New Zealand Journal of Industrial Relations Online


Volume 28 Number 2	June 2003

Conference Collection:
Growth and Innovation Through Good Faith Collective Bargaining: An Introduction

Introduction
Barry Foster and Ian McAndrew

This issue of the New Zealand Journal of Industrial Relations is largely devoted to a conference entitled Growth and Innovation through Good Faith Collective Bargaining held at Massey University, Palmerston North in May 2003. The intention of the conference was to explore the processes that employers and unions are employing to reach agreements in the new environment for collective bargaining under the Employment Relations Act 2000 ("the ERA").
Background: Collective bargaining in New Zealand

New Zealand has a colourful industrial relations history, having ventured through a full range of industrial relations systems over just the past 30 years. Each of them has given a different shape and character to collective bargaining in this country.

For 90 years from 1894, the predominant system was one of compulsorily conciliated bargaining for blanket-coverage awards, backed by the availability of arbitration if needed. Some awards were limited to local industry labour markets, but many of them were regional or national in scope. Conciliated bargaining for award renewals was the order of the day, but given the broad coverage of so many documents, opportunities for involvement in bargaining were limited. Awards were negotiated by necessarily limited numbers of representatives of employers and employees and their respective organisations. To most employers and employees, the bargaining process was pretty remote. Fixed wage relativities and the tendency towards common wage movement across industry meant that much award bargaining was confined to just a few days, with the outcome often fairly predictable.

There were exceptions, when a more demanding style of bargaining took centre stage in award negotiations. There were a limited number of industries in which second-tier negotiations for above-award rates produced some vigorous and localised negotiations at times. And there were some industries and workplaces in which labour relations were notoriously difficult and the bargaining hard-nosed and uncompromising year after year. Nonetheless, the predominant pattern of bargaining for many years was the pretty predictable process of "the annual award round" in which the relative few negotiated documents on behalf of the relative many in a conciliated setting, with contingent arbitration in the background.

Amidst the reforms of the 1980s, substantially more - and more decentralised - bargaining was intended by the Labour government's 1984 and 1987 legislative initiatives but, in the bigger scheme of things, the impact in terms of changing the nature and processes of collective bargaining was minimal. The State Sector Act of 1988 did more to stimulate "enterprise" based collective bargaining and to change the nature of collective bargaining in this country, but its immediate impact was limited to the public sector.

So, from the 1890s to the 1980s there was plenty of collective bargaining occurring. Much of it was fairly patterned and predictable award negotiations, but there were pockets and periods of more robust negotiations with less predictable outcomes. Across this period, there were many experienced and skilled negotiators, representing employers and unions, who crossed the industrial relations stage. The system also required a cadre of talented conciliators and mediators, accomplished at guiding the parties towards agreements, and putting out brush fires in the process.

The Employment Contracts Act of 1991 ("the ECA") promoted individualism in employment relationships at the expense of collectivism, causing union membership and the coverage of collectively negotiated documents to decline dramatically during the decade of the 1990s. And what unionised collective bargaining remained was quickly decentralised in many cases. Particularly where unions had been strong going into the decade, pockets of decentralised, membership-involved, power-dependent collective bargaining was sustained, and sometimes flourished during the ECA era.

But principally, the decade of the 1990s dramatically shrunk and reshaped unionised collective bargaining in New Zealand. In the process, a whole generation of skilled negotiators was lost, as unions in particular shed experienced staff in the wake of falling membership and bargaining activity. And as the decade progressed, many of the mediators experienced in collective bargaining also left the scene or turned their attention to other aspects of the employment relations field. And, not incidentally, some industrial relations scholars moved offshore, while others abandoned labour relations for a more generalist and individualist human resources management focus.

The ERA reversed the legislative philosophy that had dominated the 1990s, giving encouragement to union membership and promoting collective bargaining as a positive basis for employment relationships. An obligation to bargain in good faith was incorporated to give further substance to bargaining in the new environment. The Employment Relations Authority was given the role of regulating bargaining behaviour in the first instance. And the new Mediation Service was encouraged to be involved, both reactively and proactively, in assisting the parties in collective bargaining. An employment relations education fund was established to assist parties in developing relevant skills and knowledge, including collective bargaining skills.

Three years on, while there has been some anecdotal evidence and speculation, there has been little documented research and writing on collective bargaining under the ERA. There are interesting and potentially complex legal issues - principally good faith bargaining - on which there has been some writing for and by both scholars and practitioners, but perhaps surprisingly little litigation activity.

