Collective bargaining? Yeah right …

Written By: - Date published: 10:30 am, October 26th, 2014 - 9 comments
Categories: employment, law, national, same old national, Unions, workers' rights - Tags:

This is a continuation of my first article about work flexibility and rest and meal breaks. To recap in the earlier piece, it was established that employers will no longer be legally obliged to provide prescribed rest and meal breaks and a reasonable test was introduced in terms of allowing the employer to decide when such breaks can be taken both in timing and duration.

It was also established that the proposals in the Employment Relations Amendment Bill  will modify the Employment Relations Act (ERA) so that it will no longer have the ability to impose penalties on employers who have been found to breach their duty of good faith (in not allowing employees who are entitled to take some form of rest and meal break). Any recourse for the imposition of penalties would likely only be heard in a higher court (such as the employment court).

On the brighter side of things, the provisions that allow for the employee to request for more flexibility in terms of hours of work to suit their lifestyles and for employers to give such requests proper consideration appears to be a step in the right direction.

I would now like to highlight some changes in Collective Bargaining and try and workout what these new provisions could mean for Unions and the workers they represent.

Collective bargaining

The commentary section of the bill which relate to Collective Bargaining states:

Duty to conclude – Clauses 7 to 9 would remove the current provisions to the effect that the duty of good faith requires parties bargaining for a collective agreement to conclude the agreement unless there is genuine reason, based on reasonable grounds, not to. Parties would still be required to deal with each other in good faith, but the change aims to avoid protracted fruitless bargaining that is costly for both sides. The bill would protect against stalemate if the bargaining parties hit an impasse on one issue, as a declaration could be sought from the Employment Relations Authority as to whether bargaining had concluded. To address the possibility that an employer might walk away from bargaining on principle, we recommend amending clause 9 by inserting new section 33(2) to provide that an employer is not complying with the duty of good faith if they refuse to conclude a collective agreement simply because they object in principle to collective bargaining or collective agreements.

Opting out of bargaining – Clause 11 would allow an employer to opt out of bargaining for a multi-employer collective agreement. We recommend an amendment to make it clear that the ability to opt out of bargaining would also apply to bargaining initiated for the purpose of obtaining an employer’s agreement to become party to an already-concluded collective agreement (as provided for in section 56A of the Act). We consider that an employer should have the same opt-out option in this situation as they would if they had been identified as an intended party to the initial bargaining for the collective agreement.

Determination that bargaining has concluded – Clause 12, inserting new section 50K, would allow a party bargaining for a collective agreement to apply to the Employment Relations Authority for a determination as to whether bargaining had concluded. The Authority would be required to consider whether the parties had tried mediation or facilitation to resolve their differences and, in certain circumstances, the Authority would be required to direct that mediation or facilitation be used.

We recommend some amendments to this clause to make it clear how it would align with existing sections of the Act. The Authority can direct parties to facilitation on the grounds set out in existing section 50C(1), unless certain countervailing factors are relevant. The factors specified in proposed new section 50K(2)(c) are the same as those in existing section 159(1)(b) of the Act.

We recommend amending clause 12, new section 50K(3)(a), to make clear the intention that the Authority must (rather than “may”) make a declaration if it finds that bargaining has concluded.

I will now attempt to compare the relevant provisions in the Bill which will supersede the Act and discuss what this could mean for union members.

Good faith – Clauses 7 to 9 of the Bill replaces Section 31 to 33 of the Act

The current provision (s31) stresses the need for “good faith” in any collective bargaining and the need for orderly collective bargaining.

The term “good faith” is integral in setting the tone for any negotiations and is defined (s4) as “… parties to an employment relationship … (a) must deal with each other in good faith … (b) not do anything to mislead or deceive each other or likely to …”.

It stresses that the duty of good faith is “wider in scope than implied mutual obligations of trust and confidence …”. Terms such as “constructive, responsive and communicative relationships” are emphasised in this provision. “Good faith” also applies to any form of bargaining and variation of a collective or individual agreement. This is fairly encompassing and there is an expectation that an employer takes into account the employee’s collective employment interests when changes occur in an employer’s business (eg contracting out work, sell or transfer all or part of the business); making redundancy decisions, providing a union representative access to a work place and the employer to not induce an employee to refrain from being a party to a collective agreement, etc.

There is an expectation that collective agreements need to be concluded (s33) unless there are genuine reasons and reasonable grounds on why it cannot be concluded. s32(ca) states, “even though the union and employer have come to a standstill or reached a deadlock about a matter, they must continue to bargain …  about any other matters on which they have not reached agreement …”

The new provisions repeal the previous s31 and s32 and significantly modifies s33. The duty of good faith (s4) still applies generally but the requirement for parties to conclude a collective agreement has been done away with provided that there are genuine reasons for doing so.

