Some Concerns About Employment

7 Apr 1998 | JUSTICE

In 1991 when the Employment Contracts Legislation was being promoted, we stated that:

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.1

The underlying ideology of the new individual legislation is unacceptable, we argued:

because it emphasises free choice without balancing this concept with concern for the common good and 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.2

One of the concerns expressed in our 1991 statement was that not only does the legislation appear to emphasise the concept of free choice at the expense of the common good, it actually fails to give workers a genuine freedom of choice. A solitary worker facing negotiations with an employer is often not free to choose anything other than between unemployment and that which is offered.

This concern has become a reality in the changing working environment under the Employment Contracts Act. A market survey in October 1992 showed that 37% of employees said they did not feel free to choose the type of employment contract covering them. 3 Deteriorating work conditions since 1991 reflect this lack of ability of workers in setting the standards and conditions under which they are employed. In 1996 it was found that over 43 % of workers had either lower or unchanged ordinary time wages since 1991. 4 Around the same percentage of employers had cut overtime rates and reduced allowances and other penal rates. 5 This is despite economic expansion in this period and high levels of profit growth for business. The introduction of the Employment Contracts Act, along with other related employment reforms since 1991, have clearly led to the overall deterioration of worker conditions by tipping the balance of power in the employment relationship even further to the employers' advantage..

Worker Representation
One of our fears which has come to pass is that the legislation has resulted in a weakening of organisations whose purpose is to protect the rights of workers.6 Statistics reveal a dramatic loss in union membership since the implementation of the new employment legislation. There has been an overall decline in union membership, which reckoned across all unions, is calculated to be 44% between the years 1991 and 1996. 7 It also concerns us that the Employment Contracts Act legislation results in lessening accessibility of unions to workers and the workers rights to be represented by a collective bargaining agent in employer-employee negotiations.

Catholic Social Teaching is very clear on the matter of worker representation. It tells us that workers have the right to be represented by unions, as they can not only protect the just rights of the workers but - as an indispensable element in modern, industrialised societies - are to be a mouthpiece for the struggle for social justice. 8 This implies that the employer must be bound to recognise and accept the workers' representative, something which the Employment Contracts Act does not guarantee. Such undermining of the rights of workers in relation to negotiations is in direct contravention to Catholic Social Teaching. .

Equal Pay
As predicted in our original statement, 9 the burden has fallen especially on women. The pay gap between men and women gradually reduced between 1986 and 1991, but since the repealing of the Employment Equity Act, and the introduction of the Employment Contracts Act, the pay gap has stabilised, with women presently earning between 80.5% to 81.5% of men's pay.10 It is obvious that the marketplace alone is not able to deliver pay equity for women. .

Hours of Work
One of the results of the legislation of 1991 is that many low-paid workers have to work (sometimes at an additional job) at night or at the weekend while workers in more highly paid jobs are often expected to work almost limitless hours. As a consequence many workers are denied the opportunity to spend adequate time with their families through "over-employment", that is, by working more than 50 hours a week. 11 In 1995 it was found that over 130,000 people were then routinely working more than 60 hours per week, 12 and more than 50,000 of these people were working over 70 hours per week. 13 The average weekly hours worked have increased each year from 1991 when the Employment Contracts Act took effect. 14 The number of paid hours on overtime has actually decreased alongside the rise in hours worked. 15

The lack of worker protection under the new legislation, and the materialistic values upon which the legislation is based, effectively ignore the wider values and responsibilities of society, including family responsibility, and have led to a situation where many, either directly or indirectly, are pressured into working longer hours often with no accompanying remuneration. We are concerned that workers are coming under increasing pressure to work longer hours than is appropriate, and that there is now little real protection against this situation under the current legislation. We believe the expectations and freedoms of employers, balanced against the relative lack of freedom of employees, have fostered a new working culture that is detrimental to the health of the individual, families and society. Policies which promote such situations gravely weaken the family unit which a just and wise society should foster.

