International Centre for Trade Union Rights

Modest —but progressive reformsAuthor(s): GORDON ANDERSONSource: International Union Rights, Vol. 7, No. 2, Focus on labour codes (2000), pp. 6-7Published by: International Centre for Trade Union RightsStable URL: http://www.jstor.org/stable/41933679 .

Accessed: 13/06/2014 06:16

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.

.

International Centre for Trade Union Rights is collaborating with JSTOR to digitize, preserve and extendaccess to International Union Rights.

http://www.jstor.org

This content downloaded from 195.78.108.40 on Fri, 13 Jun 2014 06:16:24 AMAll use subject to JSTOR Terms and Conditions

LABOUR CODES □ NEW ZEALAND

Modest -

but

progressive reforms

GORDON ANDERSON is an associate professor at Victoria University of Wellington New

Zealand, specialising in employment law

IN tre-left 1990.

November

The government

Labour

1999

led

New for government

Zealand the first

elected

was time

elected

a since cen-

tre-left government for the first time since 1990. The Labour led government was elected

on a platform that included a clear and detailed commitment to labour law reform on the basis of core ILO principles. It might be recalled that New Zealand gained some international notoriety when the Employment Contracts Act 1991, passed by the Conservative government shortly after its election in late 1990, was the subject of an adverse report by the Freedom of Association Committee of the ILO in 1994. The report found the Act to be in breach of the principles of free- dom of association and as such in breach of New Zealand's ILO obligations. This report was largely ignored by the then government as well as by the judiciary in their interpretation of the Act. Although the report had noted that some judicial decisions were taking ILO principles into account this optimism turned out to be short lived when the Court of Appeal largely reversed this approach and adopted a more hostile approach to both union representation and col- lective bargaining.

The most important impact of the Employment Contracts Act, and the one that is likely to be most difficult to reverse, was a major deregulation and de-unionisation of the labour market. Since 1991 union density declined from 35 per cent of the workforce to below 18 per cent by 1998. Over the same period the number of employees whose terms and conditions were negotiated through collective bargaining also dropped and is now probably less than 20 per cent. The drop of 40 per cent in union density masks considerable industry variations. For example in the retail, wholesale and accommodation sector the drop was 81 per cent and in construction 75 per cent. On the other hand in the public/community sec- tor the drop was "only" 24 per cent. The "suc- cess" of the Employment Contracts Act can be attributed to two major factors working in combi- nation. These were the government's Lindermining the financial base of unions by the repeal of com- pulsory unionism while simultaneously removing legal support and protection for collective bargain- ing. Determined employers were able to Lise the new legal powers to block collective bargaining and to undermine union membership. Many unions were Linable to respond to the combina- tion of these two pressLires and the consequence was the financial collapse of several major unions as well as a collapse in collective bargaining in many indtistries. While there has been some slow recovery over the last few years as the restili of Linion reorganisation and improved economic cir- cumstances the environment for Linion organising and collective bargaining remained hostile and dif- ficult Lintil the election of the new government.

The Employment Relations Bill The new government recently introduced an Employment Relations Bill and it is intended that it will come into effect on 1 AugList of this year. The Bill is CLirrently being considered by a Parliamentary Select Committee and changes can be expected to the final version although the Minister has made it clear that the broad policy structure of the Bill will not be SLibstantially mod- ified. When enacted the Bill will restore and support the role of trade unions and collective bargaining and will mark a return to a more bal- anced style of industrial relations. The long title states that one objective of the Act will be to "promote observance of the principles Linderly- ing ILO Convention 87 on Freedom of Associ- ation, and Convention 98 on the Right to Org- anise and Bargain Collectively" .

Trade unions: The Act provides a system for the recognition and registration of Linions thtis reversing the policy in the Employment Con- tracts Act which repealed all legislative recogni- tion of unions. Under that Act Linions existing at the time of the Act were re-registered as incorpo- rated societies. While Linions continued to exist in practice they enjoyed no recognised legal sta- tus in laboLir law bLit coLild be one of a variety of "employee representatives", a term embracing anyone from lawyers to an employee's mother who gave advice on employment matters. While unions will continue to be registered under the Incorporated Societies Act their status as a "Linion" (as opposed to their legal personality as an organisation) will result from their being regis- tered under the Employment Relations Act. In addition to requiring that a Linion have an object of "promoting its members employment inter- ests" a union need only have mies that are not unreasonable, democratic and not unfairly dis- criminatory or unfairly prejudicial. In addition a Linion must be "independent of, and is constitut- ed and operates at arm's length, from any employer". Union membership remains voluntary (New Zealand had a form of compLilsory mem- bership until 1991) but membership is required to be open to any person within the union's membership mie.

