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Summer 2006

The Kiwi Experience of Industrial Deregulation

During the 1990s the conservative National Government made radical changes to the industrial relations system in New Zealand. The ‘Employment Contracts Act’ deregulated the work market and decentralized the bargaining process, resulting in lower wages and reduced job security. The Act was fiercely anti-union and in many respects mirrors the Australian Coalition Government’s new industrial relations legislation.

In the years following the introduction of the Employment Contracts Act in New Zealand, trade union membership dropped radically (from around 60% to as little as 20%) as workforce casualisation and income inequality increased.

HACSU member Jennifer Cook moved to Launceston from New Zealand in 2001. She has worked in Aged Care in both countries and has had direct experience of the consequences of the Employment Contracts Act (ECA) and what Australian workers stand to loose under the new IR laws if the Coalition remain in government.

Jennifer explains, "when I was 17 or 18 the ECA was brought in and we fairly quickly lost our penalty rates. We got $2 an hour to compensate for the loss of penalties, which was better than most people got."

The way that wages were set was deregulated and relied largely on individual contracts. Union power was also significantly restrained under the ECA.

Jennifer says that pay rises were much harder to come by in the new bargaining environment, "you couldn't get pay rises like you get here every year. Where I worked we went three years without a pay rise and then we got a five cent per hour rise."

Unfair dismissal provisions were also significantly downgraded, making it much easier to dismiss employees.
This affected the bargaining relationship between employers and employees. Jennifer explains, "at the end of the day, your employer could say: if you don't sign this you're gone."

To illustrate the difference between the Australian and the regulated and deregulated wage market Jennifer explains, "I got a $5 per hour pay rise just by moving to Australia, and I got penalty rates on top of that."

Jennifer feels the way to fight such anti-worker legislation is to stand strongly together.

"You need to use your collective power to avoid intimidation and be aware of what you might be signing away if you sign an individual contract," she said.