Academic journal article New Zealand Journal of Employment Relations (Online)

New Zealand's Employment Law Agenda 2014: Collective Bargaining and Unions in an Election Year

Academic journal article New Zealand Journal of Employment Relations (Online)

New Zealand's Employment Law Agenda 2014: Collective Bargaining and Unions in an Election Year

Article excerpt


As enshrined in the Employment Contracts Act (ECA) 1991, the National Party's industrial relations policy following the 1990 general election in New Zealand resulted in the total abandonment of compulsory unionism and removal of the monopoly in wage bargaining that trade unions had enjoyed in most sectors for nearly a century (Geare, 2001). This, in turn, precipitated a sharp decline in union membership and density as well as in the share of the country's workforce represented in collective bargaining. It is ironic, therefore, that collective bargaining did not become an effective mode of detennining wages, hours and working conditions in New Zealand until enactment of the ECA. Rather, for most of the last century, the predominant system for determining wages and conditions of work in this country was one of conciliated and, if required, arbitrated bargaining for awards, and that system remained essentially intact until 1991 (Dannin, 1997).

Since that time, New Zealand employment relations system has progressed from one which provided virtually no protections for trade unions and in particular collective bargaining, to a system that now relies on the duty of good faith to protect and promote collective bargaining (Davenport & Brown, 2002). Under its core conventions, collective bargaining is recognised by the International Labour Organisation (ILO) as an effective tool to protect those in weak bargaining positions. It is also acknowledged internationally as a means of overcoming any power imbalance between employers and employees which may result in unjust employment terms and conditions. An essential component for effective collective bargaining, therefore, is that the representative bodies on both sides have relatively equal bargaining power. This typically necessitates appropriate legislative support to enhance the bargaining power of the weaker party (Goldberg, Sander & Rogers, 1992).

With this purpose in mind, both key pieces of employment legislation enacted in New Zealand in the past quarter century were, in large measure, intended to enhance the relative bargaining power of either the employer party, in the case of the ECA, or the employee party, with enactment in October 2000 of the ERA. Often, the means by which these opposing policy goals is effected is either by making it easier or more difficult for trade unions to organise workers, depending on where those setting the policy believe the balance of powder in collective bargaining falls. In this context, legislation enacted to amend those statutes in that period has, likewise, frequently been aimed at giving greater influence to one party or the other (Blumenfeld, 2010).

Freedom of Association and the Right to Collective Bargaining Under the ERA

Freedom of association and the right to organise, as enshrined in the ILO's core conventions on those matters, fonn the conditio sine qua non for effective collective bargaining to take place. The viability of collective bargaining as an institution rests on the existence of a process of representing groups of workers who share a common interest in its outcomes (Blanpain & Colucci, 2004). To that end, in nearly all industrialised and developing countries, trade unions fulfil this role by negotiating their members' terms and conditions of employment. Nonetheless, if collective bargaining is to have a meaningful impact on those tenns and conditions, its 'reach' or influence must extend to a significant proportion of the workforce. For this to happen, both parties to collective bargaining - unions and employers - must be free to exercise the right to fonn and join representative organisations of their own choosing (Traxler, 1998).

Yet, notwithstanding that the law sunounding 'good faith' in collective bargaining was placed as the centrepiece of the country's employment relations system, the employment law reforms undertaken following election of a Labour-Alliance coalition overnment in November 1999 did little to change either the form or extent of collective bargaining in New Zealand (Anderson, 2010). …

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