Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

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

The Committee notes the Government’s report received in October 2013 containing detailed information in connection with its 2010 observation, and highlights the observations from the Business New Zealand and the New Zealand Council of Trade Unions (NZCTU). The Committee notes that in March 2012 the Government introduced the Business Growth Agenda, an ambitious programme of work that aims to support New Zealand businesses to grow, in order to create jobs and improve New Zealanders’ standard of living. In particular, the “Building Skilled and Safe Workplaces” work stream of the Business Growth Agenda aims to raise skills and qualifications, reduce long-term unemployment and improve workplace health and safety. In its submission, the NZCTU points out that while the “Building Skilled and Safe Workplaces” contains some laudable advances in workplace health and safety, it also includes significant changes in employment law which further reduce employment protection. The Committee reiterates its appreciation for the comprehensive assessment provided with regard to the application of the Convention.

Articles 1 and 2 of the Convention. Employment trends and active labour market measures. The Committee notes that while the unemployment rate increased from 6 per cent in March 2010 to 6.2 per cent in March 2013, it had fallen from 6.8 per cent in the December 2012 quarter. The Committee observes that youth (those aged 15–24 years) continue to be the most affected group during labour market downturns. The Government makes reference to four time-limited employment schemes agreed at a Summit on Employment hosted by the New Zealand Prime Minister in February 2009 in response to the recession. The Government indicates in its report that, overall, these schemes combined with other initiatives to a certain degree alleviated the impact of the recession. For example, the Job Support Scheme is estimated to have saved 699 jobs, and more than 19,000 young people participated in a Youth Opportunities programme. The NZCTU is concerned that the Government has not done enough in terms of policy setting to promote and sustain employment and should do more in terms of active labour market policies. Furthermore, in the NZCTU’s view, employment issues are not being adequately considered in the negotiation of free trade agreements. The Committee invites the Government to include in its next report information on the results of measures implemented under the Business Growth Agenda and on other active labour market measures undertaken under the current employment situation.

Education and training policies. The Government’s report contains information on the results achieved by vocational education and training programmes implemented under the Tertiary Education Strategy 2010–15, as well as other training programmes that aim to help under-represented groups achieve equality in employment and vocational training. The Committee notes that Industry Training Organizations that participate in these programmes are required to pay particular attention to the needs of the Maori, the Pacific peoples of New Zealand, persons with disabilities and women. In this context, the Committee observes that during 2012 under the Apprenticeship scheme, a total of 14,864 apprentices, 2,055 (13 per cent) were Maori, and 354 (2.4 per cent) were Pacific peoples. The Committee invites the Government to include in its next report further 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 takes note that the Productivity Commission is currently examining productivity in the services sector. It also notes that four measures have been taken to create employment through the promotion of small and medium enterprises. The first measure, implemented in April 2011, concerns the extension of the policy regarding 90-day trial periods for new workers to all employers, not just those with fewer than 20 employees. The latest figures show that just over one quarter of employers who had used the 90-day trial (27 per cent) had dismissed an employee who was on a trial period. The NZCTU observes that the 90-day trial period is not achieving its objectives and points out that trial periods are more likely to be used on lower wages and those who enter individual employment agreements, as opposed to collective agreements. Business New Zealand makes reference to preliminary analysis of the New Zealand Institute of Economic Research that suggests that this extension is likely to have a positive impact on employment. The second measure, implemented in May 2013, identifies groups of young people that are eligible for the starting out wage. The NZCTU does not believe this to be an effective policy to address the issue of youth employment since there is no evidence that this policy will effectively provide job creation for youths. The third measure comprises a reduction in the corporate tax rate from 30 to 28 per cent on the New Zealand dollar. The Government explains that this was intended to allow businesses more funds to invest and create jobs. The fourth measure entails changes to the Employment Relations Act. The Employment Relations Amendment Bill 2013 includes proposals relating to vulnerable workers, collective bargaining, good faith and flexible employment arrangements as well as other changes. The Committee invites the Government to include in its next report information on the results obtained in increasing workplace productivity in terms of employment generation. The Government is also invited to continue to provide information on the measures taken to create employment through the promotion of small and medium enterprises.