Partnership Resource Centre
Illustrated Report & Stocktake on Workplace Partnership In New Zealand
Table of Contents
- Executive Summary
- Introduction
- The Regulatory Environment as it Impacts Partnership Approaches
- The Trade Union Agenda as it Impacts Partnership
- Employer Viewpoints & Practices
- Case Studies of Workplace Reform
- The 2005 Research Project
- Research Findings
- Implications for the Development of Partnership Practices in NZ
- Bibliography
Executive Summary
This report is the product of a significant research project sponsored by the Partnership Resource Centre (PRC) in the New Zealand Department of Labour. The PRC sought to describe the current state of workplace partnership in New Zealand employment relations by documenting and analysing contemporary employer-union relationships in action.
Workplace partnership is about an active relationship between unions and employers to deliver outcomes that benefit both institutions and the employees and members who bring them together. Partnership is not an entirely new concept to New Zealand, but it is considered anecdotally to be an exception to the norm in union-management relations in our workplaces. The core ideas behind partnership include: a collaborative approach to bargaining; wide union and employee consultation practices; a focus on extracting "mutual gains" from negotiations; a preference for consensus over conflict; and, mutual investment in protecting relationships.
The project methodology involved a comprehensive review of all New Zealand literature and case studies relating to union-management workplace partnership, and beyond that to the literature on collective bargaining. This was followed by a comprehensive survey of all employers and unions parties at the time to registered Collective Employment Agreements. Over 200 employer representatives and 70 union representatives responded to the survey. Selected survey respondents were then interviewed to deepen understanding of the data and clarify some issues raised by the survey.
Analysis of the data resulted in a comprehensive picture of union-management relations in New Zealand today. The data indicate where and when partnerships are likely to be found, and attitudes and behaviours that tend to be associated with a sense of partnership. The data also provided documentation of what union-management workplace partnership currently consists of in New Zealand. This allowed a discussion on the PRC's strategic agenda suggested by the project findings, and highlighted opportunities for the PRC to further pursue its brief.
The principal findings of the project were:-
- A significant minority of employers in New Zealand have had experience of workplace partnership-type interactions with unions. A small majority of union officials have had such experience.
- One third of respondent employers suggested they were in partnership with a union today; and the same percentage showed interest in partnership-type approaches. However most employers currently envisage that any partnership would be focused on their individual firm's needs and style, and most would also approach the situation with a high degree of pragmatism and somewhat traditional values about the management of the workplace.
- A significant majority of the union officials surveyed are supportive of partnership approaches on a reciprocal basis (where employers are open to the same) and believe that it would be of benefit to their members, would benefit the employer, and would benefit the New Zealand economy.
- Few examples of "pure" workplace partnerships are evident at this time. However, what is evident is a mix of behaviours, practices and attitudes which are consistent with workplace partnership being employed on a selective basis and in a very pragmatic, sometimes experimental or non-committed, way.
- Deeper instances of workplace partnership in New Zealand have been sporadic and most comprehensive examples have not endured. Past failures have left "hangovers" in the minds of certain industrial parties.
- While full partnership is rare, a significant number of employer-union relationships exhibit some notable partnership behaviours. The most likely place to find such behaviours in the private sector is with an employer who is dealing with one principal union, with whom they have dealt for a number of years, and where a single employer collective agreement covers employees throughout the company.
- Only a minority of respondent employer representatives in the state sector reported being in partnership despite the assistance of the Partnership for Quality initiative.
- Workplace partnership, even in limited form, appears to take time to develop. It also appears to involve some natural ordering of circumstances involving (a) a mature collective bargaining relationship; (b) reasonable relationships between individual representatives of the employer and the union; and, (c) a catalyst initiative from one side or a circumstance requiring broader co-operation or joint discussion outside of bargaining and the usual day-to-day interactions.
- Despite the intentions of the current legislation governing collective bargaining in New Zealand, there is scope on the current evidence to significantly improve on the bargaining behaviours and styles being employed by both sides in many workplaces. Put simply there would appear to be a need for better education in the mutual benefits of utilising positive bargaining practices.
- The nature of workplace relations in New Zealand appears on the current evidence to often be very much dependent on the principal individuals involved and the relationship that they have. In many examples where partnership behaviours are reported it is based on a single employer representative and a single unionist and the way that they interrelate and the respect they have for each other. From the employers' perspective, union officials being knowledgeable of the industry and the business, and being "responsible and flexible" come across as important prerequisites to such relationships forming. From the union officials perspective the broader concept of a "good employer" comes across as an important pre-requisite.
The key opportunities for the PRC drawn from the research were identified as:-
- To target an identified audience - the theory, the data, and the analysis in this report all point to the best potential for the further development of union-management workplace partnership in New Zealand lying in that part of the private employment sector where managements and unions already deal with one another in collective bargaining. The primary focus of the PRC might be on influencing the bargaining, consultation and collaboration behaviours of parties already in collective bargaining relationships. Education and coaching would be the likely first initiatives.
- To continue to work with the union movement at national and federation level towards a clearly articulated approach to promoting workplace partnership - based on the very strong support of respondent unionists for partnership in the current research.
- To work with employer representatives on deepening the appreciation of those employers who are in relations with unions today, and realistically expect to be so for the foreseeable future, about the processes and potential benefits of workplace partnership as an alternative to combative or distant styles of interaction.
- To develop an integrated service flowing from the established role of the Department of Labour's Mediation Service in collective bargaining disputes. Currently when the parties in collective bargaining are having serious difficulties in concluding a collective agreement they utilise the services of the Department of Labour Mediation Service for mediation assistance. This would appear on face value to present a significant available "pipeline" for penetration of workplace partnership values and training in exactly the place, based on the current findings, where workplace partnership initiatives need to be focused. A clear delineation could be struck whereby the existing intervention by the Mediation Service in the bargaining dispute is maintained, but with a referral from mediation to the PRC once an immediate dispute is resolved, to work with the parties to change their relationship such that a further breakdown is less likely next time around. This sort of intra-department cooperation obviously needs to begin with some dialogue between the PRC and the Mediation Service over the PRC's focus and capabilities, and how and under what circumstances a referral by a mediator for longer term consultation might be appropriate.
- The work of the Partnership Resource Centre is naturally linked to the "productivity" agenda being discussed in other forums established by Government and industry, including within the Department of Labour. It would be natural and productive for the Centre to have direct links into this work.
Introduction
Project Outline
The Partnership Resource Centre in the Department of Labour sought to describe the current state of workplace partnership in New Zealand employment relations by describing and analysing real working examples of partnership behaviours in action. This was done in three key phases, namely: a comprehensive review of available New Zealand literature; the development of a fresh research methodology and application of a research questionnaire and qualitative interviews; and, comprehensive analysis and reporting of findings.
The definition of workplace partnership adopted as the framework for the research was that developed by the Partnership Resource Centre:
Workplace partnership is about an active relationship between unions and employers to deliver outcomes that benefit the mutual interests of both parties.
The Theory & Development of the Partnership Concept
Union-management workplace partnership is not a new concept. The core ideas behind it - a collaborative approach to bargaining, wide-ranging consultation, a focus on mutual and complementary goals, a preference for consensus over conflict, and valuing and protecting the relationship during episodes of conflict - all have long intellectual histories. Particularly during periods of heightened industrial conflict - and, some would say, during periods when unions have been conspicuously on the back foot - industrial relations scholars, and sometimes unions and employers themselves, have mused that there must be a better, more cooperative way to bargain.
Writing in the early twentieth century, Mary Parker Follett decried union and management inclinations to "fight it out" or overpower the other. But she also challenged "compromise" as an appropriate way to resolve differences. There was, she said, a third way of dealing with conflict - integration:
I certainly ought not to imply that compromise is peculiarly a trade union method. It is the accepted, the approved way of ending controversy. Yet no one really wants to compromise, because that means a giving up of something. Is there, then, any other method of ending conflict? There is a way beginning now to be recognized at least, and even occasionally followed: when two desires are integrated, that means that a solution has been found in which both desires have found a place, that neither side has had to sacrifice (Follett, 1942: 32).
Follett described the first key to an integrated approach as follows:
If . . . we think that integration is more profitable than conquering or compromising, the first step toward this consummation is to bring the differences into the open. We cannot hope to integrate our differences unless we know what they are. The first rule, then, for obtaining integration is to put your cards on the table, face the real issue, uncover the conflict, and bring the whole thing into the open (Follett, 1942: 40).
Follett's ideas did not develop much traction in labour-management circles for many years, side-tracked as they were by depression and then war, and perhaps also by a period of union ascendancy in Western industrial societies and a predominantly adversarial approach to labour relations. They were next significantly acknowledged in Richard E. Walton and Robert B. McKersie's important work, A behavioural theory of labor negotiations, published in the mid-1960s.
Walton and McKersie's multi-faceted conceptualization of collective bargaining recognized integrative bargaining, over issues on which there was mutuality or complementarily of interests, co-existing with a more distributive, competitive approach over issues on which there was direct conflict. Integrative bargaining has been a part of the mainstream literature of labour relations ever since.
Walton and McKersie recognized, too, the importance of maintaining relationships that preserved the capacity for integrative dealings. An important contribution was to appreciate that collaboration could survive conflict in a union-management relationship, an important understanding in workplace partnership.
In the meanwhile, other writers had been attracted to the same concept by other names. In the post-war industrial turmoil of 1946, for example, Yale University Professor E. Wight Bakke travelled throughout the United States industrial belt asking managers and union leaders "what their chief difficulties were in dealing with one another." Bakke concluded that difficulties arose because the parties each saw, in the posturing of the other, a threat to their own survival:
The plain fact is that management's convictions about sound management and the union leaders' convictions about effective unionism don't fit together at important points. Someone is going to have to modify his convictions enough to make workable mutual relations possible unless we want to face a struggle for dominance (Bakke, 1946: 2).
In a pamphlet that remains remarkably relevant and insightful today (albeit with a gender bias that reflects its time), Bakke had no easy solution to offer for reconciling these convictions. But he offered the following reflections that are familiar to an interest-based approach to collective bargaining and to union-management partnership in the workplace today:
Both management and labour leaders will be better equipped ... if they know thoroughly the kind of job and responsibilities faced by the other, and his convictions about what is required if he and his organization are to survive. Men will fight when they believe their survival is threatened. The first task of life is to live. I am convinced that the great majority of employers and labour leaders alike are not out to "bust" or "hamstring" or take over the other. But they can do that without intending to do so by fighting for their own survival in ways which endanger the survival of the other (Bakke, 1946: 18).
Walton & McKersie's theory took this sort of conceptualizing about labour negotiations to a new level of sophistication, putting Follett's notion of integration back in circulation in the realistic context of multi-faceted collective bargaining.
Integration landed front and centre across the wider negotiation field with the publication in 1981 of Roger Fisher and William Ury's influential Getting to YES, a stirring advocacy of integrative or interest-based bargaining as simply a better way to bargain than traditional, competitive, positional bargaining approaches. This book, backed by a platoon of sequels and imitations, has been hugely influential with negotiation trainers, negotiation scholars, mediators and other conflict revolvers, and with policy-makers in the Western world. It has generated less of a sea change in negotiation practices in fields like labour relations, but it has nonetheless infiltrated the thinking of negotiators and had a perceptible impact without yet rewriting many collective bargaining scripts. A capacity for interest-based bargaining is the first cornerstone of modern workplace partnership arrangements. It is also, of course, one of the fundamentals of the good faith bargaining obligation under New Zealand's Employment Relations Act.
The Follett concept of integrative bargaining, put in context by Walton and McKersie, was given new impetus in the labour relations field - as in others - by its advocacy as interest-based bargaining in Getting to YES. During the 1980s, interest based bargaining was, in turn, translated in the American literature to "mutual gains" labour-management relations.
Interest-based bargaining was first introduced to labour relations in the "mutual gains" guise by Edward Cohen-Rosenthal and Cynthia Burton in their 1987 book Mutual gains: a guide to union-management cooperation. Its potential was more fully realized in Thomas A. Kochan and Paul Osterman's 1994 book, The mutual gains enterprise. Kochan and Osterman called for a radical rethink of most labour-management relationships in North America, after a decade of restructuring, downsizing and general cost-cutting that had left American enterprise "lean and mean", but had also left millions of workers unemployed, underemployed or working under reduced wages and conditions.
Partnership or collaboration between employers and unions has a broader conceptualization and history in practice than solely an integrative and less conflictual approach to collective bargaining at the workplace, however. The term workplace partnership incorporates a range of cooperative practices from societal to workplace levels. Today's interest in partnership arguably derives from several quite diverse concepts and practices. Fox's (1996, 1974) frames of reference embracing employers' and employees' interests in the employment relationship, attitudes to conflict between them and perspectives on the role of unions as the operative variables is a useful conceptual tool.
One intellectual antecedent to workplace partnership might be the unitarist framework embodied in the "employee involvement" or "employee participation" schemes popularised in Britain and the United States, among other countries, in the 1980s. These were and are by-and-large employer-initiated and directed schemes that involved employees directly, sidelined unions where they existed, and frequently did little in the way of genuine power-sharing with employees (Marchington & Wilkinson 2000; Wilkinson 2001). Today, they are often supported by a strongly unitarist managerial rhetoric and a sophisticated suite of high commitment human resources management practices designed to "win minds and hearts" to organizational goals (Guest & Peccei 2001: 209-210).
In more direct lineage to modern union-management partnerships are several pluralist strands, including one that flows from the post-World War II Western tradition of collective bargaining studied by Bakke and other institutional labour market scholars in the 1940s, '50s, '60s and '70s, particularly in the United States and Britain (Flanders 1974; Clegg 1979; Brannen 1983).
This tradition is what has been referred to as:
... a minimal pluralist-voluntarist sense of partnership as a stable, collaborative relationship between capital and labour, as represented by an independent union, providing for low social conflict and significant worker influence on business decision-making through strong collective bargaining (Ackers & Payne 1998: 533).
This is essentially voluntary, collective bargaining-based cooperation between management and union, with an acknowledgement of some differences of interest between employer and employee, and an acknowledged role for the union as representative of workers, albeit with a de-emphasis on the sort of sustained, overt industrial conflict that often characterized collective bargaining in earlier times and a greater emphasis on seeking consensus through integrative bargaining (Ackers & Payne 1998: 533).
The second relevant pluralist concept is that of "industrial democracy" - an institutional arrangement that allows workers a collective say in company decision making beyond their involvement in decision-making over pay and conditions via collective bargaining. The German system of codetermination, which traces its intellectual origins as far back as the revolutionary upheavals of 1848, is the prime example of this sort of "consultation beyond collective bargaining," although similar systems have long operated elsewhere in Europe and are now institutionalized in European Works Councils under the European Social Chapter. The concept has attracted interest outside of continental Europe at times, with governments in Britain (1977) and New Zealand (1989) appointing committees of inquiry into "industrial democracy," although neither generated any sustained collaborative outcomes.
The third relevant pluralist concept is partnership in the state corporatist sense, again with roots in Northern Europe and manifestations in the political and industrial "social partnerships" of Germany, Austria, and other nations of Western Europe and Scandinavia, often complemented by multi-level collective bargaining between the social partners, and a commitment to a sort of mutual gains bargaining and an effort to minimize industrial conflict. The success and attractiveness of this model in continental Europe has also inspired efforts at imitation in Anglo countries, for example efforts in New Zealand at tripartite wage conferences in the 1980s and the aborted attempt to implement a "Compact" late in the tenure of the Fourth Labour Government, and the succession of Accords in Australia in the 1990s, following the union expedition to study "the Swedish model of industrial relations" and the release of the corporatist blueprint Australia Reconstructed (ACTU/TDS 1987).
While New Zealand has toyed with these latter two concepts of union-management partnership, it is really the "voluntarist pluralist" concept of state-enabled, but not mandated, collective bargaining, perhaps with subsidiary consultation mechanisms, and incorporating an independent union voice for employees that, based on history to date, would likely offer the most fruitful foundation for workplace partnership in this country. This is essentially the "mutual gains" approach advocated by Kochan and Osterman (1994), an approach that Guest and Peccei (2001: 210) call "a hybrid approach," accepting pluralist assumptions and the importance of representative structures, but also putting some emphasis on direct employee involvement, rather than solely through the union. To some extent, this approach seeks to distinguish potentially conflictual collective bargaining processes from more purely collaborative consultative processes, seeing them operating alongside one another rather than always as a single process (Roche & Geary 2002).
In this respect, the conceptualization by Kochan and his colleagues (Kochan & Osterman 1994; Kochan 1995; Rubinstein & Kochan 2001) essentially mirrors Storey and Sisson's conceptualization in the United Kingdom (Storey & Sisson 1993). It recognizes the distinction between distributive and integrative bargaining articulated by Walton and McKersie, and seeks to protect the potential for integration by "corralling" conflictual issues in the collective bargaining domain.
The term "workplace partnership" first gained prominent usage in the North American context in public sector practice. In 1993, President Clinton issued an order establishing a National Partnership Council charged with establishing union-management partnerships throughout the executive branch of the federal government. Some state and local agencies followed suit, and the partnership concept and terminology gradually gained some currency in the private sector as well. Amongst the most prominent examples is the Kaiser-Permanente Medical Group where a union-management partnership was established in 1997, following a decade of labour relations turmoil, and has since become a showpiece for the partnership model, complete with its own internet shopping outlet.
Across the Atlantic, after retreating from the Thatcher government in the 1980s, the British Trades Union Congress began to embrace partnership approaches following a speech to the 1988 British TUC conference by the President of the European Union Jacques Delors (Ackers & Payne 1998: 530). Thereafter, the TUC re-emerged with the new Labour government elected in the mid-1990s with a "new unionism" strategy embracing partnership with business as a better alternative to "militant unionism and macho management" (Monks, 1999). The concept began to attract serious scholarly interest in Britain at about the same time (Guest & Peccei, 1998). Meanwhile, pioneering partnership initiatives were underway in Ireland, at sites including the Irish Airports Authority (Roche & Geary 2002) and across continental Europe and Scandinavia. In-depth discussions of partnership developments in Ireland and Scandinavia are included in the international report that is a companion to the present volume.
The Regulatory Environment as it Impacts Partnership Approaches
Governments can play an important role in union-management partnerships, either directly through participation in tripartite arrangements, or by legislating for or otherwise promoting or sponsoring union-management collaboration. In New Zealand, there have been, over the years, government initiatives to promote tripartite or bipartite union-management partnership from national corporate to local workplace levels. In terms of legislative mandates, however, the attention of governments has always been, and largely remains, on union-management forums and processes for setting pay and conditions.
In the present environment, collective bargaining between employers and unions representing employees is promoted by the Employment Relations Act 2000 as a primary mechanism for building productive employment relationships. The statutory obligation to bargain in good faith prescribes collective bargaining on interest-based principles - acknowledged as a central component of workplace partnership.
Mature workplace partnerships can extend beyond the formal collective bargaining table, of course, to formal and informal consultation and decision-making forums, and to project-specific or more general and on-going working groups. Often these mechanisms arise out of collective bargaining or collective employment agreements, as parties identify issues that elude immediate resolution or are seen as needing longer-term attention.
With a few notable exceptions, including rights disputes committees and, more recently, mandatory health and safety committees, regulations governing employment relations in New Zealand have not addressed consultative mechanisms other than formal bargaining (or conciliation or arbitration) over wages and conditions. This is in contrast with many other jurisdictions, including for example the extensive and prescriptive regulation of works councils in Europe, and of social partnership structures from workplace to industry to consultative chambers to tripartite national forums in many countries of Europe and Scandinavia.
In New Zealand, with the exceptions mentioned, labour market legislation through the years has, in terms of union-management relations, prescribed and regulated only bargaining for wages and conditions. Furthermore, the legislation has changed markedly and relatively often over the past 25 years, several times significantly changing the environment for the development or otherwise of partnership-type beliefs and behaviours. The current legislation, the Employment Relations Act 2000, is more conducive to fostering partnership than previous legislation. Its underpinning is the mutual obligation of parties to employment relationships to deal with one another in good faith. In a significant departure from previous legislation, this obligation extends beyond the bargaining table to embrace the entire relationship between, amongst others, unions and employers, and it expressly embraces "consultation" between employers and unions. So while collective bargaining remains at the core of union-management relationships, the Employment Relations Act recognises that relationships involve more than that. In so doing, it provides more fertile ground for the growth of union-management partnership than did the legislation that preceded it.
The first part of this chapter traces the history of legislation authorising and regulating collective bargaining in New Zealand, including how it has supported or not supported workplace partnership approaches over the years. While legislation in the area has largely been confined to regulating collective bargaining, government has on occasion taken other, extra-legislative initiatives that incorporated or promoted union-management partnership beyond the collective bargaining table and beyond "bread and butter" wage and conditions issues. These initiatives are covered in the second part of this chapter.
Labour Market Legislation & Collective Bargaining
The Employment Relations Act 2000 takes as its principal objective the building of productive employment relationships "through the promotion of good faith in all aspects of the employment environment and of the employment relationship". Productive employment relationships are seen as essential for the social and economic well-being of the country, as well as for the well-being of workers and employers. Employment relationships are defined to include the relationships between employers and the unions representing their employees.
Although labour market legislation has never before provided the sort of fruitful ground for collective workplace partnership afforded by the Employment Relations Act, labour relations in New Zealand is not without earlier, sometimes heroic, instances of union-management cooperation under arguably less favourable legislative environments.
The Conciliation & Arbitration Era: 1894 - 1984
For 90 years, the New Zealand labour market operated under the compulsory conciliation and contingent arbitration model of the Industrial Conciliation and Arbitration Act of 1894, subsequently amended, eventually by the Industrial Relations Act of 1973. This conciliation and arbitration model offered little opportunity for the development of collaborative workplace relationships between unions and managements, though there were some exceptions.
The predominant pattern of collective coverage was a network of national and regional awards, many of them occupational in coverage and so extending across several or many industries and industrial circumstances. Awards had blanket coverage to all employers and employees within jurisdiction and in that sense were multi-employer documents. Awards were generally arrived at through quite short, central, conciliated negotiations between limited numbers of employer and union representatives, with little active involvement or even awareness on the part of most covered employers and employees. Arbitration was available if needed, although the predictability of its outcome meant that it was resorted to relatively infrequently. While the system arguably worked well in an economy running on small business and protected from external market pressures, its remoteness from the average workplace offered little prospect - or probably perceived need - for the development of significant union-management partnership at the workplace level.
