Rick Barker Speech: Address to Service and Food Workers Union Delegates Conference18 October 2004

Thank you for this invitation to address your delegates today. I am proud to be a lifetime member of this union and feel good to back amongst people where I gained my political teeth.

Since the Waihi campaign of 1912, Unions have historically influenced political outcomes. A government looking for longevity would be prudent to listen to the Union voice.

I believe one of the best things this government can do for working people is to improve job prospects and the government does have a set of policies that has seen growth and jobs return to our economy, alongside long-term investment in social services such as health and education and the modernisation of our infrastructure. Underlying this is the assumption that working through issues in partnership in regard to conditions of employment or to balancing the interests of various communities, is an infinitely better approach than one based on division and confrontation which is basically the legacy left to us by National when the Labour Coalition took office in 1999.

This government believes economic and social progress flows from investment in skills, in strong public services, a state superannuation fund and a strong health system, thus ensuring that all New Zealanders have a real and tangible stake in the future.

Today I want to tell you about what have we done in the last 5 years, and talk about what we intend to do to cement these improvements.

In 1999 this government was elected on the platform of promising reform of the Employment Contracts Act and to restore confidence between workers and employers. It was a vote of faith that we would reverse the damage of the National Government that eroded trust and trampled on workers.

I hope to show you today that much of what was promised is being delivered and more.

I will talk about the Employment Relations Act and the Transfer of Undertakings, the Holidays Act and other changes in the work place that enhance work-life balance and fairness such as the new redundancy legislation. I will also talk briefly about the economy, skills training, and lastly about what we hope to deliver in the future and why Union participation in policy formation is an active the ingredient to make a bright future materialise.

First, let’s look at what has been achieved so far in terms of getting fairness back into the workplace.

Employment Relations Law Reform Bill

In our 2002 Policy Manifesto we outlined Labour’s commitment to reviewing the ERA. In this review we identified a need to ensure there is protection of employment conditions and continuity of employment in the event of the sale of a business, transfer of undertakings, and contracting out.

As you will be aware, a Bill amending the Employment Relations Act has just been reported back to the House. It contains a range of fine tuning provisions which will add further strength to what is already a very effective piece of legislation.

The purpose of this Bill is to better meet key objectives of promoting fair, productive, and effective employment relationships between employers, unions employers and employees.

The key amendments made in this Employment Relations Law Reform Bill are about: fair employment law, about resolving disputes without lawyers if possible, about giving employees a genuine choice between individual and collective employment agreements, and about creating more certainty for employees when a business is sold or their work is contracted out.

This Bill represents a good balance of practical and realistic measures that will strengthen the Employment Relations Act and further promote positive employment relationships.

The Bill clarifies that good faith is a broader concept than the common law obligations of mutual trust and confidence, and that addressing the inherent inequality of power in employment relationships goes beyond focusing on bargaining power alone. It confirms good faith applies to individual bargaining situations, and that there must be genuine negotiations over individual employment agreements.

Stronger incentives for parties to act in good faith are provided by the introduction of penalties for serious and sustained breaches of good faith.

The Bill also directly addresses the issue of "free riding" - the practice of employers automatically passing on collectively bargained terms and conditions to employees employed on individual agreements.

My colleague Paul Swain who will be here tomorrow ( to answer all the difficult questions) welcomed recommendations from the transport and Industrial Relations Committee last month which clarify the rules around 'passing on" where collectively agreed terms and conditions are passed on to employees on individual agreements. The Committee stressed the need for clarification in dismissal situations and the need for clarifying those most at risk in restructuring situations particularly for those in food catering and cleaning services – that's you. Basically this is what this Service and Food Worker's Union would be looking for. A critical part of the Bill is the Transfer of Undertakings.

We recognise that the currently lack of protection when a business is sold may force some workers to agree to less favourable terms and conditions, in order to secure employment. As promised we have been considering a range of measures to provide protection to workers affected by contracting out or sale or transfer of businesses.

The Labour minister has informed me that he intends to have this Bill in force by December 2004.

