Individual Case (CAS) - Discussion: 1993, Publication: 80th ILC session (1993)

A Government representative reiterated her Government's commitment to generating sustainable employment opportunities. In her view, the best way to do this was to create and maintain an economic environment conducive to sustainable economic growth. The thrust of the Government's economic policy had been to improve the international competitiveness of New Zealand firms as a means of creating new and sustainable jobs for New Zealanders. There was strong evidence, acknowledged by international commentators, that this export-led economic recovery policy was working. Despite the inevitable lags before the full benefits of such reforms were seen on the labour market, New Zealand could now report an aggregate employment growth of almost 1 per cent in the last 12 months up to March 1993 and that full-time employment had grown by 2.3 per cent over the year. After peaking in December 1991, the number of unemployed had fallen by 8 per cent. The unemployment rate now stood at 9.9 per cent, down from its peak of 10.8 per cent in December 1991, approximately the median of OECD countries. The high incidence of unemployment amongst some ethnic groups, the young and the under-qualified continued to cause concern, as did the growth in the number of people who had been unemployed for six months or more who were considered to be the long-term unemployed. To address the needs of these groups, the Government had developed a broad range of active labour market initiatives targeted particularly at these groups with a view to increasing their likelihood of gaining access to employment through work experience projects, employment subsidies for the long-term unemployed and through the implementation of a cohesive strategy designed to facilitate appropriate skill development for all New Zealanders. With regard to monitoring measures to promote full, productive and freely chosen employment (Article 2 of the Convention), referred to by the Committee of Experts, the Department of Labour closely monitored both the general labour market situation and the effectiveness and appropriateness of the active labour market policies established to assist in achieving these goals.

With regard to the Committee of Experts' concern at the lack of formal consultation machinery between the Government and representatives of employers and workers, the situation varied according to the nature and structure of the policy initiatives at the time. The Government initiated discussions with both employers' and workers' organizations on a variety of different matters of mutual interest. By way of example of such consultations, she cited the case of the "Enterprise Council", a small informal advisory body established by the Government and convened by the Prime Minister, composed of members from a wide range of sectoral interests including the business community, educational institutions and unions, chosen in their individual capacity based on the contribution they were able to make. The Council met regularly, about every two months. One early matter discussed was the question of employment and employment policy discussed by the Council in May 1992. A second example concerned the Government's Community Task Force Programme, which provided work experience for disadvantaged jobseekers. Delegations from the Council of Trade Unions and the Employers' Federation were consulted and their concerns addressed. A third example was the development of possible changes to the criteria for the Taskforce Green programme, which provided paid work experience to disadvantaged jobseekers. Employers' and union groups were specifically consulted, as a result of which one proposal was dropped and a second new proposal introduced. A further example was the Community Employment Group of the Department of Labour, which operated in a consultative manner with community organizations, including local workers' and employers' organizations so as to facilitate the development of local employment and enterprise opportunities.

In the area of training, the Ministers of Labour and of Education recently commissioned a consultative committee, chaired by the chairman of the Education and Training Support Agency and having members from the Employers' Federation and the Council of Trade Unions to report on the possible blockages to the achievement of the Government's Industry Skills Training Strategy and to seek means of overcoming them. The majority of the recommendations made by the committee were considered and acted on. In addition, the Ministers of Employment and of Labour met from time to time with representatives of the New Zealand Employers' Federation and the Council of Trade Unions to discuss matters of mutual interest. In conclusion, the Government had consulted, and would continue to consult, on a regular basis with the employer and employee organizations and others who were affected by the policy changes, but it would take the final decisions.

The Workers' members had learnt from the information given by the Government that in the last few months unemployment had gone down slightly in New Zealand. Nevertheless, the employment situation had deteriorated in the last few years as was pointed out by the Report of the Committee of Experts. The Experts stressed that unemployment had reached 9 per cent of the population and affected particular categories of people such as the young and ethnic minorities. In this respect, the distribution of unemployment among the various groups of people and the risk of marginalization or exclusion of some of these groups was creating concern. The Experts also emphasized the growth of involuntary part-time work. In light of the gravity of the situation and despite the Government's declared adherence to the goal of full employment, unemployment continued to be the country's main problem. The Workers' members expressed their doubts about the Government's real commitment to the goal of full employment and to the Convention. The Convention did not allow for employment to be considered as one of many adjustment variables, yet in New Zealand unemployment seemed to be seen as an inevitable cost of adjustment. Moreover, the goals of the Convention applied not only to the ministers responsible for employment agencies and vocational training, but also to those responsible for employment, labour, economic and budgetary matters, as well as to those responsible for monetary policies and to the Government as a whole. The Workers' members considered that this should not mean that the budgetary problems faced by a given country could be ignored. However, a policy that resulted in directly or indirectly marginalizing a category of the population and affecting its weaker elements was not in reality in conformity with the Convention's basic objective of attaining social justice through the right to work. The Workers' members expressed their doubts as to whether the Government was doing what was required to attain this prime objective of the Convention.

Regarding tripartite consultations, the Report of the Committee of Experts seemed to indicate that social dialogue and tripartism were disappearing throughout the different levels of society. In their view, this was the worst possible obstacle that might arise in the application of Article 3 of the Convention, as cited in paragraph 57 of the Report of the Committee of Experts. The Experts also made comments on the Employment Contracts Act No. 22 of 7 May 1991 which abolished the existing machinery for national consultation. The Workers' members considered that there is was a very big difference between possibilities or occasions for having some contacts and the existence of machinery that ensured that real consultations and structured social dialogue take place as required by Article 3 of the Convention. In light of the 1991 legislation abolishing such a possibility, the Government should have established more effective procedures if it considered the pre-1991 machinery to be have been unsatisfactory. The Workers and the Employers had expressed their support in the general discussion for the Experts' views on the importance of consultation and of tripartism. According to the Workers' members, broad social dialogue was a prerequisite to an effective employment policy or even vital for successful structural adjustments. They noted, however, that it was in regard to this last point that difficulties persisted.

The Employers' members recalled that the Experts had been making comments on this case since 1983, but that it was the first time that this Committee was discussing this case. They further recalled the importance of the Convention as it involved jobs, but noted that it was also a very generally-worded Convention setting out important employment policy goals. In reality, there was probably not one policy prescription that would solve all the issues concerned in all countries because of the varying circumstances involved. When this Convention first came into force in 1966, the prevailing economic philosophy was strongly linked to fiscal and monetary policies. Since the 1970s, the world had become a more competitive place and New Zealand, like many other countries, had undergone a substantial amount of structural adjustment to accommodate these rapid changes and suffered unfortunate consequences for disadvantaged individuals with the least amount of formal education and technical training, and requiring particular attention. Today, specially targeted approaches for the benefit of disadvantaged workers, such as skill development schemes, were more likely either to bring individuals into the workforce or to lead to the creation of jobs and reducing unemployment. New Zealand was attempting to do this and seemed successful to some extent. Notwithstanding the comments of the Committee of Experts, these policies were at least moving in the right direction. It was evident that measures to control inflation had the unfortunate consequence of increasing unemployment, at least temporarily, and particularly when compounded by complications of structural adjustment. The Employers' members hoped that more efforts would be made by the Government in this regard.