There were exceptions, although many worksites with more active industrial relations environments - the freezing works, the wharves, the ferries, and so forth - tended more towards aggressive and even hostile union-management relations, rather than workplace partnership. Nevertheless, there was scope for voluntary, single-employer collective bargaining both within the system and outside it, with commentators estimating that up to five percent of the unionized workforce were covered by registered collective agreements, and perhaps the same number again were covered by collective agreements negotiated by unions which chose not to register as such within the conciliation and arbitration system (Young, 1983).
Many of the registered agreements were in fact "second tier" agreements, in which unions singled out employers for post-award negotiation of terms superior to those in the awards. They were largely confined to manufacturing in the North Island main centres (Geare, 1983; Harbridge, 1983) and were very much extractive rather than collaborative on the part of the unions involved. Still, in the period leading up to the abandonment of the conciliation and arbitration system, there was plenty of single-employer bargaining occurring, even if the numbers of covered employees were still small. Geare (1983) reported the existence of over 500 registered collective agreements in 1980; most would have been single-employer and single-union documents. He also reported the existence of 33 documents negotiated by unions outside the registration system, and 37 "composite" agreements.
Much of the most intensive collective bargaining in this era occurred around composite agreements on major work sites, perhaps most spectacularly on some of the "think big" projects initiated by the Muldoon Government. On these sorts of construction projects, site agreements were negotiated specific to the site and the project, and composite agreements were negotiated by combined consortiums in lieu of requiring a myriad of contracts between different trade unions and contractors. Labour relations on some of these projects - the Marsden Point refinery, the Clyde Dam, the New Zealand Steel Plant at Glenbrook, for example - were anything but collaborative. The Motonui methanol plant project was however an exception, standing out as an effort at some sort of union-management partnership in an environment that was not seeing a lot of such efforts (Cammock, 1987).
Labour relations at Motonui were credited as a major factor in the project coming in on time and significantly under budget. Keys were the decision of the contractor, Bechtel, to acknowledge the role of the union as a constructive vehicle for representing employee voice in an organized manner, agreement on the union role, and the formulation of mechanisms for ongoing consultation:
For both management and union respondents "close communications" between Bechtel and the union leadership was the most frequently cited reason for Motonui's low conflict levels. This communication was initiated by Bechtel in its first contacts with the union officials in 1980 and with the reciprocity of the unions became a key feature of the project's industrial relations. Communication was facilitated by ... regular formal meetings ... and informally by an 'open door' policy which provided union leaders with direct access to Bechtel's industrial relations managers. (Cammock, 1987: 77)
So, while industrial relations for most employers and employees in the conciliation and arbitration era was a fairly remote experience, some employers and unions were involved in various types of closer-quarters collective bargaining, apparently more so towards the end of the arbitration era. Much of this workplace or enterprise level collective bargaining was more adversarial than collaborative, but it was nonetheless the beginnings of the sort of local bargaining that is so prevalent now. And it was in these pockets of collective bargaining that at least some observers recognized the instincts and potential for union-management collaboration:
In general, management has a unitary perspective, but the increased need to resolve industrial relations problems at the workplace due to the impact of technological change and economic constraints has resulted in an acceptance of collective bargaining along with the traditional conciliation and arbitration. As the practice of joint decision-making becomes accepted following a gradual extension of collective bargaining, a wider range of participatory institutions can be envisaged, with extensions to the range of subjects covered by collective bargaining as well as variants on both ascending and descending participation. (Stephens, 1982: 26-27)
The Transition to Collective Bargaining: 1984-1990
The next period in the evolution of collective bargaining in New Zealand was as short as the previous one was long. It lasted just the six years of the fourth Labour Government from 1984 until 1990. By the mid-1980s, the world within which the New Zealand economy had to operate was changing rapidly, fuelled by technological developments, the realignment of nations into trading blocks, and the globalization of markets. The new government embarked on a wide-ranging programme of deregulation and restructuring, which itself became a part of the new environment for New Zealand labour relations. Much of the public sector was corporatized and some privatized; financial, product, transport and utility markets were deregulated; and, import protections were earmarked for gradual elimination or reduction.
Reform of the labour market was also a priority for the new government. The perceived restrictions and inflexibility of the award system were deemed to be no longer appropriate in the developing environment (Harbridge & McCaw, 1989). The first step was the passage of the Industrial Relations Amendment Act of 1984 which made arbitration voluntary. The intent was to loosen the rigidities of the system by allowing awards to lapse, letting relativities drift, and opening the way for initiatives in the direction of enterprise-based, single-employer collective bargaining. In fact, however, unions and employers made relatively few structural changes under the sponsorship of the 1984 legislation.
Impatient with the pace of change the government in 1986 conducted a "Green Paper" review of industrial relations, a comprehensive consultation that led eventually to the passage of the Labour Relations Act 1987 (LRA). The LRA intended to provide further stimulus to breaking down the award-based structures and to experimentation with industry-based, and preferably enterprise-based, collective bargaining (Harbridge, 1988; Harbridge&McCaw, 1989; McAndrew, 1989).
The LRA included several devices intended to encourage direct enterprise collective bargaining. Each worker, for instance, was to be covered by only one set of negotiations, with unions encouraged to "cite out" employers from the multi-employer awards for separate enterprise bargaining. Previous limits on the range of subject matter over which negotiations could take place were removed; the thinking was that more wide ranging negotiations were appropriate with the specificity and particularity that enterprise or even industry bargaining allowed. In respects such as these, the Government sought to engage unions and employers in genuine enterprise level (or industry level) collective bargaining across a broad scope of subject matter. What was envisioned was a constructive engagement of unions and employers to get New Zealand industries and enterprises geared up for successful competition in the new global market environment.
As a further initiative in the late 1980s, the government conducted a Committee of Enquiry into Industrial Democracy, giving further articulation and impetus to the notion that unions should be accepted as constructive partners with business in negotiations at industry and enterprise level over a range of employment, operational and strategic issues as a part of New Zealand's preparation for economic success in the new environment (McAndrew, 1989: 137). This is dealt with in more detail later in this chapter.
While these efforts to revise labour market regulations can be seen as intended to lower the centre of gravity of New Zealand labour relations and promote what would now be recognized as workplace partnership, in fact there was sufficient inertia in the system that at the whole economy level relatively little real change occurred and only isolated instances of collaborative bargaining were reported. It is known, however, that there were some examples of significant union-management co-operation in the period, for example in the plastics industry where an innovative industry award was struck, in the auto industry for example at Nissan, in the Health sector, and in some further instances at enterprise level for example at Fisher&Paykel.
Some awards lapsed, but most remained largely in tact (Harbridge, 1988; Deeks, 1990). The number of collective agreements actually declined as some second tier agreements lapsed, but most second tier agreements remained in place informally (Harbridge, 1988). Few employers were cited out by unions for separate negotiations (Harbridge&McCaw, 1992). A final initiative by the outgoing Labour Government in 1990 to allow employers to cite themselves out of awards never got off the ground.
All in all, despite the best of intentions and some imaginative government initiatives, there is no evidence of substantial increases in industry, or single-employer enterprise or composite bargaining during the latter half of the 1980s (Harbridge&McCaw, 1989). And, despite the removal of restrictions on scope and the push for industrial democracy, there is no evidence of unions achieving any widespread input on either operational or strategic decisions (McAndrew, 1989).
There were probably several reasons for the lack of change during this period. The award system had been in place for 90 years; some inertia seems natural. Despite employer lobbies demanding radical labour market reform, most employers were not particularly bothered by the award system and they were split in their preferences for local bargaining versus the national awards. Most employers were largely untroubled by unions, not seeing them as a major impediment to managerial decision making, but at the same time, of course, not contemplating them either as strategic partners (McAndrew&Hursthouse, 1990, 1991). So employers generally felt little urgency for change. And Wood (1988) has pointed out why it was quite logical, economically, for unions to stay with the award structures, especially in the early wage rounds under the Labour Relations Act as it was a better use of their resources and the centralised power base was in place.
So, while the late 1980s progressed the march towards union-management partnership intellectually in New Zealand, there was not much achieved at a practical level.
There were, nonetheless, some encouraging signs. Many employers who did deal closely with unions saw unions in positive terms (McAndrew & Hursthouse, 1991). A small majority of employers in published research expressed a preference for enterprise bargaining over the national award system, and those expressing that preference generally saw advantages in enterprise bargaining for both themselves and their employees (McAndrew & Hursthouse, 1990). There were also some isolated, but quite substantial developments in enterprise negotiations in the manufacturing sector, including at Fisher and Paykel, Masport, and Watties (Deeks, 1990). Perhaps, as Deeks (1990) speculates, after operating for so long in a fairly remote labour relations environment, employer and union operatives simply didn't have the skills and confidence in one another to move in large numbers to more collaborative, more wide-ranging, enterprise or industry collective bargaining at that time. The Labour Relations Act was permissive rather than prescriptive, and not too many took up the challenge.
The Employment Contracts Era: 1991-2000
Whatever multi-employer bargaining structures were holding or building in the late 1980s were pretty much demolished in the early 1990s under the onslaught of the Employment Contracts Act 1991, passed by the new National-led Government. Established enterprise bargaining relationships that covered a minority of the New Zealand workforce fared much better, including those that had been established in the public sector under the State Services Act 1988.
The core principle of the Employment Contracts Act was individual freedom to contract for labour. The Act allowed but discouraged collective bargaining, denying its basic rationale - an inequality of bargaining power between employer and employee. It provided no legislative protections or supports for collective bargaining, and shunned unions as partners to employers to the point of omitting them entirely from mention in the legislation. The Act promoted individual employment relationships over collective bargaining and, to the extent that it contemplated collaborative workplace partnerships at all, it would have done so on the basis of individual employee contributions in direct dealings with the employer.
The impacts of the Act were sweeping and immediate. Supports that unions had relied on for a century were removed, and union membership and coverage of union-negotiated documents dropped immediately from about 40 percent and 60 percent respectively to half those numbers and continued to drop, albeit much more slowly, during the decade of the 1990s.
The structure and nature of employment contract formation changed dramatically under the Employment Contracts Act. Employers had a relatively free hand (Walsh, 1991) and made most of the running. First, many employees who had previously been covered by union-negotiated awards were moved onto individual employment contracts (Armitage & Dunbar, 1993; Boxall, 1993; Finsec, 1994; Honeybone, 1997). Hector and Hobby (1997-98) reported that by the middle of the decade bargaining arrangements had stabilized under the Act, "with roughly equal coverage of collective and individual contracts" (Hector & Hobby, 1997-98: 311). However, not all collective contracts were created equal.
Where collective contracts remained in place, multi-employer collective contracts quickly gave way to single-employer collective contracts based on the enterprise, the workplace or the cost centre (Armitage & Dunbar, 1993; Boxall, 1993).
McAndrew (1993) distinguished three models of collective contract formation: employers developing collective contracts, largely of their design, in direct discussions with staff as a whole; employers developing collective contracts, again largely of their design, in direct discussions with staff one at a time; and employers developing collective contracts in negotiations with representatives of employees, almost always union representatives. Only the last of these processes involved significant negotiating behaviour. The other two and the formation of individual employment contracts rarely involved any significant movement from positions initially adopted by the employer (McAndrew, 1993).
Subsequently, McAndrew and Ballard (1995) determined that methods of contract formation were more usefully distinguished as the "negotiation" model, which always involved employers dealing with unions in collective bargaining, versus the "non-negotiation" model. The latter had three variations: collective contract formation through direct dealings with the workforce; collective contract formation through direct dealings with individual employees; and individual contract formation. Gilson and Wagar (1998) drew similar conclusions.
Boxall (1993) characterized employer strategies under the Act as "mainstream," being employers opting to move to enterprise bargaining without significantly disturbing their employment relations; "high trust" or "progressive" (Boxall & Haynes, 1992), being essentially well-intentioned employers who preferred to deal directly with their employees rather than through the medium of union officials; and "harsh bargaining, anti-union" strategies. Ryan (1997) developed a similar typology of employer approaches: the good employer, the paternalist, the legal minimalist, and the exploitative.
Unsurprisingly, employees represented by unions in collective bargaining made substantially less concessions in the process of contract formation than employees involved in any of the other methods of employment contract formation (McAndrew, 1992, 1993; McAndrew & Ballard, 1995; Rasmussen, McLaughlin & Boxall, 2000).
These general findings in terms of contract structures, employer strategies, and contract outcomes are essentially and collectively endorsed in a number of rich New Zealand case studies undertaken during the Employment Contracts Act era: Dowling's (1996) study of the domestic airline industry, Fryer and Haynes' (2001) study of the fast food industry, Harbridge and Crawford's (2000) study of the horse racing industry, Hunt's (1995) study of the clothing industry, Law's (1998) paper on the dairy industry, McLaughlin's (2000) study of retail workers, Oxenbridge's (1994) study of nurses, Powell's (1995) report on the senior doctors, and Ryan's (1997) study of restaurant workers.
Interestingly, despite the anti-union thrust of the Employment Contracts Act, following the shake down of the first years under the Act, some mature collective bargaining relationships either continued on from the 1980s or were newly formed under the Act. There was no obligation to bargain and no prescription to do so in good faith, so parties were left to their own devices (Davenport, 1999). Multi-employer bargaining structures were discouraged, so while many employers opted out of collective relations, others found themselves with no choice but to deal with unions at enterprise level. These were generally large employers with workforces that were strongly unionized before 1991, and one suspects that they remain the core of the collective bargaining population today. A few of these tried, but failed to break their unions or bring them to heel, notably the New Zealand Fire Service (Hartill, 2000). McAndrew (1993) identified this important element of the new industrial relations system as follows:
What can be said is that within the emerging industrial relations system, there is a group of firms, concentrated somewhat by size, affiliation, geography and industrial sector that are accustomed to dealing with effective unions - unions that are strong, competent or bloody-minded depending on one's point of view. Though, for the most part, these firms have not had past experience negotiating comprehensive employment contracts, they know how to negotiate. They do not particularly like dealing with unions, but they know how to do it and, in many instances, they would feel that they do not have any choice. ... this group comprises about one quarter of New Zealand firms but, by virtue of their size, a considerably higher percentage of the New Zealand workforce (McAndrew, 1993: 182-183).
So this group - those employers who entered the 1990s with local collective agreements, together with those who gravitated or were pushed to local agreements with the collapse of multi-employer structures - formed the nucleus of the New Zealand collective bargaining system, largely characterized by enterprise negotiations up close and personal, and quite different from the remote award negotiations of the past. There is no evidence that partnership strategies were widespread during the 1990s, but it is ironic that it was during the 1990s that many enduring collective bargaining relationships were formed, and it is these relationships that would seem to offer the best prospect for maturing into union-management partnerships.
McAndrew (1993) documented in some detail the collective bargaining process engaged in by these employers and the unions with which they dealt. As described by employers, it was generally a robust process, involving high levels of responsible managers and industrial relations or human resources specialists, paid union officials but almost always union members, sometimes many, as well. The employers reported spending an average total of almost 20 hours at the bargaining table, and a like amount of time in prior preparation meetings. About ten percent reported experiencing industrial action.
So, it might well be said that the Employment Contracts Act did what the earlier efforts of the Labour Government in the 1980s intended but failed to do - it pretty much demolished what was left of the award system of collective bargaining.
What has emerged in its place - initially, in small pockets, within the framework of the conciliation and arbitration system; in additional small pockets under the encouragement of the Labour Relations Act; and more extensively with the collapse of multi-employer structures under the Employment Contracts Act - is a largely enterprise-based collective bargaining system, centred on the public sector and larger private sector employers, particularly in key sectors like manufacturing and transport and storage. While the practice of union-management workplace partnership in the context of bargaining under the Employment Contracts Act cannot be said to have been widespread, there were nonetheless some notable examples of partnership flourishing during the decade.
From Collective Bargaining to Workplace Partnership: the ERA 2000
As noted at the outset of this section, the Employment Relations Act 2000 ("the ERA") takes as its principal objective the building of productive employment relationships "through the promotion of good faith in all aspects of the employment environment and of the employment relationship." Productive employment relationships are seen as essential for the social and economic well-being of the country, as well as for the well-being of workers and employers. It is intended under the ERA that good faith infuse the entire employment relationship, a term defined to include not only that between employer and employee, but also the relationship between employer and union. It is significant too that the good faith obligation expressly and specifically applies beyond the bargaining table to "consultation" between union and management.
Collective bargaining between employers and unions representing employees is, nonetheless, promoted as the primary mechanism for building productive employment relationships, and the statutory obligation to bargain in good faith prescribes collective bargaining on interest-based principles - acknowledged as a central component of workplace partnership.
The architect of this legislative reversal by the newly-elected Labour Government was the incoming Minister of Labour, Margaret Wilson, a former academic and long-time scholar of labour relations and employment law. Her ideas were informed in part by input from the New Zealand Council of Trade Unions (CTU):
The policies of both the Labour Party and the Alliance had been clear: that the Employment Contracts Act was to be replaced by a return to collective bargaining and recognition of the right of unions to bargain collectively on behalf of their members. The notion of good faith was also an essential element of collective bargaining and had been developed by the CTU prior to the 1999 election in the Workplace Relations Bill. (Wilson 2004: 15)
Wilson has expressed the underpinnings of the ERA's philosophy on collective bargaining this way:
I see a number of advantages with employers bargaining collectively with unions in good faith. Primarily, good faith collective bargaining - and the conclusion of collective settlements - can assist in building the fair and productive employment relationships that must underpin and support a growing and innovative economy. Although there may be some conflict during the bargaining process, the end result of a concluded agreement comes from dialogue and consensus... This is where I see good faith negotiations heading in the future - providing a foundation for good faith behaviour and a collaborative partnership in all aspects of the employment relationship. (Wilson, 2003: 124-125)
The ERA's championing of collective bargaining was to some extent opposed by employer interests (see Burton, 2004), but was well received by collective bargaining enthusiasts and even moderates in the academic community, Peter Boxall labelling it "a sound re-balancing of rights" (Boxall, 2001: 27).
The statute itself, at Section 32, set out the most basic obligations of the parties to collective bargaining relationships incorporated in the good faith concept: to try to reach an initial agreement on bargaining process to facilitate the substantive negotiations, to meet with one another and to give proper consideration and a response to each other's proposals, to continue bargaining despite reaching deadlocks at times, to respect the role of parties' representatives and to do nothing to undermine the representatives or the collective bargaining process more generally.
The Act also provided for the development of codes of food faith to guide the behaviour of bargaining parties. A committee of the industrial parties appointed by Wilson and chaired by experienced mediator Walter Grills developed a generic Code of Good Faith in Collective Bargaining that was approved by the Minister in May 2001, following the monitoring of early experience under an interim code (Guerra, Merwood & Osborne, 2001). The Code provided more detailed direction on the development of a bargaining process agreement, and on the logistics and processes of bargaining meetings and behaviours.
Still more detailed prescription was provided in the Department of Labour's 68-page "how to" booklet In good faith. The booklet reinforced good faith ethics and practices in collective bargaining as tools for the promotion of union-management partnerships:
Unions and collective bargaining provide employees with an avenue for redressing the imbalances between employers and employees ... They also provide a channel for exchanging ideas, promoting parties' common interests and managing separate interests effectively. By enabling the expression and resolution of divergent interests, collective bargaining offers opportunities to develop social partnerships at enterprise and national levels. (Employment Relations Service, Department of Labour 2001: 11)
While some commentators and practitioners would feel that In good faith was, in the detail, a little unrealistic in its expectations of the parties, the following passage nonetheless nicely captures the intent to change some collective bargaining behaviours and relationships without having parties neutered by the need to be nice:
Good faith does not require parties to set aside their own interests. It allows vigorous bargaining, including economic pressure in the form of strikes and lockouts. Nor does good faith pretend that collective bargaining involves only dispassionate, reasoned argument. Bargaining often involves emotion, tension, grandstanding, brinksmanship and tactics. These are normal aspects of the process and good faith bargaining allows for these realities. However, the duty of good faith does place limits on the tactics each side may employ to further their objectives (Employment Relations Service, Department of Labour 2001: 12).
The keys are, first, that the parties search for and find outcomes "in which both desires have found a place," to quote Mary Parker Follett, rather than leaving one or both parties unhappy from being unduly compromised; and second, that the parties invest in their relationship long term rather than one seeking to "conquer" or exclude the other. So, while vigorous bargaining behaviour is not prohibited, the good faith obligation encourages bargaining parties to engage in behaviours that maximize the potential for joint gain and that build and enrich their relationship.
The principal consultants to the Department of Labour's Employment Relations Service on In good faith also produced a definitive legally-based practice guide to obligations, and permissible and suggested bargaining behaviours under the good faith bargaining requirements of the ERA (Davenport & Brown 2002) as practitioners attempted to come to grips with the requirements. Legal scholars have continued to explore the new obligations (Benefield, 2001; McKay, 2001; Cummack, 2002; Hughes, 2004), although the good faith concept has proved to be far less legally contentious than many originally anticipated.
Collective bargaining, then, conducted under the principles of good faith as defined, was promoted by the ERA as the foundation for union-management relationships. It provided a platform for unions, managements and employees to move beyond confrontation-based relationships to partnership arrangements that allowed the optimum benefits to flow from mutual interests while respecting the separate and sometimes conflicting interests of the bargaining parties.
The ERA initially provided one other resource to assist willing parties in the overhaul of their collective bargaining relationships - a reconstituted Mediation Service within the Department of Labour. As noted above, the Employment Tribunal in the 1990s had only a lukewarm mandate, at best, to involve itself in collective bargaining disputes, and no mandate at all to work proactively with parties' long term in the improvement of their relationships.
The new Mediation Service necessarily had to attend to its "bread and butter" work of resolving rights disputes, but it was also directed from the outset to be proactive and facilitative with early intervention in both individual and collective bargaining problems. The requirement of parties to participate in mediation in good faith can be seen as supporting this approach (Borchardt 2003). While the Service has struggled to prioritize its proactive initiatives under the ongoing burden of reactive interventions, proactivity - including in collective bargaining - has remained on the agenda (Hooper 2002; McAndrew, Morton & Geare 2004). The proactive programme is designed to promote bargaining skills and an interest-based bargaining philosophy consistent with both good faith obligations and union-management partnership.
While most Mediation Service interventions in collective bargaining have necessarily been event-based, the Service has been able to provide some limited assistance to parties in remaking conflictual relationships:
Though implementation of a full preventative programme remains in the future, mediators have at times been able to use event-based interventions to assist parties in enhancing their bargaining relationships. In a minority of cases, mediation assistance is sought early in a bargaining relationship and mediators can work with parties on negotiating constructive bargaining process agreements. On other occasions, mediators entering an impasse situation have been able to work with parties to bring some structure and orderly process to the bargaining relationship as a basis for breaking the deadlock and moving the negotiations forward. (McAndrew, Morton & Geare 2004: 110)
The Department of Labour's Mediation Service, then, remains an important resource for collective bargaining parties wanting to develop their relationship to its full potential, although the Service is not equipped or resourced to provide substantial investment of time or money in any given union-management relationship. Mediators are, however, in key positions to refer parties to the Partnership Resource Centre whenever a longer-term commitment to working with the parties is required, desired and appropriate.
