Labour Market Adjustment under the Employment Contracts Act

Abstract

In order to measure the extent of adjustment since the Employment Contracts Act 1991 was introduced, the Department of Labour has contracted two surveys of labour market adjustment under the Act. The first survey was conducted in August-September 1992 by the Heylen Research Centre and Teesdale Meuli & Co. (the results of the survey were reported in the NZJIR (18(1): 94-112). Three particularly important outcomes were reported. First, enterprise bargaining and individual contracting had become far more widespread Second, some enterprises took the opportunity to begin or speed up strategic industrial relations reforms, although others seemed to have simply removed union rights and cut labour costs in the short term. Finally, while the overall rate of labour market adjustment increased, adjustment was generally concentrated amongst larger enterprises. The second survey, conducted by Hey/en in late 1993, indicates that the bulk of the structural changes occurred in the initial years under the Act, and now appear to be largely complete. Enterprise collective and individual contracts now predominate. The other adjustments that were indicated in the first survey are little changed, though there is evidence that the effects of adjustment are being felt differentially. There is evidence of greater acceptance of the Act, though employers and employees still feel that employers hold more power than employees.