Many reasons to say no to Mecas

Virginia Nicholls
Virginia Nicholls
Multi-employer collective agreements are a trap for business, writes Otago Southland Employers’  Association chief executive Virginia Nicholls.

There is plenty for employers to be wary about in the new Employment Relations Bill.

Among the changes which will effectively drag New Zealand's employment relations back to the 1970s is a beefing up of rules around multi-employer collective agreements that will effectively force employers into Mecas whether they want one or not.

What is a Meca and why should businesses be worried?

A Meca is a collective agreement that covers employees of multiple employers under one agreement. A single Meca can therefore cover many workplaces across multiple businesses and organisations, despite the fact these entities may operate in different locations and under different conditions.

Mecas aren't new. There are a few in existence in the private sector, while in the public sector there are several Mecas in universities, schools and District Health Boards. The recent nurses' and primary school teacher strikes were examples of unions bargaining towards a Meca.

Unions like Mecas because they are an easy and convenient way to negotiate for a lot of people at once - and they give unions big bargaining power. But for the private sector there is no plus side for a company joining a Meca - and plenty of disadvantages.

For a start, being in a Meca with other companies in the same sector makes it harder for a company to be nimble and compete. And if a company gets cited into a Meca with other companies, the rules make it difficult for them to protect their private commercial information.

Unless they have a strong bargaining position, companies in a Meca also lose control of their ability to pay according to what they think is right - and may not be able to afford the pay rates set by the Meca. It could eliminate their ability to offer pay based on performance, too.

Under existing law, when cited by a union to join a Meca, most companies simply opt out - which is why there are relatively few private sector Mecas these days.

But the Government's proposed new legislation will remove the right of companies to opt out, because the new rules say that once a company is shoulder-tapped to join a Meca they are deemed to have begun bargaining, and it will be compulsory to come to an agreement with the union concerned.

This is a draconian retraction of employer rights - a sweeping change that will effectively enable unions to force companies into Mecas, with no ability for the companies to opt out.

This could have profound repercussions not just on business, but also on the economy, as it will give unions the opportunity to hold entire employment sectors to ransom.

For example, bargaining for a Meca involving road and rail transport companies could lead to strike action that would bring New Zealand to a halt. Bargaining for a maritime Meca could similarly enable strike action across all ports.

More Mecas in the manufacturing sector could have a negative impact on innovation and productivity. If a company's private commercial information becomes compromised as the result of a Meca - if the information becomes available to other companies in the Meca, for example - its ability or desire to innovate is reduced.

New Zealand has a fair and flexible employment relations framework that enables innovation and economic growth - as evidenced by the economic growth of the past decade. This benefits all New Zealanders.

Forced membership of Mecas is a backwards step that is contrary to natural justice. OSEA also believes the coming Meca rules are in breach of international conventions that say collective bargaining should always be voluntary and together with our sister organisations and BusinessNZ we have formally asked the Government to drop them from the Bill.

This is yet another reason why we do not support the coming changes to employment law - and why Otago and Southland businesses should send a clear message to their local MP and sector ministers that says ''No''.

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