Assessing Collective Bargaining Developments Under the ERA
Given the substantially revised legislative environment for collective bargaining created by the ERA 2000, developments in bargaining since 2000 have been less spectacular than many practitioners, scholars and policy makers might have anticipated. There has been substantial monitoring of the impact of the Act by the Employment Relations Service of the Department of Labour since 2000 (Guerra, Merwood & Osbourne 2001; Employment Relations Service, Department of Labour 2002; Waldegrave, Anderson & Wong 2003; Waldegrave, Roberts, McMillan & Mason 2003; Wyllie & Whitfield 2003; Anderson & Wilson 2003; Waldegrave 2004 & 2004a; Annakin 2003; and Lindsay & Merwood 2004).
In addition to official reports on the operation of the Act, the Industrial Relations Centre at Victoria University of Wellington continues to issue the regular series of reports on union membership, collective bargaining coverage, and the contents of collective agreements that were initiated by the Centre during the decade of the Employment Contracts Act (Thickett, Harbridge, Walsh & Kiely 2002; Harbridge, May & Thickett 2003; May & Walsh 2004; Thickett, Walsh & Harbridge 2004; Blackwood, Feinberg-Danieli & Lafferty 2005). These reports, while valuable for the information they contain, do not address bargaining processes or the nature or quality of union-management relationships. Together with the official reports, however, and with occasional pieces of independent research, they do provide a pretty clear picture of the practice of collective bargaining in five years under the ERA. As hinted above, there have been changes in collective bargaining, but they have not been spectacular ones. While union-management workplace partnership ideally involves more than just collective bargaining, in the New Zealand context a strong collective bargaining relationship remains the essential foundation for partnership, so that changes in the fortunes of collective bargaining are pivotal to the potential for partnership.
First, there has been under the ERA a slow but steady increase in union membership since the low point of December 1999, though union density has remained about static. May & Walsh (2004) reported an increase of about 40,000 members to 342,000 since the introduction of the ERA. At the very least, the trend towards union decline in the 1990s has been reversed.
Second, there has been a decline in collective bargaining coverage under the ERA. However, this is more complex than it seems. Collective contracts were put together in a variety of ways under the ECA, only some of them union-initiated. Some collective contracts were initiated and dictated by employers (McAndrew & Ballard 1995); some of these were multi-employer documents of convenience. Many of these have disappeared (May & Walsh 2004: 12). It is likely that, in terms of numbers, the coverage of "real" union-negotiated collective agreements has remained about as it was at the time of the ERA's introduction.
The Otago University studies in the early to mid-1990s found that unionization and collective bargaining endured under the ECA in industries, occupations, areas and employing organizations where unionization had been strongest at the time the Act was introduced (McAndrew 1993). The same appears to be the case under the ERA:
There has been relatively little change seen so far in the extent and coverage of collective bargaining. Increases tended to be in areas where there is existing union coverage and a history of unionization in the workplace, most notably in the public sector. (Waldegrave, Anderson & Wong 2003: 12)
The Victoria University studies supported this view of collective bargaining as a predominantly public sector phenomenon, reporting in 2004 that public sector employees were now six times more likely to be involved in collective bargaining than private sector employees (May & Walsh 2004: 13).
This is not to say that there is not significant collective bargaining in the private sector. There is, but it is increasingly centred in manufacturing, with there being some slippage in unionization and collective bargaining outside of the manufacturing sectors (May & Walsh 2004: 13), and it is increasingly centred in large firms with workforces of 500 or more (Blackwood, Feinberg-Danieli & Lafferty 2005: 10).
Something similar is happening on the union side of the table. While a number of small unions have registered under the ERA, such new local unions represent relatively few workers. The few largest unions, however, are the ones most likely to have negotiated a new collective that did not exist under the ECA (Waldegrave, Anderson & Wong 2003: 36).
There has, correspondingly, been a reduction in the number of employers covered by collective agreements, although many of these would have been covered by contracts of convenience organized by trade associations during the ECA era and not renewed under the more demanding requirements of the ERA. Some other employers have simply not renewed employer-initiated collective contracts from the ECA period (May & Walsh, 2004: 15).
There has been some increase in coverage of multi-employer collective agreements, although this is largely confined to the public sector, and within the broader public sector to the health and education sectors. Half of all government employees are covered by multi-employer, and sometimes multi-union as well, collectives, but less than ten percent of private sector workers covered by collective agreements are covered by multi-employer documents.
Single employer-single union enterprise or workplace collective agreements are the predominant form in the private sector, accounting for over two-thirds of covered private sector workers (May & Walsh, 2004: 20).
To some extent, then, there has been a stabilization of collective bargaining centred in the public sector and in large private sector manufacturing organizations. There is another sign of stability as well. Initially under the ERA, there was a shortening of the terms of collective agreements compared with the average two years or more terms of collective contracts in the late 1990s. This has more recently been reversed, with the Victoria University studies showing a lengthening of average terms, with two thirds of covered employees now covered by agreements with terms of 18 months or more (May & Walsh 2004: 22). So it seems likely that the most fertile ground on which to look for current union-management partnerships and especially the potential for future growth is increasingly in the public sector and large private sector employers, particularly in manufacturing, where relationships are showing signs of long-term maturation.
The Department of Labour, through its database of collective agreements, has consistently monitored the substantive contents of collective agreements under the ERA, as it did collective contracts under the ECA before it. This data is regularly reported in the Department's periodical publication ERA Info: the report on employment relations in New Zealand. It is however not necessary here to detail the general contents of collective agreements.
What is of interest, though, is the extent to which collective bargaining parties have chosen to include in their agreements provisions that go to the nature and quality of their relationships. In this respect, Andrew Annakin, then the General Manager of the Department's Employment Relations Service, reported as follows to the Massey University conference in 2003:
A high proportion of agreements made specific reference to the rights of a union to represent its members or recognized the union's authority in the bargaining process... Almost half ... allowed for union delegates to perform their union duties during normal working hours without loss of pay... A small number of agreements made explicit provision for union delegates to use the employer's facilities, such as meeting rooms, telephones and email to carry out the business of the union... Very few agreements made specific reference to the code of good faith, yet good faith obligations were written into a variety of areas within agreements. References to good faith were typically expressed in clauses dealing with consultation, the exploration of redundancy options, and employment relationship problems. (Annakin 2003: 136-137)
Relatedly, in terms of what is known thus far about collective bargaining under the ERA, is the question of the impact of the Act, its good faith mandate, and its support structures and institutions, on the nature and quality of collective bargaining relationships. This question has been addressed in both the general reviews of the Act commissioned by the Department of Labour and the more focused studies of parties' experiences with the good faith code. In approximate summary, the evidence suggests that the Act has had an impact in improving collective employment relationships, albeit not in as pronounced a manner as policy makers might have hoped for, and well short of the potential for improvement that exists.
One significant contribution - perhaps the most significant concrete contribution documented to date - of the good faith obligation to the quality of union-management relationships is the widespread practice, mandated by the ERA, of parties negotiating for a formal bargaining process agreement to define their relationship and behavioural obligations to one another in the collective bargaining arena. This is a practice that has accelerated rapidly under the Act (Lindsay & Merwood 2004: 4).
This development is consistent with reports to a Massey University conference on union-management relations held in 2003:
Participants reported having most difficulty wrestling with bargaining process arrangements in the first year under the Employment Relations Act, in part because it was new for many, and in part because there was a lack of guidance to parties on how to proceed. For many, putting in place process arrangements has become routine and largely trouble-free. (McAndrew & Penn, 2003: 173)
Other than through the bargaining process agreement, parties appear to be most often influenced by the obligation to bargain in good faith in a general way, without necessarily paying it much conscious heed in the course of bargaining or other interactions (Lindsay & Merwood, 2004: 5). In part this seems to be because, as parties often report to researchers, they believed that they already dealt with one another in good faith, and so did not need to pay much close attention to the precise requirements of the good faith obligation.
Some participants at the Massey University conference in 2003 reported that the ERA facilitated the development of more positive union-management relationships by removing "barrier" issues - union access, information and recognition issues that had be fought out on the front line under the ECA - thereby allowing the parties to focus on real, substantive matters (McAndrew & Penn, 2003: 176). The conclusions from the conference were that "the ERA and its good faith mandate have generated an environment that has encouraged parties into more positive approaches" to collective bargaining and to one another (McAndrew & Penn, 2003: 177). Other than official reports and the Massey University conference proceedings, there is some limited case study data that also seems to indicate that the ERA has had a somewhat positive impact on bargaining behaviours, processes and union-management relationships, at least for some parties (Anderson & Wilson 2003; Treanor & Rasmussen 2003).
The union view was that the ERA had prompted the beginnings of a more cooperative style of union-management relations, but that more needed to be done to promote the extent of collective bargaining coverage (Wilson, R. 2004). This view was broadly adopted by the Labour Government following the review of the Act, and the ERA was amended effective December 1, 2004, albeit not specifically in ways that noticeably changed the environment for workplace partnership.
State Sector Legislation & Approaches to Bargaining
Since 1988, the legislation governing the employment relationship between the State and its employees, and in particular the resulting State approach to bargaining with unions, has played an instrumental role in the development of partnership type approaches in New Zealand.
The State Sector Act 1988 made radical changes to public sector industrial relations, with Chief Executives being established as employers of their own staff, the State Services Commission being established as the "employer party" for negotiations (although they could and did delegate this authority to individual Chief Executives), statutory criteria governing collective bargaining being abolished, and the public sector moving under the provisions of the Labour Relations Act which previously governed only the private sector. The role of unions in the bargaining process was protected; however the elimination of compulsory arbitration of pay disputes and an increasingly "managerialist" ethic in public sector management resulted in more difficult bargaining conditions for the unions than had been experienced in past regimes (Boston et al. 1996).
In hand with the changes to bargaining came new forms of managerialism across the civil service. Walsh observed that:
Consultation was an important area where the issue of managerial prerogative was posed sharply. The changes in this area appear to be most visible in Electricorp and in the three corporations that emerged from the Post Office. As government departments, these organizations had a centralised, highly consultative and cooperative decision-making process in which the unions enjoyed considerable influence. In the SOEs, management has tried to diminish union influence over decisions by moving decisively away from a genuinely consultative approach, although, as we shall see, there is some variation in the degree to which this has happened. (Walsh, 1998: 185)
Public sector unions were forced to deal with a range of new scenarios in the late 1980's and early 1990's as a result of the new arrangements, new approaches to management and also the deregulation of previous state owned assets. A PSA delegate of the time made the following observations:
In the corporatisation and restructuring of the NZED, I have argued, management was preoccupied with controlling the labour process in order to increase the profitability of their operations. In their attempts to achieve the primary pursuit of profit, management was forced to deal with the political implications of the conflict of interest resulting from their initiatives. Overall, the objectives of management were achieved. However, management had to make compromises along the way, and will continue to need to accommodate the requirements of the workforce. The union (PSA) did achieve a degree of success in ameliorating the adverse impact of change on its members and in demonstrating to the senior management of Electricorp that the union cannot be ignored with impunity. The changes introduced via restructuring and the ongoing technology based changes will create new sets of interests that will provide the raw materials for ongoing conflict, resistance and compromise. (Ammon, 1989: 118)
In 1991, the Employment Contracts Act became the legislation governing all employment contracts in New Zealand and the State Services Commission decided to delegate authority for negotiations to Chief Executives for negotiations to be held in 1992. This was a delegated authority which could, in theory, be revoked and consultation with the SSC was required. In subsequent years the level of delegation of authority to Chief Executives increased to the extent that individual institutions took control of their bargaining agendas and processes.
The legislative change to the Employment Relations Act 2000 and subsequent amendments have sparked few meaningful changes to the conduct of collective bargaining in the public sector, however the ability to draw multiple employment bodies together into Multi-Employer Collective Agreements has been pursued by some unions (and in some cases successfully).
Within this changing framework, public sector unions and the State employer developed some new and innovative approaches to collective bargaining. The most notable of these is the Partnership for Quality (PfQ) initiative.
The Public Service Association (PSA) PfQ strategy was the first explicit attempt by a union in New Zealand to go down a comprehensive workplace partnership route. The strategy was borne from negative experiences under the ECA and was influenced by partnership initiatives in Ireland and South Africa.
In May 2000 the PSA and the Labour-Alliance Government signed the Partnership for Quality Agreement. The agreement recognised that public service workers as a group share common interests with their employers - high quality public services. That agreement set out an approach which:
...involves common ownership of plans, issues and problems, and involves the direct collective participation of employees through their union and an investment in their training, personal development, and their working environment.
The Guidelines for Departments and PSA organisers, issued jointly by the State Services Commission and the PSA in September 2000 noted that partnership will involve a greater and growing level of participation by PSA members, collectively, in departmental decision-making, and that this would require departments to enable and facilitate the participation of PSA members in decisions concerning strategy development, quality improvement and service delivery. The benefits of partnership were said to include:
- Increased buy-in from employees in the management decisions made in the department;
- Wider contribution to, and potentially more rigorous, management decisions;
- Improved job satisfaction; and
- Improved quality of services.
An important feature of the PfQ was that each Government department was left to reach its own partnership agreement with the PSA, "after considering the implications of the overall partnership agreement between the PSA and the Government". In this way the methods of implementing the PfQ were non-prescriptive, althought the State Services Commission undertook some facilitating, monitoring and co-ordination of PfQ initiatives across the public service.
The PfQ agreement was renewed and expanded in November 2003 and records a commitment by the government and PSA to broadening and deepening the implementation of PfQ. Specifically that agreement formalised a commitment by the government and the PSA to spreading PfQ to a greater number of departments and agencies and deepening the impact of PfQ at a wider range of levels of management.
Paul Cochrane, then National Secretary of the PSA said of PfQ:
At the heart of the PSA approach is a commitment - a commitment to quality public services. In turn, we seek a commitment from employers to provide decent jobs and good management. Through this combination we can have a partnership - a partnership for quality. The partnership approach emerges partly from the knowledge that workers do not seek or desire workplace conflict, nor do they just want 'decent' pay and working conditions. Survey after survey shows workers value job security, having a rewarding, worthwhile job with an employer who respects and trusts them, and being charged with the responsibility to do the job well. Partnership involves a much wider understanding of the role of unions than simply as a bargaining agent or workplace representative - union members are as interested as management in the future of the organization they work for and where it is heading, and have a right to be involved in the decisions about how the work is done.
The impact and operation of the PfQ has been reviewed in detail in other publications (for example the joint State Services Commission and PSA 'Stocktake' of 2005). The PfQ is noted here simply as providing a significant impetus for workplace partnership to enter the political and economic agenda, and as a strong catalyst for the Government to invest in the Partnership Resource Centre.
Government Initiatives Around Partnership Approaches
Until very recently, New Zealand Governments have not acted to provide any significant State level sponsorship for workplace partnership to develop in this country. However there have been examples of Government initiatives around tripartite approaches to key industry or labour market issues which are worthy of note.
The Attempted "Compact" (1988)
Derived from ongoing practice in Australia at the time, in 1988 an attempt was made at a national level to establish a tripartite agreement between the Government (Labour Government), central employer representatives and the CTU in the nature of a social and economic "Compact". For a variety of political and economic reasons this initiative did not realise any tangible agreements, and was aborted to be never reconvened. In 1990 a much more limited "Growth Agreement" was developed between the CTU and Government; however it did not survive the change of Government in October 1990.
Committee of Enquiry into Industrial Democracy (1989)
In February 1989 the then Minister of Labour, Hon. Stan Roger appointed a tripartite Committee to enquire into industrial democracy in New Zealand. For the purpose of the enquiry industrial democracy was defined as:
... the meaningful participation of workers in decisions affecting their working lives. Amongst other things, it includes the involvement of labour market participants at national, industry and work place levels and, through individual and/or union channels, the system of work-place delegates.
The terms of reference for the enquiry were:
- To identify the extent to which improved industrial democracy would help employers, workers and their organizations work to benefit the economy, particularly in terms of better functioning of the labour market.
- To advise on a framework which would facilitate and support industrial democracy initiatives, within the context of the labour relations strategy contained in the Labour Relations Act 1987.
- The Committee used written and oral submissions as its principle research vehicle. Two seminars were also hosted by Victoria University during the course of the enquiry, bringing together Government, union and employer stakeholders. Case studies were discussed in those seminars, and these are touched on later in this review.
In its Final Report the Committee identified considerable debate amongst the various potential stakeholders of "industrial democracy" concerning exactly how and where the principle could be applied in New Zealand. Amongst the range of opinions were both employer and union parties finding reason to not support the concept. Employers tended to favour human resource management type interventions such as "worker participation", whereas most unions saw protected and extended collective bargaining as their key vehicle and were concerned that most forms of "democracy" simply resulted in "consultation over decisions already made by the employer".
The Committee made eleven recommendations which, if adopted, would have included a requirement for all awards and agreements in organizations with more than forty employees to include a mechanism for "participatory practices" as determined by the parties. They would have also amended the Labour Relations Act to compel the development of "Participative Councils" or "Work Councils", again in organisations with more than forty employees. The employer representative on the Committee entered a Minority opposing the recommendation which would have mandated union representation on all participatory or works councils.
History shows that the recommendations of the Committee were not adopted in any substantive form and the general results of the Enquiry were largely ignored by both the union movement and employers.
Health Effectiveness Studies (Late 1980's)
Government funding was made available for a series of research and practical "studies" across the health sector, some of which involved the relevant unions of the time around issues going to staffing, productivity, and working conditions. Very little published information is available on the outcomes of the Health Effectiveness Studies and there is no evidence of significant lasting impact.
Tripartite Health Forum & Aged Care Forum (2003)
The Tripartite Health Initiative was established to contribute to a "sustainable public health system" by developing a culture of engagement and co-operation between health workers, their unions and District Health Boards. In more direct terms, the aim was to identify and address national issues requiring co-ordination and agreement between Government, employers and unions.
The Aged Care Forum was established to pursue tripartite agreement on mechanisms to address recruitment and retention issues for workers in the Aged Care sector.
Pay & Employment Equity Task Force (2003)
The Pay & Employment Equity Task Force was commissioned by the Government to examine the gender pay gap in New Zealand, with a particular focus on the public service, and the public health and education sectors. The Task Force comprised of a significant number of sub-teams and included civil servants, employer representatives and (a relatively high number) of union delegates.
The Task Force's report of March 2004 included a developed five-year action plan which included the set-up of a dedicated unit within the Department of Labour.
In December 2004, the Pay & Employment Equity Unit of the Department of Labour was formally launched. The Pay & Employment Equity Unit's governance membership includes union and employer representatives from the public service, public health and public education sectors, the Secretary of Labour and the Director of the Pay & Employment Equity Unit.
Workplace Productivity Work Group (2004)
In March 2004 the Government announced the establishment of a Workplace Productivity Working Group (WPWG). The short version of the Group's brief was to "determine ways that improved workplace productivity can deliver a high wage, high value economy for the benefit of all New Zealanders". The WPWG comprises members from business groups, the NZCTU, academia and Government. Amongst detailed terms of reference was the following:
Workplace and employment relations and practices: this area covers employee-employer dialogue aimed at identifying and implementing more productive workplace practices, building on the principles of partnership and participation in recent legislation ... The Government has instituted an Employment Relations framework which includes the key principles of good faith and employee participation. The WPWG should be focused on building on the principles of this framework.
Amongst their activities to date the WPWG ran a workshop in May 2004 which included a wide range of tripartite stakeholders and in November 2004 they released a summary report of their activities and findings titled "The Workplace Productivity Challenge". The key outcome of the WPMG was a framework for workplace productivity named the 'Seven Drivers'. The Seven Drivers continue to form the basis of discussion in the successor body of the WPMG, the Productivity Taskforce and some subsidiary and/or related working parties and advisory teams. At a high level the Seven Drivers are:
| Drivers | Examples |
|---|---|
Building Leadership and Management |
Encouraging leadership at every level of the business Leading by example and creating positive and productive work environment Making sure workers have the skills and resources to improve their learning and go on learning Investing in management development and training Supporting innovative thinking and making use of new ideas |
Organisational Structure |
Ensuring that all workers understand their role in achieving the firm's objectives Recognising and rewarding workers whose efforts support the firm's goals Regularly analysing work processes and work flows Encouraging workers to make suggestions about how the workplace can be better organised Regularly sharing information across teams, processes and networks. |
Networking and Collaborating |
Building relationships with other businesses and industry bodies Joining regional or national industry/trade organisations Creating good business relationships with suppliers and other organisations that add value Getting involved in local, regional or national government agencies or programmes |
Investing in People and Skills |
Giving workers the training they need to be effective Providing all workers with opportunities for formal learning (for example, industry qualifications, job specific training) Structuring the workplace so that experienced workers can give support/coaching to less experienced workers Auditing the skill level of workers; ensuring there are high levels of literacy, numeracy and computer skills Providing workers with personal career development discussions or plans |
Encouraging Innovation and the Use of Technology |
Working out what new technologies could be useful to the firm Regularly investing in research and development Consulting workers and giving them training when new technology is introduced Being open to innovation and doing things differently Giving workers opportunities to suggest new ideas or processes |
Creating Productive Workplace Cultures |
Treating workers at all levels of the business well All workers sharing the same goals and values All workers having the chance to suggest how they could improve their part of the business Rewarding participation and good ideas Gathering feedback on workers attitudes and ideas for improvement |
Measure what Matters |
Ensuring information systems provide the information needed to work out how well the firm is doing Measuring performance against a range of goals (rather than just focusing on financial performance) Identifying key performance measures/indicators and regularly measuring them throughout the year Making sure all workers know what the key performance measures are Measuring or monitoring customer satisfaction, workers morale and supplier feedback Benchmarking your organisation against industry best practice |
Partnership Resource Centre (2004)
In May 2004 a formal report titled 'Scoping a Partnership Resource' was delivered to the Department of Labour and the State Services Commission recommending the establishment of the Partnership Resource Centre (PRC). This recommendation was adopted and late in 2004 the PRC was formally launched by State Services Minister, Hon. Trevor Mallard and Labour Minister, Hon. Paul Swain.