Turning to the issue of consultations, they thought that Article 3 of the Convention's emphasis regarding consultation concerned not only consultation with workers' and employers' organizations -- as was the case with most other ILO instruments -- but also with other groups such as disadvantaged groups and community-based groups. It seemed to them that New Zealand was moving more in the direction of meeting the requirements of the Convention, while at the same time not neglecting consultations with employers' and workers' organizations. The problem the Government faced in seeking job creation and dealing with issues of competitiveness, inflation and unemployment were not easy. The Employers' members expressed the firm hope that the Government would continue its efforts in this regard and would soon fully comply with the Convention.

The Workers' member of New Zealand stated that even though his Government had for many years been pursuing firm monetary and fiscal policies aimed at reducing inflation and the public debt accompanied by major structural reforms, the current unemployment rates were particularly high and between June 1990 and June 1992 attained an increase of 36 per cent. Although there had been some minor but positive changes in recent months, official statistics revealed that there were 2,000 jobs less than two years ago, a reduction of 3,300 full-time jobs by November 1992 and 40,400 jobs less in the last two years. These statistics were consistent with the comments of the Committee of Experts according to which involuntary part-time work had increased. The number of people of working age out of work or not actively looking for work had increased dramatically. The speaker expressed concern at the hidden unemployment which he considered a growing indicator of despair, alienation and family dependency, particularly as the greatest increase in unemployment was among young people and Maori and Pacific Islanders. The New Zealand Council of Trade Unions (NZCTU) shared the views of the Committee of Experts that the Government's priority was the control of inflation and that its commitment to the goals of the Convention was ambiguous. The speaker stated that the legislation governing the Central Bank stipulated that the Bank's sole objective was the achievement of low inflation. There was no mention of employment as an objective, as would be appropriate if it were truly a major goal of the Government as required by the Convention. The Government considered rising unemployment to be an inevitable cost in the short term of its economic adjustment strategy. In this respect, he underlined the interpretive comments of the Committee of Experts according to which employment as simply one of many adjustment variables would be decidedly against the spirit of the Convention. He also considered that the employment programmes cited in the Report of the Committee of Experts and described by the Government representative were insignificant when compared with the macro-economic measures which the Government could reasonably be expected to have in place if it were really pursuing full employment as a goal. The Experts considered that the pursuit of employment policies was indispensable in order to safeguard the fundamental rights of workers as set out in international labour standards and that unemployment had discriminatory side effects, entailed the degradation of employment and working conditions, threatened the free choice of employment and might affect the full exercise of freedom of association and the right to collective bargaining. He stated that these were the effects being experienced in New Zealand. Social welfare payments had been reduced by up to 25 per cent and unemployment benefits were withheld for six months if the worker refused a job offer, left a job voluntarily or was dismissed for misconduct. The Employment Contracts Act of 1991 deregulated the labour market and, inter alia, enabled employers to alter contracts of employment unilaterally, including the reduction of wages and allowances. All these measures seriously undermined workers' security, dignity, freedom to choose and to bargain collectively which were the subject of a complaint pending before the Committee on Freedom of Association, and further eroded the concept of freely chosen employment guaranteed by the Convention.

As regards consulations required by Article 3 of the Convention, the Committee of Experts stressed that consultation with representatives of persons affected was a fundamental obligation on the Government, as was the enlistment of their cooperation in implementing such policies. No such consultation took place in New Zealand. He considered that Article 3's terms clearly contemplated structured tripartite consultation. The Prime Minister's Enterprise Council referred to by the Government representative was not only limited to one worker representative among many employer and government representatives, but was not established as a tripartite consultative structure as envisaged by Article 3. The consultation, to the extent that there was any, was on an informal and ad hoc basis as described by the Government representative. In fact, in passing the Employment Contracts Act into law, the Government repealed the 1987 Act which had specifically provided for tripartite consultation and thus removed formal recognition of trade unions. Unions were not mentioned in the Employment Contracts Act and were now registered as incorporated societies in the same way as sports clubs. Finally, the speaker considered that, by the policies pursued linked with some social measures, the Government had consciously created unprecedented levels of unemployment and used unemployed workers as a tool in its economic policy without any real regard to the consequences in human terms. The NZCTU supported the call made to this Committee by the Workers' members for it to formulate firm conclusions requiring the Government to report next year on the implementation of the provisions of the Convention.

The Workers' member of Japan recalled that the Committee of Experts had examined this case for the last ten years and regretted the deterioration in the situation year after year and the fact that effective measures had not been taken by the Government, despite the recommendations of the Experts. He also noted that some administrative and legislative measures had been taken for the purpose of destroying free trade unions. He further noted the glaring contradictions between the information supplied by the Government representative and the conclusions of the Committee of Experts. He drew the attention of this Committee and that of the Government representative to Article 3 of the Convention, which not only provided for consultations with the social partners and other interested groups in the formulation of employment policies, but also for such consultations to take place during their implementation. These two elements seemed to be absent in the case of New Zealand. He stressed the need for this Committee to urge the Government to take the necessary measures to apply this Article of the Convention fully.

The Workers' member of Canada supported the statement made by the Workers' member of New Zealand regarding the preoccupying situation in the country. He considered the situation to be similar to that which still persisted in several other industrialized countries. As pointed out by the Experts, long-term unemployment had increased, some segments of the population such as women and youth were particularly affected and there was an increase in involuntary part-time work at the expense of full-time employment. Given the fact that the Government considered the increase in unemployment to be an inevitable cost at least in the short term of its structural adjustment policy, he wondered what was meant by "short term" in this context. He considered that the Committee of Experts was correct in once again drawing the Government's attention to Article 2 of the Convention which required the Government to decide on and keep under review within the framework of a coordinated economic and social policy the measures to be adopted for the attainment of the major goal of productive and freely chosen employment.

The Workers' member of India criticized the Government for not consulting the workers' organizations before adopting laws or taking other measures. He regretted that many governments did the same with respect to the reporting obligations to the ILO.

The Employers' member of New Zealand considered that employment was undoubtedly an essential concern of the Government, the workers and the employers. With a view to reducing unemployment, it was necessary to pursue a policy of economic growth. He stated that the Government actively pursued such a policy. He confirmed that various measures to increase employment had been taken. As regards tripartite consultations at different levels, he supported the statements of the Government representative and stated that he himself took part in such tripartite consultations in February 1993 on the implementation of Conventions, during which a formula for continuing consultation was agreed upon and at which all groups expressed their views. He added that the sustained policy of the Government and the consultations with the social partners had produced clear results and that the Convention was applied in reality.

The Government representative of New Zealand firmly rejected the statement of the Workers' member of New Zealand according to which the Government only fought against inflation. On the contrary, had the Government not fought inflation, unemployment would have been higher today. The emphasis placed on the fight against inflation was only one of the elements of the Government's policy for increasing employment. She was of the view that among the wide options available to governments in adopting and pursuing policies for employment, her Government had opted for a set of choices of measurably higher quality, when compared to those of other OECD countries. While she acknowledged that some aspects of the consultation machinery emphasized the formal side and related to wage fixing, the diversity of the means of consultation were, in her view, an appropriate response to the requirements of the Convention. Finally, she reiterated her Government's commitment to implementing the Convention.

The Workers' members shared the views of the Committee of Experts which in their opinion had been strengthened by the information supplied by the Workers' member of New Zealand. As regards Article 3 of the Convention, they noted that there were no real consultations with the workers and requested this Committee to support the two requests made by the Committee of Experts to the Government, namely to supply information on a complete assessment of the measures taken, and on the regular consultation procedures.