This year, to enhance this Bill I promoted to new laws, which were passed called the Insolvency Amendment Act and Companies Amendment Act. We're protecting employees' redundancy payments and wages with a 250 per cent increase in maximum payments, from $6,000 to $15,000. This includes, for the first time ever, redundancy pay.

We have in my view, more than restored the damage done to this part of law by the National Government.

Now to other improvements: increasing the Minimum Wage and the Holidays Act:

This government has increased the minimum wage 5 times in the last 5 years.

New Zealand's lowest paid workers received a 5.9% pay increase in April.

We raised the adult wage went from $7 in 1999 when we took office up to $9 per hour. The youth wage has gone up from $4.20 in 1999 to $7.20 an hour now.

Despite the predictions of the "right" This has not seen a corresponding drop in youth unemployment.

In December 2003 we passed the Holiday Act that came into effect April 2004. These changes were about quality of life and equity with white-collar managerial jobs already enjoying better holiday clauses.

Sick leave and bereavement leave were separated out. The new Holiday's Act gives everyone three days to mourn for someone within their immediate family and a single day to mourn someone close to them.

Four weeks holiday comes in from 2007. I can promise you that National would get rid of this.

Changes to the Holidays Act that were necessary following some glitches such as pay rates, that showed up last Christmas and Easter are being ironed out and the Holidays Amendment Bill is expected to be passed in time for Labour Day. As well as clarifying procedure and workers rights around requests for medical certificates, The Bill also clarifies that workers should genuinely be paid time and a half on public holidays.

Paid parental leave changes help retain skilled workers Recently we announced a further increase for working families, which saw payment for 12 weeks paid parental leave increase from $334.75 per week to $346.63 per week this July 2004. The scheme is to be extended further so that eligible parents will get 13 weeks of paid parental leave from 1 December 2004, and 14 weeks from 1 December 2005. Parents will also be able to take paid parental leave if they've been in the same job for at least 6 months, rather than a year. This is good news.

Now to the bigger picture: the focus on families and health and retirement:

This government is looking at the bigger picture: up skilling, good health, and strong communities. We know that these things go hand and hand.

Rather than offering tax cuts that disadvantage people less well off because public services are then be cut, the government is redistributing wealth to low paid families.

The Working for Families Package when fully in place will deliver an average increase of around $100 a week in direct income assistance to families in the $25,000 to $45,000 band.

By 2007 an estimated 61 per cent of all families with dependent children will benefit from the cumulative increases to Family Income Assistance, gaining an average $66 net a week.

In addition, around 28,000 families and 33,000 children would benefit from increases to childcare assistance with average gains of $23 a week per child from 2005 and around 95,000 households would receive increases averaging $19 a week to their Accommodation Supplement in 2005-06.

The increases also represent the biggest offensive in the war against child poverty in decades.

Primary Health Organisations: greater access to cheaper healthcare

There are now 77 Primary Health Organisations around the country, with a total of over 3.7 million people enrolled in them.

Two of the benefits that will be most noticeable now are lower fees for children under 18 and for people aged 65 and over, who were not previously able to get lower-cost care through the Community Services Card or High Use Health Card. These age groups will also be able to get fully subsidised prescriptions for no more than $3 an item.

These benefits will be rolled out for 18 to 24 year-olds in July next year, for 45 to 64-year-olds in July 2006, and for the rest of New Zealanders, the 25 to 44-year-olds, in July 2007

The Superannuation Fund is another example of the government looking ahead to what sort of society we want for older people.

An ageing population means the cost of New Zealand Superannuation will double over the next 50 years. To prepare for this, the Government is allocating around 2% of annual GDP (around $2 billion a year in current terms) to the New Zealand Superannuation Fund over the next 20 years.

The Fund is expected to reach $38 billion in 10 years and in 20 years the Fund is expected to total around $101 billion

The fund has been set up now to secure superannuation for all into future.

Finance Minister Dr Michael Cullen has also hinted that he is considering some kind of savings scheme for workers, but that is in the early stages of discussion.

