Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

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

The Committee notes the Government’s detailed report for the period ending in May 2010, including comments from Business New Zealand and the New Zealand Council of Trade Unions – Te Kauae Kaimahi (NZCTU). In reply to previous comments, the Government indicates that the Better work working better – Labour market and employment strategy is no longer in place. The Government reported in detail on the response to the recession, the Medium-term Economic Agenda, the careers strategy, the five-year action plan and labour market reform. Business New Zealand emphasised that anyone seeking employment in New Zealand is free to apply for any job for which he or she is qualified or for which he or she feels capable of performing. No one is directed to take up employment even though the person concerned may have been unemployed for a considerable period. The Committee further notes concerns expressed by the NZCTU for changes to employment legislation, policies and economic approaches by the Government to meet its obligations under the Convention. In this respect, the Committee recalls the concerns expressed by the NZCTU in the 2010 General Survey concerning employment instruments that measures to encourage competitive business success should not be taken at the expense of workers’ rights. The NZCTU reiterates in the report on Convention No. 122 that new employment legislation allowed businesses with fewer than 20 employees to dismiss new employees during their first 90 days of employment without cause or recourse to standard employment protections, such as personal grievance provisions. According to the NZCTU, this legislative reform undermines workers’ rights. The NZCTU emphasizes again that minimum labour rights should apply to SMEs as well as to larger employers. The Committee refers to paragraphs 397–399 of the 2010 General Survey and reiterates that any measures designed to promote full employment and encourage the creation of productive and sustainable jobs, particularly in small and medium-sized enterprises, should be adopted in consultation with the social partners, under conditions that are socially adequate for all concerned and in full conformity with the international instruments ratified by the respective countries. Within this framework, the Committee also recalls that, in its 2007 conclusions concerning the promotion of sustainable enterprises, the Conference urged all enterprises, regardless of their size, to apply workplace practices based on full respect for fundamental principles, rights at work and international labour standards. The Committee again expresses its appreciation in receiving information and data on successes, problems encountered and lessons to be learned from the experience of the social partners in New Zealand with regard to the application of the Convention.

Articles 1 and 2 of the Convention. Employment trends and active labour market measures. The Government indicates that a period of economic recession began in early 2008 and as a result, efforts to minimize its negative effects were initiated by maximizing employment opportunities for those most affected and by implementing a plan for sustained economic growth. The Committee notes that in response to the economic recession, government agencies are working closely with businesses to help maximize the potential for economic development across sectors and regions. The Government recalls a Summit on Employment hosted by the Prime Minister on 27 February 2009 which included participants from business, industry, trade unions, Maori groups and local and central government agencies (paragraph 84 of the 2010 General Survey). The Summit produced 20 initiatives to alleviate the effects of the economic crisis on those made redundant and at a higher risk of long-term unemployment due to the recession. The Committee notes that in March 2010, the unemployment rate fell from 7.1 per cent to 6 per cent while employment increased by 1 per cent, its largest increase since June 2008. The Government indicates that this result combined with high business and consumer confidence and rising employment intentions demonstrated that the labour market had reached a turning point and was beginning to recover. The Government also indicates that in March 2010 the number of people employed rose by 1 per cent, or 22,000 people and subsequently stood at 2,177,000. The Committee notes concerns raised by the NZCTU stating that unemployment has remained high over the last nine months and further indicates the unemployment rate during June 2010 was 6.8 per cent, not far below its peak in December 2009 of 7.1 per cent. The NZCTU reports support for government fiscal stimulus measures to be increased in light of continuing unemployment, a stalling recovery and the economic outlook internationally. The Government reports on overall policy initiatives aimed at achieving economic growth and development, raising the levels of living and meeting manpower requirements through two aspirational goals: to catch up with Australia’s GDP per capita (the New Zealand figure was 76 per cent of Australia’s) and for exports to be 40 per cent of the GDP (previously reported at 31 per cent). The Government indicates an economic plan to achieve these objectives through the following six main policy drivers: growth-enhancing tax system, better public services, innovation and business support, better regulation, including regulations around natural resources, investment in infrastructure and improved education and skills. The NZCTU indicates concern that the Government’s response in 2008–09 to the recession caused by the global economic crisis was inadequate and poorly targeted and mainly consisted of tax cuts. The NZCTU further expressed concern regarding the possible impact of free trade agreements on manufacturing jobs in New Zealand and the potential for such policy to restrict freedom of choice of employment. The Committee notes the Government response to incorporate labour issues into a framework to guide trade negotiations with other countries. The Committee invites the Government to provide in its next report information on the impact of the schemes implemented to alleviate the effect of the economic crisis (the ReStart assistance package, the job support scheme, the youth opportunities package and the small business relief package). It also invites the Government to indicate the extent to which the employment objectives included in the medium-term economic agenda have been or are being attained and further information on the employment-related issues to guide trade agreements.

Education and training policies. The Committee notes the detailed information provided in the Government’s report on education and training policies and its ongoing commitment to raise workforce literacy, language and numeracy skills in order to support productive employment. The NZCTU has highlighted the recent research by the Government Human Rights Commission which determined youth unemployment to be a top priority and identified high unemployment of young Maori and Pacific people and a current bias against hiring some young people as issues. The Committee also notes the statement by Business New Zealand for ensuring that many Maori and Pacific peoples are better served by the education and training system so that they have the skills required to do the jobs available. In this respect, the Committee notes the Tertiary Education Strategy 2010–15 which seeks to achieve higher levels of education and provide for better employment opportunities among vulnerable categories of workers and in particular, the Maori and the Pasifika. The Government states that this initiative includes a long-term view for tertiary education which includes both institutional and workplace based education for increased employment opportunities among disadvantaged young people and people with low level skills. The Committee invites the Government to continue to provide information on the results achieved by the Tertiary Education Strategy and other measures implemented to coordinate education and training policies with prospective employment opportunities.

Workplace productivity and entrepreneurship. The Committee notes the measures taken to ensure productive work through a targeted review of New Zealand’s tertiary qualifications in order to reduce the duplication of skills training, to improve education and training quality and to create better employment outcomes for employers and employees. The Government further indicates measures taken to promote small and medium-sized enterprises through the Government’s small business relief package which aims to improve the business environment by reduced impact of taxes and firms’ cash flow, improving firms’ access to credit and reducing business compliance costs. The Committee also notes a government allowance which is paid to businesses facing temporary difficulties due to the recession. The Government indicates that this initiative was initially made available to employers with more than 100 staff, though, as of April 2009, it was extended to cover employers with 50 to 100 employees. The Committee invites the Government to include information on the results obtained in increasing workplace productivity and further information on the measures taken to create employment by the promotion of small and medium-sized enterprises.