The Employers' members considered that the discussion showed that in dealing with the Convention there was hardly a perfect world nor perfect solutions to problems. They requested this Committee to include in its conclusions the point that one could not have job growth without economic development. As regards tripartite consultations, they supported the views of the Workers' members, but preferred the conclusions not to mention that there had not been consultations with the social partners in New Zealand because the facts were not clear on this point. The Employers' members were of the view therefore that this Committee should request further information in order to resolve the facts regarding consultations.

The Committee noted with interest the detailed discussion and was pleased to have had the opportunity to discuss the implementation of the Convention on employment policy in New Zealand. It appreciated the Government's efforts to provide detailed information on the measures adopted in the labour market as part of its applied economic strategy, as well as various other measures implemented. Although the Government was successful with regard to inflation, the public debt and economic competitiveness, it was concerned about the increase in unemployment and about the seriousness of the resulting social problems. Unemployment had doubled since 1988 and despite the improvements in the last few months it still affected 10 per cent of the active population. The Committee hoped that the Government would take into account the comments of the Committee of Experts on the need regularly to review as part of its economic and social policies the measures that should be adopted to promote the goals of the Convention. The Committee, while stressing the importance of social dialogue as indicated by the Committee of Experts, requested the Government to make every effort to give full effect to the provisions of the Convention regarding consultation and cooperation with workers' and employers' organizations and other interested parties in relation to employment policy. It also expressed the hope that it would be able to note progress in the next report.

Observation (CEACR) - adopted 2023, published 112nd ILC session (2024)

Observation (CEACR) - adopted 2017, published 107th ILC session (2018)

Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

The Committee notes the Government’s detailed report for the period ending in May 2010, including comments from Business New Zealand and the New Zealand Council of Trade Unions – Te Kauae Kaimahi (NZCTU). In reply to previous comments, the Government indicates that the Better work working better – Labour market and employment strategy is no longer in place. The Government reported in detail on the response to the recession, the Medium-term Economic Agenda, the careers strategy, the five-year action plan and labour market reform. Business New Zealand emphasised that anyone seeking employment in New Zealand is free to apply for any job for which he or she is qualified or for which he or she feels capable of performing. No one is directed to take up employment even though the person concerned may have been unemployed for a considerable period. The Committee further notes concerns expressed by the NZCTU for changes to employment legislation, policies and economic approaches by the Government to meet its obligations under the Convention. In this respect, the Committee recalls the concerns expressed by the NZCTU in the 2010 General Survey concerning employment instruments that measures to encourage competitive business success should not be taken at the expense of workers’ rights. The NZCTU reiterates in the report on Convention No. 122 that new employment legislation allowed businesses with fewer than 20 employees to dismiss new employees during their first 90 days of employment without cause or recourse to standard employment protections, such as personal grievance provisions. According to the NZCTU, this legislative reform undermines workers’ rights. The NZCTU emphasizes again that minimum labour rights should apply to SMEs as well as to larger employers. The Committee refers to paragraphs 397–399 of the 2010 General Survey and reiterates that any measures designed to promote full employment and encourage the creation of productive and sustainable jobs, particularly in small and medium-sized enterprises, should be adopted in consultation with the social partners, under conditions that are socially adequate for all concerned and in full conformity with the international instruments ratified by the respective countries. Within this framework, the Committee also recalls that, in its 2007 conclusions concerning the promotion of sustainable enterprises, the Conference urged all enterprises, regardless of their size, to apply workplace practices based on full respect for fundamental principles, rights at work and international labour standards. The Committee again expresses its appreciation in receiving information and data on successes, problems encountered and lessons to be learned from the experience of the social partners in New Zealand with regard to the application of the Convention.

Articles 1 and 2 of the Convention. Employment trends and active labour market measures. The Government indicates that a period of economic recession began in early 2008 and as a result, efforts to minimize its negative effects were initiated by maximizing employment opportunities for those most affected and by implementing a plan for sustained economic growth. The Committee notes that in response to the economic recession, government agencies are working closely with businesses to help maximize the potential for economic development across sectors and regions. The Government recalls a Summit on Employment hosted by the Prime Minister on 27 February 2009 which included participants from business, industry, trade unions, Maori groups and local and central government agencies (paragraph 84 of the 2010 General Survey). The Summit produced 20 initiatives to alleviate the effects of the economic crisis on those made redundant and at a higher risk of long-term unemployment due to the recession. The Committee notes that in March 2010, the unemployment rate fell from 7.1 per cent to 6 per cent while employment increased by 1 per cent, its largest increase since June 2008. The Government indicates that this result combined with high business and consumer confidence and rising employment intentions demonstrated that the labour market had reached a turning point and was beginning to recover. The Government also indicates that in March 2010 the number of people employed rose by 1 per cent, or 22,000 people and subsequently stood at 2,177,000. The Committee notes concerns raised by the NZCTU stating that unemployment has remained high over the last nine months and further indicates the unemployment rate during June 2010 was 6.8 per cent, not far below its peak in December 2009 of 7.1 per cent. The NZCTU reports support for government fiscal stimulus measures to be increased in light of continuing unemployment, a stalling recovery and the economic outlook internationally. The Government reports on overall policy initiatives aimed at achieving economic growth and development, raising the levels of living and meeting manpower requirements through two aspirational goals: to catch up with Australia’s GDP per capita (the New Zealand figure was 76 per cent of Australia’s) and for exports to be 40 per cent of the GDP (previously reported at 31 per cent). The Government indicates an economic plan to achieve these objectives through the following six main policy drivers: growth-enhancing tax system, better public services, innovation and business support, better regulation, including regulations around natural resources, investment in infrastructure and improved education and skills. The NZCTU indicates concern that the Government’s response in 2008–09 to the recession caused by the global economic crisis was inadequate and poorly targeted and mainly consisted of tax cuts. The NZCTU further expressed concern regarding the possible impact of free trade agreements on manufacturing jobs in New Zealand and the potential for such policy to restrict freedom of choice of employment. The Committee notes the Government response to incorporate labour issues into a framework to guide trade negotiations with other countries. The Committee invites the Government to provide in its next report information on the impact of the schemes implemented to alleviate the effect of the economic crisis (the ReStart assistance package, the job support scheme, the youth opportunities package and the small business relief package). It also invites the Government to indicate the extent to which the employment objectives included in the medium-term economic agenda have been or are being attained and further information on the employment-related issues to guide trade agreements.

Education and training policies. The Committee notes the detailed information provided in the Government’s report on education and training policies and its ongoing commitment to raise workforce literacy, language and numeracy skills in order to support productive employment. The NZCTU has highlighted the recent research by the Government Human Rights Commission which determined youth unemployment to be a top priority and identified high unemployment of young Maori and Pacific people and a current bias against hiring some young people as issues. The Committee also notes the statement by Business New Zealand for ensuring that many Maori and Pacific peoples are better served by the education and training system so that they have the skills required to do the jobs available. In this respect, the Committee notes the Tertiary Education Strategy 2010–15 which seeks to achieve higher levels of education and provide for better employment opportunities among vulnerable categories of workers and in particular, the Maori and the Pasifika. The Government states that this initiative includes a long-term view for tertiary education which includes both institutional and workplace based education for increased employment opportunities among disadvantaged young people and people with low level skills. The Committee invites the Government to continue to provide information on the results achieved by the Tertiary Education Strategy and other measures implemented to coordinate education and training policies with prospective employment opportunities.

