Trade unions in New Zealand: past, present and future

This article is written by Gordon Anderson, Professor Emeritus at Te Herenga Waka — Victoria University of Wellington, and is part of Employment Law Bulletin No.6 issue, November 2024.

The history of trade unions generally, and within the common law world in particular, has been usefully summarised by John Orth:²

Trade unions were not created by law; they originated in the felt needs of workmen in industrial society. Unlike business associations, trade unions existed long before the law took any notice of them (or even knew what to call them). Indeed, the first statutes concerning labour organisations, the combination acts, were criminal laws, aimed at their suppression. The legal problems of capital and labour were in consequence quite distinct, almost opposite in fact. Labour wore down the opposition to trade unions eventually winning a place for them, while capital sought, not recognition of a right to organise (this was conceded without question), but more efficient means thereto.

The first workers arriving in New Zealand in the 1840s and 1850s were certainly well aware of the antipathy of the common law and the British Parliament to attempts by workers to combine to further their own interests. Early worker immigrants would have known of the fate of the Tolpuddle Martyrs who, having been convicted for taking an oath to combine to attempt to raise wages for agricultural workers, had been transported to Australia before being pardoned.³ While trade unions had been given some recognition in the United Kingdom by the Combinations of Workmen Act 1825,⁴ legal ingenuity, which is often applied in the law relating to unions, saw a prosecution brought under the Unlawful Oaths Act 1797. Workers would also have been familiar with the Master and Servant Act 1867. While these Acts played little role in New Zealand labour history,⁵ they were in enthusiastic use in the Australian colonies well into the 19th century.

As Bert Roth makes clear,⁶ working conditions were a live issue with New Zealand immigrants from the beginning of colonisation. Parnell’s eight-hour-a-day speech took place in 1840, and trade unions and strikes came and went from the early days of colonisation. Maori were not slow to adopt similar tactics with Roth recording industrial action by Maori workers in 1848. Nevertheless, while unions and industrial action were not uncommon in the first decades after 1840, labour law had no significant profile in New Zealand before the 1890s.⁷ In principle, labour was regulated by the laws of England as they existed at the date of colonisation,⁸ but no prosecutions associated with industrial disputes appear to have been brought. When any significant industrial unrest did occur, as the 1890 maritime strike clearly demonstrated, employers were well placed to defeat the unions of the day without recourse to the law or government.⁹

Unions during the arbitration era

While unions were central to the working of the arbitral system, the type of union that was envisaged by those promoting the Act was somewhat different to that which might have been desired by traditional unionists. This is made clear by Reeves, the architect of the Industrial Conciliation and Arbitration Act 1894 (IC&A Act) system:¹⁰

A union which may not strike, and may not shut out any decent workman in its trade who wishes to join it, is a union left with little power for mischief, however much it may do legally and peaceably for its members ...

Registered unions were created for the purposes of the Act and were dependent on the Act. Their existence, their legal status, their powers and activities were all constrained by the Act and if the state so decided, a union could be deregistered and its assets confiscated. The IC&A Act imposed significant legal constraints on trade union activities and, unsurprisingly, the courts reinforced this status by a restrictive application of the ultra vires rule to restrict a union’s role to narrowly defined “industrial matters” within their own industries. Even setting up a welfare fund for the benefit of its own members was unlawful.¹¹

Nevertheless, for most unions the advantages of registration outweighed the disadvantages: only registered unions could use the arbitration system; blanket coverage of awards ensured that the terms obtained in an award applied throughout an industry or occupation; registration protected a union from encroachment by a rival union;¹² and, after 1936, membership became compulsory.

Compulsory unionism proved to be a mixed blessing. On the positive side, it gave unions and their officials financial security; it resulted in an increase in union membership, especially of women, and awards where none had previously existed, such as in clerical work.¹³ More neutrally, it encouraged moderate unionism, but in many cases, it also led to seriously negative consequences.

In principle, industrial action was not permitted under the arbitration system. As time went on, a more pragmatic approach developed with limited strikes largely tolerated. What was not tolerated was any serious general increase in union militancy or direct threat to the arbitral system itself. On the two occasions this occurred, in 1912–1913 and 1951, the powers deployed by the state to defeat the militants were not derived from industrial legislation but were a combination of general emergency and police powers together with the coercive forces of the state. Moreover, in taking such actions the state had one initial advantage, the acquiescence or neutrality of a significant number of unions dependent on the arbitral for their existence.¹⁴ In 1912–1913, the state relied on its coercive forces and the criminal law where necessary, but did not need special legislative measures. Hill has described the very active role played by the police, police specials and the military in defeating the Red Feds at this time.¹⁵

In 1951, resort was had to draconian emergency regulations under the Public Safety Conservation Act 1932. These regulations allowed the armed forces to be used to replace the locked-out workers, but more generally, made it an offence to publish or distribute any material supportive of the strikers or to make payments or contribution for the benefit of locked-out workers or their families. Police were empowered to prohibit processions or meetings on largely subjective grounds and had virtually unlimited, and widely used, powers to enter any premises without a warrant for a variety of purposes on suspicion that there might be evidence of a breach of the regulations.¹⁶

After 1951, and particularly after the nil-wage order in 1968, New Zealand industrial relations became increasingly volatile¹⁷ and saw unions become increasingly militant, but the legal character and internal structure of unions changed little.¹⁸ Perhaps the most significant change was the need to adapt to the personal grievance procedure introduced in 1973.