The Trade Union Agenda as it Impacts Partnership
The trade union agenda for workplace partnership preceded the introduction of the Employment Contracts Act, but that legislation undermined the conditions and frameworks supporting this agenda.
In 1992 the CTU published two 'union guides' to workplace reform (Workplace Reform: A Union Guide and Building a Better Workplace. The latter was an updated and expanded version of the original guide. Then CTU President, Ken Douglas made the following comment in his introduction in the guide:
There is some debate about whether unions should be involved in workplace reform. To me, this is a non-issue. The workplace is, and always has been, in a state of constant change. The only question is who will dictate the pace and form of change - the employers on their own terms, or with worker input. Those opposed to workplace reform presumably like the workplace as it is today. Personally, I haven't met too many workers who do! The issues of workplace change are fundamental issues of worker and union rights and obligations.
The guide itself suggested the following agenda would be required if unions were to effectively engage as part of the process of workplace reform:
- Restructure so that they cover a larger number of occupational groups within an industry;
- Ensure that union structures (delegate systems etc.) follow the evolving company structure;
- Improve information services to delegates in multiplant firms and multinational enterprises;
- Make clear distinctions between what is most appropriately and efficiently negotiated nationally, at industry level and at the level of the workplace;
- Try to make enterprise bargaining a complement to industry and national level bargaining, and not an alternative to them; and,
- Develop acceptable frameworks for "empowering" workers in smaller groups to influence their specific working conditions.
However, not all union officials adopted the participatory perspective on workplace reform and the devolution of bargaining. Boxall & Haynes reported:
... those unions disposed to aggressive, free bargaining outside the constraints of the arbitration-based system, viewed participation in workplace reform as a dangerous identification with employer interests. (Boxall & Haynes, 1997: 8)
Likewise at a union leadership level individual unions took differing approaches in their attitude towards workplace reform and participation in the face of the Employment Contracts Act. The Engineers Union played a particularly prominent role in the workplace reform campaign, both through its own engagement strategies at industry and enterprise level and in its support for Workplace New Zealand. The Engineers Union was successful in its partnership role in the formation of new industrial instruments in the plastics, packaging, and dairy industries. The bargaining strategy adopted by the Engineers Union was described as:
- Restructuring occupation-based documents to cover all workers on an industry or workplace basis;
- Providing skill-based career paths within documents as a framework for training and skills development;
- Development of managed flexibility within documents to allow agreed site variations for a variety of work arrangements;
- Promoting workplace reform and consultative mechanisms to jointly manage the process of change (Webster, 1993).
However some other unions took a "defence via offence" position and others focused on internal issues as a result of the need or desire for union re-organization and amalgamations. Union membership itself fell from around 73 percent in 1989 to half that number in the mid 1990's and the number of unions dropped from around 3259 in 1985 to 66 in 1994 (Harbidge & Hince in Perry et. al.: 54). Mostly this was a result of union amalgamation; however some unions (most prominently the Clerical Workers Union) did cease to exist in the face of the regulatory and social changes.
With the return of a Labour Government in 1999 the trade union agenda turned visibly towards optimism; however scars were apparent as a result of experiences during the 1990's. Ross Wilson, President of the CTU, said this in a 2001 speech to Business New Zealand:
New Zealanders have been through tremendous change during the last decade. In my own case I negotiated many of those changes in rail and ports. In ports in the late 1980s I persuaded our union to positively embrace and negotiate change. Our members accepted that and re-structured long-standing agreements and work practices to deliver huge efficiency gains in ports, but with some productivity sharing incentives for the smaller workforce which remained. And then many of the same employers used the ECA to unilaterally vary the deals which had been done and reduce wages and conditions again. That has been a common experience during the last decade. More than anything else I think workers felt they were not respected, because they were seen as a cost rather than an asset. Can we move to a more mature relationship? We both have our cowboys. There are pockets of resentment from the 1990's ... I think it is your choice more than ours but, like any partnership, it would require a genuine joint commitment to make it work. I think we could deliver. Could you? (Wilson, R. 2001).
It also remained the case that the union movement was still not settled on what then CTU Vice President Darien Fenton called "strategic relationships between unions and management":
In the last fifteen years in New Zealand we have witnessed debates in the union movement about the proposed Compact, and the Growth Agreement, Nissan Way, Workplace New Zealand and partnership. We do not always handle these debates particularly well. Proponents are variously described as "sell outs", "dinosaurs" or worse. In fact, it needs to be acknowledged that the potential always exists for either conflict or co-operation in union-management relations. It depends on many factors including the overall environment, the history of how personalities have dealt with each other and the extent to which goals can coincide (Fenton, 2002: 1).
Fenton went on to say:
Entering into a strategic relationship with management is obviously a step up from a tactical engagement. For unions, a successful strategic relationship would be informed by:
- A desire from union members to be more involved in key decisions affecting their work lives;
- Union members who wanted their union to be more than a "bargaining agent";
- A recognition by the parties that they did not want their relationship to be confined to contractual bargaining of wages and conditions;
- A recognition that management were seeking tangible benefits from such engagement;
- A continued entitlement to worker/union rights;
- An improvement in union organization and education as part of the process of engagement;
- Membership support and understanding of the goals and involvement in the process;
- A recognition that engagement is not a process in itself and must include, to be sustainable, issues of substance; and,
- A shared and strong commitment to fundamentally change the culture of the workplace.
Conditions will not always exist for union/management relationships based on the above criteria to be established (Fenton, 2002: 4).
The union movement's promotion of legislative changes in the lead up to the Employment Relations Act 2000 focused on union rights in the workplace and legislative support for collective bargaining. In some areas, the unions were disappointed with the resulting Act. In 2003 the CTU sought four changes to the Employment Relations Act. In the words of Ross Wilson, these were:
- Promotion of collective bargaining;
- Strengthening good faith requirements and consequences for breach;
- Restrictions on employers who pass on union-negotiated terms and conditions in such a way that it undermines collective bargaining; and,
- Protection for vulnerable workers in a sale, transfer or contracting out situation (Wilson, R. 2004: 179).
Based on this agenda, the CTU would have been happy with the resulting amendments to the Act. As it went to the development of partnerships in the workplace, the available literature suggests that the main union agenda in the decade to date, outside of the state sector and selected pockets of the private sector, has been on developing "good faith" practices in collective bargaining and on developing what they have termed the "social dialogue".
In terms of workplace partnership, the CTU has since 2000 laid the groundwork for debate to take place within the union movement. Formal debates have been held in CTU conferences and, subsequently, their message was taken out into member unions. The CTU also contracted research into the international experience of partnership that was made available to member unions in a national workshop. The CTU also actively promoted the creation of the Partnership Resource Centre.
Employer Viewpoints & Practices
At a tri-partite seminar held during the Committee of Enquiry into Industrial Democracy in 1989, Roger Jessup then Director-General of the New Zealand Employers Federation outlined an employer position on workplace partnership matters which was fairly consistent with the key themes from employer representatives over time. In part he said:
Let me clearly say that I am not hostile to the concept of unions of workers. Groups of employees will always have interests in common and at times these will be in conflict with the views of their employers ... For the last ten years the Employers Federation has actively promoted the concept of industrial democracy under the title of employee involvement in the workplace. In 1978 we surveyed over 550 firms in New Zealand to assess the existing level of employee involvement practices. That survey showed a significant number of companies were practising some form of employee involvement. Almost half those surveyed showed an interest in involving their workforce more closely in the affairs of the enterprise. Many were looking for advice in the form of reports or case studies of New Zealand experiences ... The NZEF also commissioned a detailed study of the experiences of twelve companies of varying size and character and published a summary of the results in 1980. Our 1980 booklet set out to define employee involvement and settled on a definition ... "providing the opportunity for individual employees to influence decisions concerning their work and their work environment". The Federation sees such employee involvement as an integral part of an employer's task of managing people so as to obtain the best results for the enterprise and for the people who work for it.
The theme here which is consistent with the long-term employers' agenda is that employee involvement or participation is a desirable management practice in making organizations more productive, but does not require union involvement. The nature of the "employee voice" being sought by these employer representatives is thus fundamentally different to that in the dialogue of those in the union movement who promote partnership type practices. The distinction is perhaps strongest on the issue of collective bargaining and the requirement for any power balance through the presence of a union. As a result of this unitary focus very little has actually been said by employer representatives about workplace partnership per se.
Under the era of the Employment Contracts Act most employer representatives remained concerned and focused on human resources management practices which they perceived would make organizations more efficient through enhancing the productivity of staff and, where appropriate, giving staff a direct means to contribute to, and benefit from, increased organizational effectiveness.
In a study of members of the Auckland Employers Association in 1992, Ryan concluded that:
Indications from Northern employers suggest that the ways in which firms use their employment patterns to assist in their adjustment to changing economic circumstances may vary across industries and different sizes of firm. There are some indications, however, that forms of flexibility which allow employers to adjust to short-term economic pressures are likely to be preferred over those which require employer investment in training and development and the active co-operation of the workforce. This is not to say that there are not employers in New Zealand who are taking a longer term strategic approach to human resource development and the management of their employees. It must be said, however, that this may be limited to larger and more sophisticated companies, and that smaller companies faced with the immediate pressures of survival in a harsh economic environment perceive themselves as being unable to afford the luxury of a strategic approach to the issue of labour relations and workplace flexibility (Ryan, 1992: 64).
From another perspective, Roger Kerr of the New Zealand Business Roundtable summed up the central employer's view on changes under the Employment Contracts Act by 1995 in the following way:
There is a theme in these changes which emphasises the common interests of the enterprise and the people who work in it. Their lifeblood is improved communication. The workplace has been depoliticised; customers are the key drivers. These changes are welcomed by those experiencing them. They are not welcomed by those whose allegiances are to the collectivism of the past (Kerr, 1995: 2).
Following the election of a Labour Government in 1999 and the subsequent introduction of the Employment Relations Bill, representatives of employers voiced considerable concern about the future of labour market regulation in New Zealand. Roger Kerr's view was:
The minor amendments to the Bill made by the select committee leave unchanged its basically flawed premise that firms and employees are not capable of working out for themselves the employment arrangements that suit them best. The notion that there is unfair bargaining power, no matter how competitive the industry, is simply Marxist nonsense. Neither small employers nor large ones can force anyone to work for them (NZBR Press Release, 2002).
The submission of Business New Zealand on the Employment Relations Law Reform Bill in February 2004 touched on sensitivity to the potentially enhanced use of "good faith" in collective bargaining in the future:
The Bill will cause the New Zealand business environment to be less conducive to innovation, productivity, and economic growth ... The Bill purports to apply good faith to all aspects of the employment relationship but it is apparent that the concept's new - and major - function is for use in undermining the right of employers to manage their enterprises in the most effective way. Good faith is no longer a process but an end in itself...
From a research perspective it is not clear whether the much appreciated "flexibility" which employers enjoyed in the 1990's via enterprise bargaining ever translated itself into long-term systems of employee participation or "voice" in many New Zealand workplaces nor whether the changes made in workplace flexibility were long-term in nature or simply efforts to reduce short-term costs. An analysis of the Australian experience of deregulated enterprise bargaining suggests:
What we are able to draw from this is that in terms of various major forms of flexibility, enterprise-based agreements are producing (not perhaps in a revolutionary sense, but to a considerable degree at least) a quite different workplace, and quite different working patterns and arrangements than had been the case under centralised awards. But is this indicative of the kind of workplace "partnerships" or "co-operative workplaces" which both the human resources literature and the political rhetoric seem to suggest is desirable? (Mitchell, 2004)
A comparative study of Australian and New Zealand workplaces undertaken in 1995 found that managements in New Zealand were adopting a wider range of workplace reform measures than their Australian counterparts. The study concluded that New Zealand workplaces were more likely to be introducing new technologies, reforming management and production methods, and increasing skill levels. The study also concluded that:
There was also a much more extensive adoption of negative cost cutting measures in New Zealand than Australia ... A greater proportion of workplaces were using less expensive workers, cutting wages and penalty rates and introducing sub-contracting to reduce labour costs. The introduction of the ECA has clearly provided New Zealand management opportunities to force down the wages bill as a means to improving short-term competitive advantage. A greater proportion of New Zealand firms were also introducing new payment systems to elicit greater work effort or simply making staff work harder. ... In the less-regulated New Zealand labour market, private sector employers have shown a greater willingness to experiment with both positive and negative approaches or workplace reform. Therein lays the dilemma for government policy seeking to promote workplace reform: how to introduce legislative change that will encourage long-term productivity enhancement methods while restraining the use of negative cost minimisation and work intensification measures (Allan, Brosnan & Walsh, 1999: 840).
There is limited research in New Zealand on the impacts of employee participation on firm performance. An exception was a study by Guthrie in 2001 which, based on data from 164 firms with workforces of over 100 employees, concluded that:
This analysis supports arguments and previous results suggesting that firm competitiveness can be enhanced by utilizing high-involvement work practices ... The findings in this study are particularly supportive of the U.S. steel minimill industry ... I found that turnover and employment practices interact to affect firm productivity; employee retention is especially critical when investments in high-involvement work practices are relatively high (Guthrie, 2001: 187).
Case Studies of Workplace Reform
Committee of Enquiry into Industrial Democracy
At a tri-partite seminar held during the Committee of Enquiry into Industrial Democracy in 1989, two case studies were presented on "employee participation" in New Zealand companies. Nissan New Zealand was the first of these and company officials described their programme as "relatively simple and unsophisticated" compared to northern European models. Nissan had at the time an agreement with the Engineers, Carpenters and Electricians unions which they described as "institutionalising employee involvement in decision making". The formal mechanism established by that agreement was described as:
The Consultative Committee as part of the Agreement is the formal involvement mechanism for the Trade Union party of our agreement. The Committee meets quarterly or as required and is made up of Company Directors, Trade Union Officials, Union Delegates and elected employee representatives. It is basically a Committee for sharing information, and agreeing on overall objectives and finding solutions to problems which involve the parties. The Consultative process is the major facilitating vehicle for successfully implementing change, understanding of relative positions, developing trust and as a formal means of involving both the Union and the Company, as "keepers" of the consultative and involvement process.
The second case study was New Zealand Steel. In retrospect, it did not appear from the written text to be a real example of industrial democracy in action; more a case of serious collective bargaining and power struggles. However, an interesting and insightful note was made by Steel's Industrial Relations Manager:
Although surprisingly overlooked by many commentators, within the limited approach to worker participation and industrial democracy in New Zealand's adversarial industrial relations system, it seems to me that enterprise-level bargaining is by far the most meaningful manifestation of genuine power-sharing between employees and management that exists. It is also a prerequisite, in my view, for much of the other machinery of worker participation to be effective in an organization.
Workplace New Zealand
Workplace New Zealand (WPNZ) was established as a sort of co-operative group to organise a major conference to examine work reform initiatives in New Zealand. The major players in the establishment of WPNZ were the NZ Engineers Union, the PSA and several notable employer representatives who had dealings with those unions (mostly from the manufacturing or heavy industry sector). The conference was modelled on a similar initiative held in Australia called Workplace Australia which happened to be attended by several New Zealand labour relations personalities. The sponsors for the New Zealand conference numbered twenty-seven including the Trade Union Education Authority, Air New Zealand, Glaxo, Goodman Fielder Wattie, the Department of Labour and the New Zealand Qualifications Authority.
The conference was held in September 1992, was attended by over six hundred participants and reportedly was considered by most participants as a notable success albeit that the environment with the recent passing of the Employment Contracts Act would not have been optimal. A report from the conference was produced and remains widely available titled Quality through Partnership - Successful Workplace of the Future. A second conference was held in 1994.
Subsequently WPNZ continued operating as a non-profit incorporated society which aimed to promote a "high wage, high skill, and high added value economy through integrated workplace reform". WPNZ strongly advocated the partnership of unions in workplace reform. It defined workplace reform as:
A comprehensive and integrated approach to redesigning the organization and management of work to achieve improvements in economic performance and adaptability and an improved life for staff. The redesign goes beyond shop floor production, service and processing systems to involve the integration of work organization with technology, information, learning, and quality and reward systems. Under workplace reform the twin goals of economic efficiency and an improved quality of working life become the optimal strategy. The participative and democratic workplace becomes the most efficient and productive workplace.
WPNZ did not endure, however, and was eventually voluntarily wound up. It is accepted by most stakeholders that the environment created by the Employment Contracts Act was the key to its demise. WPNZ's lasting legacy is probably the success of the conferences and the cases of participative workplace reform which were influenced by those proceedings. Many of those cases have subsequently been documented and are covered below.
Mealings & Rasmussen (2000)
This case study compared New Zealand workplace reform initiatives in the 1990s to that of Norway - looking at the organizations established to deliver Workplace Reform, specifically Workplace New Zealand (WPNZ) and Norway's Work Research Institute (AFI).
Mealings and Rasmussen observed that the New Zealand approach to radical deregulation had failed to deliver the promised, sustainable "high-growth, high-skill and high-wage" economy. They found that workplace reform had been more successful in Norway than in New Zealand and claimed that the failure was due to the lack of three key elements: Government support, wider union and employer collaboration, and facilitating structures. They concluded that New Zealand organizations had tended to take the "low road" to workplace reform in that there was no union involvement, work was intensified and the focus was on short term enterprise outcomes. Their research also found that meaningful and effective workplace reform was compromised by multi-national corporations and growing international competition.
In analysing Workplace New Zealand, they considered that while WPNZ had a wide ranging brief focusing on quality and innovation, the organization struggled due to constrictions in funding, and the hostile environment created by the Employment Contracts Act. Moreover, globalisation and increased overseas ownership made it difficult to embed workplace reform, as decisions affecting New Zealand enterprises were increasingly made off-shore. In the case of Toyota Thames, for example, the "ultimate demise" of the plant, despite its being the most productive Toyota automotive assembly plant outside Japan, was due to tariff changes and Toyota's world-wide strategy.
The authors claimed that in Norway the AFI was based on the initial Director's philosophy that working life should be more accommodating of employee needs and a society was only truly democratic if democracy was extended to the workplace. The AFI reported directly to the Ministry of Local Government and Labour, and derived its main funding from the Government as a clear sign of the State's support for workplace reform in Norway. Despite a later move to require AFI to derive half its income from external research and a new focus on providing benefit to employers as well as employees, the organization is considered to have increased both employee participation and enterprise outcomes.
The authors considered that the WPNZ and AFI had similar philosophies and values, but that WPNZ had a far less supportive environment. They concluded that a positive, congruent environment is vital to the success of workplace reform. They also acknowledged that globalisation is a threat to workplace reform since the transfer of decision-making processes goes hand-in-hand with internationally standardised approaches to employees and employment relations.
Westpac & TrustBank Merger
This case study (Bryson 2000) portrays a highly effective bank merger which is considered as distinctive in that the high level of union involvement helped the bank to manage human resources risks. The acquisition announcement and merger of Westpac and TrustBank took place over a two year period (1996-1998). The open relationship between the bank and union enabled a potentially difficult merger to proceed with a positive focus on human resources issues. The FinSec Union was involved in the merger from an early stage; in fact FinSec were informed of the merger the day before it was announced. The merger was predominantly New Zealand run, meaning that the local bankers were familiar with the union, comfortable with collectivity and knew how these would work to support the merger goals.
The bank clearly wanted union involvement and the union played key roles throughout the merger process as well as representing members' interests in negotiating the new collective agreement. The additional roles included:
- Agreement between the bank and union council of a joint protocol on communicating sensitive information;
- Producing the "One Step Ahead" FinSec publication for employees to deal with merger issues;
- Regular meetings with the merger project team and making suggestions on "hot issues", e.g., alerting the bank to different terms in the two collective contracts and how these could be upgraded; and
- Advised on specific issues, e.g. hours of work, branch security, payment of overtime.
It is concluded that while union involvement is seldom addressed in human resources merger literature, it needs to be acknowledged that frequent and honest communications to staff have a stabilising effect. Union input both informs and balances management's merger task. In the case of WestpacTrust the union significantly influenced human resources management throughout the merger and as a result has maintained union membership within WestpacTrust.
Fonterra Co-operative Group Limited
Fonterra is the fourth largest dairy company and the second largest milk producer in the world. It featured in a New Zealand Department of Labour Case Studies Series on the Department's website. In 1999, the General Secretary of the Dairy Workers Union (DWU) identified a shop-floor based improvement methodology in Australia. The DWU believed this represented an opportunity for upskilling its members, increasing the scope of their roles, and providing long-term sustainability for Fonterra - and consequently DWU members. Kiwi Dairies bought a licence for the methodology and started implementing it at Wharehoa in 2000.
Kiwi Dairies named the initiative Manufacturing Excellence (ME) and when Fonterra was established, a decision was made to undertake a controlled roll-out across the organization. The key philosophy behind ME is that it is a joint DWU/Engineering Printing and Manufacturing Union (EPMU)/Fonterra initiative. As a part of the ME initiative, Fonterra implemented a Visual Performance Measurement (VPM) system, which is based on identifying key performance indicators for each work team (based on the firm's key drivers and the major losses in the area), agreeing with the team on improvement objectives and providing them with visual, short-cycle feedback on their performance against these objectives. The VPM gives the team visibility on their performance and improvements, establishes a drive for improvements, ensures timely corrective action at source, gives the team ownership and accountability for their performance, makes the workplace transparent, and empowers the work teams with information to make decisions. Staff involvement is also integral to the way the performance measurement is used.
Weddels Tomoana
Weddel Tomoana was one of the largest meat processing works in New Zealand; however the plant had operated below capacity for several years due to falling stock numbers, greater competition, and significant structural changes in the meat processing industry. The company needed to change from a traditional freezing works to a market oriented meat processor where quality performance and reliability could be achieved. The owners introduced workplace development to adapt to these external factors and the case study is reported in Perry, Davidson & Hill (1995).
In 1990 Weddel became the first established meat processing company to introduce a total quality management (TQM) inspired reform strategy which they called Total Customer Service (TCS). To support this change, the company also introduced new workplace relations methods based on greater shared commitment amongst all parts of the organization to the goals of the company. Reaction from officials of the Auckland and Tomoana Freezing Works Union (representing most workers at Tomoana) was initially suspicious as quality initiatives were linked in their minds to repressive Japanese practices. However as TCS was developed with plant and corporate-level consultative forums workers had the opportunity to influence the development, and the union was invited to take part in separate industrial relations negotiations.
Several tiers of consultation forums were established to link the company-wide commitment to TCS. Steering groups involving managers, union officials, and staff from the workplace reviewed initiatives to improve work efficiency. Beyond these forums, a workplace development division was established, a TCS newsletter called "The Way Ahead" was introduced. A Towards 2000 Committee, where industrial relations could be discussed, was established outside the TCS process. The opening of the books was seen by union negotiators as a positive change in attitude from the company - although it confirmed that reductions in labour costs were necessary. In 1992, a management-union agreement to build a new relationship was signed.