Note that the implied test of reasonableness in the previous paragraph above has been stealthily dropped in this modification. Are the terms “genuine reason” and “reasonable grounds” the one and the same? I’m sure there are lawyers out there who will point out that the two can be mutually exclusive.

Opting out. Clause 11 of the Bill replaces s45 of the Act

The current provision (s45) gives the unions the ability after endorsement from its membership to initiate bargaining with 2 or more employers for a single collective agreement. This type of collective agreement is called a multi-employer collective agreement.

The new provision (cl 11) gives the employers the ability to opt out of such multi-employer collective agreements. They can literally walk away without good reason for not agreeing to be part of such multi-employer collective agreements.

There are unions in the public service (PSA), banking sector (Finsec) and fast food sectors (Service and Food Workers Union, Unite) to name a few, that have many members who work across a wide spectrum of businesses and employers. Most of these unions will have multi-employer collective agreements so that improved conditions fought for its membership can benefit all members.

The removal of the need for employers to engage in such collective agreements basically sets different groupings of the union membership against each other as some employers may ratify agreements that are more favourable to certain groupings of the union membership than others. It would appear that this is a veiled attempt to impose the divide and conquer rule practised by many in the dark arts of management and will likely have the effect of destroying multi-employer collective agreements.

Concluding the collective bargaining process even though it’s not been concluded – new clause 12 of the Bill

A new provision (cl 12) has been inserted that gives the Employment Relations Authority (ERA) to determine that collective bargaining has concluded even if it has not. Talk about an oxymoron!

In saying that, there is a test that needs to be met before the ERA can determine bargaining has been concluded even when in reality it has not. The test is benchmarked against the mediation (s159) and facilitation (s50B to 50I) provisions and the process is overseen by the ERA. Regardless of the outcome as to whether collective bargaining has been deemed to be concluded or not, there is a cooling off period of no less than 60 days before any party can re-initiate the bargaining process.

The drafters say the introduction of this provision is to encourage parties who are in a stalemate to hurry along in terms of finding solutions to ratifying the agreement or risk starting from scratch again. It is not clear what the unintended consequences could be if the ERA were to conclude collective bargaining processes “prematurely”.

This may very well leave employees who are union members exposed to inferior terms and conditions. Does this really incentivise all parties concerned to go back to the drawing board and renegotiate in good faith for best outcomes? Or is it just another way of dragging the chain but placing the onus on the ERA to be the party responsible for prolonging the pain? Or is this an exercise in gauging the union membership’s appetite and endurance for another round of protracted negotiations?

Continuity of employment in the event of a proposed restructure : Clauses 28 to 36 of the Bill amends subpart 1 of Part 6A of the Act

The current provisions require employers who are proposing to restructure the work place to ensure specified classes of employees have the option to elect to transfer to the new employer on the same terms and conditions or have the right to bargain for redundancy entitlements if made redundant by the new employer. These specified classes of employees include but are not limited to employees who work in cleaning services, food catering, care-taking, laundry, orderly services for Education, Health, Local Government sectors, etc. In short, the current law attempts to protect vulnerable workers in sectors where restructuring can be common place.

The new provisions introduces a category called exempt employers who are small to medium sized businesses (19 or fewer employees) from the aforementioned requirement (option to transfer to new employer, etc). This exemption applies for any sale between small to medium sized businesses as these businesses would all be classed as exempt employers.

It would appear that some measure of protection for the most vulnerable workers has been left intact but and this is a big “But” only if the business is transferred or sold to a large business/corporation. What this means is that these protections are pretty much useless if businesses get sold or transferred within the small to medium sector. Anecdotally, it would appear that a significant number of employees in these sectors are employed by small to medium sized businesses. So, in actual fact, the reality of this change is likely to result in a significant abrogation of the vulnerable worker’s rights to have some semblance of continued employment when such a “restructure transaction” occurs.


The slow and steady chipping away of collectivism and solidarity – the power base of unionism is further eroded by these provisions. It is not quite the last nail in the coffin for the union movement yet but the scales have certainly been tilted in favour of employers yet again which is the modus operandi for the current administration – no surprises really. For some on the right, the changes made in favour of employers to the detriment of employees are not nearly far reaching enough and there needs to be more – much more. Already, the stark reality for most employees is to take on more responsibility with no corresponding recognition in remuneration and/or conditions in pursuit of that old chestnut, “efficiency and productivity gains”.