Skilling up, retaining skilled workers and attracting more

Improving skills and keeping them current with the demands of a changing economy is a major focus of our investment as a government. With lower unemployment, we’ve are starting to see a skill shortages emerge in some sectors.

We are addressing that issue on a number of fronts:

Primarily we are focusing on getting all working age New Zealanders into work by matching skills to jobs. As the Minister for Work and Income I have taken a strong interest in getting work opportunities for all.

We have made great strides in industry training, increasing participation to around 127,000 trainees in 2003, a 56 per cent increase since 2000. Employer involvement in industry training has also steadily risen, as more businesses seek the benefits of industry training. By 2003, around 29,000 employers were participating in industry training, an increase of 19 per cent since 2000. We have adopted a target of 150,000 trainees by 2005.

The revival of apprenticeships is a great success, and investment in the Modern Apprenticeships programme which has increased each year under Labour. As at March 2004, there were 6,580 Modern Apprenticeships throughout New Zealand in 30 industry areas.

Economic Growth and Business confidence.

This government is proving its critics wrong. You can have better working conditions and fairness in the workplace alongside high productivity and good returns. In fact, work stoppages have declined for the third year in a row. The use of the Department of Labour's new mediation service has been able to resolve disputes more quickly in less legalistic forums. The free service has been recognised by employers and workers as a practical mechanism for resolving workplace disputes. Over the past two years, when mediation has taken place, around 77 per cent of problems are settled there.

The World Bank’s 'Doing Business in 2005' report of 145 countries placed New Zealand at number one in the ease of doing business, followed by the United States, Singapore, Hong Kong (China) and Australia.

In contrast to the National Party attempt to generate doom and gloom, we’re actually seeing New Zealand at the top of the pile in terms of the way in which our regulatory regime impacts upon business.”

And finally to more good news about jobs

Our term in office to date has been rich in job growth. The number of people in work has risen considerably in the last 4 years –since the government came to office 211,000 new jobs have been created; or 136 more people in work each day since the beginning of 2000. Meanwhile, the unemployment rate has fallen from around 7 per cent in 1999 to 4 per cent in June 2004, a 17 year low. Youth Unemployment has dropped on average by 66%.

New Zealand now has the second lowest unemployment rate in the OECD (behind Korea on 3.5 per cent), and significantly lower unemployment than our major trading partners including Japan the United Kingdom, Australia and the United States.

The statistics also confirm that employment gains are being shared around, with strong growth in the regional economies and with Maori and Pacific people’s unemployment dropping again this quarter.

. Wrapping up and summing up

From 18 years as a Union official, I know that employers never give anything away. Therefore I'd like to see more workers joining unions and strengthening the hand of negotiators into your collective employment agreements.

While Union membership is now steady on around 22 per cent, it is of course important to attract more members to join the Service and Food Workers Union.

Labour is networking with the Unions now about how to sell all this good news and to inform people about what they would lose under National.

What does Brash want?

He wants your holidays, your superannuation, your fought for wages and conditions, health and safety clauses, time and a half on statutory holidays. He would turn the clock back to the Winter of Discontent: To the days where the social dividend was not shared out and where the rich benefit while the workers suffer.

While the opposition scare-monger on race issues and the idea that some groups are getting more than others in this country, it is vital that workers and their families are well informed about how they are better off personally under a Labour-led government.

This government has distributed wealth more widely by maintaining, the value of benefits and the superannuation and by increasing expenditure on social services such as health care, housing and education which benefit all sectors of the community.

We inherited a fragmented and disenfranchised electorate from National and are building a country where everyone has a stake and is valued.

What all of these measures I have highlighted boil down to.is a simple message which we will be taking to the electorate next year: this is a government that is working – working for the economy in terms of building the platform for ongoing growth, working for families in terms of sustaining and improving the services that they need and expect, and working for New Zealand workers in terms of creating an environment in which they have clearly established rights to bargain over pay and conditions.

Clearly, much has been done to restore balance and bring fairness into the workplace and there is of course still plenty to do. This Labour-led government is now preparing for the next decade of government to firm up a fairer future that distributes wealth and widens opportunity for all.

Thank you.

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