Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

Employment Policy Convention, 1964 (No. 122) - New Zealand (Ratification: 1965)

1. The Committee took note of the Government's report which contains detailed information in reply to its previous comments and encloses a communication from the New Zealand Employers' Federation on the application of the Convention.

2. With reference to its previous observation, the Committee notes that the downward trend in employment, which was already marked in the previous period, continued between June 1990 and June 1992. Total employment dropped by 1.2 per cent while unemployment increased by 36 per cent. The unemployment rate rose from 7.5 per cent to 10 per cent of the labour force. The Government points out that unemployment has reached a particularly high level in New Zealand terms and refers to worrying characteristics in the way it is distributed over the various categories of the population: there is more long-term unemployment, the greatest increases in unemployment were among young people and unemployment has increased significantly among the Maoris and Pacific Island Polynesians whose unemployment rates have reached 25 per cent. The Committee also notes that involuntary part-time work has increased, particularly among women, at the expense of full-time employment.

3. The Government indicates that the overall strategy of its economic policy remains unchanged and is based on the Government's belief that the best way to generate employment opportunities in the long term is to create, in the immediate future, an environment conducive to growth of supply and to remove barriers to the necessary adjustments. Firm monetary and fiscal policies are aimed at reducing inflation and public debt, and at the same time major structural reforms are being implemented which include measures for privatization, the phasing down of border protection and radical changes in wage fixing. In this connection, the Government refers to the adoption of the Employment Contracts Act, 1991, under which employers and employees are free to negotiate conditions of employment at enterprise level. The New Zealand Employers' Federation considers that the adoption of this new system of labour relations which aims to make the labour market more flexible was logical in view of the deregulation of the goods and capital markets. The Government recognizes that the structural reforms have contributed directly to job dislocation in sectors where protective devices have been dismantled and that particular groups and individuals are facing difficulties in adjusting to the new labour market conditions. However, it considers that the gains of economic reform in terms of lower inflation and increased competitiveness have created the right conditions for eventual employment growth. In this respect it answers to the allegations made by the New Zealand Council of Trade Unions, to which the Committee referred in its previous observation, to the effect that higher priority was given to fighting inflation, and that the Government's commitment to the objective of full employment was ambiguous. The Government recognizes, however, that improvement in the employment situation will take time, as labour markets are slow to adjust.

4. The Committee notes that the Government stated when the 1992 budget was adopted that the high level of unemployment was the country's main social problem. It indicates in its report that the implementation of an active labour market policy is an essential component of its social and economic programme, and describes in detail a set of measures to promote job creation and vocational training and integration for the unemployed. The Committee notes in particular that the Ministry of Labour has set up a Community Employment Group and regional teams to lend support, in the form of advice, technical assistance and grants, to local employment creation initiatives. There are also a number of programmes for the partial subsidizing of jobs in the private sector, the financing of employment for the long-term unemployed in environmental protection projects, the granting of allowances to start up businesses, the organization by the employment services of job search seminars and in-depth interviews with the long-term unemployed. The Committee asks the Government in its next report to provide a detailed evaluation of the results obtained by each of these programmes, particularly in terms of the viability of the jobs created and the lasting integration of the persons concerned.

5. The Committee appreciates the quality of the information supplied by the Government. It is none the less bound to note that although the new approach in economic policy of the last few years has proven quite successful in terms of reduced inflation, reduced public debt and improved competitiveness of the economy, it has not yet enabled the ultimate objective of employment growth to be attained. As it indicated in its reports of 1988 and 1990, the Government still considers that growing unemployment is one of the costs, in the short term, of its economic adjustment strategy. However, it reaffirms its commitment to the objective of full employment, while recognizing that it is not inscribed in the legislation or any other formal document. The Committee takes due note of this commitment in principle. However, in view of the fact that the unemployment rate has doubled since 1988 and that this situation threatens to marginalize if not exclude certain categories of the population, the Committee wishes to draw the Government's attention once again to Article 2 of the Convention which stipulates that each Member shall decide on and keep under review, within the framework of a coordinated economic and social policy, the measures to be adopted to promote, as a major goal, full, productive and freely chosen employment.

6. With regard to Article 3, the Committee notes from the Government's report that no formal consultations have been held with the representatives of employers and workers, whose views are sought on specific issues or when legislative reforms are envisaged. It recalls that the Convention requires not only consultations with employers' and workers' organizations, and other persons affected, when employment policies are formulated, but also their cooperation in the implementation of such policies. The Committee would be grateful, therefore, if the Government would include in its future reports detailed information on the effect given to this essential provision of the Convention, indicating the consultations that have been held with representatives of the persons affected during the period under review, the procedures for such consultations, the views recorded and the manner in which account has been taken of them.