Both the Department of Labour and the Industrial Relations Centre at Victoria University have continued their work, begun under the ECA, documenting the structure and content of collective bargaining agreements. It seems likely that some other scholars have been examining aspects of collective bargaining, and that union and employer bodies have been conducting their own studies and educating their own members in the art of bargaining. However, little of this has reached the public domain. And there has been no real research attention to collective bargaining processes and behaviours in New Zealand since the Otago University studies under the ECA in the mid-1990s.

The conference

The Massey conference was intended as small beginning at examining collective bargaining under the ERA. Presenters were invited to submit versions of their presentations for publication in this collection, and we are pleased and grateful that so many were able to do so.

The conference was multi-themed, examining collective bargaining from a range of perspectives. The Minister of Labour, the Honourable Margaret Wilson, opened the conference and her opening address is reproduced here as a part of the collection. Andrew Annakin, the General Manager of the Department of Labour's Employment Relations Service, the key organisation charged with implementing the ERA, reported on the Service's role and from the Department's database of employment agreements. Robyn May reported from the equally extensive Victoria University database on collective bargaining.

From an international perspective, Geoff Davenport provided an insight into good faith bargaining, drawing on the long North American experience, and Erling Rasmussen provided a European perspective from his extensive experience and research on Danish employment relations.

To bring a practitioner perspective to the conference, there were a number of case studies reported. Unfortunately, published versions were not available for this collection. They included a multi-perspective presentation on the health sector, the Fonterra Milk Products Agreement with the NZ Dairy Workers Union, the Multi-Employer Collective Agreement (MECA) for the Plastics Industry negotiated by the New Zealand Engineering, Printing and Manufacturing Union, the Partnership Agreement between the Ministry of Economic Development and the Public Service Association. Following on from the case studies was a workshop on collective bargaining experiences in the new environment, and a report from that workshop is included in the collection.

Finally, we have included in this issue with the collection a paper on the banking industry by Treanor and Rasmussen. While it was not a part of the negotiation conference, we think that it complements the collection and reinforces some of the points brought to conference by the participants.

Growth and Innovation Through Good Faith Collective Negotiation
Hon. Margaret Wilson
Minister of Labour

The Labour-led Government is committed to long-term growth and innovation. Our vision for the achievement of the growth and innovation agenda is built on a foundation of a fair and equitable society and economy.

A high value and sustainable economy must be underpinned and supported by decent labour standards and healthy employment relationships. Without fair and productive employment relationships, economic activity cannot flourish. A country cannot have a productive workforce unless people are treated properly and are safe at work.

This is where this Government's employment relations interventions are so important - they help create the conditions that will increase New Zealand's long-term economic growth by achieving greater balance in employment relations. The idea is that growth and innovation in the economy should be built upon a foundation of workers' rights and terms and conditions of employment that are socially and economically fair.

Growth and Innovation Through Collective Good Faith Negotiation in New Zealand: What is Happening Now?
Andrew Annakin
General Manager, Employment Relations Service, Department of Labour

The Employment Relations Service has a number of information, advisory and operational functions which support the employment relations framework. These are all directed at the Service's role of promoting and supporting fair and productive employment relationships. We also contribute to this objective through our monitoring and research activities. The Employment Relations Service, and the wider Department, monitor collective bargaining under the Employment Relations Act in a number of ways, one of which is through the analysis of terms and conditions in collective employment agreements.

The Employment Relations Service has maintained a database of collective employment agreements since the Employment Contracts Act came into force in 1991. Our database contains over 11,000 collective employment agreements, of which 2200 are current. These agreements cover almost 300,000 employees, approximately 15% of the employed labour force.

The Employment Relations Act 2000 introduced a number of changes to collective bargaining in relation to the form and content of collective agreements. We have monitored the effect these legislative changes have had on the kinds of clauses seen in collective agreements within our database and examined in detail those clauses that directly reflect the changes brought about by the Act.

This paper not only examines the types of clauses that are required by the Act to be in collective agreements, such as coverage clauses, but it also highlights some emerging trends in clauses that aren't specifically required by the Act but which have nevertheless begun to appear in collective agreements. This paper illustrates some of the ways in which the objectives of the Act have been incorporated into collective agreements, and the kinds of clauses parties have introduced in an attempt to promote good faith and build productive employment relationships in their work places.

