

It has been estimated that the failure to recognise these international labour standards in China artificially suppresses the price of Chinese labour by between 47% and 86%.

All of this gives urgency to the need to move our products and services up the value chain so we aren't competing on price, but on Kiwi innovation and skill into higher value products which China can't match. Fisher & Paykel are a good example.

Even this strategy is frought with difficulty

In June Interlock announced it was being forced to move part of its production to China by a Chinese competitor which had copied Interlock's friction window stays. Since then Interlock has announced that over 300 jobs will be lost and the entire plant will close.

A Canterbury manufacturer of saw blades has seen a Chinese manufacturer directly copy a saw blade design. They even copied one batch number on to every saw blade rather than sequentially number the batches. This is in a product that faces an 8% tariff into China.

But we have to work with the Government to take up this challenge. That is an important role for unions in 21st century New Zealand, even if employers don't see it.

And we can't wait for the employers. Most of the employers I spoke to at the Gateway to China Conference in Auckland recently was to shift their production to China. That is no solution for unions. That simply transfers several hundred thousand New Zealanders' manufacturing jobs to China.

So we, as unions have another big challenge - to empower workers to debate the issues in their own sectors and industries. We are building the capacity to do that. By the end of this year we will have trained 12,000 Health and Safety Reps in New Zealand workplaces. The excellence of our programme is recognised and the CTU is now the largest health and safety training organisation in the country.

We now have pilot funding to do the same with Learning Reps.

These programmes are only partly about health and safety and lifelong learning. They are also about building the capacity of workers and unions to participate in debates about our economic and social future. About what sort of New Zealand our children and grandchildren will inherit.

And linked with that is the challenge to build our union movement's power and influence to do that job more effectively.

We have been working towards this for several years, but we made a breakthrough at the CTU Union Leaders' meeting in Palmerston North in February.

Leaders at that meeting acknowledged that it is vital that we work together as a union movement, and that we develop strategies on an industry basis around not just organising and recruitment, but all of the other issues which are of vital interest to union members and potential union members.

We have proceeded to establish those industry and sector groups and it is our intention to progressively structure our CTU work so our focus is almost exclusively at that industry and sector level.

If there is one thing that we have learned over the past decade, and have tried to implement over the past 5 years I have been CTU president, it is that we can achieve a lot more if we work together as a union movement.

We have a responsibility to workers, present and future, to ensure that we do rebuild our movement; not to go back to old structures and old ways, but to move forward as a modern, participatory union movement which is relevant to workers' interests, which is professional in what we do, and which leads the debate around a broad agenda of economic and social development.

My purpose today is not to spend a lot of time on the detail of what we have achieved over the past year, or the detail of the work we are doing and planning to do over the next year and more.

What I really wanted to do was put our role in the context of the political choice we face next year and the critical importance of re-electing a Labour led Government to continue the building of its social democratic programme, but also to emphasise the urgency of the challenge we face, not only in leading the re-building of the union movement, building on gains we have made with the ERA amendments and other measures, but also engaging around the broad agenda of issues which reflect the interests of workers in New Zealand today.

I hope I have left you something to think about.