Workplace productivity and entrepreneurship. The Committee notes the measures taken to ensure productive work through a targeted review of New Zealand’s tertiary qualifications in order to reduce the duplication of skills training, to improve education and training quality and to create better employment outcomes for employers and employees. The Government further indicates measures taken to promote small and medium-sized enterprises through the Government’s small business relief package which aims to improve the business environment by reduced impact of taxes and firms’ cash flow, improving firms’ access to credit and reducing business compliance costs. The Committee also notes a government allowance which is paid to businesses facing temporary difficulties due to the recession. The Government indicates that this initiative was initially made available to employers with more than 100 staff, though, as of April 2009, it was extended to cover employers with 50 to 100 employees. The Committee invites the Government to include information on the results obtained in increasing workplace productivity and further information on the measures taken to create employment by the promotion of small and medium-sized enterprises.

Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

The Committee notes the Government’s detailed report for the period ending in May 2009, including replies to the 2007 observation, as well as comments of Business New Zealand and the Government’s corresponding reply.

Articles 1 and 2 of the Convention. Employment trends and active labour market measures. In its previous observation, the Committee asked the Government to keep providing information on the results of its employment strategy, Better Work Working Better (BWWB), launched in 2004. The Government refers to the economic and social indicators used to measure progress towards the goals of BWWB and notes that the steady macroeconomic performance has seen reductions in the official unemployment rate and increases in the participation rate since December 1999, which have resulted in progress towards meeting these goals until the end of 2007. In 2007, there was a registered employment growth of 2.5 percentage points, with employment standing at a record high of 2,173,000 persons and the labour force participation rate reaching 68.8 per cent, the highest rate recorded over the last 21 years. According to Statistics New Zealand, after a record low of 3.4 per cent in October–December 2007, the unemployment rate has progressively increased to reach 4.7 per cent at the end of 2008. With reference to the work–life balance work programme, the Government recognizes that improved work–life balance contributes to increased workplace productivity, improved wellbeing and quality of life, and addresses skill and labour shortages by encouraging labour market participation. The Committee notes that the Employment Relations (Flexible Working Arrangements) Amendment Act 2007 provides employees with caretaking responsibilities with the right to request a variation to their working hours, days of work, or place of work. The Committee asks the Government to continue to provide evaluations in its next report of the impact of the various labour market reform measures undertaken on the current employment situation.

Education and training policies. The Committee notes the detailed information provided in the Government’s report on education and training policies, focusing in particular on the Unified Skills Strategy 2008–12 which is based on a collaboration and commitment to social partnership through the active engagement of the NZTU and Business New Zealand, Government agencies and other stakeholders, including education and training providers. The strategy aims at lifting labour productivity through skills development. Among the priorities set to be achieved within the framework of the tertiary education strategy, the Committee notes that a special focus is placed on increasing literacy, numeracy and language levels for the workforce, as around 1.1 million New Zealanders have low literacy skills. With reference to the initiatives taken to increase employment opportunities for Maori, Pacific peoples and new immigrants, the Government indicates a number of legislative and other measures that are being implemented, including support mechanisms to increase skills levels, employment schemes benefiting Maori jobseekers through partnerships with local and regional councils, and policy measures to facilitate the temporary entry of foreign seasonal workers. The Committee asks the Government to continue providing information, including statistical data, on the measures taken to coordinate education and training policies with employment opportunities for vulnerable categories of workers, specifically Maori, Pacific peoples and new immigrants.

Entrepreneurship. The Government reports on workshops organized jointly by employers and industry partners which were attended by over 3,000 firms for the implementation of the Workplace Productivity Agenda (WPA). The Government further underlines that the most representative workers’ and employers’ organizations have been active in promoting these workshops to their members. The Committee would welcome receiving information in the next report on the results obtained in increasing workplace productivity and information on measures taken to create employment by the promotion of entrepreneurship of small and medium-sized enterprises.

Article 3. Participation of the social partners in the formulation and application of policies. Business New Zealand indicates that although the Government undertakes regular consultations with employers’ representatives on employment-related issues, their views are rarely taken into account, which might have an adverse effect on the job opportunities that the policy measures taken are supposed to promote. In this regard, the Government indicates that, while both employers and employees generally agree that workplace flexibility is positive, the views of other stakeholders are divergent. The Government recalls that, in November 2006, a general consensus on the importance of flexible work for all New Zealanders has been reached, not only including parents or persons with caretaking responsibilities. In this regard, the Committee would appreciate continuing to receive information and data on successes, problems encountered and lessons to be learned from the experience of social partners in New Zealand with regard to the application of the Convention.

Observation (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the Government’s very comprehensive report received in December 2006, including replies to the 2004 observation, as well as the comments of the New Zealand Council of Trade Unions (NZCTU) and the corresponding reply by the Government.

1. Articles 1 and 2 of the Convention. Labour market policies. Strong economic growth in the year to December 2004 translated into employment growth of 3.4 per cent dropping slightly in the year to December 2005 to 2.8 per cent. As a result, the unemployment rate had dropped to a low of 3.6 per cent in the December 2005 quarter, creating a shortage in skills and labour, which the Government’s new labour market and employment strategy – Better Work Working Better (BWWB) – aims to address. The primary outcome for BWWB is high-quality employment in productive and innovative industries, regions and businesses, that drives sustainable economic growth opportunities for all New Zealanders. The four goals are to achieve high levels of participation in high-quality, well-paid and diversified employment; a diverse, adaptable and highly skilled workforce; high-quality and productive workplaces, within an effective regulatory environment; and high-performing sector and regional labour markets. The policy integrates a number of social and economic indicators as a means of measuring progress towards the goals set out in the BWWB and identifies areas where more work is needed. In addition, following the publication of the Achieving balanced lives and employment: What New Zealanders are saying about work–life balance report, a three-year work programme was introduced to promote a better balance between paid work and life outside of work and, in partnership with employers, develop practical customized work–life balance tools for the workplace. The Committee asks the Government to keep providing in its next report information on the BWWB as well as the Work–Life Balance work programme. In particular, it notes with interest the use of social and economic indicators, included in the BWWB, and asks to be kept informed of the results of its new employment strategy.

2. The Committee notes the detailed information that the Government provided in its report on education and training policies, including the Tertiary Education Strategy 2002–07. The Committee notes with interest the large investment (NZ$57 million) the Government announced in its 2004 budget to be allocated to a number of initiatives assisting the transition of young people from education to the world of work. These include vocational counselling, enhancing vocational training through the Secondary Tertiary Alignment Resource (STAR) programme and through expanding the Modern Apprenticeships programme. It also takes note of initiatives taken to increase the employment opportunities to meet the needs of particular categories of workers including women, older workers and workers with disabilities. The Government indicated that some other groups continued to experience labour market disadvantage, in particular Maori, Pacific peoples and new immigrants, and that a range of targeted interventions had been undertaken focusing on improvements for these groups. The Committee asks the Government to continue providing it with information on the measures it has taken in the area of education and training policies and their relation to employment policies. It also requests the Government to provide more information on initiatives taken to increase employment opportunities for Maori, Pacific peoples and new immigrants and the impact they have had on bridging the gap between the employment opportunities of these groups and the general population.

