A fairer way for workers

The new Government will move fast to repeal two controversial areas of National-era industrial law, the ‘‘fire at will’’ law and the meal breaks legislation. It has put aside a year for further negotiations with business about its ‘‘fair pay’’ package, a much more wide-ranging series of reforms.

The ‘‘fire at will’’ clause was rather misnamed. It did make it easier than previously for employers to sack workers during their first 90 days of work, but this power was subject to certain limitations. The supposed aim was to remove barriers to employment, particularly of young, inexperienced or unskilled workers.

But a 2016 report to Treasury found that the foundations of the law were radically flawed. The study by the Motu consultancy firm said the legislation had done nothing to help struggling job seekers or to increase the number of workers employed. The then National prime minister, John Key, lamely replied that ‘‘anecdotal’’ evidence from employers showed the law was useful. This was hardly convincing.

Labour had always opposed the law, and earlier seemed likely to repeal it. But in the 2017 election it proposed rather to modify it. Under the new trial period, employees would be given reasons if they are sacked and disputes must be heard quickly by referees, whose decisions cannot be appealed.

Hearings of disputes won’t involve lawyers and there will be a cap on the value of penalties that can be awarded. So the plan, at least as in the form given in its election pledge, aims to provide a quick and nonbureaucratic means of testing the sacking of trial workers. This seems a reasonable and moderate measure.

Labour also promises to ‘‘restore the right to rest and meal breaks at work.’’ National’s law allowed employers to restrict or even remove such breaks, if the changes were ‘‘reasonable and necessary’’ and the workers received ‘‘reasonable’’ compensation.

What Labour will put in its place is unclear, but the National change clearly gave too much power to bad employers. A more balanced law is needed.

Labour’s more comprehensive package of ‘‘Fair Pay’’ agreements has already roused employers’ ire, and the new Government clearly wants to avoid a repeat of the Clark government’s ‘‘winter of discontent’’ with the employers. So the Government is buying some time to do a deal.

National’s industrial legislation has tilted the playing field too far in favour of the employers. Labour quite reasonably wants a fairer or more level playing field.

It also wants to reduce inequality by raising the wages of the most poorly paid. This also is a fair and economically defensible aim, although what the final ‘‘fair wage’’ package will look like remains unclear. Economists have increasingly shown that inequality it itself harmful for the economy. A fairer economy means a more efficient and productive one.

This argument has gained greater weight in the days of austerity and Trumpism. It will even occupy the world’s elite at its annual talkfest in Davos, Switzerland, this week. The times are changing.