It is important that the existing (quite minimal) legislative protection of some free time for workers be retained. It would, indeed, be easy - and socially progressive - to legislate for more free time at weekends. .

Unemployment and Underemployment
In addition to the problem of overworking of those with employment, there has been a rise in the numbers of those who are underemployed. The number of people employed in part time work who would like to increase their hours has risen substantially, by 140%, since 1991. 16 In fact, the number of part-time workers has increased by 4.6% in the year 1996 to 1997 to the highest level ever recorded. 17 Currently part-time workers make up 23% of the work force. 18 These figures are disturbing because underemployment is linked to poverty. Foodbanks and charitable missions indicate that a growing number of those who rely on their services are employed but either do not earn enough to provide the basic necessities for their families, whether because they are low-waged or because they can only secure part-time employment. The Church's Social Teaching tells us that people have the right to work that enables them to support themselves and their dependents - that is, they have the right to full and adequate employment.

Although one rationale for the Employment Contracts Act was to reduce unemployment, the unemployment rate is still relatively high: the official unemployment figure is now 7.1%, but the "jobless" figure is 12.1%. 19 For Maori and Pacific Islanders, the level of unemployment, with its attendant stresses and disadvantages, is higher than for other New Zealanders. In March (1998), the unemployment rate was 18.3% among Maori and 16.4% among Pacific Islanders, whereas it was at 5.5% for New Zealanders of European descent..

Further Erosion of Workers’ Rights
Many now believe that the time has come to amend the legislation in ways which protect the poor and the vulnerable. However, some Employer groups and Government spokespersons, far from letting up, are signalling further attacks on the rights of workers. Specifically, these involve:

· Changes to the Holidays Act which will jeopardise the absolute right to annual paid time off work for many workers.

· Downgrading the status of the Employment Court which, to the annoyance of employer interests, has ruled that employees have rights in addition to those contained in particular contract.

· Further erosion of pay and conditions of employment, especially in the state sector.

· The reduction or elimination of minimum wage rates on the grounds that minimum wages lead to unemployment - a belief which is founded on inadequate and selective research, and which is being disproved by contemporary economic research.20

· Hardening attitudes to the granting of unemployment benefits and other welfare entitlements..

Church Teachings on the Role of the State
Since we brought out our statement in 1991, further expressions in the Church's social teaching strengthen our stance in opposition to the Employment Contracts Act. Three features of this teaching are particularly relevant in the current context; (we quote freely in the following section from Pope John Paul's encyclical Centesimus Annus, section 15.)21
The State has the obligation to provide a juridical framework which ensures a certain equality between the parties, such that one party would not be so powerful as practically to reduce the other to subsistence.
The State must ensure wage levels adequate for the maintenance of the worker and family, including a certain amount for savings. The role of trade unions in negotiating minimum salaries and working conditions is decisive in this area.
Humane working hours and adequate free time need to be guaranteed in order that that workers well being is not jeopardised.

The Church teaches that the State has an important and central function: it is bound not only to create conditions for the exercise of economic activity but also to defend the weakest, by placing certain limits on the autonomy of the parties who determine working conditions and by ensuring in every case the necessary minimum support for the unemployed worker..

Paid Annual Leave Entitlement
Currently, leave entitlements in New Zealand are amongst the lowest in the developed world. 22 Out of eighteen nations in the western world, New Zealand ranks in the bottom four in terms of paid annual leave entitlement alongside Japan and Canada, which also have a three week entitlement, and the USA where there are few legal rights in this area and where leave entitlements exist on the basis of custom or by negotiation. 23 The United Kingdom and Ireland are moving to a four week leave entitlement which will place them alongside Australia, Greece, the Netherlands, Norway, Portugal and Switzerland. 24 Austria, Belgium, Denmark, France, Germany, Spain and Sweden all have either five or six week entitlements. 25 A move to open up part of the existing entitlement for negotiation will be going against international trends and will place New Zealand even lower down the ladder.