3. The Committee notes the implementation of the Workplace Productivity Agenda (WPA) in November 2004 following the final report of the Workplace Productivity Working Group, which identified seven drivers for workplace productivity. The Committee notes that a stocktake of progress made in implementing the WPA was undertaken in December 2005. The Committee would be interested in examining the results obtained in increasing workplace productivity and would appreciate if the Government could include data on these matters in its next report.

4. Article 3. Participation of the social partners in the formulation and application of policies. The Committee takes note of the Government’s statement that, as a general principle, it consults with those affected by employment policies and that the scope and level of consultation is tailored to the particular policy. The Government provides examples of consultations which include implementation of the WPA by the Workplace Productivity Working Group, a shared responsibility led by industry, business and unions with government support; continued consultations between the Government and the Public Service Association (PSA) under the Partnership for Quality agreement. The Work–Life Balance work programme was developed in response to key messages received through a wide range of public consultation on the matter. In this regard, the Committee would appreciate continuing to receive information on the manner in which the Government seeks the views of employers’ and workers’ representatives as well as of other interested groups concerning all issues related to employment policies, in order to take fully into account their experience and views, to secure their full cooperation in formulating and to enlist support for such policies.

Observation (CEACR) - adopted 2005, published 95th ILC session (2006)

The Committee takes note of the very comprehensive Government’s report received in November 2004, including replies to the 2002 observation and the 2003 direct request, as well as the comments of the New Zealand Council of Trade Unions (NZCTU) and Business New Zealand and the corresponding replies by the Government.

1. Labour market policies. The Government reports on the implementation of an overarching employment strategy since September 2000, which was reviewed in November 2002, following which a number of changes were made to reflect emerging priorities. The overarching objectives now place greater emphasis on sustainable employment, quality of employment and increasing productivity. Strong economic growth translated into employment growth of 1.5 per cent in the year to March 2003 and 3.2 per cent in the year to March 2004. As growth in employment outstripped growth in the labour force, the unemployment rate has fallen from 5.2 per cent in the March 2002 quarter to 4.3 per cent in the March 2004 quarter.

2. Concerning training, including training for youth, the Committee notes with interest the Government’s indication that it has recently agreed to a strategy to improve the foundation competencies of adults. While the first phase will increase the emphasis on foundation learning in a wide range of tertiary education provision through the development of a set of aligned initiatives that will improve quality and build knowledge, the second phase will involve the introduction of a new funding mechanism and a focus on broadening provision to ensure that priority groups can access quality learning opportunities. The Committee also takes note with interest of the statistical information on participation and achievement levels in the Industry Training Strategy report, as well as the document entitled Education Priorities for New Zealand (2004).

3. The Committee also took note with interest of the latest report on progress in implementing the New Zealand Disability Strategy as well as statistics and indicators concerning the current trends of the social well-being of working-age people with regard to employment. Concerning the Government’s Employment Evaluation Strategy, the Committee has taken note with interest of the document entitled Synthesis of evaluations of active labour market policies which reviewed the programmes and services delivered through the Work and Income Service Unit of the Ministry of Social Development. The most effective programme in getting jobseekers off benefits was the opportunity creation programme. That programme was appropriate for the small proportion of jobseekers who wanted to start their own businesses. Matching programmes, such as wage subsidy programmes and job placement services, were the next most effective in providing job opportunities. Least successful programmes were training and work experience programmes. When work experience programmes were combined with a wage subsidy, they showed increased effectiveness. The Committee welcomes this evaluation of the results regarding active labour market measures that are being implemented by the Government. The Committee highlighted the need to monitor progress and to analyse data, as even the best-designed policies can have unexpected effects, can become outdated due to changing circumstances, or may need to be modified to achieve maximum benefit (see General Survey of 2004 on promoting employment, paragraph 491). It would, therefore, be grateful for the Government to keep providing detailed information on all measures demonstrating the effectiveness of an active employment policy. It also wishes to express its interest in receiving information on how measures taken to promote employment operate within a "framework of a coordinated economic and social policy" (Article 2, paragraph (a), of the Convention) and would appreciate it if the Government could indicate how the key elements of monetary and fiscal policies contribute to the employment objectives.

4. Participation of the social partners in the formulation and application of policies. The Committee takes note of the Government’s statement that, as a general principle, it consults with those affected by employment policies and that the scope and level of consultation is tailored to the particular policy. The Government provides examples of consultation which include the Partnership for quality agreement originally agreed between the Government and the Public Service Association in 2000 and revised in 2003, and the paid parental leave scheme of 2003. On the question of consultations, the Committee notes the comments of Business New Zealand to the effect that, while that organization acknowledges being frequently consulted about government policy proposals, its views about likely effects are just as frequently ignored. For its part, NZCTU expresses its concern about the effect of free trade agreements undercutting job initiatives by weakening some sectors and wonders how should government policies look to minimize the trend for manufacturing and production companies to either move offshore or to outsource their production offshore. In this regard, the Committee trusts that the Government will continue to actively seek the views of employers’ and workers’ representatives concerning all issues related to employment policies, in order to take fully into account their experience and views and securing their full cooperation in formulating and enlisting support for such policies (Article 3).

Direct Request (CEACR) - adopted 2003, published 92nd ILC session (2004)

The Committee is grateful for the comments made by the New Zealand Council of Trade Unions on the Government’s report for the period ending in May 2002, and for the reply by the Government, received in December 2002, after the closing of its session. The Committee requests that the Government continue to elaborate in its next report, due in 2004, on the measures of active labour market policies taken in order to achieve the objectives of the Convention in a framework of a coordinated economic and social policy and in consultation with the social partners. The Committee would be grateful if the Government would supply information on the impact of the Employment Relations Act. Please also provide the indications requested in the 2002 observation.

Observation (CEACR) - adopted 2002, published 91st ILC session (2003)

The Committee notes the information contained in the Government’s detailed and well-organized report for the period 1 June 2000 to 31 May 2002.

1. Article 1 of the Convention. The Government states that in the year to September 2001 employment has been at an all time high, and all ethnic groups have experienced employment growth. Labour market participation also has gone up, in particular for older workers. GDP grew by 2.2 per cent for the year to September 2001. Solid economic growth has also led to robust growth in employment: unemployment fell from 6.4 per cent in March 2000 quarter to 5.4 per cent in March 2001 quarter and 5.3 per cent in March 2002 quarter.

2. Concerning training, including training of youth, the Committee notes the Government’s intention to focus on foundation skills and sustainable employment. This will include focusing eligibility for training on lack of foundation skills and difficulty in finding and sustaining employment. The Committee recalls the importance of ensuring broad access to training and lifelong learning and would appreciate receiving further information on the results of measures taken. Please also indicate the measures taken or envisaged to ensure access to training for those who do not lack foundation skills.

3. The Committee notes with interest that the welfare system has been replaced by a programme entitled "From Social Welfare to Social Development". This programme aims to increase skill levels and move more people into paid work through local partnerships and individualized assistance. It also notes that the Government has committed to moving more people with disabilities into the open labour market, and has developed some programmes aimed at reaching this objective. The Committee would appreciate receiving more information on the outcome of these programmes.

4. Articles 2 and 3. The Committee notes with interest the information contained in the attached annexes, which indicate that policies and programmes are evaluated in substantial detail, using a variety of criteria and with wide consultation. It also notes the development of the Employment Evaluation Strategy, which aims to improve the utility of administrative databases for evaluation, develop standard definitions and measures, measure the impact of employment interventions, and evaluate cost-effectiveness. It looks forward to receiving in future reports policy and programme evaluations based on this systematic approach.