Most employees are expected to commit to working in excess of what their contract specifies – Heck, most contracts even have provisions written in them that provides a catch all with obligations to undertake duties above and beyond the call of duty. The overarching narrative would appear to strengthen the hand of the employer with these raft of changes which is likely to cast a long and foreboding shadow to employees writ large – especially the marginalised and vulnerable work force.

On Labour day, I think it is important to acknowledge and reflect on the many protections we enjoy and take for granted as workers. And by workers, I also mean the managerial class which quite often reflects the embodiment of false consciousness. The old adage, “We’re all in this together” applies to you lot too.

The protections that we enjoy can be severely eroded or lost when practices become entrenched. It becomes significantly harder for subsequent left leaning governments to turn the tide and reinstate the protections and rights employees used to have once these practices become entrenched.

It pays to be mindful that changes to legislation by this cascading effect can lead to an acceptance of a new regime that will have deleterious consequences for our rights to challenge unsavoury practices imposed by employers.

It is my hope that the opposition parties and especially the media scrutinise these reforms and ask the hard questions and not settle for smoke screen replies. I cannot stress enough, in our era of obfuscation and spin doctoring to hold the policy makers to account, otherwise we will continually relinquish our rights and eventually find ourselves being serfs in a dystopian like Aotearoa.


9 comments on “Collective bargaining? Yeah right …”

  1. karol 1

    Thanks very much for his important analysis. This part of the conclusion is the really important bit for people to attend to:

    The slow and steady chipping away of collectivism and solidarity – the power base of unionism is further eroded by these provisions. It is not quite the last nail in the coffin for the union movement yet but the scales have certainly been tilted in favour of employers yet again which is the modus operandi for the current administration – no surprises really.

    And its why as many people as possible need to get behind the campaign against this latest erosion of workers’ rights.

  2. Foreign Waka 2

    A change in the Employment law will erode the income of workers. Given that they pay the majority of taxes, it will lead to ministers not able to be paid in the current structure but bought by big business. So in that sense NZ is not a Democracy anymore. The political impact of the ever decreasing means of making a living, leading to premature death and chronic illness will impact on the social structure and most likely to internal unrest within the country. If this political landscape does not change it will be mayhem in 20 years time. Mr Key, this will be your legacy and it is not something to be proud of.

    • Skinny 3.1

      Little gets it about ‘Work’ none of the other leadership contenders really do. The way we work means everything. The rate things are happening with the likes of casualization and now zero hours, workers will be tendering for a couple of hours work a day.

      I am quite critical of the CTU who in my opinion have been weak since it’s concept. Far too PC. Kelly should be talking up on the likes of the Nation and National radio things such as ” Who can blame workers for mass industrial action over the current attacks, the Tories in the UK just got a taste of a mass walk out of workers, they simply took the view that they weren’t prepared to take it without a fight, so workers here may think it’s time to hit the bricks here”. Of course Unions and her as head of the CTU can’t be calling the shots, however nothing stopping the workers. It’s not like the Bosses are going sack the workforce if they all stick together.

      • KJT 3.1.1

        Do you blame them as anyone calling for strike action is likely to end up with large fines, if not imprisoned, as withdrawing your labour is effectively illegal in New Zealand..

  3. Tracey 4

    enshrining low income and low skilled workers as peasants, by stealth… its why a third terms was SO important… and why the LP decision to have kelvin davis at any cost and not accomodate greens and talk alternatives with greens is SO costly

  4. Tracey 5

    rodney hide writing selective history to advance his anti union stance in the herald today…

    like many his reading comprhension is at best lacking and at worst selective.

    parnell demanded an 8 hour day for himself due to lack of carpenters but he then represented this stance for those who arrived later. hide leaves this out. parnell told employers arriving that 8 hours was the custom and those ignoring it would be dunked in the harbour.

    “… … Other employers tried to impose longer hours, but Parnell enlisted the support of other workmen and informed those arriving on incoming ships of the local custom. In October 1840 a meeting of Wellington workmen apparently resolved to work eight hours a day, from 8 a.m. to 5 p.m. – anyone offending would be ducked into the harbour.”

    hide claims labour day is wrongly celebrated as a union victory when he claims it was merely market forces and not unions

    but for hides version of history to work he had to omit the following

    “.. By 1890 the eight-hour working day had become standard for tradesmen and labourers, but many other employees still worked much longer hours. The Labour Day parades that began that October were part of a union campaign to force the government to restrict working hours by law rather than custom. The Labour Day Act 1899 established a statutory holiday, which is today celebrated on the fourth Monday in October…. ”

    the truth wont matter… hide achieved his anti rant propaganda with flawed history

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