The proposed changes to the Holidays Act, we believe, will seriously jeopardise the existing right of people to adequate annual paid time off work. There is a very clear message about working hours and free time in the Church's teachings. The Vatican Council II Pastoral Constitution on the Church in the Modern World, Gaudium et Spes, 1965, stated that workers "should be allowed sufficient rest and leisure to cultivate their family, cultural, social and religious life".26 .

The Employment Court and Tribunal
Current proposals to weaken the status of the Employment Court and the Tribunal are based on the belief that the worker does not need particular protection; but it is very clear that in recent years the balance of power has tipped further in favour of employers and, therefore, workers require the specific protection of the State. The focus on freedom of choice in the employment legislation is actually enabling employers in effect to dictate employment conditions and the contents of employment contracts. The only real choice many workers are being left with is to choose between unemployment or accepting what is offered by employers. It is vital to retain the Tribunal and the Employment Court as they are very good ways for the State to ensure quick and affordable access for "the weakest" to impartial consideration of their complaints, and so provide some kind of protection for workers from exploitation..

It is also Catholic teaching that those who are unemployed must be supported financially and that society and the State must act together in assuming responsibility for protecting the worker from unemployment. These are not privileges to be given or taken back at the will of the State but a right in justice. While the State may set reasonable conditions for the granting of benefits, it should not do so in a way which threatens the dignity of the person or undermines the family unit. In the USA, certain types of "workfare" programmes have been criticised by some church groups as stripping recipients of their dignity. The adoption of such a program in New Zealand is of grave concern to us. Whether work is provided through Government schemes for the unemployed or not, it must be decent and productive work with fair wages and working conditions..

According to Catholic Social Teaching, wages are to be determined not only by the bargaining power of workers but also by their absolute right to a just participation in the fruits of their labour. The traditional role of the State in New Zealand in ensuring a basic minimum wage is utterly consistent with the teaching of the Church on "the just wage". We would recommend that the Government introduce a minimum wage which is adequate for the needs of workers and their dependents, which enables them to live in health and with dignity and recognises the right of workers to a just remuneration for their labour.

New Zealanders are aware that while some labour on minimal wages, others are paid very high salaries and that the gap between rich and poor in New Zealand is increasing. The average income of the lowest 10% of the population dropped in the 1991 to 1995 period by over $2000.00 from $11,318.00 to $9,134.00, yet during the same period the average income of the top 10% of the population rose by over $12,000.00 from $65,873.00 to $78,226.00.27 In the 1991 to 1996 period there has been an increase in the "working poor" during a time when both the economy and unemployment grew. 28 It is time that our country had some guidelines as to desirable ratios between the highest and the lowest paid within industries. Those at the bottom of the scale must receive a fair rate of pay which enables them to realise their needs and to live with dignity, and the pay gap between these workers and those at the top levels should not be so vast as to encourage either the greed of top executives or the dissatisfaction of those below them..

In recent years there has been much talk about the economy, especially the need to be economically competitive. We recognise that as a nation we must be efficient and effective and use our resources well. However, the State and the economy exist for the well-being of the people. The people do not exist for the well-being of the State and the economy. Policies and legislation regarding the economic life of the country must be shaped with this in mind.

Many claim that, as a result of Government policies, the economy is in better shape than it was some thirteen years ago. Yet the working and living conditions of many have declined. It is timely to remind ourselves that according to the Church the worker is always more important than capital, for the workers are human persons. We wish to remind all New Zealanders of the rights which belong to all who work and those without work, and call on them and on all people of integrity to resist further erosion of the dignity of the worker, and the unemployed. We ask all to ensure that the fruits of reform are made available to all citizens and that all members of society have access to the goods which ensure a life consistent with human dignity.