5. Article 3. The Committee notes the comments sent by Business New Zealand. Business New Zealand emphasizes the importance of sustainable economic growth for employment promotion. Present growth in employment is due, in its opinion, to strong economic growth resulting from external factors. The current growth in inflation casts doubt on the future prospects for economic growth. Business New Zealand is also concerned that potential liability for stress or fatigue-related action against an employer may result in increased discrimination against people with disabilities. Lastly, it notes that the high compliance costs imposed on employers discourages self-employed persons from expanding and hiring others, and considers that the current Government tends to discount the views of the productive sector. The Committee trusts that the next Government report will also include information on the issues raised by Business New Zealand.

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

The Committee notes the information contained in the Government’s detailed and well organized report for the period 1 July 1998 to 31 May 2000.

1. Articles 1 and 2 of the Convention. The Government states that the economy grew very rapidly in late 1998 and 1999, and was expected to grow at about 3.5 per cent per year in 2000-01. The Government’s macroeconomic policies include: stabilizing prices, increasing market competition, reducing government debt, cutting deficit spending, increasing national savings, and stabilizing tax rates. A coalition agreement endorsed pursuing orthodox economic policies and prioritizing economic growth.

2. During the late 1998-99 period, employment increased by 1.4 per cent and unemployment decreased from 7.2 per cent to 6.4 per cent. The labour force increased 1.1 per cent, with a substantial increase in the participation of women. Employment increased 0.6 per cent in 1999 and 1.4 per cent in March 2000. Growth was stronger in services and primary sectors. Youth unemployment increased slightly from 16.4 per cent in 1998 to 16.8 per cent in March 2000. Unemployment for Maori people decreased from 17.3 per cent to 15.5 per cent, but still remains significantly above total unemployment rates. Long-term unemployed as a proportion of total unemployed remained about the same at 35.2 per cent.

3. In response to previous comments, the Government states that participation in education or training is no longer compulsory to receive benefits; rather the Government follows a facilitative approach. In the industry training strategy, industry designs training to meet its needs, with worker involvement. The modern apprenticeships programme encourages greater participation of young people in industrial training. The national qualifications framework aims to coordinate industrial, senior secondary, and tertiary education and training to foster lifelong learning. The more general industry training framework was to be reviewed in 2000. The Committee notes this information and requests more details on the findings and outcome of this review.

4. Concerning periodic review of other policies and programmes, the Government states that it conducted an impact evaluation of the community taskforce. It found that participation did not significantly increase the probability of moving to unsubsidized employment. The Committee notes this information and requests further details on the action taken in light of this finding. The Committee also notes the Government’s statement that it intended to undertake a wage subsidy review in 2000, and requests further information on the outcome of this review as it relates to employment promotion.

5. The Committee notes more generally that the Government has developed an employment evaluation strategy - a framework within which to evaluate capacity building, strategic evaluation, and monitoring of employment and welfare policies. The first phase has been to build up its capacity to evaluate. Next will come an attempt to answer more systematically the question "what works for whom and under what circumstances". Lastly, the Government will address wider strategic issues such as the community benefits of employment promotion programmes. The Committee would appreciate being kept informed of progress made in developing the employment evaluation strategy.

6. Article 3. The Government states that it follows a "case-by-case approach to the issue of consultation" and has held consultation on the Employment Relations Bill, the minimum wage for young people, and the Social Security (Work Test) Amendment Bill. However, it adds that it is "seeking to move towards partnerships with various stakeholders on delivery of employment services" and that a "new partnership is to be built with business and local communities". The Government has undertaken a regional partnership programme with NGOs. It also has partnerships between central and local government and industries and enterprises, in an effort to boost industry. And the business development programme (BIZ) is run with input from the New Zealand Employers’ Federation and provides management support to SMEs. The Committee notes this information and asks the Government to continue to supply details on the manner in which representatives of the persons affected are consulted concerning employment policies, and the outcome of these consultations.

7. The Committee notes comments sent by the New Zealand Employers’ Federation (NZEF). It notes in particular the NZEF’s concern about the impact of the Employment Relations Bill on wage inflation, which has the potential to adversely affect employment promotion, and the Government’s reply to the effect that it considers the NZEF’s predictions to be unfounded. Please continue to supply information on the employment impact of the Employment Relations Bill, once adopted.

8. Lastly, the Committee notes that the Confederation of Trade Unions substantially endorses the Government’s report and expresses its general support for the policy direction indicated.

Observation (CEACR) - adopted 1998, published 87th ILC session (1999)

1. With reference to its previous observation, the Committee notes the Government's full and detailed report for the period ending in May 1998, which transmits the observations made by the New Zealand Employers' Federation (NZEF) and the New Zealand Council of Trade Unions (NZCTU), as well as the Government's observations made in reply to them.

2. The Committee notes that the downturn in growth was reflected during the period under consideration by a marked slow-down in the growth of employment, which did not exceed 0.2 per cent for the year ending in March 1998 (as opposed to 3.9 per cent for the year ending in March 1996), and by a slight rise in the rate of unemployment, which rose from 6.5 per cent in March 1996 to 7.1 per cent in March 1998, while the proportion of long-term unemployment (i.e. lasting more than six months) remained stable at around 35 per cent of total unemployment. In this context, the NZCTU emphasizes the particularly high incidence of unemployment among certain groups such as the Maori, the Pacific Islands people, young people and unskilled workers. In addition, the trade union considers that an assessment of the employment situation should not focus exclusively on the number of jobs created, but should also take account of their quality, bearing in mind in particular the growth in involuntary part-time employment.

3. In its report, the Government explains that its growth and employment promotion policy is based principally on responsible fiscal management, price stability and a high level of competition in the markets. It emphasizes that, without this strategy, the significant growth in employment and the fall in unemployment recorded since the beginning of the decade would not have been possible. The NZCTU, on the other hand, considers that, far from implementing an active employment policy as required by the Convention, the Government continues to put its faith in a passive policy on the assumption that growth in employment will result from a restrictive monetary policy, fiscal austerity and micro-economic liberalization. The disregard for the development of infrastructure and skills has led to a fall in productivity and in the competitiveness of exports, while monetary policy has for too long maintained interest and exchange rates that are not conducive to employment. The Committee, which recalls that under Article 2 of the Convention the measures to be adopted for attaining the objective of full, productive and freely chosen employment, must be decided on and kept under review within the framework of a coordinated economic and social policy, requests the Government to continue providing the most detailed information available on the macroeconomic policies that are being applied and their actual or expected effects on employment.

4. The Committee notes the description of the various active labour market policy measures and recalls its interest in any available assessment of their effectiveness in terms of the successful placement of individuals in employment. It notes that the Government announced the introduction, as of 1 October 1998, of significant changes in its strategy for fighting unemployment, such as the provision at a "one-stop shop" of job placement and income support services to jobseekers, greater decentralization of the employment services, and the unification of the various benefits paid to unemployed persons in the form of a "community wage" which is more strictly conditional on an active search for employment or participation in "organized activities". The NZCTU considers in this respect that the obligation which can be imposed on persons receiving these benefits to participate in such activities is contrary to the objective of the Convention of promoting freely chosen employment. The Committee invites the Government to indicate the manner in which the new measures adopted with a view to achieving a better coordination of unemployment assistance with active labour market policy measures contribute to the promotion of full, productive and freely chosen employment.