The company had a firm strategy to progress industrial relations and TCS separately. The rationale for this strategy was to prevent contract disputes from affecting the development of TCS. In practice, because the two areas progressed unevenly, it was difficult to prevent a perception amongst some workers that TCS was being used to reduce terms and conditions. In his retrospective analysis of Tomoana, Barry Foster reports that the "going back on some of the [earlier] agreed elements was a recipe for discontent. The Trust that had been built up in the early stages diminished and never recovered" (Foster, 1999).
The TCS initiative was considered a success in that quality management was ideally suited to a meat processing plant and many improvements were established. However TCS had started too late to bring relief from the company's high debts and the plant was closed in August 1994 when its owner Weddel New Zealand Limited went into receivership.
Interlock Industries
Interlock Industries started up 30 years ago, making a kitset fence for the local New Zealand market. The company experienced rapid growth through developing and exporting innovative products, and now owns over 300 patents worldwide. Interlock's original production organization was based on "just in case" manufacturing where performance was judged by throughput and a large inventory was kept on site. This was a high cost production environment. Furthermore, Interlock experienced delays in completing orders and severe penalties were often paid to customers as a result of missing shipment guarantees.
Interlock introduced Just in Time (JIT) production to address these factors. During 1987-92, a management reorganization allowed factory managers closer involvement in day-to-day operations by putting them back on the shop floor, and gave greater responsibility to individual workers (especially in the monitoring of performance). The number of salaried staff was cut by half while retaining output levels, and workers have had to accept more repetitive tasks.
Workplace change was led and designed by senior managers often in consultation with union representatives.Perry et. al. note that:
...management control has not been a significant source of conflict in the workplace. Most employees have a high level of trust that the company acts fairly, reflecting how Interlock's management style has always emphasised good worker relations (Perry, Davidson & Hill, 1995: 134).
The participative culture at Interlock is clearly a key contributor to the successful implementation of JIT. However, while there was widespread acceptance of the changes, the advantages of these changes were not experienced equally by the workforce; in particular, workers who tend to resist change (e.g. older workers, some supervisors and current team leaders) were regarded as not having enjoyed the new environment. On the other hand, the reality of the production environment and the participation of the workforce still fell short of the organization's ideal.
Macpac Wilderness
Macpac Wilderness Equipment is a privately owned Christchurch-based company that manufactures outdoor equipment. Growing from the local market, they began selling in Australia in 1978, the UK in the 1980s, then to Europe and Japan in the 1990s. A series of reforms (TQM, JIT, communications and reward systems) were introduced from 1987 onwards that attempted a unique balance between the company's business goals of improved quality and efficiency with a highly participative work culture.
There were significant changes in Macpac's business operating environment as the company needed workers to move between departments and tasks depending on market demand. This was difficult to achieve while MacPac employees were covered by six different union awards. Consequently a common employment agreement was negotiated for Macpac employees. This agreement was negotiated without direct union involvement, although the final version was reviewed by the Clothing Workers Union. In their case study, Perry et. al. (1995) describe Macpac's culture as very open, with a very strong emphasis on communication and genuine participation where "senior staff tried to treat the production staff in a way that valued them as people." The case study points to this as a key success factor in achieving the changes with little employee or union disruption.
The workplace reforms were generally well received and can be shown to have derived a number of benefits to employees, including: increased opportunities for skills development; greater participation in team-based problem solving; and, workplace design. A number of difficulties were still noted however, particularly inadequate consultation, increased workloads and inadequate reward systems. It is notable that the New Zealand manufacturing operations of this business were subsequently closed when production shifted to China.
BHP New Zealand Steel
BHP took control of the Glenbrook Steel Plant in 1989; at that stage the company's problems included capital expenditure overruns, sub-optimal performance, the withdrawal of import protection and export incentives, high debt servicing costs, declining domestic demand, foreign competition, and significant ownership uncertainty (Hill & Wilson, 1996).
The company initiated a series of reforms in response to these issues. Needed improvements were substantially achieved a year later without the need to sell off parts of the business which had previously been considered not viable (Perry et. al., 1995).
The company reforms were associated with a complementary social programme which was designed to reduce the fear of change and encourage maximum employee participation in the improvement process. BHP also established a new consultation and participation structure which systematically involved employee and union representatives. While the nature and extent of employee involvement and genuine participation varied from unit to unit, BHP is generally cited as an example of workplace reform where the significant achievements were directly related to improving workers' knowledge and skills, and achieving a high level of participation in decision making.
Workers were involved in the restructuring process, both directly in the workplace and indirectly through union representation through a consultation participation agreement negotiated by the combined site unions. This agreement committed BHP Steel management and the site unions to try to reach consensus about all aspects of the restructuring. ... One of the principles driving this agreement was a recognition that the smooth introduction of new production improvements, work methods, processes, equipment, technology and training could only be achieved with consultation and participation. (Hill & Wilson, 1996: 13-14)
Toyota Thames
Toyota's automotive plant at Thames is an example of an operation that introduced workplace reforms as a response to the new market environment. By 1991, more than half of all domestic motor vehicle assembly plants were closed, and in December 1994, the Government introduced a motor vehicle industry plan which removed much industry protection and led the industry to believe that further closures and rationalisations were inevitable. In response to these changes, Toyota and its unions jointly developed a range of significant workplace change processes. These included introducing lean production methods such as TPS - the Toyota Production System, and Kaizen continual incremental improvements.
"Among the managers at Thames there is a greater recognition that the production workers are the only ones who make something we can sell." This view was reflected in the way employees were at the centre of the new reforms, and employee communication and participation was highly valued. The change process was designed by management and the staff and unions were only involved once the basic concept was in place. Management recognised the need for union involvement but were cautious about the traditional union attitudes in what was a heavily unionised site. However the Engineers Union was heavily involved in the change process and was seen as an active participant in reforms.
Production at Toyota Thames ceased in 1999 despite the success of many of the changes which were introduced. Toyota's fate was not singular as essentially the whole car assembly sector in New Zealand closed around the same period chiefly as a result of the changed regulatory, and global economic, environments.
The 2005 Research Project
Research Methodology
Research Model
Building on the literature review and the understanding of previous experience of workplace partnership in New Zealand, a theoretical model was developed by the researchers in consultation with the PRC. The purpose of the model was to extrapolate the actual behaviours which represent workplace partnership in action, allowing the development of appropriate research instruments to measure the extent and type of partnership behaviours that are occurring in New Zealand at this time.
The research model is shown graphically below:
Survey Design & Population
A survey was designed based on the theoretical model. The target population of the survey was determined to be all New Zealand employers who at July 2005 had single-employer Collective Employment Agreements registered with the Department of Labour (n = 951), and representatives of the fifty-four trade unions who were party to those agreements.
It was decided to not survey employers who were parties only to registered Multi-Employer Collective Agreements (MECAs). To do so would have resulted in an awkward survey design and/or a second parallel survey which was deemed to be beyond the scope of the current project. The number of MECAs in place, where detailed behavioural analysis could be undertaken, is quite low and any survey population would be unlikely to be statistically valid. Accordingly, a different methodology is appropriate for examining workplace partnership within the framework of MECAs. It is recognised that the exclusion of MECA's from the study scope results in some significant partnership arrangements being omitted from the present stocktake (for example the Plastic Industry MECA).
The Department of Labour provided the research team with restricted assess to the database containing details of registered collective agreements and the parties to those agreements, and also to an existing mail-out database. A comprehensive review exercise was then undertaken to construct a highly accurate and detailed survey database for the purposes of the present study.
An "online" survey tool (Zoomerang) was used in the development and conduct of the survey. Two draft surveys were developed; employers and union representatives undertook different surveys. Before the online survey could be administered, a number of quality control procedures had to be completed, including the administration of a pilot sample of office professionals. Testing indicated that the survey would take 15-20 minutes for a participant to complete. This process also yielded further enhancements to the survey, which were subsequently integrated into the final version.
Survey Process
All potential respondents (employer and union representatives) were sent a letter outlining the purpose of the survey including instructions to access the online survey site. Two websites were constructed, one for employers and one for union representatives. The website greeted the respondent and contained a link that transferred the respondent to the online survey.
The survey population who received the letter numbered 904 employers and 189 union representatives from 52 unions.
The survey was available for completion for a period of three weeks in September - October 2005. A reminder letter was sent to all potential respondents five days before the survey closed.
Survey Analysis
The online survey tool includes automated collation and statistical capabilities which were used to review and analyse the data at the completion of the survey period. Some data were also downloaded into the SPSS system for statistical processing. Descriptive statistics and cross tabulation produced a summary of the responses from all survey respondents and formed the basis of the findings.
Qualitative Interviews
In the last section of the survey tool, respondents were invited to provide their contact details should they be willing to participate in a follow-up conversation with the researchers about their collective bargaining and/or workplace partnership experiences. Sixty-three employers and thirty-seven union officials indicated that they would be prepared to have follow-on discussions if required.
A preliminary review of the survey results was conducted, including an individual review of participants who indicated a willingness to have a follow-on interview. Based on this analysis a limited list of targeted interview participants was selected. The choices were based on the primary purposes of the qualitative stage of the research which were to:-
- 'Stocktake' where partnership was reported to be occurring; and,
- Deepen the researchers' understanding of the enablers and barriers to workplace partnership.
Twenty employers and five union officials were selected for interview. Interviews were conducted during November 2005, with fourteen conducted in-person and eleven conducted via telephone conference. All interviews were taped with the participants' consent, and transcripts were produced for analysis by the full research team.
Survey Response
Response Rates
For the employer survey, 201 responses were received, for a response rate of 22.3 percent. For the union survey, 70 responses were received, for a response rate of 37 percent.
The response rates represent an acceptable result for surveys of this kind in New Zealand, and the data provide a snapshot of industrial relations behaviour in New Zealand which has rarely been available.
Response Profile
As shown below, the employers who responded to the survey represent a broad profile of New Zealand industry by sector (Graph 6.1) and size (Graph 6.2).
It is to be noted that employers covered by collective bargaining agreements, and so those included in the survey sample, tend to be employers with larger than average workforces. Around ninety percent of New Zealand employers have less than ten employees; and therefore the sample covered by the survey can be said to be more heavily representative of larger-than-average New Zealand employers.
As shown below, the union officials who responded to the survey represent a broad profile of the New Zealand workforce by industry sector (Graph 6.3). The respondent union officials also cover New Zealand in a geographically representative manner (Graph 6.4).
Research Findings
The primary research project addressed the key themes proposed in the Partnership Resource Centre's RFP and subsequently agreed project terms of reference, namely to understand:
- The level of awareness of the concept and practice of workplace partnership and gaps;
- The extent that relevant workplace parties are willing to partner and the barriers to partnering;
- The extent of workplace partnership practice and where and when it happens; and
- The type of workplace partnership practices that are occurring.
The research proceeded from the PRC's definition of workplace partnership, and translated the concept into the practices represented in the theoretical model set out in the Methodology chapter. The data are reported in a structure consistent with the key themes.
Awareness of Workplace Partnership
To gauge awareness of the concept of union-management workplace partnership, employers were asked whether they had had any experience with a range of what are generally seen as collaborative practices - "mutual gains bargaining or workplace partnership with a union representing the organization's employees", and "workplace reform or consultative approaches to change management".
Just 12 percent of respondent employers indicated that their organizations had had any experience with mutual gains bargaining or workplace partnership with unions. One quarter indicated that their organizations had experienced workplace reform or consultation over change management.
As a second gauge of awareness of the partnership concept, employers were asked to indicate whether they felt that their organization's employees were "in partnership" with management, and again whether the union representing the organization's employees - or the principal union if there was more than one - was "in partnership" with management and the employees.
Seventy percent of the respondent employers believed that the employees of their organizations were in partnership with management, while 30 percent did not. Just half as many, 35 percent, believed that the union was in partnership with the management and employees of their organizations.
Respondent union officials were also asked about their experience with consultative practices. By contrast with the employers in the sample, a majority of union respondents, 58 percent, said that they had had experience with mutual gains bargaining or workplace partnership. About the same number, 61 percent, said that they had had experience with workplace reform or consultative approaches to change management.
As a second measure of awareness, union respondents were also asked about their union's policy on workplace partnership. Eighty-one percent said that their union saw its role as being a strategic partner in the management of organizations in which members were employed. Of these, one half said that their union strongly endorsed that view, while the rest reported that that was union policy "to some extent".
It might be an accurate summary to say that a majority of union respondents and a minority - albeit a significant minority - of employer respondents have some familiarity with workplace partnership or the notion of union-management cooperation in the workplace more broadly. Actions won't always match labels, but an important first step is some exposure to the concept of collaboration between unions and employers. An important second step is, perhaps, a readiness to describe one's relationship as a "partnership". There is certainly a base here on which to build partnership practices.
At interview a good level of understanding about partnership practices was apparent in the selected group that was met (who for the most part were seen to be positive about workplace partnership so to an extent this was self-fulfilling). The emphasis of employers was that both unions and employees ought to be involved in the partnership, not just the employer and union representatives in isolation. The emphasis of the union officials interviewed was that partnership should focus on industry competitiveness and how economic factors impact on employees.
Willingness to Partner & Barriers to Partnering
The second dimension of workplace partnership examined is the willingness of union and management parties to engage in partnership and, on the other side of that coin, the barriers to partnering that are likely to be encountered.
Union Willingness to Partner
That four out of every five union respondents believe that union policy is to adopt the role of strategic partner to the management of organizations in which the union's members are employed is a first indicator that unions are willing to partner.
As the front line operatives responsible for implementing union policy and representing members' preferences at the workplace, union respondents were asked their own views on partnering with employers.
Fifty-two percent of union officials agreed "totally" with the statement "unions should be prepared to act in partnership with an employer where the employer is willing to do the same". Another 34 percent agreed "to some extent", while 15 percent disagreed entirely with that statement. In other words, 85 percent of respondent union officials were prepared, at least to some extent, to engage with employers in reciprocal workplace partnerships.
Reciprocity is a key factor. In interviews with union officials a strong theme was that the attitude and approach of CEO's was critical to the success or otherwise of open relationships with employers. An open and inclusive CEO was said to be a key enabler to partnership from the union perspective. For example one union official said, "These (partnership approaches) have endured and led to a change in management and union culture in the work place. It did require a large degree of commitment to the process by the CEO. Without the CEO commitment partnership begins to wane."
As might be expected, there was a quite strong statistical correlation between union officials' expressed personal views and what they reported to be official union policy on partnering [R .592; signif .000].
As a second measure of union officials' willingness to engage with employers in workplace partnerships, union respondents were asked whether they believed "that the promotion of workplace partnership (co-operative relations between managements and unions) would help the economic position of New Zealand?" An overwhelming 84 percent did, and again this was closely correlated with officials' personal view that unions should be prepared to act in reciprocal partnerships with employers [R .588 signif .000]. Relatedly, 90 percent of union respondents reported that their unions accepted that it was their responsibility to play a part "in building a stronger New Zealand economy". This was fully endorsed by union officials that were interviewed and an important theme was the national competitiveness of New Zealand industries.
The personal view of officials that unions should be prepared to act in partnership with an employer where the employer is willing to do the same - what has been termed here "reciprocal partnership" - is taken as the primary gauge of union willingness for the remainder of this section. Some key attitudes, experiences and demographics are associated with this view.
Attitudes Associated with Willingness to Partner
Union officials reactions to attitude statements intended to gauge their personal approaches to employers and collective bargaining are set out in Table 7.1.
Table 7.1 Union Officials' Personal Approaches & Beliefs
| 'Thinking about your personal views as a union/ association representative, please describe the extent to which you agree or disagree with each of the following statements.' | To a large extent (%) | To some extent (%) | Not at all (%) |
|---|---|---|---|
| A union's role is to maximize the direct benefits flowing to its members | 87 |
11 |
2 |
| Unions should use their bargaining power in an overt manner when required to get what their members want from reluctant employers | 40 |
56 |
5 |
| Unions should take a longer term view and be prepared to compromise even when they have more bargaining power than the employer | 29 |
56 |
15 |
| Unions and employers have more common interests than conflicting interests | 35 |
53 |
11 |
| Industrial action is best avoided unless absolutely necessary | 85 |
11 |
3 |
| Unions should resist employer attempts at 'changes' which may disrupt the working lives of members | 35 |
58 |
6 |
| It is OK for union leaders to have a close social relationship with management | 8 |
54 |
38 |
| Most employers want to do the right thing by their employees | 5 |
84 |
11 |
| Most employers want to do the right thing by the union | 2 |
55 |
44 |
| A union should compromise its interests a little rather than damage its relationship with an employer | 6 |
43 |
51 |
| Having a union involved enhances an employers efficiency and productivity | 75 |
22 |
3 |
Some interesting patterns emerged in the data associating union officials' attitudes with their willingness to partner with employers. Significantly, officials clearly see partnering in pragmatic terms as beneficial to their members. Eighty-seven percent of those who agreed "totally" that "a union's role is to maximize direct benefits to members" endorsed reciprocal partnership either "totally" or "to some extent." Three quarters of the union officials surveyed also believed that union involvement in an organization "enhances an employer's efficiency and productivity," and those officials were somewhat more likely than the minority quarter to favour partnership. So a substantial majority of union respondents to the survey see close union involvement with management, in practical terms, as mutually beneficial to both employers and employees.
There were strong correlations between willingness to partner and some other relevant personal values. Those favouring partnership were, for example, also more likely to be willing to exercise restraint in the use of power, to compromise and to take a longer term view of employer relations [R .445 signif .000]. There were, as well, correlations between union officials' endorsing partnership and the beliefs that "unions and employers have more common interests than conflicting interests" [R .485 signif .000], that industrial action should be very much seen as a last resort [R .348 signif .006], and that social mixing between management and union officials is "OK" [R .476 signif .000].
This picture presents as a substantial group of union officials endorsing workplace partnership - as long as employers are prepared to reciprocate - and carrying a quite cohesive set of values supportive of a partnership approach.
Experiences Associated with Willingness to Partner
The willingness of union respondents to engage in workplace partnerships with employers where employers were willing to do the same can be linked not only to their attitudes and beliefs, but also to their reported experiences with employers. However, these links are not, for the most part, statistically strong, suggesting that a union official's belief in partnership approaches can withstand some snubbing by employers.
The one moderately strong correlation revealed in the data was that union officials were less likely to favour reciprocal partnership to the extent that they had experienced employers trying to bypass them and deal directly with the membership as a problem in the past [R .361 signif .004]. This is unsurprising given that respect for the role of the union is fundamental to a successful union-management partnership.
More surprising is that union officials' willingness to support partnership appeared to be not significantly diminished - some effect was apparent, but not at a statistically significant level - by experience of employers undermining the union by unilaterally implementing change, or by employers exhibiting a dismissive attitude of not valuing employee or union input or involvement. Union officials who had consistently been treated as "outsiders" by employers were more likely than others to completely reject the concept of workplace partnership, but this influence was only at the margins. Those who had only sometimes been treated as outsiders were not more or less inclined to endorse workplace partnership than those who had not experienced that problem.
Union officials who reported having had experience with "workplace reform or consultative approaches to change management" were only marginally more likely than others to favour partnership. Experience with "mutual gains bargaining or workplace partnership" was more telling; those reporting such experience were more likely to totally endorse partnership than other union officials, and less likely to totally reject it, although again these correlations were not statistically strong ones.
There were no apparent patterns to union officials' willingness to endorse workplace partnership on any demographic dimension, other than the fact that union officials who gave Auckland as the primary geographical base for their work unanimously "totally agreed" that unions should be prepared to act in partnership with an employer where the employer was prepared to do the same.
What emerges then is a group of union respondents overwhelmingly supportive of a partnership approach to union-management relationships, believing that that approach benefits both employees and the employer. Reciprocation by the employer is important to them, and they see the inclinations of the CEO as pivotal in the development or not of workplace partnership. Employers disrespecting the role of the union, by bypassing officials and attempting to deal directly with employees, is a turnoff for these union officials. However, their support for partnership is pretty resilient despite sometimes encountering other employer conduct not conducive to partnership. Certainly the picture is of a group of union officials who believe that the union has something to contribute to employing organizations, who believe that members would benefit from a collaborative relationship between employer and union, and who are ready to play their part if employers are willing to play their's.
Employer Willingness to Partner
The research data include several indicators of employers' willingness to engage with unions in workplace partnership arrangements. First, employers were asked why they deal with unions representing their employees. In multiple union situations, employers were asked to respond with reference to the union that represented the largest number of their employees. Their responses are set out in Table 7.2.
Table 7.2: Why Employers Deal With Unions
| 'Could you please indicate whether you mostly agree or mostly disagree with each of the following statements about why your organisation has a relationship with this union.' | Mostly agree (%) | Mostly disagree (%) |
|---|---|---|
| Because it can't easily be avoided | 77 |
23 |
| Because our employees want it | 83 |
17 |
| Because 'it has always been that way' | 63 |
38 |
| Because it is beneficial to the organization | 41 |
59 |
| Because the law requires it | 65 |
35 |
While a significant minority of employers acknowledge that union involvement is beneficial to the organization, this is not a driving motivation to deal with a union for most employers. When asked to choose which of the reasons listed in Table 7.2 was "the single most influential reason" for dealing with the union, just eleven percent of employers nominated "because it is beneficial to the organization".
One necessary ingredient for successful partnership, but not a sufficient one on its own, is acceptance of a diversity of interests in the workplace, including an independent voice for employees. In this respect, it is noteworthy that 83 percent of employers said that they dealt with a union because that was what their employees wanted, and 43 percent nominated this as the primary reason for dealing with the union. As will be seen, employer respect for the role of the union as an independent representative of employee interests is quite a strong theme that emerges from the data, and one that has more widespread acceptance among employers at the moment than the full partnership embrace.
In interviews with employers it was apparent that there may be a strong correlation between employers who have a high respect for their employees' opinions and employers who have respect for the role of the union. One employer we spoke with said: "I think they (the union) tend to be prepared to listen to what we have to say and seriously consider that. They are not highly political, we don't get political union agendas thrown at us. I think to be fair there is a high degree of trust...They will tend to listen to situations and I thank the managers, we have been fortunate in the types of managers we have got, they have been very close to their people. If they think me as an HR person or the company in terms of general strategy is going off in a direction that is going to be wrong for their people, they will go to bat for their people."