Conclusions about unions during the arbitration era were not always complimentary. Woods¹⁹ refers to some unions becoming little more than “fee collectors”, and later in a much more critical assessment refers to “a disintegrated, weak, poverty-stricken and untrained trade union- ism ... hundreds of small unions kept small and ignorant and poverty-stricken by the law”.²⁰ Gross,²¹ writing of unions in the late 1950s, characterised the majority of the union movement in New Zealand as “stagnant”, as “perhaps incapable of using the strike weapon”, and as deprived “of certain functions which seem essential to organisational vitality”. By 1991, unions had evolved in response to new modes of industrial relations and, following the reforms of the Labour Relations Act 1987, may well have continued to evolve into more effective organisations. Unfortunately, they never had the opportunity.

The neoliberal war on unions and a new normal

Unions and collective bargaining are anathema to the neoliberal ideology, so it was perhaps unsurprising that the unions were clearly within the sights of the 1991 reformers. Prior to 1991, labour legislation recognised, even if imperfectly at times, the unique characteristics of trade unions as collectivities of workers and as the legitimate vehicle for worker representation. The Employment Contracts Act 1991 (EC Act) denied trade unions’ independent legal status as organisations and deprived them of any separate or preferential role within the bargaining and representational pro- cess. Legally, all unions were deemed to be societies registered under the Incorporated Societies Act 1908.²² Reinforcing the approach that a representative was purely a service provider and underlining the “outsider” status of unions was the requirement that members individually authorise their union to represent them in negotiations; membership alone was not sufficient.²³ Membership was of course strictly voluntary. Similarly, access to members and potential members was restricted to purposes related to negotiations for an employment contract and did not extend to enforcement of the contract or discussion of an employee’s other legal rights nor for such purposes as dealing with health and safety issues. As is well-known, the impact of the EC Act regime saw both the number of unions and union membership collapse; a collapse from which it has never recovered, even under the more friendly regime of the Employment Relations Act 2000 (ER Act).

Under the ER Act, unions continued to be registered but did regain their industrial persona by registration under the ER Act. The requirements for registration are minimal and in principle, unions are required to be independent of employers — a relatively soft requirement. They are, however, provided with a range of powers to carry out their representative functions, including reasonably broad rights of access to members and potential members.

Conclusion

While unions continue to play an important role in industrial relations, the face of the modern trade union movement is very different from that of the 1980s. Changing economic circumstances, and, in particular, the collapse of the industries from which unions once drew their power, has seen the modern union movement become dominated by large public sector unions and by unions often dominated by women. While pay and conditions of work will always be the first priority, these demographic changes also mean that issues such as work-life balance, pay equity and psychosocial safety are increasingly important for unions.

The legal structure of unions has now been in place for 25 years and there seems no particular reason why that structure needs to change. Union density is, however, a major problem, particularly in the private sector. To a significant part, that is due to very weak freedom of association guarantees. Current law does little to prevent assertive anti-union practices; practices that deny workers their fundamental human rights. Exercising the right to join the union may well be the most important way in which workers protect not only themselves but social equity generally.

A new future for unions and collective bargaining?

Neoliberal economic philosophy as it applies to labour markets, or indeed elsewhere, was always dubious but is now being seriously questioned within its heartland, most notably by the Organisation for Economic Co-operation and Development (OECD),²⁴ an organisation that was previously one of its strongest advocates. Evans and Spriggs argue that 1994 marked the high point of an era of market fundamentalism but that three decades later the OECD has had an epiphany. In its 2019 report on collective bargaining, it states that collective bargaining is a key institution to promote rights at work and that collective-bargaining and workers’ voice are unique instruments to reach balanced and tailored solutions to the challenges facing OECD labour markets.’²⁵

The OECD’s website is even more explicit:²⁶

Collective bargaining and social dialogue are key labour rights and have the potential to make job markets more inclusive. As major demographic and technological changes are re-shaping the labour market, collective bargaining is well placed to generate solutions to emerging collective challenges. However, its capacity to deliver is threatened by the weakening of labour relations in many countries and changing employment trends.

Rather than regarding collective bargaining as a substantial component of the problems with labour markets, the OECD now takes the view that:²⁷

... collective bargaining and workers’ voice remain important and flexible instruments that should be mobilised to help workers and companies face the transition and ensure an inclusive and prosperous future of work.

The problem of the 1990s seems now to be regarded as the solution for those of the 21st century. The OECD paper does, however, recognise that for collective bargaining to work effectively, significant legal reforms may be needed to provide the flexibility necessary to address contemporary challenges.²⁸

To misquote Jane Austen: “It is a truth universally acknowledged, that a worker in possession of a job, must be in want of a strong union.”

The footnotes can be accessed in Employment Law Bulletin, Issue 6, November 2024.

This article is written by Gordon Anderson, Professor Emeritus at Te Herenga Waka — Victoria University of Wellington, and is part of Employment Law Bulletin No.6 issue, November 2024.

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