Observation (CEACR) - adopted 1998, published 87th ILC session (1999)

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

1. With reference to its previous observation, the Committee notes the Government's full and detailed report for the period ending in May 1998, which transmits the observations made by the New Zealand Employers' Federation (NZEF) and the New Zealand Council of Trade Unions (NZCTU), as well as the Government's observations made in reply to them.

2. The Committee notes that the downturn in growth was reflected during the period under consideration by a marked slow-down in the growth of employment, which did not exceed 0.2 per cent for the year ending in March 1998 (as opposed to 3.9 per cent for the year ending in March 1996), and by a slight rise in the rate of unemployment, which rose from 6.5 per cent in March 1996 to 7.1 per cent in March 1998, while the proportion of long-term unemployment (i.e. lasting more than six months) remained stable at around 35 per cent of total unemployment. In this context, the NZCTU emphasizes the particularly high incidence of unemployment among certain groups such as the Maori, the Pacific Islands people, young people and unskilled workers. In addition, the trade union considers that an assessment of the employment situation should not focus exclusively on the number of jobs created, but should also take account of their quality, bearing in mind in particular the growth in involuntary part-time employment.

3. In its report, the Government explains that its growth and employment promotion policy is based principally on responsible fiscal management, price stability and a high level of competition in the markets. It emphasizes that, without this strategy, the significant growth in employment and the fall in unemployment recorded since the beginning of the decade would not have been possible. The NZCTU, on the other hand, considers that, far from implementing an active employment policy as required by the Convention, the Government continues to put its faith in a passive policy on the assumption that growth in employment will result from a restrictive monetary policy, fiscal austerity and micro-economic liberalization. The disregard for the development of infrastructure and skills has led to a fall in productivity and in the competitiveness of exports, while monetary policy has for too long maintained interest and exchange rates that are not conducive to employment. The Committee, which recalls that under Article 2 of the Convention the measures to be adopted for attaining the objective of full, productive and freely chosen employment, must be decided on and kept under review within the framework of a coordinated economic and social policy, requests the Government to continue providing the most detailed information available on the macroeconomic policies that are being applied and their actual or expected effects on employment.

4. The Committee notes the description of the various active labour market policy measures and recalls its interest in any available assessment of their effectiveness in terms of the successful placement of individuals in employment. It notes that the Government announced the introduction, as of 1 October 1998, of significant changes in its strategy for fighting unemployment, such as the provision at a "one-stop shop" of job placement and income support services to jobseekers, greater decentralization of the employment services, and the unification of the various benefits paid to unemployed persons in the form of a "community wage" which is more strictly conditional on an active search for employment or participation in "organized activities". The NZCTU considers in this respect that the obligation which can be imposed on persons receiving these benefits to participate in such activities is contrary to the objective of the Convention of promoting freely chosen employment. The Committee invites the Government to indicate the manner in which the new measures adopted with a view to achieving a better coordination of unemployment assistance with active labour market policy measures contribute to the promotion of full, productive and freely chosen employment.

5. Article 3. The Government states that it is consulting different sectors of society in various ways and that, within the framework of the preparatory work on the changes recently made in its employment strategy, written comments have been received from more than 200 organizations or individuals. The NZCTU indicates that it did submit a written communication, but was not given any opportunity to discuss it. During discussions of the Bill obliging beneficiaries of the "community wage" to participate in "organized activities", it was only able to present its point of view to the competent parliamentary committee. In the NZCTU's opinion, such procedures do not meet the requirement of the Convention for consultation, and reflect the Government's contempt for the social partners. The NZEF states that it does not share the concern of the NZCTU and emphasizes that macroeconomic policy is the responsibility of a democratically elected government which is responsible to the electorate. The Committee recalls that, like the Conference Committee in its conclusions in June 1993, it has for a number of years stressed the importance which it attaches to giving full effect to this fundamental provision of the Convention, by undertaking regular consultations with employers' and workers' organizations on employment policy measures, especially when those measures involve major structural reforms. The Committee notes with regret that the gradual disappearance of tripartite dialogue on employment policies, which it has noted in previous observations, is now even more apparent. The Committee trusts that the Government will adopt the necessary provisions to ensure that consultations are held with the main recognized social partners and that it will be able to indicate real progress in this regard in its next report.