Business NZ President address to ILO

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Address by Business NZ President Terry Arnold to the ILO, Geneva: 'Decent Work'

Mr President

The Director General’s decision to focus this year’s report on ILO progress to date and the way forward is timely, particularly as the issues considered have not changed to any great extent since the ‘Decent Work’ concept was first introduced. What is unresolved is precisely, how, given different country circumstances, decent work is to be achieved. Certainly from an employer’s point of view, high productivity levels are notably important.

How to realise the decent work objective is a question that my organisation has frequently addressed. So it is good that the ILO intends to discuss with constituents how it can best support them to achieve the decent work programmes currently being prepared. It is reassuring to find that, progressively, country-based programmes will be the main delivery vehicle for the ILO’s 2006/7 Programme and Budget. On this point, it is pleasing to note the success of the April sub-regional forum held in Melbourne Australia.

It is also good, in relation to youth employment, to see the emphasis placed on the promotion of entrepreneurship and enterprise creation. The Director General’s report considers these are the key to increasing employment generally and youth employment in particular. However, there must be some concern that official views of what constitutes ‘decent’ work can, at least in developed countries, have the effect of inhibiting entrepreneurship.

This is not to suggest that employment protections should be ignored. We also support the priority given to a promotional framework on Health and Safety.

But that said, developed countries have a tendency to go beyond what is reasonable. Rather than creating fair minima and leaving additional terms and conditions to the parties themselves, imposed legislative constraints often make growing small firms or taking on new employees very difficult.

This unfortunate effect has probably encouraged the growth of different forms of work organisation observable over recent years. Some, of course, reflects what individuals themselves want – the increase in part-time employment for women is a good example. By contrast, other forms are a response to excessive employment obligations that, given the nature of the jobs on offer, employers and prospective employers either cannot afford or cannot sustain.

Entrepreneurship is all too easily stifled by over-regulation. The increasing emphasis on so-called flexible employment is a case in point. Most employers who can, willingly accommodate employees with family commitments. They accept that to do so encourages loyalty and effective job performance. On the other hand, the likely effect of legislated flexibility will be reduced employment opportunities – undoubtedly an unintended consequence.

Legislation cannot create productive employment but it can provide a productive infrastructure. Acknowledging and supporting the need for entrepreneurial activity is useful; it would be equally useful to accept that excessive regulation can stifle that same activity. Governments should set decent work minima. Standards should not be set so high that only the largest organisations can achieve them.

By the same token, ILO instruments should adopt a principled, not a prescriptive approach to employment protection. A prescriptive approach will not reduce poverty or provide greater employment opportunities. Too often, for many countries prescription makes Convention ratification impossible. Then principle may be lost as well.

In conclusion, the Director General’s aims of decent work and social justice cannot be faulted. But to flourish they need stable and prospering economies. Over-prescription and restrictive practices defeat those good intentions. For New Zealand, it must be asked whether recently enacted prescriptive changes will have just that effect.