Employment Contracts Legislation - a Catholic Response

This year the Church commemorates an event of great importance, whose prophetic value has been confirmed with the passing of time: the publication of the encyclical RERUM NOVARUM by Pope Leo XIII on 15 March 1891. This was the first 'social' encyclical of modern times, and it took as its subject the condition of workers.

As we celebrate in 1991 the 100th anniversary of Rerum Novarum we strive to become a community of faith even more committed to the promotion of the rights and dignity of every human person. We strive to become a community working day to day to build a world of genuine solidarity and social and economic justice.

For us in New Zealand this year of the 100th anniversary of Rerum Novarum with its focus on the conditions of workers has special significance in view of the fundamental changes in labour relations proposed through the Employment Contracts Bill. The new legislation will radically alter relations between employers, workers and the state as they have developed since the Industrial Conciliation and Arbitration Act of 1894, 100 years ago. The Church identifies three groups active in labour relations, all of whom must work for the common Good (1) - workers, direct employers and indirect employers (2)

According to Government the purpose of the proposed legislation is to create flexible labour market practices so that production efficiencies will be encouraged; they in turn will lead to economic growth. The legislation dismantles the national award system and promotes new forms of work place bargaining. It does away with compulsory unionism and allows employers and workers to enter into collective or individual contracts, thereby removing unions statutory bargaining rights. It redefines the internationally understood terms, freedom of association and right to organise in trade unions, thus hampering the right to form unions. It also restricts the right to strike.

The legislation is proposed in a depressed economic climate with a current 9% unemployment rate .3 At the same time the legislation is part of wider economic policy, which is underpinned by a monetarist approach to economic planning. "Monetarist" theory is a return to liberal capitalism with its emphasis on the reliance of market forces alone. The theory proposes that full employment, as we have known it, is not possible without inflation, and that there is an natural rate of employment consistent with wage costs. It also proposes that the welfare state has had its time. This is an economistic approach which the Church views with grave concern, because it puts capital and resources alone at the centre of economic activity, and considers human labour solely according to its economic purpose. 4

This legislative change is not simply a technical issue. It involves ethics and morality. The question must be asked what the new legislation does to people and society, to human dignity and the common good. As Bishops of New Zealand we must speak against this proposed legislation as its underlying ideology is contrary to the social doctrines of the Church. Pope Paul VI teaches that, "All social action involves a doctrine. The Christian cannot admit that which is based upon a materialistic and atheistic philosophy.''5 The underlying ideology of the new industrial legislation is unacceptable for two reasons: firstly, because it emphasises free choice without balancing this concept with concern for the common, ie. public, good; and secondly because it emphasises the rights of the individual without their accompanying duty to act in solidarity and without giving any corresponding rights to the group. The legislation assumes that the free pursuit of his or her interest by the private individual automatically leads to the public or common good of society. As Bishops, guiding our people in faith and morals, it is our duty to reject this assumption for two reasons.

Firstly because egoism is an inevitable part of the fallen human condition. Greed and lust for power are basic sinful attitudes. The "all consuming desire for profit" and the thirst for power" lie behind the "sinful structures" in society .6 The prescription for freedom in the legislation includes the freedom of the strong to exploit the weak, resulting in less freedom for the weak. Thus the legislation will not lead to the common good.

Secondly the Church teaches that human beings are by nature social beings and therefore the rights of individuals cannot be separated from the duty of individuals and the rights of the group. There is a relational aspect to all human activity: freedom is not the right to do anything one pleases but the right to act freely in doing what is just, not only for oneself but also in relation to others. The pre-eminence given in the legislation to the rights of the individual and the ignoring of the corresponding duties of the individual in effect negate the rights of the group. Thus again the legislation will not lead to the common good.

The Church Option for the Poor
The legislation purports to give equal bargaining power to employers and workers. We are convinced that in a period of high and rising unemployment and in our difficult economic times, employers and workers do not have equal bargaining power. Direct negotiations will favour employers as workers will not ~ to put their jobs at risk in order to get a fair award. It is women - whose skills have traditionally been undervalued - along with low skilled workers with a disproportionate represention of Maori among whom unemployment figures already are highest,' who will be the hardest hit by this new legislation.

The Value of Work
The result of the Employment Contracts legislation will be that human labour will be compensated according to the principle of supply and demand. This reduces human labour to the position of a commodity and makes the New Zealand worker accept the fluctuating price in a labour market irrespective of the needs of themselves and family. But according to Church teaching human labour has special dignity. Human beings are always more important than capital: workers are not instruments in the whole production process but are to be treated as the true subjects of work. Unemployment can never be accepted as an unfortunate by-product of restructuring: human beings have the inherent right to be given the opportunity to work.8 Full employment is the foundation of a just society and human work has special dignity and is the key to achieving justice in society.

One hundred years ago, May 1891, Pope Leo XIII pleaded with governments, capital and industry to abolish economic injustices and to establish just working conditions. One hundred years later, we, the Catholic Bishops of New Zealand, plead with our Government to withdraw this legislation and redraft it so that justice may be ensured. If it happens that this legislation becomes law, we plead with those who have economic power to apply it with fairness and equity in their labour relations.


Second Vatican Council, Gaudium et Spes: The Church in the Modern World, 1965, p 26.

The direct employer is the person, company or institution with whom the worker enters directly into a work contract in accordance with definite conditions. The indirect employers are all those groups or institutions which exercise a determining influence on the shaping, both of the work contract and, consequently, of just or unjust relationships in the field of human labour.

Pope John Paul II, Laborem Excercens: Human Work, 1981, para 16.4.

April 1991 Unemployment Statistics.

Pope John Paul II, Laborum Excercens: Human Labour, no. 13; Sollicitudo Rei Socialis: Social Concern of the Church, paras. 20, 21.

Pope Paul VI, Populorum Progressio, para 38, translation from CTS Edition, London.

Pope John Paul II, Sollicitudo Rei Socialis: The Social Concern of the Church, 1987.

NZ PLanning Council, Who Gets What? The Distribution of Income and Wealth in New Zealand, 1990, pp. 125-128.

Pope John XXIII, Pacem et Terris: Peace: Peace on Earth, para 18.