Column: Employment act unlikely to undergo major change

IT employment contracts are unlikely to change much in light of the election result.

Coverage of election nights on television is always grist to lunchroom conversations around the country. I thought TVNZ’s coverage was highly tedious, despite or maybe because of the technology. I would have watched TV3 but for them trying to inflict the Topp Twins on me.

But two things struck me on the night. The first was the statement that the result would be a nightmare for journalists and pundits of all kinds as they waited for some form of final resolution. The second was Ruth Richardson bewailing what a left coalition was going to do to her beloved Employment Contracts Act.

“They’re going to clip its wings,” she said.

Well, I’m not so sure about that.

More than a little of the pre-election debate centred on that act, which has been one of the linchpins of National’s economic policy. And, as of election night, its fate hung in the balance, with two of the three parties in the likely left of centre grouping having gone to the electorate on the promise of its repeal. But it seems clear that employers need not be fearful of a return to national awards and compulsory unionism--those days have well and truly gone.

No matter what the make-up of the new government, despite what scarifiers in the Australian media say, the new employment regime will probably not be very different.

We should not forget that the party with the most left-wing views on employment--and everything else for that matter--the Alliance, was the big loser on the night. Jim Anderton sounded very subdued, talking about “keeping Labour honest” rather than pushing ahead with his own party’s policies. On the other side, New Zealand First supports the act in principle but would like to make adjustments to it.

If Labour does dominate the new government alliance it could have difficulty doing much of anything.

The future regime (that is the employment regime) may well favour workers more than the old one, with a lifting of minimum conditions being an obvious area for change. Such changes should have little impact on the IT sector unless they result in some more general loss of business confidence and economic momentum.

That seems unlikely with the international credit ratings agency Standard and Poors saying the result is already factored in and Union Bank of Switzerland seeming similarly untroubled.

But employers will retain a strong advantage in the setting of terms of employment, an advantage strengthened in the IT industry, especially by the seemingly inexorable move away from long-term to shorter-term employment and contracting out. But, in the end, the technology sector is a unique employment market, dealing mostly in highly skilled people and offering remuneration above the norm for most other sectors.

Steve Marshall of the Employers Federation feels the necessary inter-party agreements to abolish the Employment Contracts Act could be hard to come by.

“At the moment, it would appear the Employment Contracts Act environment has a reasonable prospect of being upheld,” he says. “If Labour is to be in coalition with New Zealand First then it is unlikely that any agreement to move to the left would find favour with a party which is pretty centrist in its position.”

Of course, it’s all speculation. Other scenarios could include a split in New Zealand First or Labour or both. But my bet is that the act will come back somewhat softened and under a new name as some kind of face-saver for parties that went to the electorate promising its repeal.

* An ANZ bank employment survey has indicated a considerable drop in the number of advertised vacancies, with the number of jobs advertised in September down 2.3% on the previous month and 8.7% down on September 1995.

Wellington was hardest hit with a drop of over 20% on the previous year. Auckland was down 6.6%.

However, Gary Collier, of Doughty Group employment consultants, says there is no sign of a decline in activity in the IT sector, which he describes as “buoyant”.

A quick check of September to September Computerworld back-issues seems to confirm that view, with job vacancies advertised year on year in this publication at least the same and perhaps a little higher this year over last.

(O’Neill is a Computerworld reporter and can be contacted by email at rob_o’neill@idg.com.)

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