5. Article 3. The Government states that it is consulting different sectors of society in various ways and that, within the framework of the preparatory work on the changes recently made in its employment strategy, written comments have been received from more than 200 organizations or individuals. The NZCTU indicates that it did submit a written communication, but was not given any opportunity to discuss it. During discussions of the Bill obliging beneficiaries of the "community wage" to participate in "organized activities", it was only able to present its point of view to the competent parliamentary committee. In the NZCTU's opinion, such procedures do not meet the requirement of the Convention for consultation, and reflect the Government's contempt for the social partners. The NZEF states that it does not share the concern of the NZCTU and emphasizes that macroeconomic policy is the responsibility of a democratically elected government which is responsible to the electorate. The Committee recalls that, like the Conference Committee in its conclusions in June 1993, it has for a number of years stressed the importance which it attaches to giving full effect to this fundamental provision of the Convention, by undertaking regular consultations with employers' and workers' organizations on employment policy measures, especially when those measures involve major structural reforms. The Committee notes with regret that the gradual disappearance of tripartite dialogue on employment policies, which it has noted in previous observations, is now even more apparent. The Committee trusts that the Government will adopt the necessary provisions to ensure that consultations are held with the main recognized social partners and that it will be able to indicate real progress in this regard in its next report.

Observation (CEACR) - adopted 1996, published 85th ILC session (1997)

1. In its previous observation, the Committee drew attention to the persistence of a diversity of views between the parties concerned on the question of reforming the labour market. It requested the Government to continue to supply information on the results of the various training and employment programmes and stressed the need under the Convention to strengthen direct tripartite consultations. The Committee notes the Government's full and detailed report for the period ending June 1996 as well as the comments of the New Zealand Employers' Federation (NZEF) and the New Zealand Council of Trade Unions (NZCTU), and the Government's comments in reply to them.

2. The Committee notes that the strong growth in economic activity has resulted in an unprecedented increase in employment (by 9 per cent) and a significant drop in unemployment rates from 9.5 per cent in March 1994 to 6.5 per cent in March 1996 and in the share of long-term unemployed in total figures. The Government indicates that it is still concerned at the level of activity rates which remain lower than those during the 1980s; the persistent high unemployment rate for certain groups, such as the Maori and Pacific Island communities; the increase in the number of people receiving social benefits other than unemployment benefits; and the low productivity gain. Its strategy aims at an open and competitive economy relying on enterprises, price stability, strict budgetary management, flexible labour markets, and reduced taxation. The Government has supplied the Tax Reduction and Social Policy Programme, announced in February 1996, which aims at helping people to get jobs by boosting the available income of households from wages earned. The Government considers that real salaries have tended to increase since 1994.

3. The NZCTU states that it is in fundamental disagreement with the strategy, which does not respond to the requirement of the Convention as to a "coordinated economic and social policy". It considers that the State is withdrawing from applying an investment policy, and the drop in public expenditure on infrastructures and training ultimately threatens competitiveness and employment. In pursuing the sole objective of a stable currency, the monetary authorities are indifferent to the consequences of their decisions for employment. Deregulation of the labour market is resulting in greater dispersal of earned income and a drop in real wages.

4. The Committee requests the Government to continue to supply detailed information in reply to the questions under Article 1 of the Convention on the report form adopted by the Governing Body on the macroeconomic policies in question, attempting to analyse their results in terms of the essential purpose of the Convention, which is an active policy aimed at promoting full, productive and freely chosen employment.

5. The Committee notes the labour market policy measures designed to promote employment for the most disadvantaged groups, such as young people and the long-term unemployed, by concentrating on tailoring assistance offered to individual employment seekers. The Committee notes, furthermore, the modifications made in the various income support benefits to make them a greater incentive to seek work. The NZEF draws attention to two other youth employment assistance programmes in which it has cooperated. Meanwhile, the NZCTU refers to the risk in suspending any benefits for refusing a job offer, which infringes the principle of free choice of employment.

6. The Committee would be grateful if the Government would supply any available evaluation of the results obtained by these measures in terms of people obtaining employment. Furthermore, it requests it to specify how the system of unemployment benefits contributes to promoting full, productive and freely chosen employment in the terms of the Convention.

7. Article 3. The Government states that the Prime Ministerial Task Force on Employment comprises representatives of employers' and workers' organizations, and has led to one of the most extensive public consultations ever. The NZCTU considers that the fact that this is the only example of consultation which the Government can give confirms the unilateral manner in which employment policy was formulated and the Government's failure to comply with its duty to consult the social partners in order to ensure their collaboration in developing this policy. Recalling the conclusions of the Conference Committee in June 1993, the Committee would stress once again the importance it attaches to giving full effect to this essential provision of the Convention by carrying out regular consultation of the representatives of the persons affected and, in particular, employers' and workers' organizations, both when formulating employment policy and when implementing it. It trusts that the Government will be in a position to relate progress in its next report.

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

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.

Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

1. The Committee took note of the Government's report which contains detailed information in reply to its previous comments and encloses a communication from the New Zealand Employers' Federation on the application of the Convention.

2. With reference to its previous observation, the Committee notes that the downward trend in employment, which was already marked in the previous period, continued between June 1990 and June 1992. Total employment dropped by 1.2 per cent while unemployment increased by 36 per cent. The unemployment rate rose from 7.5 per cent to 10 per cent of the labour force. The Government points out that unemployment has reached a particularly high level in New Zealand terms and refers to worrying characteristics in the way it is distributed over the various categories of the population: there is more long-term unemployment, the greatest increases in unemployment were among young people and unemployment has increased significantly among the Maoris and Pacific Island Polynesians whose unemployment rates have reached 25 per cent. The Committee also notes that involuntary part-time work has increased, particularly among women, at the expense of full-time employment.

3. The Government indicates that the overall strategy of its economic policy remains unchanged and is based on the Government's belief that the best way to generate employment opportunities in the long term is to create, in the immediate future, an environment conducive to growth of supply and to remove barriers to the necessary adjustments. Firm monetary and fiscal policies are aimed at reducing inflation and public debt, and at the same time major structural reforms are being implemented which include measures for privatization, the phasing down of border protection and radical changes in wage fixing. In this connection, the Government refers to the adoption of the Employment Contracts Act, 1991, under which employers and employees are free to negotiate conditions of employment at enterprise level. The New Zealand Employers' Federation considers that the adoption of this new system of labour relations which aims to make the labour market more flexible was logical in view of the deregulation of the goods and capital markets. The Government recognizes that the structural reforms have contributed directly to job dislocation in sectors where protective devices have been dismantled and that particular groups and individuals are facing difficulties in adjusting to the new labour market conditions. However, it considers that the gains of economic reform in terms of lower inflation and increased competitiveness have created the right conditions for eventual employment growth. In this respect it answers to the allegations made by the New Zealand Council of Trade Unions, to which the Committee referred in its previous observation, to the effect that higher priority was given to fighting inflation, and that the Government's commitment to the objective of full employment was ambiguous. The Government recognizes, however, that improvement in the employment situation will take time, as labour markets are slow to adjust.