This data gives an early indication that New Zealand employers may, at this stage, be most comfortable with what was termed in Chapter One "a minimal pluralist-voluntarist sense of partnership", centred in, but not necessarily restricted to collective bargaining, with parties exercising restraint in terms of industrial action, with some willingness to bargain collaboratively when the opportunity arises, but still stopping short of a full partnership embrace.
As a second measure of willingness to partner with unions, employers were asked to indicate whether they believed "that the promotion of workplace partnership (cooperative relations between managements and unions) would help the economic position of New Zealand business", and responses to this question are taken as the primary measure of employers' enthusiasm for workplace partnership.
Precisely 40 percent of respondent employers supported workplace partnership as likely to help New Zealand business, while 60 percent did not, and the responses show some interesting patterns by demographics, employer attitudes, and their reported experiences in dealing with unions.
Who has Greater Propensity to Partner?
There were no marked patterns to employers' expressed support for union-management partnerships as being beneficial for business by nature of the employer's business or industry classification, although respondents representing state agency employers were marginally more likely to endorse workplace partnership as being beneficial to business. Perhaps surprisingly, there were no patterns associated with the nature or scope of competition in markets for employers' products or services, or by self-reported indicators of market or cost pressures.
Employers in Canterbury were most likely (70 percent) to believe that the promotion of workplace partnership would benefit New Zealand businesses, with those in Auckland least likely (28 percent) of employers in major centres.
Table 7.3: Employers' Support for Partnership by Size of Workforce
| "Do you believe that the promotion of workplace partnership (cooperative relations between managements and unions) would help the economic position of New Zealand businesses?" | Yes (%) | No (%) |
|---|---|---|
| One to 20 employees | 22 |
78 |
| 21 to 50 employees | 29 |
71 |
| 51 to 100 employees | 40 |
60 |
| 101 to 500 employees | 38 |
62 |
| More than 500 employees | 55 |
45 |
As illustrated in Table 7.3, employers with larger workforces were more likely to believe that the promotion of workplace partnership would benefit New Zealand business; the relationship is apparent in the figures, but the correlation is not a statistically strong one.
As illustrated in Table 7.4, the greater the percentage of union membership amongst an employer's workforce, the more likely was an employer to believe that the promotion of workplace partnership would work to the benefit of New Zealand businesses; again, the relationship is apparent in the figures, but statistical analysis does not support the correlation as being a particularly strong one.
Table 7.4 Employers' Support for Partnership by Union Density
| "Do you believe that the promotion of workplace partnership (cooperative relations between managements and unions) would help the economic position of New Zealand businesses?" |
Yes (%) | No (%) |
|---|---|---|
| None | 0 | 100 |
| One to 20 percent of the workforce | 23 | 77 |
| 21 to 50 percent of the workforce | 42 | 58 |
| 51 to 75 percent of the workforce | 43 | 57 |
| More than 75 percent of the workforce | 58 | 42 |
While the demographics tell an interesting story, the interviews with employers also suggested that employers' support for partnership, and their belief that partnership could be economically beneficial, was clearly influenced by their perception of particular unions. One employer who deals with multiple unions said, "Where we have got reasonably responsible delegates and organizers I think from a 'getting on with business' perspective it is a good quality relationship and I think in fact it is better than any alternative that I can think of. In other places though where the union involved is an inhibitor the opposite is the case and as a result we are forced to employ other strategies".
Willingness to Partner Coloured by Experiences
Whereas union officials' support for partnership most directly correlated with their attitudes and beliefs, to some extent withstanding negative experiences with employers, employers' support or not for partnership was more directly tied to their experiences with unions.
Employers who said that they dealt with the union primarily because it was beneficial to the organization or because that was what their employees wanted were more likely to say that partnership would benefit New Zealand businesses (50 percent and 48 percent endorsement respectively) than those who dealt with the union because it couldn't easily be avoided (29 percent endorsement) or because it had always been that way (33 percent endorsement).
To a considerable extent, employers' attitudes to workplace partnership are reflected in their approaches to collective bargaining, and that is unsurprising given the central role of collective bargaining in union-management relations under the Employment Relations Act. While these "at the table" practices are examined in greater detail in the later discussion of partnership behaviours, it is instructive to note relationships between some bargaining practices that would normally be associated with an "interest based" approach and a willingness to endorse workplace partnership as being beneficial for New Zealand businesses.
Employers who said that they always openly shared with the union their thinking on the organization's needs to see whether they might have had common interests were far more likely to endorse workplace partnership as beneficial (53 percent endorsement) than those who said that they were open with the union only sometimes or not at all (24 percent endorsement) [R .274 signif .000]. Employers who said that they always preferred to "brainstorm" with the union over a range of options before taking positions on how particular issues should be settled or dealt with were far more likely to endorse the benefits of partnership (80 percent endorsement) than those who only sometimes (38 percent endorsement) or never did so (28 percent endorsement) [R .312 signif .000].
Employers who said that they always "worked to find areas of mutual interest to the organization and the union, and to jointly develop proposals in those areas" were more likely to endorse the benefits of partnership (71 percent endorsement) than those who said that they only sometimes (27 percent endorsement) or never (13 percent endorsement) did so [R .433 signif .000]. On the other side of the coin, employers who said that they always "tried to protect the organization's interests by limiting the union's input to just wages and basic employment conditions, not management issues" were less likely to endorse the benefits of partnership (27 percent endorsement) than those who said that they took that approach only sometimes or not at all (50 percent endorsement) [R -.205 signif .006].
A commitment to relationships is an ingredient in successful partnerships. So it comes as no surprise that employers who said that they were willing to agree to some collective bargaining proposals that they did not particularly like in order to build a better relationship with the union were much more likely to endorse the benefits of partnership (49 percent endorsement) than those who said that they were never willing to do that (3 percent endorsement) [R .332 signif .000].
There are also some interesting experiences of partnership beyond collective bargaining such as one noted at interview, namely "We are producing a CD at the moment for our induction ... Part of the CD content is supplied by the union. We have worked with them on that, we have developed the text that they want and they will present on the CD." Usually, though, collective bargaining was seen as a necessary precursor to broader partnership activities. As one union official said, "I have been part of both workplace partnership and workplace reform (at lots of employers) ... all were built on solid collective activity and good sound collective agreements, the latter being the springboard."
It is clear from this data that employers who have had success being open with the unions in the past, particularly in bargaining styles or approaches, are more supportive of workplace partnership than those who have approached the union with a more protective mindset.
Attitudes Associated with Willingness to Partner
Employers were asked to react to a series of statements designed to gauge their attitudes to unions and collective bargaining. Some of these, principally dealing with employers' preferences regarding unions, and the statistics on the percentages of respondent employers who agreed and disagreed with each statement, are set out in Table 7.5.
As might be expected, there is generally a correspondence between employers' attitudes to unions and their appreciation or not of the promotion of workplace partnership as holding economic benefits for New Zealand businesses. On this issue a key theme from the interviews was that employers generally believe that six factors are required to enable partnerships, namely:
- Union officials need to have a good understanding of the business;
- The union should have a pragmatic, realistic approach;
- The union needs to be prepared to be flexible;
- The union is able to embrace appropriate change;
- The union is willing to look at the wider picture in terms of business performance;
- The union is able to align their engagement practices to the values present in the organization.
In the words of one employer, "I think the unions have a good understanding of the business. That has been really helpful. The union understands the people they represent very well and the representative is clearly pragmatic and industry aware, and if one of his members is being a prat, he understands that. Bbut if there is a legitimate issue involved we will debate that out and come to a conclusion".
Another employer said "All the delegates' average service would be close to ten years and we have been at great pains to educate them in the business so that when we start talking about EBIT and profit they understand that because we have taken the time to educate them".
Table 7.5 Employer Attitudes to Union Involvement
| 'Please describe the attitudes or policies of those in your organisation mainly responsible for dealing with the union.' | Agree (%) | Disagree (%) |
|---|---|---|
| We would like to see the union more fully involved in the organization | 11 |
89 |
| The union is a legitimate representative of employees, but not part of our team | 77 |
23 |
| The union is a source of conflict and division in the organization | 38 |
62 |
| The union officials will do the right thing by our organization | 37 |
63 |
| We would prefer to deal less with the union and more directly with employees | 76 |
24 |
| We have an effective relationship with the union and are keen to keep it the way it is | 78 |
22 |
| Our relationship with the union is tense and unproductive | 16 |
84 |
| We consult with the union before making decisions that significantly impact the organization and the way we operate | 72 |
28 |
| We would rather compromise our interests a little than damage our relationship with the union | 50 |
50 |
| We would trust the union to keep commercial information about our organization confidential | 59 |
41 |
| The union is a problem we could do without | 32 |
68 |
| Having union involvement enhances the operation of our business | 23 |
77 |
| The union creates a better workplace environment for employees | 30 |
70 |
| Employees will not achieve anything through the union that management would not have given them anyway | 50 |
50 |
| The union improves the organization's competitive position | 9 |
91 |
There were some interesting correlations between attitudes to union involvement and endorsement of workplace partnership as being beneficial to business. For example, employers who said that they had an effective relationship with the union and wanted to keep it the way it is were more likely to say that the promotion of workplace partnership would benefit New Zealand businesses (46 percent endorsement) than those who did not agree that they had an effective relationship with the union (22 percent endorsement). This is suggestive, but not a statistically significant correlation.
Nevertheless, interviews with employers underscored the importance of the personal relationships at the centre of union-management relations. "Trust" was a word used consistently by employers in comments in the survey and in the interviews. As one said, "We can talk off the record and you develop trust; what you say off the record is not going to be thrown in your face 12 months later during wage negotiations".
Some correlations were statistically significant and strong enough to be noteworthy. Employers who consult with the union before making significant decisions - what many would consider a fundamental of workplace partnership - were much more likely to endorse the benefits of partnership (51 percent endorsement) than those who don't (14 percent endorsement) [R .337 signif .000]. Employers who agreed that they would rather compromise their interests "a little" than damage their relationship with the union were more than twice as likely to endorse the benefits of workplace partnership (56 percent endorsement) than those who said that they would not compromise (25 percent endorsement) [R .310 signif .000].
Employers who agreed that the union creates a better workplace environment for employees were more likely to endorse the benefits of workplace partnership (67 percent endorsement) than those who did not agree with that statement (29 percent endorsement) [R .358 signif .000]. Those who were prepared to go beyond that to say that having union involvement enhances the operation of the business were far more likely to endorse the benefits of workplace partnership (79 percent endorsement) than those who did not agree with that statement (28 percent endorsement) [R .450 signif .000].
Again, it is clear that employers who have the inclination to be relatively open in their dealings with unions, who are prepared to take the risks associated with openness and trust, and to pay the costs associated with protecting and building the relationship, and who have committed those inclinations to practice, are more often appreciative of the value of partnership than those who don't have those inclinations and experience.
It is also clear, as it was with union respondents, that employers' approach to partnership is a largely pragmatic one, not an ideological thing. The employers who most endorse the value of partnership are those who say, from their experience, that it not only benefits their employees, but that it benefits the organization as well.
Barriers to Partnership
While there are substantial positives, the attitudes reflected in Table 7.5 do not present an entirely positive environment for partnership. Attitudinal barriers to partnership are apparent in the employers' attitudes to union involvement set out in Table 7.5.
Key themes from the interviews with employers suggested five barriers to partnership from the employer perspective, namely:
- Lack of union visibility at smaller sites;
- Unrealistic union expectations;
- Confrontational/adversarial approaches;
- Hidden agendas or agendas not seen as being related to the business itself; and
- Lack of knowledge or industry experience (on the part of union officials).
It is noteworthy that this list could well have been pulled from E. Wight Bakke's survey of American employers sixty years ago (Bakke 1946). Employer concerns about unions remain the same; the question is whether the barriers can be overcome by employers and unions in modern New Zealand.
The notion of "outside agendas" and lack of connectivity with enterprises came out strongly in several interviews with employers. An example of what was said is, "I don't think that the unions create the relationships needed. You know we talk about partnership but I don't think their relationships with companies are good enough really. We are in a little remote place and when they come to negotiate, when they come to talk to us, you can always sense that they are talking about or are negotiating from a position based around another site somewhere".
Capturing this negative mood one employer at interview said: "I think they are in a time warp. I really think, I am generalizing, of course, they haven't kept up with how businesses operate these days. They are unrealistic, they create unrealistic expectations and it is really frustrating."
The finding that one third of these employers "could do without" the union, that only one in ten sees any benefit to the employer from having a union, that at least half aren't convinced that even the employees realize any benefits from union membership, and that most would rather deal directly with employees would suggest that unions are likely to encounter some significant attitudinal barriers to partnership amongst employers.
Union officials were asked about these sorts of views, and their reactions to employer attitudes that impact on the chances of establishing collaborative relationships are presented in Table 7.6.
Table 7.6: Union Officials' Perceptions of Employers' Attitudes to Unions
| 'Please describe the extent to which you have encountered the following problems in trying to establish effective relationships with employers.' | A consistent problem (%) | Sometimes a problem (%) | Generally not a problem (%) |
|---|---|---|---|
| Employers attempt to deal directly with employees even when the union has an established role | 16 | 53 | 31 |
| Employers are not open to collaborative approaches | 11 | 60 | 29 |
| Employers assert a right to run their business however they choose to without 'union interference' | 23 | 44 | 34 |
| Short-term economic imperatives are the single most important factor to employers | 29 | 53 | 18 |
| Employers do not genuinely want employees or the union to have a real say in the running of the organization | 36 | 51 | 14 |
| Employers undermine the union's attempts at 'partnership' by establishing direct employee participation schemes that exclude the union | 15 | 42 | 42 |
| Employers are not really interested in any value that active union involvement could add to the business | 23 | 53 | 23 |
| Employers insist on treating the union and union officials as 'outsiders' rather than as an integral part of the organization | 35 | 39 | 26 |
To summarize the theme of Table 7.6, about three-quarters of union officials said that they either consistently or sometimes encountered a range of attitudes amongst employers that would not ordinarily be thought of as being conducive to establishing collaborative relationships. Most union officials had, from their perspectives, to deal with employers who were not open to collaboration, who didn't believe that unions had anything to contribute, who did not welcome union input into decision-making, who regarded them as outsiders to the management-employee relationship, and who essentially attempted to side-step the union and diminish its role.
These are not insignificant attitudinal barriers confronting a union seeking to establish a partnership relationship with an employer. And it is well to recall that a significant minority (40 percent) of union respondents said that they sometimes encountered resistance to their efforts to forge partnership arrangements with employers from their own members and delegates as well.
From comments in the survey responses and our limited follow-on conversations with union officials we drew eight themes regarding barriers to partnership from their perspectives, namely:
- Turnover of managers/executives;
- Autocratic management styles;
- The welfare of employees being seen as a low priority by an employer;
- Employers looking at issues in isolation or with a micro view;
- Lack of leadership consistency - changes in direction;
- Individual employer styles that inhibit openness and the development of trust;
- Employers having a solid pre-set position; and
- Members not interested - focused on core benefits.
Union officials spoke consistently of partnership behaviours falling away over time. Some examples of statements to this effect are set out below:
"Efforts have not endured, because generally we find management are only interested in partnership and cooperation on their terms. Partnership is practiced where the employer finds it convenient, but ignored when they don't."
"The ability for such practices to have sustainability often is determined by immediate business concerns. The more competition a business has the less time they have for such practices. Where there is consultation required under the collective agreement then there is endurance. My employers will tell you that all such things have a financial cost and it will be about what takes priority at a given time."
"The partnership approaches have consistently been used to mask short term needs of the employer and have always ended before there has been either genuine equity of outcome or transfer or sharing of authority."
"Partnership is holding on by a thread. Middle management and site delegate scepticism. Gains are being made but are slow coming due to resistance. Difficult to get company to reward in real terms to members for gains to date."
Without diminishing the barriers to partnership, the statistics can also be interpreted more hopefully. It is noteworthy that a substantial minority of union officials (ranging from 14 to 42 percent on the various items in Table 7.6) reported that they were generally not encountering these negative attitudes as a problem in establishing effective relationships with employers.
It is significant that quite a lot of union officials in the sample were not being treated as "outsiders," were not finding employers bypassing them and attempting to deal directly with employees, were not finding employers closed to collaborative approaches, and generally reported that they were dealing with employers who appeared to believe that the union added value to their operation and who seemed interested in what the union could contribute.
One union official who was interviewed and felt very positive about how an employer was engaging with him said, "The high level of trust and confidence goes both ways ... the rates are good, the other conditions are good and it is an environment where the staff recognize that and are prepared to come to work and get on with it ... Issues that have arisen have been talked through openly and brought to a reasonable middle-ground for everybody...".
Collective bargaining is not the only vehicle or forum for union-management partnership, but it is certainly the principal one provided for under the Employment Relations Act 2000. So union officials' perceptions of employers' attitudes specific to the bargaining arena are also of interest as indicators of prospects for partnership. Some key perceptions are set out in Table 7.7 and, while they show up some further obstacles, they again show that about one quarter of officials are not encountering attitudinal barriers to cooperation, and only about 20 percent say that they are consistently running into attitudinal barriers to partnership among employers.
Table 7.7 Union Officials' Perceptions of Employers' Attitudes in Bargaining
| 'Please describe the extent to which you have encountered the following problems in trying to establish effective negotiating relationships.' | A consistent problem % | Sometimes a problem % | Generally not a problem % |
|---|---|---|---|
| Employers have a set bargaining agenda and are unwilling to discuss other issues | 19 | 55 | 26 |
| Employers do not share the information I need to work effectively with them on their issues | 23 | 53 | 24 |
| Employers resist ideas from the union 'on principle' rather than on the merits of the ideas | 17 | 51 | 32 |
| Employers undermine our positions by implementing their own alternative policies unilaterally | 19 | 61 | 19 |
It is appropriate, by way of summary, to put prospects for and barriers to partnership in perspective. Generally speaking, the union respondents in this research are supportive of dealing with employers in a partnership relationship. While there are exceptions among the union officials in the survey, for the most part union respondents see partnership as beneficial to their members and many of them also see partnership as beneficial to the employer. They believe that the union and union officials and an organized workforce have something of value to contribute to the operation of the employing organization.
Union officials in the study, again for the most part, carry attitudes and beliefs that are broadly supportive of partnership approaches to union-management relationships. So one might be entitled to conclude on the evidence that for many of these union officials, while they take a pragmatic view that partnership is a benefit to their members, there is also something of a commitment to partnership at the level of personal beliefs or even ideology. Their support of partnership largely survives contrary experiences with employers, except that experience of employers' attempts to circumvent the union and deal directly with employees turns union officials away from partnership.
Union officials participating in this study are largely supportive of taking partnership approaches provided that the employer is willing to do the same, and they see the employer CEO's attitude to the union and partnership behaviours as pivotal.
Employers are, in general terms, less enthusiastic about partnership. There is less relationship between beliefs and willingness to engage in partnership, which is consistent with other data in the survey indicating that employers are very pragmatic in their view of partnership. Those most in favour of partnership are those that have had experience of partnership-type dealings with the union, most often in collective bargaining, and found those dealings a satisfactory experience.
Many employers remain reluctant to engage closely with unions, and those attitudes remain a barrier to the spread of workplace partnerships. Interestingly, union officials experiencing negative employer attitudes largely remain ready to partner. But if the majority of employers remain unwilling to engage in bargaining or more general consultation practices that let unions closer than arms length, then it is not an easy way forward.
It is well to remember, however, that there is already a majority of union officials and a minority of employers who endorse and practice workplace partnership and profess to see pragmatic benefits in it for themselves and each other. The report turns now to examine where partnership is occurring.
Workplace Partnership: Where is it Happening?
It is difficult to be precise about when and where union-management workplace partnership is occurring because the definitions of partnership and the range of attitudes and actions that characterize partnership are themselves variable, to some extent debatable, and imprecise. As has been said, while labels and behaviours do not always match, one indicator of the existence of partnership is a belief or acceptance by an employer that it is in a partnership relationship with a union.
In this respect, the basic measure used here is employer reaction to the statement, "The union is in partnership with management and employees". Thirty-five percent of employer respondents accepted that that was the case in their organizations; 65 percent did not. A later section will detail the collective bargaining and consultation practices of employers who say that they are in partnership with unions. This section examines the data for indications of where and under what circumstances union-management partnerships are most likely to be found and flourishing. Again, the measure of partnership in this section is self-reporting by employers of the existence of partnerships.
Partnership & Demographics
There is no decipherable pattern of reported partnerships by the nature of the employing organization, with between 35 and 41 percent of respondent employers in all categories, bar one, reporting that they were in partnership with a union. The one exception was the category covering New Zealand operations of overseas companies, where the rate of reported partnerships was just 20 percent. The distribution of the sample amongst the various public and private sector categories was such that 54 percent of respondents who reported being in partnership with a union were representing "the whole of a New Zealand company", suggesting that the partnership "prototype" is a whole private sector company (as against a branch, facility or cost centre within a company) dealing with one principal union for a single employer collective agreement.
There is more variation, though not a statistically significant pattern, of reported union-management workplace partnerships by industry classification, as illustrated in Figure 7.1:
Because of the distribution of the sample of respondent employers amongst the industry classifications, 25 percent of employers reporting workplace partnerships with unions were in manufacturing, with the general Government category and the health services category together constituting another 25 percent of the total.
There were differences, but no clear correlations, between reported workplace partnerships and workforce size. Forty-seven percent of employers with workforces of 50 or less reported being in partnerships with unions, whereas only 33 percent of employers with workforces of over 50 employees did so. On the other hand, because of the distribution of respondents, 78 percent of those reporting workplace partnerships had over 50 employees, and indeed a majority (57 percent) had workforces of over 100 employees.
Figure 7.2 shows partnerships by the number of different New Zealand work sites employers' employees usually worked on.
As is apparent from Figure 7.2, employers with unionized staff employed on just one or several work sites were more likely to report being in partnership with unions than employers with larger numbers of work sites. Intuitively, it would seem to be more difficult to foster a sense of partnership in circumstances where employees are scattered amongst many sites or branches of the organization. Thirty-eight percent of respondent employers who reported being in partnership with unions had just one work site.
There was an interesting geographical pattern to reported partnerships. Just 28 percent of employers with a primary base of operations in either Auckland or Wellington reported being in partnership with unions.
In all other areas the percentages reporting partnership were in the range of 40 to 44 percent. Nonetheless, because of the distribution of the sample, one-half of those employers reporting workplace partnerships listed Auckland or Wellington as their principal base.
Partnership & Market Pressures
Employers were asked about the nature of markets in which they placed their products or services. In fact, there were few pronounced patterns evident by the nature of product markets. Employers in captured or monopoly markets, including many public sector employers and those competing in local markets were somewhat more likely (42 percent) to report being in partnership than those competing in national or international markets (30 percent).
