Observation (CEACR) - adopted 1995, published 82nd ILC session (1995)

Employment Policy Convention, 1964 (No. 122) - New Zealand (Ratification: 1965)

1. The Committee notes the full and detailed report provided by the Government for the period ending June 1994, in which it transmits the comments of the New Zealand Employers' Federation and the New Zealand Council of Trade Unions (NZCTU), as well as the Government's observations on these comments. It also notes the discussion at the Conference Committee at the 80th Session of the Conference (June 1993).

2. The Committee notes that the strong growth in economic activity during the reporting period has been accompanied by an increase in total employment (of 5 per cent), a halt in the growth of unemployment, followed by a decrease in the unemployment rate, which fell from 9.9 per cent in June 1992 to 9.5 per cent in March 1994. The Government notes that the unemployment rate is thus getting back to the average level for OECD countries (8.5 per cent in 1994), while the NZCTU emphasizes that it continues to be higher than the OECD average, whereas it was traditionally lower in the past. The information supplied shows that the decline in unemployment has benefited the Maoris and the Polynesian Pacific Island populations, who are however still affected by an unemployment rate of over 20 per cent. It also shows that the decline in unemployment has been about twice as rapid for men as for women. The Government states that it is concerned by the persistence of a high level of long-term unemployment (around 30 per cent of total unemployment) and of very long-term unemployment (over two years).

3. The Government considers that the positive results achieved during the reporting period in respect of employment confirm the soundness of its policy to achieve full employment through economic growth and the development of a skilled and adaptable workforce. It states that its priority over the next five years is to maintain a high rate of growth (between 3.5 and 5 per cent), which should result in the creation of between 25,000 and 30,000 new jobs. In these conditions, taking into account the forecast increase in activity rates, the Government estimates that the unemployment rate should fall to 7 or 8 per cent by 1999. However, the NZCTU considers that the decline in the level of unemployment is largely cyclical in nature and is a result of the improvement in the terms of international trade and the decline in interest rates, and that it cannot be sustainable in the absence of an active employment policy. According to the NZCTU, the Government is confining itself to pursuing a policy of deregulation and disinflation which it presumes will result in the growth of the economy and employment. The NZCTU also alleges that the existence of unemployment is being used in the context of a monetarist policy as a means of securing price stability. In contrast, the Government believes that overcoming inflation is an indispensable prerequisite for healthy and sustainable growth of the economy and employment, even if the monetary policy adopted for this purpose may have been associated initially with a temporary negative effect on employment. Furthermore, the Committee notes from the report of the Prime Ministerial Task Force on Employment, which reported in 1994, that the problem of unemployment cannot be resolved only by economic growth.

4. The NZCTU also considers that the apparent reduction in the level of unemployment has only been achieved at the price of a deterioration in the quality of employment and emphasizes that the adoption of the Employment Contracts Act of 1991 has encouraged the increase of precarious jobs and led to the greater proportion of total employment being accounted for by part-time work. In the opinion of the NZCTU, there is also a contradiction between the stated objective of the Government to promote the development of workers' skills through further training and the measures taken, which have had the effect of restricting their career prospects in stable employment. The Government recalls that the 1991 Act is an essential component of its strategy of growth, employment and social cohesion and its implementation appears to have been a major contributor to the growth of employment, without having led to a significant change in conditions of employment. This is also the opinion of the New Zealand Employers' Federation, which welcomes the flexibility of the labour market introduced by the Act. With reference to its previous observation and the discussion during the Conference Committee, the Committee of Experts notes the persistence of a diversity of views between the social partners on the effects of the reform of the labour market. It emphasizes in this respect that, in pursuit of the objective of full, productive and freely chosen employment, it is important to ensure that the costs and advantages of structural reforms are equitably distributed.

5. The Committee notes that the description of labour market measures, such as wage subsidies and training and employment programmes, is supported where possible by statistics showing the increase in the number of beneficiaries and the contribution made by these measures to improving their employability. The Committee notes in particular the introduction in 1994 of the new Job Action Programme aimed specifically at the very long-term unemployed. It would be grateful if the Government would continue to supply detailed information on the results of these programmes, and on any new measures which may have been taken or are envisaged to improve the coordination of education and training policies with prospective employment opportunities.

6. With regard to Article 3 of the Convention, which provides for the consultation of the representatives of the persons affected by the measures to be taken in respect of employment policy, the Government stated to the Conference Committee that effect was given to the Article through the Enterprise Council, which is an informal advisory body convened by the Prime Minister, composed of members representing various interests chosen in their individual capacity, as well as through the consultation of employers' and workers' organizations in the context of the various employment and training programmes. The Worker members emphasized the difference between the mere possibility of some occasional meetings and the authentic consultation required by the Convention, which presupposes the existence of a formal procedure. The Employer members recalled that these consultations should not only include representatives of employers' and workers' organizations, but also the representatives of other groups affected, such as disadvantaged groups or communities. The Government refers in its report to the establishment of the Prime Ministerial Task Force on Employment, and attaches a report by the Task Force. Composed of 11 members, including leaders of the Employers' Federation and the NZCTU, the Task Force has the role of gathering information, analyses and suggestions from the various sections of the community with a view to submitting employment policy options to the Government. The Committee notes that the NZCTU considers that this Task Force is insufficient to ensure real consultation with the representatives of employers and workers. The Committee requests the Government to continue supplying information on the activities of the above Task Force and the effect given to its proposals. The Committee, whilst noting the major differences of analysis existing between the Government, the employers and the trade unions, considers that it is important under the terms of the Convention to strengthen direct consultations between the Government and the representative bodies of employers and workers.