The main advantages of registration as a union will be: ■ Only registered unions will be able to engage in collective bargaining and enter into collective agreements with employers. ■ Unions will enjoy a broad right to enter work- places both to interview members and for the pLirposes of informing workers about the benefits of union membership. ■ Unions will be entitled to hold two paid work- place stopwork meetings per year ■ The Act is introducing a system of paid educa-

INTERNATIONAL union rights Page 6 Volume 7 Issue 2 2000

This content downloaded from 195.78.108.40 on Fri, 13 Jun 2014 06:16:24 AMAll use subject to JSTOR Terms and Conditions

tional leave for union members. The amount of leave will be based on the number of union mem- bers employed by an employer.

Collective bargaining The proposed long title to the Act states that one of its principal objects is "promoting collective bargaining". Apart from reinforcing the role of unions the Act will achieve this first by imposing a broad "good faith" obligation in relation to bar- gaining, second by permitting multi-employer and multi-union bargaining and third by widening the ability to lawfully strike.

Good faith: The obligation of the parties to an employment relationship to deal with each other is a general theme running. For the most part this obligation is written in fairly general terms but in the case of collective bargaining there is a more detailed statutory scheme. As might be expected there are obligations such as to meet with the other party and to consider and respond to their proposals. It is also made clear that good faith does not require the parties to agree to enter into a collective agreement. There is also an obliga- tion intended to prevent employers undermining the relationship between a union and its mem- bers, conduct that was prevalent under the Employment Contracts Act. This prevents the parties to negotiations directly or indirectly bar- gaining, negotiating or communicating about terms and conditions of employment with per- sons represented by the other bargaining party. The most contentious aspect of the good faith obligation, however, is the duty to provide "infor- mation (including financial information and busi- ness planning and forecasting) that might reason- ably be expected to be relevant" to the bargain- ing. This obligation has drawn considerable criti- cism from employer groups.

Multi-employer and multi-union bargaining: In theory multi-employer bargaining was possible under the old Act but as strikes were unlawful in support of such bargaining single employer agree- ments rapidly became the norm. The new Act permits strikes in support of a multi-employer agreement subject to some limitations. The most important of these is that the union members in each workplace must support negotiating a multi- employer contract in a secret ballot. The Act also allows unions and employers to initiate multi- union bargaining. While such bargaining cannot be imposed a refusal to participate is likely to dis- advantage those unions that refuse to participate.

Strikes: The Employment Contracts Act consid- erably narrowed the right to strike by limiting lawful strikes to the employees who would be covered by the proposed agreement. This made all secondary and sympathy strikes unlawful. The new Act does not move significantly from this

position and secondary and sympathy strikes will remain unlawful. The one significant reform is that employers will be prohibited from employ- ing replacement labour during a lawful strike or lockout other than in very limited circumstances. The refusal of the government to broaden the right to strike to at least some secondary actions is disappointing. Nevertheless the proposed change will mean that employers will be required to confront some greater costs than is currently the case. In particular the inability to replace locked out employees is likely to seriously restrict the use of offensive lockouts which had become a feature of the last decade.

Comment: The proposed Act is in many ways a relatively modest reform. In particular the Government's refusal to significantly broaden the right to strike can be seen as disappointing. In particular it means that many employees, espe- cially in small workplaces, may be unable to bar- gain collectively as they lack the critical mass to strike effectively and at the same time cannot rely on outside support. That being said the Act will represent a major advance on the old legislation. While it is essentially "self-help" it does provide unions with a positive legal environment in which to organise and bargain. The trials of the last decade have resulted in a union movement that has relearned its organising skills and is well positioned to take advantage of the new Act.

Page 7 Volume 7 Issue 2 2000 INTERNATIONAL union rights

This content downloaded from 195.78.108.40 on Fri, 13 Jun 2014 06:16:24 AMAll use subject to JSTOR Terms and Conditions