Again, there were some, but not marked, differences in partnership propensity by self-reported economic position, with those employers reporting themselves as "under pressure" economically being a little less likely to report being in partnership than employers who reported their organization's position as stronger, stable or fixed by government funding. This data is illustrated in Figure 7.3.
Employers were asked directly about challenges and pressures confronting their organizations and Table 7.8 illustrates the propensity for partnership by reported levels of pressure being felt by employers on some key dimensions.
In terms of general competitive pressures in the marketplace for their goods or services, 40 percent of those who indicated that they were under "no pressure" reported being in partnership relations with unions, compared to 35 percent of those who described themselves as being under "some pressure" and 33 percent of those under "intense pressure".
As to more specific sources of pressure, the pattern associated with competing in the labour market was equally unremarkable. However, internal labour cost pressures seem more relevant. Substantially higher percentages of employers who said that they were under no pressure from either or both their current labour cost structures or the future cost implications of union demands reported being in partnership with unions than was the case for those feeling under pressure from labour costs now or in the future. The relationship between reported partnership and the felt pressure from union demands was particularly noteworthy [R -.221 signif .003].
A theme from the interviews with employers, and from comments made in open sections of the survey instrument, was that many employers are disturbed by industry wide wage campaigns, union initiatives to establish MECAs, and other strategies that employers believe do not take into account the circumstances at enterprise or business levels. Conversely, many union officials suggested that some employers have an overly micro view on their business and are not thinking long-term or at the required industry level. Both employers and union officials consistently cited that labour cost pressures from Asia were a significant concern on both their agendas.
Table 7.8: Partnerships by Pressures on Employers (Employers reporting partnerships)
| 'Could you please rate each of the following in terms of the pressure that they are causing your organization'. | Intense pressure (%) | Some pressure (%) | No pressure (%) |
|---|---|---|---|
| Competition in the marketplace for your products or services | 33 | 35 | 40 |
| Difficulty in recruiting or retaining appropriate staff | 30 | 36 | 40 |
| The existing level of the organization's labour costs | 29 | 35 | 83 |
| Employee or union demands that will increase the organization's labour costs | 22 | 38 | 54 |
Generally speaking, demographics do not emerge as a reliable predictor of the practice of workplace partnership. There were some suggestive patterns but no statistically significant variations by the nature of the employing organization, by industry classification, or by workforce size. Partnerships were more likely to be reported by employers with just one or a few worksites than by employers with many sites, and employers in New Zealand's two major cities were the least likely to report being in partnership with a union, although again these relationships were not at a statistically significant level. Interviewed employers and union officials often talked of competition from Asia based on lower labour costs as being on their minds. But, again, general market conditions were not predictors of partnership, although labour cost pressures, and particularly from anticipated union demands, did register as a factor moderately strongly related to the existence of partnership arrangements.
All in all, while there were some interesting patterns to the demographics, there is nothing in the data to suggest that partnership is assured of flourishing in one particular location or industry or market or plant configuration, but doomed to fail in others. The link between reported partnership and demographic variables is simply not that strong. It seems reasonable to conclude that there is potential for workplace partnership pretty much anywhere that union and management commit to it.
Partnership & Experience with Unions
Intuitively, one might expect employers' propensity to partner with unions to reflect employers' experiences with and attitudes towards unions. Several dimensions of union "presence" were examined and matched with employers' reporting of themselves as being in partnership with unions.
Figure 7.4 shows reported partnerships by union density or the percentage of employers' workforces that were members of unions. Figure 7.4 shows that the higher the percentage of union membership the greater the likelihood that an employer would report being in a partnership arrangement with the union. Sixty percent of employers describing their relationships with unions as partnerships also reported union membership of 50 percent or better amongst their workforces.
Another union dimension might also play a part. About 45 percent of the respondent employers deal with just a single union representing their employees. The rest deal with two or more unions. Employers who deal with just one union were more likely (42 percent) to report that they had a partnership relationship with the union than employers who dealt with more than one union (30 percent). Fifty-three percent of those employers reporting partnership relationships dealt with just one union. This was supported at interview where employers stressed that having effective interpersonal relationships with a single union contact greatly enhanced their propensity to deal openly with the union.
Employers were also asked how long they had been a party to collective agreements with the union (or, again, the union representing the largest number of their employees where the employer dealt with more than one union). The percentages of employers reporting partnership relationships with unions according to length of time dealing with the union are illustrated in Figure 7.5.
There is obviously no consistent relationship between felt partnership and length of time working together in the sense that it cannot be said from the data that the longer the period a union and management work together the more likely they are to develop a partnership relationship. However, what is clear from Figure 7.5 is that a sense of partnership is not prevalent amongst employers in new bargaining relationships with unions. What is apparent on the face of the graph is that partnership takes some time to build. Indeed, 80 percent of employers who said that the unions with which they dealt were in partnership with management and the employees had been parties to collective agreements with those unions for six years or more. And indeed all but one employer describing the union-management relationship as a partnership had dealt with the unions for three years or more.
At interview both employers and union officials suggested that interpersonal relationships were a more important factor than time per se, although trusting relationships generally take some time to develop. Having confidence in the style and credibility of the other party was seen to be critical. It was also noted, however, that over time the relationship sometimes moves depending on organizational pressures and environmental factors. Unions particularly cited that employers can be inconsistent depending on the legislative and economic environment. Employers particularly cited that national union strategies can interrupt local relationships.
To summarize, an employer dealing with a single union representing a high percentage of the employer's employees, with the opportunity to develop over time a trusting relationship with a credible union official would seem to reflect some of the key ingredients in the recipe for a successful workplace partnership.
Partnership & Attitudes to Unions
As noted earlier, employers were asked the reasons, including the principal reasons, for their organization's relationship with the union. There were some clear differences in reported partnership on this score. Just 18 percent of employers who dealt with the union principally "because it can't easily be avoided" described their relationship with the union as a partnership. Of those citing either "because employees want it that way" or "because it has always been that way", 39 percent described their organizations as being in partnership with the union. By contrast, 74 percent of employers who said that the main reason they dealt with the union was "because it is beneficial to the organization" described their relationship as a partnership. Statistically, this was a moderately strong relationship [R -.322 signif .000].
Nonetheless, it is appropriate to note that close to one half of employers reporting partnership say that they deal with the union principally because that is what the employees want, and that sort of respect for plurality or a diversity of interests in the workplace is entirely consistent with the concept of workplace partnership, and particularly with the "voluntarist pluralist" notion of partnership as described in Chapter One.
Employer perceptions of unions and collective bargaining might be expected to be predictors of workplace partnership. In this respect:
- Employers who said that they always accepted that the union accurately represented employees' needs were more likely (63 percent) to report being in partnership with the union than those who only sometimes or never gave the union that credit (27 percent and 0 percent reporting partnership respectively) [R .362 signif .000];
- Employers who believed that union officials "will do the right thing by our organization" were more likely (55 percent) to report being in partnership with the union than those who did not so believe (23 percent) [R .323 signif .000]; the reverse relationship was similar - 57 percent of employers who reported being in partnership with a union believed that the union would do the right thing by the employer; only 25 percent of those not in partnership believed that;
- Employers who believed that employees were in partnership with management were more likely (41 percent) to also believe that the union was in partnership with management than employers who did not see their employees as being in partnership with management (21 percent) [R .199 signif .008]; and
- Employers who agreed that "collective bargaining is probably the best way to settle differences between the organization and its employees" were more likely (51 percent) to report being in workplace partnership with unions than those who disagreed (23 percent reporting partnership) [R .291 signif .000].
At interview it was generally cited by both employers and union officials that if issues of utility (i.e. pay and conditions) can be efficiently and openly dealt with between the parties then this would enable a window of opportunity to place emphasis on broader business/industry strategies or requirements.
Workplace Partnership Practices
This section details the practices associated with workplace partnership in New Zealand today. The major part of the section again uses the self-reporting by employers of the existence of partnership as the indicator of the existence of a partnership relationship between the employer and a union representing that employer's employees.
In other words, partnership is taken to exist where the employer respondent agrees to the statement, "the union is in partnership with management and the employees" as being descriptive of the employer's situation. That was 35 percent of the employer sample or 63 employers, each with single employer collective agreements, and each responding in terms of their relationship with the union representing its employees or, where more than one, the union representing the largest number of its employees.
The section details the reported behaviours and attitudes of those employers primarily in and about collective bargaining, the primary forum for workplace partnership in New Zealand under the Employment Relations Act, but also in consultation forums beyond the formal bargaining arena.
It is not suggested that employers who did not indicate that they were in a partnership arrangement with a union do not have some of the same practices and attitudes as those who consider themselves in partnership. Many of them do, and some comparisons are drawn in the course of the discussion.
But the intent here is to take a substantial group of New Zealand employers who consider themselves to be in partnership with unions, and to present a profile of their approaches to dealing with the union. The data has been designed to address all of the elements of partnership identified in the theoretical model of partnership that has guided this project from the outset. The details begin with some basics of the collective bargaining process.
Bar 7.1 Hours Spent in Bargaining by Employers in Partnership
| Less than 8 hours | 8 to 24 hours | 25 to 48 hours | 49 to 100 hours | 100+ hours |
|---|---|---|---|---|
| 17 % | 44 % | 23 % | 10 % | 6 % |
Bar 7.1 shows the amount of time taken in negotiations for a collective agreement by employers who say that they are in partnership with the union. Clearly, most don't take long. There was, in fact, a fairly strong correlation between hours spent in negotiations and the likelihood that an employer would report being in partnership with the union [R .294 signif .000]. The fewer hours spent in direct negotiations between the parties in pursuit of a collective agreement, the more likely was the employer to label the relationship a partnership. This correlation is illustrated in Figure 7.6.
As might be expected, where parties engaged in protracted negotiations involving over 100 hours of interaction, few employers were prepared to say that they were in a partnership with the union. It follows from these statistics that employers enjoying a partnership relationship with unions spent, on average, less time in negotiating a collective employment agreement than did employers not describing their relationships as partnership.
Respondent union officials generally dealt with several or many employers, and so union officials cannot be so easily identified as "in partnership". Many are likely to feel that they are in a partnership arrangement to some degree with some employers but not with others. As reported earlier, union officials were asked their propensity for forming partnerships "where the employer is willing to do the same". Fifty-two percent of union respondents "totally agreed" that unions should be prepared to partner if employers were; 34 percent agreed "to some extent" and 14 percent rejected the idea. Union officials were asked to focus on a recent set of negotiations in which they were involved and to provide some details of the negotiations. It is not known whether these negotiations involved employers with whom the union officials felt they were in partnership, so a direct comparison with the employer data cannot be made. There were no significant differences in these details between those totally committed to reciprocal partnership and those committed "to some extent". For comparison purposes, the experiences of the large majority of the union respondents who favoured reciprocal partnership to any extent are included in this section.
To begin, Bar 7.2 shows the time that these union officials favouring partnership reported spending in direct negotiations with the employer in their most recent negotiations.
Bar 7.2 Hours Spent in Bargaining by Union Officials
| Less than 8 hours | 8 to 24 hours | 25 to 48 hours | 49 to 100 hours | 100+ hours |
|---|---|---|---|---|
| 5 % | 13 % | 32 % | 15 % | 34 % |
It is noteworthy that union officials reported spending more time negotiating, on average, than did employers in partnership, virtually half of these union officials spending more than 48 hours in direct negotiations with the employer. Again, it is not known to what extent these negotiations involved partnership-type relationships, so it is difficult to draw any reliable conclusions from the data.
Bars 7.1 and 7.2 detailed time actually spent interacting with the other party. Bar 7.3 sets out the periods of time over which negotiations for a collective agreement extended for the sub-sample of employers in partnerships with unions. Again, and perhaps unsurprisingly, relatively few extended to a point that could be regarded as protracted. Eighty-six percent of negotiations for collective employment agreements in relationships deemed by the employer to be union-management partnerships were completed inside two months with 48 hours or less of direct interaction.
Bar 7.3 Weeks Spent in Bargaining by Employers in Partnership
| 1 to 3 days | 1 to 2 weeks | 3 to 8 weeks | 9 to 26 weeks | 27+ weeks |
|---|---|---|---|---|
| 20 % | 27 % | 39 % | 11 % | 3 % |
There was not the same direct linear relationship between this calendar variable and the likelihood of an employer being in partnership with a union. However, collapsing some categories, employers across the whole sample who completed their negotiations for a collective agreement in two weeks or less were more likely (48 percent) to report being in partnership with the union than those whose negotiations extended over longer periods [R .210 signif .005]. These details are illustrated in Figure 7.7.
Employers describing themselves as being in partnership with unions, on average, completed negotiations for collective agreements in shorter calendar periods than employers who did not consider themselves to be in partnership with unions.
As illustrated in Bar 7.4, union officials reported spending a good deal more time to reach agreement than did employers in partnership arrangements. Whereas only 14 percent of the sub-sample of employers reported negotiations extending beyond two months, 42 percent of the union officials reported negotiating beyond two months in recent negotiations. Again, however, it is not known whether those negotiations involved partnership relationships.
Bar 7.4 Weeks Spent in Bargaining by Union Officials
| 1 to 3 days | 1 to 2 weeks | 3 to 8 weeks | 9 to 26 weeks | 27+ weeks |
|---|---|---|---|---|
| 11 % | 9 % | 89 % | 25 % | 17 % |
Participants in Collective Bargaining
Respondents were asked about team membership for collective bargaining purposes. There were no material differences in bargaining team makeup reported by those employers describing themselves as in partnership with a union from those reported by the sub-sample of employers who did not describe themselves as being in partnership with unions. The CEO, for example, was only marginally more likely to be involved in negotiations in partnership situations than in non-partnership situations. Overall, the CEO was reported as being "always" present for negotiations by about one-half of the employer respondents, and "sometimes" present by another one-third.
Likewise, those reporting workplace partnerships were no more or less likely to have human resources advisors or operations staff present for the employer, and only marginally more likely to have employment relations specialists or lawyers involved in the bargaining. Most respondents reported that human resources advisors and representatives of operations management were involved some or all of the time. Specialist employment relations advisors or lawyers were reported as much less often present.
The profile of union representation was also close to identical between the two sub-samples of employers - those in partnership and those not. Almost always the union bargaining team included both paid officials from outside the employing organization and employee delegates from the workforce.
Bargaining Procedures & Behaviours
The data contain a rich description of bargaining approaches and procedures followed by the bargaining parties in partnership relationships in pursuit of collective employment agreements. It is widely accepted that one significant contribution of the ERA's good faith regime to the shape of collective bargaining is the encouragement to parties to reach bargaining process agreements (BPAs) preliminary to beginning substantive collective bargaining. BPAs are intended to regulate the logistics of negotiations, but they also give bargaining parties an opportunity to get a "feel" for one another and they provide a vehicle for parties to define and set the tone of their relationship.
BPAs are now sufficiently widely employed that it is unsurprising that, as illustrated in Table 7.9, there is little difference between the partnership sub-sample of employers and the non-partnership sub-sample in terms of whether they and their unions completed a BPA in preparation for their most recent negotiations. Data provided by union respondents who supported reciprocal partnership are included in the table for comparison, and they look quite similar to the data provided by the employers.
Table 7.9 Status of Bargaining Process Agreements
| "The Employment Relations Act requires employers and unions to attempt to negotiate a 'Bargaining Process Agreement" governing the procedures they will use for negotiating collective agreements. Which of the following statements best describes the 'BPA' situation during your most recent negotiations?" | Employers in partnership with unions (%) | Employers not in partnership with unions (%) | Union officials favouring partnership (%) |
|---|---|---|---|
| We negotiated a BPA for these negotiations | 44 | 48 | 41 |
| We had an existing BPA and it did not need any changes | 34 | 27 | 32 |
| We have had a BPA in the past but no longer bother with it | 3 | 4 | 4 |
| We have attempted to negotiate a BPA with this union /employer but never been successful | 0 | 5 | 6 |
| We have never attempted to negotiate a BPA with this union/employer | 19 | 16 | 17 |
What Table 7.9 says is that 78 percent of employers in partnership and 75 percent not in partnership (and 73 percent of union officials) either rolled over BPAs from previous negotiations or agreed a new one for their most recent negotiations. Given that most partnership relationships were longer-term, the higher roll-over figure makes some sense. Suffice to say that there was no correlation between having negotiated a BPA and being in a partnership relationship with a union.
The reported contents of BPAs also differed little between the sub-sample of employers in partnership, the sub-sample of employers not in partnership, and the union respondents. Table 7.10 details the provisions in BPAs negotiated by employers and unions in partnership relationships, as reported by the employers. It suggests that BPAs in these relationships largely reflect the intent of the good faith bargaining obligations and, at least on paper, incorporate the key principles of both principled bargaining and union-management partnership.
The one apparently jarring exception here is that almost one in five employers who describe themselves as in partnership with a union have never attempted to negotiate a BPA with the union. While this is at odds with the obligation under the ERA to endeavour to do so, it may very well be, given the longevity of many partnership relationships, that the parties have a sufficiently well-established and mutually satisfactory way of working together that they have not seen the need to formally address their bargaining logistics and protocols in a BPA. That 17 percent of the union officials likewise have not attempted to negotiate a BPA with the particular employer they had in mind in completing the survey would presumably be largely explained in the same way, although anecdotal evidence suggests that there remain at least a few negotiators "of the old school" who shun BPAs as unnecessary.
Table 7.10: Contents of Bargaining Process Agreements in Partnerships
| "If the most recent negotiations with the union were conducted under a bargaining process agreement (BPA), please check any and all of the following which accurately describe the provisions or tone of the BPA." | Employers in partnership with unions % |
|---|---|
| It respected the role and authority of the employer | 78 |
| It respected the role of the union as representing employees | 84 |
| It committed each party to considering the other's interests | 78 |
| It required a party to offer a response to the other's proposals | 78 |
| It committed the parties to working together to identify and overcome barriers to agreement | 77 |
| It required the parties to treat each other respectfully | 73 |
| It provided for mediation or other assistance in the event of an impasse or other serious dispute during bargaining | 63 |
| It provided for an exchange of relevant information | 69 |
| It reflected a mutual commitment to bargain in good faith | 92 |
Employers' Approaches to Bargaining
As can be seen from Table 7.10, the bargaining process agreement sets out the ideals to which the bargaining parties aspire entering their negotiations for a collective agreement. Their conduct of the negotiations may or may not live up to those ideals.
Both good faith under the ERA and the union-management partnership approach to workplace negotiations embrace a principled or interest-based approach to collective bargaining. By a realistic definition, an interest-based approach involves a commitment to emphasize mutual interests, an acceptance nonetheless of some diversity of interests, a willingness to openly explore the parties' respective interests and to search for mutually-beneficial resolutions wherever possible, avoiding premature commitment to positions in the meanwhile, and a willingness to be self-limiting in the exploitation of bargaining power in the interests of the parties' relationship and long-term prospects.
These are the elements of collective bargaining that might be looked for in a union-management partnership relationship. Again by a realistic definition, none of this denies the possibility or legitimacy of the parties' interests conflicting at times, or of the parties exercising their statutory rights to bargain hard and to back it up with industrial action as a last resort.
Employers were asked to indicate the extent to which a series of statements describing behaviours in negotiations accurately described the approaches they took in the most recent negotiations with the union or principal union representing their employees.
The data for employers who said that they were in partnerships with unions are presented in several parts in Table 7.11. Table 7.11a records several dimensions indicative of the extent to which the employers not only acknowledged a plurality of interests, but accepted a need to satisfy the separate interests in order to achieve a satisfactory outcome to the negotiations.
Table 7.11a: Employers in Partnership: Accepting a Plurality of Interests
| "Please describe your organization's approach to the most recent collective negotiations with the union". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We knew clearly what we wanted to achieve for the organization before we began negotiations with the union | 82 | 16 | 2 |
| We took the view that employees' needs also had to be met for the negotiations to be successful | 72 | 28 | 0 |
| We took the view that the union's own needs, as an organization, also had to be met for the negotiations to be successful | 42 | 52 | 6 |
While there is less sympathy amongst employers for the union's institutional needs, it is nonetheless noteworthy that virtually all of these employers who described themselves as being in partnership with unions acknowledged the need to meet the union's needs at least some of the time. Most employers in partnership accepted that unions accurately reflect the needs of their members most of the time, so it would seem apparent that these employers are, for the most part, recognizing separate institutional needs over and above the union's representations on behalf of employees. Virtually all employers indicate that they were clear on their own objectives going into the negotiations.
Table 7.11b provides a look at the partnership employers' propensity to pursue traditional "positional bargaining" approaches in negotiations for collective agreements. Interest-based bargaining purists might find the data in Table 7.11b disappointing, but that ought not to be the case. Even ardent champions of interest-based bargaining acknowledge that, though it might be the ideal, most people don't bargain according to pure interest-based principles most of the time.
What the data in Table 7.11b seem to say is that the instincts to think through one's interests, to take positions (tactically) designed to protect or advance those interests, to hold fast at times, but to engage in reciprocal compromise as necessary to reach a mutually satisfactory agreement are alive and well amongst this group of employers who consider themselves to be in partnership with the unions with whom they bargain.
But the purists' critique of positional bargaining has always overstated the case. What matters is the extent to which parties are working together to maximize their mutual and separate gain, whether they do that under cover of bargaining positions or more openly and fluidly.
Table 7.11b: Employers in Partnership: Positional Bargaining Behaviours
| Please describe your organization's approach to the most recent collective negotiations with the union". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We took initial positions on key issues early on in the negotiations | 48 | 44 | 8 |
| We calculated the bottom lines on key issues (e.g. the maximum pay increase) before we met with the union, or early on in negotiations | 79 | 16 | 5 |
| We were willing to modify out initial positions on some issues in the negotiations, if necessary to reach agreement | 49 | 51 | 0 |
| We were only willing to compromise our positions on issues if the union also showed a willingness to compromise | 35 | 50 | 15 |
| We preferred to "brainstorm" with the union over a range of options before taking positions on how particular issues should be settled or dealt with | 23 | 50 | 27 |
| We tried to reach agreement on issues by compromising our positions in exchange for the union compromising its positions | 21 | 71 | 8 |
| We held firm on positions until the union backed down or forced the issue | 11 | 67 | 22 |
Table 7.11c presents self-reported behaviours of employers in partnership with unions that might fit in the category of interest-based bargaining behaviours - a willingness to be open in discussing one's own needs and the needs of the other parties to the bargaining, a willingness to share information, a willingness to jointly explore possible avenues for resolving issues and to jointly champion those resolutions once found.
