Published in the National Business Review 20 March 2008

Two of the country's major unions are joining forces to establish a centre to help companies and unions boost productivity in small and medium sized firms.

The Engineering, Printing and Manufacturing Union (EPMU) and the Diary Workers Union are setting up the Centre for High Performance Work after what EPMU Secretary Andrew Little says is a successful history of co-operation in the dairy industry, particularly in Fonterra's Milk Products company.

Mr Little told a Wellington business audience that big companies in New Zealand were prepared to invest in productivity negotiations and were willing to share the gains with employees.

"Small and medium sized companies are much less willing and they find it much harder to share," he said.

The new centre aims to make the intellectual property "around the productivity question" accessible to small and medium sized businesses.

The Department of Labour is helping with funding of a study of 12 workplaces (eight selected by the EPMU and four by the Dairy Workers) to test how various different processes work.

The project aims to gives employers, unions and staff willing to make a practical commitment of lifting productivity a head start based on real life experience.

Mr Little said that to address the productivity question, "which is at the heart of improving wages and incomes", the right environment was needed.

"Unions and their members need to know that their right to negotiate collectively is preserved and that their other rights are not going to be undermined. The legal framework should be about establishing the right climate for discussions and not about rights being traded off. It's about negotiating the sharing of the gain.

He agreed that productivity improvements alone would not be enough to lift New Zealand back in the top half of the OECD. Improving the productivity of capital was also necessary.