4. The Committee notes that the Government stated when the 1992 budget was adopted that the high level of unemployment was the country's main social problem. It indicates in its report that the implementation of an active labour market policy is an essential component of its social and economic programme, and describes in detail a set of measures to promote job creation and vocational training and integration for the unemployed. The Committee notes in particular that the Ministry of Labour has set up a Community Employment Group and regional teams to lend support, in the form of advice, technical assistance and grants, to local employment creation initiatives. There are also a number of programmes for the partial subsidizing of jobs in the private sector, the financing of employment for the long-term unemployed in environmental protection projects, the granting of allowances to start up businesses, the organization by the employment services of job search seminars and in-depth interviews with the long-term unemployed. The Committee asks the Government in its next report to provide a detailed evaluation of the results obtained by each of these programmes, particularly in terms of the viability of the jobs created and the lasting integration of the persons concerned.

5. The Committee appreciates the quality of the information supplied by the Government. It is none the less bound to note that although the new approach in economic policy of the last few years has proven quite successful in terms of reduced inflation, reduced public debt and improved competitiveness of the economy, it has not yet enabled the ultimate objective of employment growth to be attained. As it indicated in its reports of 1988 and 1990, the Government still considers that growing unemployment is one of the costs, in the short term, of its economic adjustment strategy. However, it reaffirms its commitment to the objective of full employment, while recognizing that it is not inscribed in the legislation or any other formal document. The Committee takes due note of this commitment in principle. However, in view of the fact that the unemployment rate has doubled since 1988 and that this situation threatens to marginalize if not exclude certain categories of the population, the Committee wishes to draw the Government's attention once again to Article 2 of the Convention which stipulates that each Member shall decide on and keep under review, within the framework of a coordinated economic and social policy, the measures to be adopted to promote, as a major goal, full, productive and freely chosen employment.

6. With regard to Article 3, the Committee notes from the Government's report that no formal consultations have been held with the representatives of employers and workers, whose views are sought on specific issues or when legislative reforms are envisaged. It recalls that the Convention requires not only consultations with employers' and workers' organizations, and other persons affected, when employment policies are formulated, but also their cooperation in the implementation of such policies. The Committee would be grateful, therefore, if the Government would include in its future reports detailed information on the effect given to this essential provision of the Convention, indicating the consultations that have been held with representatives of the persons affected during the period under review, the procedures for such consultations, the views recorded and the manner in which account has been taken of them.

Observation (CEACR) - adopted 1991, published 78th ILC session (1991)

1. The Committee takes note of the information supplied by the Government in reply to its previous comments, and expresses appreciation of the detail and quality of the full report on the application of the Convention. The Committee also notes the observations of the New Zealand Employers' Federation and the New Zealand Council of Trade Unions (CTU) on the Government's report.

2. Article 1 of the Convention. The Government indicates that its overall strategy on employment policy for 1988-90 is essentially unchanged from that described in the previous report: balanced and sustained economic growth is the best means of generating productive employment. At the macro-economic level, the Government is pursuing firm fiscal and monetary policies with the goal of reducing inflation and the public debt. This strategy has been complemented by a series of structural reforms designed to facilitate the more efficient allocation of resources at a micro-economic level. The Government states that it has implemented an active employment market policy which forms parts of its economic and social programme. The Government recognises that, in the short term, this strategy will involve the unwelcome consequences of a drop in employment, particularly in sectors where regulatory or protective measures have been dismantled, and relatively high unemployment levels. The Government is not expecting any rapid improvement in the labour market situation, as labour markets are slow to adjust to change. However, the Committee notes that the Government refers in its report to the announcement by the Prime Minister of the Government's commitment to returning New Zealand to full employment by 1995.

3. In its observations, the New Zealand Council of Trade Unions comments that the Government did not go beyond general promise of full employment. The control of inflation has received higher priority than job creation. Monetary and exchange rate policies have had the effect of depressing activity and growth, leading to a high level of job losses. Deregulation has affected particularly certain sectors and regions. With regard to labour market policy and initiatives to assist young people in finding employment, the CTU states that these measures and programmes failed to address the causes of unemployment and so do not offer effective employment policies. The New Zealand Employers' Federation recognises the Government's efforts to improve employment levels but expresses the regret that labour market deregulation did not follow deregulation in other markets. In the view of the Federation, this essential contradiction in policies has had the effect of exerting strong economic pressure on employers and has resulted in an acceleration of unemployment.

4. With regard to the application of Article 2, the CTU states that the information supplied by the Government does not meet the requirements of this provision of the Convention under which Members must decide on and keep under review, within the framework of a co-ordinated economic and social policy, the measures to be adopted for attaining the objectives specified in Article 1. Furthermore, the CTU states that the consultations provided for in Article 3 have not been held, at least as regards consultations with workers' representatives.

5. With reference to its previous observation, the Committee notes, on the basis of the information supplied by the Government, the deteriorating trend in employment. During the period June 1988 to June 1990, the overall employment level dropped by 2 per cent in 1988-90, and the number of unemployed grew by 41.1 per cent. The overall unemployment rate increased from 5.3 per cent to 7.5 per cent of the active population over the same period, and the Government states that it is concerned at the high number of long-term unemployed (approximately one third of the unemployed remained without a job for 27 weeks or more) who are likely to have particular difficulty in finding remunerative employment.

6. The Committee trusts that the Government will continue to provide information on the measures that have been taken or are contemplated to guarantee, in accordance with Article 2, that the effects on employment of the implementation of economic policies receive due consideration and that the measures to be adopted for attaining the objectives of full employment specified in Article 1 are decided on and kept under periodical review. It would also be grateful if the Government would indicate the manner in which the representatives of workers' organisations, in particular, are consulted, as required by Article 3.

Observation (CEACR) - adopted 1989, published 76th ILC session (1989)

The Committee notes the detailed information provided by the Government in reply to its previous comments. It particularly welcomes the summary of the principal labour market programmes and the statistical data provided. Concerning the overall economic and development policies pursued, the Committee notes, from the information supplied under Article 1 of the Convention, that there are no development plans that incorporate objectives or targets for the growth of employment in the economy as a whole. The Government's employment policies are based on the premise that sustainable new jobs are most likely to be created in the context of a growing and flexible economy. Macro-economic policies are designed to bring about lower inflation, interest and exchange rates. Micro-economic and structural reforms aim at removing unnecessary direct controls and restrictive practices that act as barriers to jobs, new investment, higher productivity.

The Committee notes that, over the period March 1986-March 1988, the number of employed people fell by 1.1 per cent, while the number of unemployed increased by 19.4 per cent. The overall unemployment rate increased from 4.2 per cent to 5.0 per cent of the labour force. Unemployment rates were particularly high (nearly 13.0 per cent in 1988) amongst the young Maori and Pacific Island Polynesian populations, and tended to be higher for non-metropolitan areas than for metropolitan areas. These trends in employment and unemployment do not appear to reflect the general tendencies of the OECD countries as reported in the last issue of the OECD Economic Outlook (December 1988).

The Government indicates in its report, that a number of reforms (e.g. deregulation, reduced fiscal deficits) led to job losses in the short term. Although the situation is expected to reverse itself in the medium to long term, the Government has given no more precise indication of the time-scale in which it expects its strategy to produce net positive effects on employment.

The Committee hopes the Government will continue to provide information on these and the other matters referred to in the report, including the development of employment in the urban as contrasting to the rural areas; the employment effects of the reduction of subsidies to employers for training; and the extent to which any specific employment goals are set by region or sector or population group and subsequently attained.