+ P J Cullinane
Bishop of Palmerston North,
President, NZ Catholic Bishops Conference

+ D G Browne
Bishop of Hamilton
Vice President, NZ Catholic Bishops Conference

+ J A Dew
Auxiliary Bishop of Wellington
Secretary, NZ Catholic Bishops Conference

+ L A Boyle
Bishop of Dunedin

+ J J Cunneen
Bishop of Christchurch

+ O J Dolan
Coadjutor Bishop of Palmerston North

+ P J Dunn
Bishop of Auckland

+ R W Leamy SM
Emeritus Bishop of Rarotonga

+ M T Mariu SM
Auxiliary Bishop of Hamilton

+ Cardinal Thomas Williams
Archbishop of Wellington


1. New Zealand Catholic Bishops Conference, "Employment Contracts Legislation: A Catholic Response", in Church in the World: Statements on Social Issues 1979 - 1997 by NZ Catholic Bishops, Wellington, 1997, p.40.

2. Ibid.

3. A Survey of Labour Market Adjustment under the Employment Contracts Act 1991, prepared for the Department of Labour by Heylen Research Centre, October 1992.

4. Ruth Smithies, "Were the Bishops Wrong?", article in New Zealandia, May 1996.

5. Ibid.

6. New Zealand Catholic Bishops Conference, "Employment Contracts Legislation: A Catholic Response", in Church in the World: Statements on Social Issues 1979 - 1997 by NZ Catholic Bishops, Wellington, 1997, p.39 .

7. A. Crawford, R Harbridge, and K Hince, "Unions and Union Membership in New Zealand: Annual Review for 1996", NZ Journal of Industrial Relations, Vol 22, No 2, August, 1997.

8. Laborem Exercens 20, 1981 (LE).

9. New Zealand Catholic Bishops Conference, 'Employment Contracts Legislation: A Catholic Response", in Church in the World: Statements on Social Issues 1979 - 1997 by NZ Catholic Bishops, Wellington, 1997, p.41.

10. Denise Brown, "Gender Statistics on Income and Earning", in 'Closing the Gap', Wellington, 1997, p.35.

11. Employment - The Issues, Prime Ministerial Taskforce on Employment, Wellington, 1994, p.37.

12. The Jobs Letter No.18, 29 May 1995, p.5.

13. Ibid.

14. Ibid.

15. Quarterly Employment Survey, August 1997

16. See Household Labour Force Survey, 1997, table 4.1.

17. Ibid.

18. The Jobs Letter no.73, 10 February 1998.

19. The Jobs Letter no.73, 10 February 1998, explains the difference between the official "unemployment" figures and the "jobless" figures: 'Those without a job and wanting a job'. 'According to Statistics NZ, the difference between the official unemployment figures and the "jobless figures" is that many of the people on the jobless measurement are available for work but not actively seeking it. The reasons for not actively seeking work range from people being discouraged because they lack the skills needed, or were the wrong age, or that the right work was not available in their area, or they were only looking for jobs in the newspaper. This measurement also includes those actively seeking work but not yet available for it.'

20. Refer to David Card and Alan Kreuger, Myth and Measurement: The New Economics of the Minimum Wage, Princeton University Press, 1996.

21. Pope John Paul II, Encyclical Letter, Centesimus Annus, I May 1991, Polyglot Press, Vatican City.

22. New Zealand Council of Trade Unions; Submission on the 1997 Review of the Holidays Act, December 1997, p4.

23. Ibid., pp.4 - 5.

24. Ibid.

25. Ibid.

26. Vatican Council II: Pastoral Constitution on the Church in the Modern World, Gaudium et Spes, 7 December 1965, in Giorgio Filibeck ed., Human Rights in the Teaching of the Church: from John XXIII to John Paul II, Libreria Editrice Vaticana, Vatican City, 1994.

27. Department of Social Welfare, From Welfare to Well-Being, 2nd Edition, 1995.

28. Paul Callister, Paper: "Work-Rich" and "Work-Poor" Individuals, Families, Households, and Communities: Changes Between 1986 and 1996, Victoria University of Wellington, Paper presented at the Institute of Policy Studies, VUW, 23-10-97, 20pp.