The Current State of Play: Collective Bargaining and Union Membership under the Employment Relations Act 2000
Raymond Harbridge, Robyn May and Glen Thickett
La Trobe University, Victoria University of Wellington, Victoria University of Wellington

The Employment Relations Act is making a difference. But, not the one that unions had necessarily sought. Nor one that employers had necessarily anticipated. We can summarise the trends apparent in the first two years of the Employment Relations Act as fourfold. First, the Act has reversed the trend of union decline. There has been a slow and steady growth in union membership that over the three years to December 2002 has outpaced growth in total labour force. Second, the Act has seen a decline in collective bargaining coverage. Despite the Act's stated intention to promote collective bargaining (at s3(a) iii) our provisional figures for 2002/03 show bargaining levels declining to the lowest seen over the last twenty-five years. Third, a clear trend is emerging that collective bargaining in New Zealand is becoming a public sector phenomenon. Public sector employees under the Employment Relations Act are over four times more likely to be covered by a union negotiated collective agreement than are their private sector colleagues. The drop in collective bargaining coverage since the new Act took force in 2000 has largely been in the private sector. Fourth, there has been no significant restoration of working conditions lost under the Employment Contracts Act.

Approach to Good Faith Negotiations in Canada: What Could be the Lessons for us?
Geoff Davenport
Partner, Broadmore Barnett, Wellington.

Six years ago, when the Employment Contracts Act was full flow, I tossed aside my tie, briefcase and 6 minute billable units, and headed back to university. Those of my lawyer colleagues who could be described as capitalists (of which I'm told there are one or two) thought I was completely mad, but I had an itch I wanted to scratch.

At the time debate had arisen about whether a duty of good faith might be introduced to the ECA, but this had fairly much stalled. One of the reasons for this was an impression that such a duty could stifle employment relationships and lead to unwanted outside interference - that courts and judges would start telling employers, unions and employees how to deal with one another. In other words, it was feared that a duty of good faith could be the very anti-thesis of growth and innovation.

This view was surprising to me because I had understood that a duty to bargain in good faith had been in place in countries such as Canada for decades, and had not been discarded. So I decided to move to Vancouver and spent 14 months studying good faith bargaining.

Productive Employment Relationships: European Experiences
Erling Rasmussen and Jens Lind
University of Auckland, University of Aalborg

Productive employment relationships and the concept of Good Faith have been promoted through recent legislative changes in New Zealand. Likewise, there is now a greater emphasis on employee participation through information sharing and consultation. This presents uncharted territory for New Zealand but not for some smaller European countries. Thus, this paper discusses European, and in particular Danish, attempts to promote employee participation as part of productive employment relationships. This discussion highlights the historical embeddedness of European employment relations approaches, it shows how several 'levers' have been applied to promote an alignment of employer and employee interests, and it illustrates how employer and employee perceptions have adjusted to the reality of continuous collaboration. While recent European research has detailed how behaviours and employment relationships fluctuate across workplaces, collaborative (good faith) behaviours are now often seen by many employers, unions and employees as a necessary and integrated part of on-going productive employment relationships.

Collective Bargaining Under the ERA 2000: Report of a Workshop on Negotiation, Representation and Conflict Management
Ian McAndrew and Steve Penn
University of Otago, Mediator with the Department of Labour's Mediation Service in Hamilton

Integral to the Conference on Growth and Innovation through Good Faith Collective Negotiation was a workshop on "negotiation, representation and conflict management" in which conference delegates were invited to discuss their collective bargaining experiences under the Employment Relations Act 2000 ("the ERA"). Having heard the keynote speakers and the stylized case studies, we were interested in learning from "everyday" practitioners how they conducted their negotiations. What worked and what didn't? What were the secrets of success, and what were the pitfalls?

If the theme of the conference - and a theme of the ERA - was growth and innovation through good faith collective negotiation, we were interested in what collective negotiation under the Act looked like. And we were interested in what practical impacts the key element of bargaining under the new Act - the good faith regime - was having on negotiations processes, parties and outcomes.

A New ERA in Banking? A Case Study Analysis of Employment Relations After Legislative Change
Damian Treanor and Erling Rasmussen
University of Auckland

The Employment Relations Act 2000 (ERA) promised a new era in employment relations in New Zealand, as the Act sought to redress bargaining inequality through a new legal framework but with minimal direct state involvement in the employment relationship. However, even two years after its introduction, little detailed research has been published about the ongoing effects of the Act's key concepts and provisions on employment relations practices. This study provides insight into the legislation's effects on employment relationships through a case study analysis within the banking industry. The research found that many of the key provisions of the ERA appeared to have had only minor direct effects on the particular policies and practices of the various parties. Nevertheless, there appears to have been a significant shift in the relationships between the various parties, towards building and maintaining a co-operative association. It is suggested that the surveyed banks are entering a new era of employment relations, although the role of the ERA in this shift is uncertain.

CHRONICLE:

February 2003 - May 2003
Erling Rasmussen and Ian McIntosh

A round-up of recent New Zealand industrial relations events.