In these respects, there are some substantial positives in the data. As suggested above, it would be unrealistic to expect even employers in partnership with unions to act in accordance with interest-based principles all of the time. Ninety percent or better of these employers are prepared to be open about their organization's needs and looking for common interests and solutions at least some of the time, are prepared to jointly develop a bargaining agenda, are prepared to talk openly with the union about at least some organizational issues beyond immediate employment terms, are prepared to share commercial information with the union, and are prepared to stand jointly with the union in advocating agreed solutions to their employees and members.
Table 7.11c represents the substantial practice of interest based bargaining principles, while Table 7.11b says that these employers implement these principles in a pragmatic and, in many respects, conventional or traditional way.
Table 7.11c: Employers in Partnership: Openness & Mutuality of Interests
| "Please describe your organization's approach to the most recent collective negotiations with the union". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We kept our objectives to ourselves during the negotiations, but had strategies and tactics to achieve them | 18 | 60 | 22 |
| We openly shared with the union our thinking on the organization's needs to see whether we might have had common interests or similar ideas | 61 | 32 | 7 |
| We developed, jointly with the union, a list of issues which then served as the agreed agenda for the negotiations | 53 | 39 | 8 |
| We openly discussed with the union organizational issues beyond the immediate employment conditions of employees (or would be willing to do so if asked) | 46 | 44 | 10 |
| We tried to protect the organization's interests by limiting the union's input to just wages and basic employment conditions, not management issues | 27 | 29 | 44 |
| We were willing to share with the union commercial information about the organization, the challenges it faces, and the environment in which it operates | 47 | 43 | 10 |
| We worked to find areas of mutual interest to the organization and the union, and to jointly develop proposals in those areas | 43 | 52 | 5 |
| We have, or would be prepared to, appear jointly with the union in front of employees to present agreed solutions on issues or problems confronting us | 60 | 35 | 5 |
Another cornerstone of good faith bargaining, of interest-based bargaining, and of workplace partnership is investment in, and protection of, the relationships between employer, employees and the union. And a large part of that is the willingness of the parties to exercise self-restraint in the context of the relationship. Table 7.11d addresses this aspect of bargaining for the sub-sample of employers who report being in partnership with unions representing their employees.
It is probably fair to say that there are mixed signals in the data in Table 7.11d. It is instructive that four out of five of these employers were prepared to agree to disagreeable proposals not merely to get an agreement, but expressly to protect their relationships with the unions. Beyond that, the vast majority of these employers were unwilling to use industrial "force" - the lockout - under any circumstances to achieve their objectives, were willing to respond with concessions to industrial "force" by the union and employees, at least under some circumstances, were for the most part willing to continue negotiating under a strike threat, and were inclined to use a mediator to try to resolve disputes in preference to either party resorting to industrial action.
Table 7.11d: Employers in Partnership: Self-restraint & Relationships
| "Please describe your organization's approach to the most recent collective negotiations with the union". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We were prepared to lock out union employees if necessary in order to achieve our objectives in the negotiations | 5 | 13 | 82 |
| We would have been willing to compromise if we thought that union members were likely to go out on strike | 10 | 52 | 38 |
| We continued to negotiate (or would have) even though the union had threatened a strike | 57 | 28 | 15 |
| We were willing to involve a neutral mediator who could help us resolve points of difference if necessary | 44 | 43 | 13 |
| We softened our position on issues (or would have been willing to) as a result of a strike by the union and our employees | 8 | 61 | 31 |
| We were willing to agree to some proposals that we did not particularly like in order to build a better relationship with the union | 21 | 60 | 19 |
Union Approaches to Bargaining
Union respondents were asked a similar set of questions, in fact identical to the extent that that made sense. They were again asked to respond in terms of a recent set of negotiations for a collective bargaining agreement, but there is no indication as to whether either the union or employer representatives involved in those negotiations considered the parties to be in workplace partnership or to have a more conventional or traditional union-management relationship. Accordingly, it cannot be said that the bargaining behaviours reported by the union respondents apply to an acknowledged partnership relationship.
That said, however, the data in Table 7.12 are drawn only from those union officials who indicated that they favoured taking a partnership approach some or all of the time, provided that the employer did the same. In that sense, the data could be said, perhaps with some licence, to be somewhat analogous to the employer data in Table 7.11. For convenience of comparison, the equivalent employer data from Table 7.11 are reproduced in square brackets with the data reported by the respondent union officials favouring reciprocal partnership.
Tables 7.11 and 7.12 provide a comprehensive portrayal of recent collective bargaining behaviours of a sample of employers who regard themselves as being in workplace partnership with a union, and of a sample of union officials who say that, provided the employer is of a like mind, they favour a partnership approach to labour relations some or all of the time.
Table 7.12a: Union Officials: Accepting a Plurality of Interests
| "Please describe your approach to the negotiations with the employer". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We knew clearly what we wanted to achieve for the members before we began negotiations with the employer. | 92 [82] |
8 [16] |
0 [2] |
| We took the view that employer's needs also had to be met for the negotiations to be successful | 49 [42] |
49 [52] |
2 [6] |
Table 7.12b: Union Officials: Positional Bargaining Behaviours
| "Please describe your approach to the negotiations with the employer". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We took initial positions on key issues early on in the negotiations | 50 [48] |
46 [44] |
4 [8] |
| We calculated the bottom lines on key issues (e.g. the minimum pay increase) before we met with the employer, or early on in negotiations | 49 [79] |
41 [16] |
10 [5] |
| We were willing to modify out initial positions on some issues in the negotiations, if necessary to reach agreement | 51 [49] |
45 [51] |
4 [0] |
| We were only willing to compromise our positions on issues if the employer also showed a willingness to compromise | 34 [35] |
56 [50] |
10 [15] |
| We preferred to "brainstorm" with the employer over a range of options before taking positions on how particular issues should be settled or dealt with | 25 [23] |
49 [50] |
26 [27] |
| We tried to reach agreement on issues by compromising our positions in exchange for the employer compromising its positions | 27 [21] |
67 [71] |
6 [8] |
| We held firm on positions until the employer backed down or forced the issue | 13 [11] |
58 [67] |
29 [22] |
There are few differences between bargaining behaviours reported by employers and unions in Tables 7.12a and 7.12b that are more than marginal. The one marked difference is the employers' greater inclination to routinely think through bottom lines before entering collective bargaining. There are more differences in approach apparent when comparing Tables 7.11c and 7.11d with Tables 7.12c and 7.12d. Again, the comparable employer data from Tables 7.11c and 7.11d are shaded in square brackets in Tables 7.12c and 7.12d.
Table 7.12c: Union Officials: Openness & Mutuality of Interests
| "Please describe your approach to the negotiations with the employer". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We kept our objectives to ourselves during the negotiations, but had strategies and tactics to achieve them | 26 [18] |
32 [60] |
42 [22] |
| We openly shared with the employer our thinking on our members' needs to see whether we might have had common interests or similar ideas | 74 [61] |
24 [32] |
2 [7] |
| We developed, jointly with the employer, a list of issues which then served as the agreed agenda for the negotiations | 61 [53] |
14 [39] |
25 [8] |
| We openly discussed with the employer issues beyond the immediate employment conditions of employees (or were willing to do so if asked) | 68 [46] |
30 [44] |
2 [10] |
| We were open to hearing about the employer's business, the challenges it was facing, and the environment in which it operates | 89 [27] |
11 [29] |
0 [44] |
| We worked to find areas of mutual interest to the employing organization and the union, and to jointly develop proposals in those areas | 44 [43] |
48 [52] |
8 [5] |
| We appeared jointly with the employer in front of our members (or would have been prepared to) to present agreed solutions on issues or problems confronting us | 19 [60] |
30 [35] |
51 [5] |
Table 7.12d: Union Officials: Self-restraint & Relationships
| "Please describe your approach to the negotiations with the employer". | Always % | Sometimes % | Never % |
|---|---|---|---|
| We were prepared to take strike action if necessary in order to achieve our objectives in the negotiations | 43 [5] |
35 [13] |
22 [82] |
| We were willing to compromise if we thought that the employer was likely to put pressure on our members | 4 [10] |
28 [52] |
68 [38] |
| We were willing to involve a neutral mediator who could help us resolve points of difference if necessary | 65 [44] |
21 [43] |
14 [13] |
| We were willing to agree to some proposals that we did not particularly like in order to build a better relationship with the employer | 10 [21] |
53 [60] |
37 [19] |
Generalizing to the two groups, union officials appear to be less circumspect about their objectives for the negotiations, to be more divided on working with the employer to develop an agreed agenda to guide the negotiations, to be more willing for the talks to range beyond wages and employment conditions into a wider range of issues confronting the organization, but to be quite wary about appearing jointly with the employer in front of the membership. Even allowing for some bravado fuelling responses, Table 7.12d suggests that union officials were both more willing to apply pressure to the employer than employers were to unions, and less willing to compromise in response to pressure applied to them. At the same time, union officials as a group were somewhat more inclined to involve a mediator as an alternative to (or perhaps in conjunction with) industrial action.
None of these differences in approach between a sample of employers and a sample of union officials would come as a surprise to experienced industrial relations observers. Again, Tables 7.11 and 7.12 provide a comprehensive guide to the collective bargaining behaviours of New Zealand industrial parties inclined towards workplace partnership.
Contents of Collective Employment Agreements
Employers were asked to indicate some of the contents of their negotiated collective employment agreements, not in detail, but in areas that might be expected to give some witness to the nature of a workplace partnership. The data reported by those employers who indicated that they were in a partnership relationship with unions are presented in Table 7.13.
Table 7.13 Contents of Collective Employment Agreements
| "Could you please tick any and all of the following types of provisions that are included in one form or another in your existing collective bargaining agreement with the union" | Employers in partnership with unions % |
|---|---|
| An agreed statement of your organization's purpose, "vision" or guiding principles | 43 |
| An agreed statement of the union's role in the organization | 43 |
| An expression of the relationship between the organization, the employees and the union | 59 |
| One or more provisions governing how work is to be assigned to employees and how employees are to be assigned to work (e.g. use of casuals, assignment of overtime, shift or roster assignments etc) | 66 |
| Provisions for on-going union -management consultation | 60 |
| Specific provision for consultation over future change (e.g. new technology/modernization, contracting out, relocation etc) | 67 |
| A procedure for resolving employment relationship problems internally with the union | 74 |
There were some differences with agreement contents of the sub-sample of employers who did not regard themselves as being in partnership with unions. Only 33 percent, for example, had included a statement of the union's role in the organization. In most respects, however, the differences in agreement contents reported by the two sub-samples of employers were relatively minor.
The data in Table 7.13 indicate that collective agreements in what the parties see as partnership relationships do not always articulate the relationship or give expression to it, but often times they do. Two out of three also include some "job control" provisions or agreed rules for the assignment of work and people. And a majority have specific and general consultation provisions.
Consultation
Employers were also asked specifically about consultation. While collective bargaining, and the way in which it is conducted, are central to the relationship between union and employer under the Employment Relations Act, whether in partnership or not, a mature workplace partnership will generally involve other forums for discussion and consultation and cooperation beyond the bargaining table.
Employers were asked whether certain types of provision for consultation existed in their organization, and they were asked to indicate whether "the union has a recognized role" in the forums identified. The data provided by employers who say that they are in partnership relationships with unions are reproduced in Table 7.14.
Table 7.14: Contents of Collective Employment Agreements (Percentages of all employers in partnership with unions)
| "Please tick any of the following consultation mechanisms that exist in your organization ... please indicate in which, if any, of these consultation mechanisms the union has a recognized role." | Have the consultation mechanism | Have a recognized role for the union |
|---|---|---|
| A general issues consultative committee | 33 | 29 |
| One or more health and safety committee(s) | 96 | 96 |
| Quality teams | 40 | 35 |
| Participatory working parties | 49 | 49 |
| Other forms of or forums for consultation | 14 | 14 |
Again, these numbers are not overwhelming. Other than in the mandated area of health and safety committees, only minorities of employers who say that they are in partnership with unions report any particular type of consultation mechanism. And only one-third report having an on-going general consultation forum. These numbers are, however, broadly consistent with the numbers given for consultation provisions in collective agreements as set out in Table 7.13.
It is, however, noteworthy that where mechanisms for consultation exist, the union is usually involved in a recognized role, and that would be considered indicative of union-management workplace partnership. This is borne out by the fact that 77 percent of employers indicating partnership said that they "consult with the union before making decisions that significantly impact the organization and the way we operate".
Employer Attitudes in Workplace Partnership
Employer attitudes towards unions were detailed in Table 7.5 and discussed as they relate to employers' willingness to endorse union-management workplace partnership as being beneficial to New Zealand business. Table 7.5 presented the attitudes of the full sample of employers involved in this research.
As a final component of the profile of the sub-sample of employers who have indicated that they are involved in workplace partnership, Table 7.15 shows the attitudes towards unions, employees and collective bargaining of the partnership group of employers. The attitudes of the sub-sample who say that they are not in partnership are included for comparative purposes.
Table 7.16: Employer Attitudes to Unions & Collective Bargaining
| 'Please describe the attitudes or policies of those in your organization mainly responsible for dealing with the union.' | Employers in Partnership % agree | Employers not in Partnership % agree |
|---|---|---|
| Collective bargaining is probably the best way to settle differences between the organization and its employees | 63 | 34 |
| Employees of our organization are in partnership with management | 83 | 63 |
| The union is a legitimate representative of employees, but not part of our team | 80 | 77 |
| What's best for the employees is usually also best for the organization | 56 | 55 |
| The union is a source of conflict and division in the organization | 20 | 48 |
| The union officials will do the right thing by our organization | 57 | 25 |
| Employees will not achieve anything through the union that management would not have given them anyway | 36 | 60 |
| We would prefer to deal less with the union and more directly with employees | 63 | 82 |
| We have an effective relationship with the union and are keen to keep it the way it is | 94 | 67 |
| Our relationship with the union is tense and unproductive | 5 | 21 |
| We would rather compromise our interests a little than damage our relationship with the union | 65 | 41 |
| We would trust the union to keep commercial information about our organization confidential | 70 | 52 |
| The union is a problem we could do without | 14 | 43 |
| Having union involvement enhances the operation of our business | 44 | 11 |
| The union creates a better workplace environment for employees | 55 | 16 |
| The union improves the organization's competitive position | 22 | 3 |
The primary point of Table 7.15 is to profile the views and attitudes of those employers in the survey who describe themselves as being in partnership with unions representing their employees. Nonetheless, the comparison with the views and attitudes of the remaining employers who say that they are not in partnership is instructive. There is a substantial margin of opinion between the two groups regarding unions.
Employers in partnership are decidedly more likely than those not in partnerships to believe that union officials will do the right thing by the organization, including keeping information confidential. They are more likely to give the union credit for delivering something for employees that they would not have gotten otherwise, a view that acknowledges a diversity of interests in the employment relationship and an advocacy role for the union.
They are more likely to say that they have an effective relationship with the union, to be comfortable dealing with the union and so less likely to prefer more direct dealings with employees, and to be willing to compromise their interests to protect the relationship. They are less likely to hold negative views of the unions as a source of conflict and to wish them away as "a problem we could do without". And they are more likely to credit them with enhancing the business and even, to a more limited extent, helping the organization's bottom line.
This comparison really defines the profile of unions as seen by employers in partnership. A substantial percentage of these employers hold positive, pluralist views of the role of the union in representing their employees. Most see unions as positive for their employees, and many see unions as contributing to the operation of the business, even if not the bottom line, and as trustworthy even if not quite "part of our team". And more of them than is the case with the non-partnership sub-sample see their employees as being in partnership with them.
It is noteworthy that the partnership employers are also more likely, again by a substantial margin, to endorse collective bargaining as "probably the best way to settle differences between the organization and its employees".
Implications for the Development of Partnership Practices in NZ
This stock-take of workplace partnership, including the detailed literature review and extensive primary research project, presents for the first time a comprehensive portrait of workplace partnership in New Zealand.
This concluding section first employs the data to paint an overall picture of workplace partnership in New Zealand. The opportunities available for the Partnership Resource Centre are then identified based on the findings of this project.
Towards a New Zealand Model of Workplace Partnership
The Practice on the Ground
The research confirms that a significant minority of employers in New Zealand have had experience of workplace partnership-type interactions with unions. A slim majority of union officials report such experiences; however a vast majority is supportive of the practice personally and suggests that their organizations are also sympathetic to partnership approaches. It is notable, however, that fifteen percent of union officials surveyed are individually suspicious of and opposed to the concept of workplace partnership.
The findings suggest that the most likely setting in which to find workplace partnership-type engagement in New Zealand at this time is a private employer dealing with one principle union for a single employer collective agreement covering employees throughout the company. There are otherwise no very clear patterns by industry or area of the country.
The research supports the anecdotal evidence that most efforts at workplace reform or workplace partnership in New Zealand have not endured. Often the reasons for this have been cited as economic (the need for management initiated change has been too compelling to resist) or relationship based (the executives or union officials fronting the effort have changed). The failure of workplace partnership-type initiatives is often cited as leaving participants with "a bad taste". Perhaps relatedly, employers who reported feeling under pressure from current or anticipated labour costs were significantly less likely to report being in partnership at this time than others in the survey. The linkage of partnership to economics is not statistically particularly strong; however it is consistent with the survey and interview comments of union officials on why partnership initiatives have not endured.
In New Zealand there exists a core group of private sector employers and unions that have been dealing with each other in meaningful collective bargaining for around fifteen years (39 percent of respondent employers have been in a bargaining relationship with the same union for fifteen years or more; another 41 percent have been together for between 6 and 15 years). Most of these relationships withstood the Employment Contracts Act and have not been materially affected by the Employment Relations Act, albeit that the power dynamics may have changed/oscillated over time. It is here for the most part that "workplace reform" took effect and here where most examples of partnership behaviour were anecdotally apparent outside of the state sector prior to the current research.
PfQ represented a fundamental shift towards institutionalized workplace partnership in the state sector and has produced successful outcomes in patches; however implementation remains short of the stated ambitions of the central parties. It is noteworthy that only a minority of employers in the state sector reported being in partnership despite the assistance of the PfQ initiative.
The nature of workplace relations in New Zealand appears to often be very much dependent on the key individuals involved and the relationship that they have. In many examples where partnership is reported it appears to be based on a single employer representative and a single unionist and the way that they interrelate and the respect they have for each other. From the employers' perspective, union officials being knowledgeable of the industry and the business, and being "responsible and flexible" come across as important prerequisites to such relationships forming. From the unionist perspective, the broader concept of a "good employer" comes across as important. Also from the union officials' perspective, the CEO of an organization has a very important role to play in allowing partnership to work well and to be sustained in any meaningful way.
There are few examples of "pure" or "model" workplace partnerships evident in this research. In the sub-samples of employers and union officials who report either being in partnership or being inclined towards partnership, actual bargaining and other workplace relations practices tend to be a mixture of some behaviours and attitudes that would be associated with a partnership approach and other behaviours and attitudes that would normally be associated with, perhaps, a more traditional, competitive approach to union-management relations. It can be inferred from the research that most workplace partnership in New Zealand, at least in the private sector, is "self-taught" or experimental, is not strategically based on a cohesive concept or "theory" of partnership, and is "incomplete" in the sense noted above - parties mix partnership behaviours with more traditional ways of relating to one another. Beyond bargaining and beyond other statutory associations and forums (health and safety committees, for example) no consistent pattern of co-operative relationships or forums emerged, although there were a small number of notable exceptions.
Workplace partnership in New Zealand where it does occur, even in limited form, appears to take time to develop. It also appears to involve some natural ordering of circumstances involving (a) a mature collective bargaining relationship; (b) reasonable relationships between individual representatives of the employer and the union; and, (c) a catalyst initiative from one side or a circumstance requiring broader co-operation or joint discussion outside of bargaining and the usual day-to-day interactions.
The Employers
One in every three employers surveyed is interested in partnership-type approaches with unions, albeit that the evidence suggests that what they currently envisage is something less than an all-embracing partnership. Many union officials suspect that employers often want partnership "only on their terms". It is clear from the research that employers' views of workplace partnership are very pragmatic and experience-based. Employers who have had good experiences when trying to be more open with a union tend to be interested in partnership; those who have not, or who have had a bad experience, are less interested or opposed. One of the implications of this pragmatism is selectivity. A number of employers dealing with more than one union told the researchers that they would be open to some forms of partnership with a particular union, but not with another. From an employer's perspective, partnership approaches (and the union) need to be focused on the needs of the organization and its people, and few employers are interested in accommodating a union's broader agenda.
Around two-thirds of employers hold somewhat traditional values about the management of the workplace, and not surprisingly these employers are less inclined to believe that workplace partnership is potentially beneficial to New Zealand's economy. The majority of employers surveyed have what might most accurately be described as a "limited" view of unions. Most respect the right of employees to have representation and accept the role of the union in representing employees. However, relatively few are prepared to go so far as to acknowledge the union as "part of our team." As a result, a lot of union officials report facing a range of attitudes and behaviours from employers that only encourage traditional "position taking" in response.
It is worth noting that, just as many employers in partnership nonetheless exhibit some traditional competitive or defensive behaviours, so too many employers who deny the concept of partnership reported practicing some behaviours that would be quite consistent with partnership. So the picture is not one of a minority of employers wholly embracing partnership and all that it implies, and a second, larger group wholly avoiding all behaviours associated with partnership. Rather, a minority of employers surveyed is - pragmatically based on their experiences, rather than through conviction - practicing quite a wide range of behaviours, particularly in their approach to collective bargaining, that are consistent with union-management partnership. The majority of employers, meanwhile, continue to adopt a largely traditional "defensive" approach to dealing with the union, but report sometimes departing from that approach, again presumably for pragmatic rather than ideological reasons.
It is notable for the union movement that employers appear to become closed and defensive when faced with union strategies based on universal claims or the pursuit of MECAs - both of which are seen as insensitive to the needs of the particular employer - and/or front-end power tactics/threats of industrial action. Both sets of tactics appear to dramatically diminish employers' openness to inclusive or partnership-type behaviours in both the immediate and longer terms.
Employer representatives, principally Business New Zealand, have, since the onset of "globalization" and the deregulatory phase of New Zealand's economic governance, largely focused their attention in this policy area on limiting the role of unions and collective bargaining based on an advocacy of statutory limitations on the rights of unions and the role of "third-parties" in the labour market. There appears to have been relatively little attention at a policy level to the nature of union-management relationships where unions and collective bargaining are in place and likely to stay so. As a consequence, national level employer representatives have demonstrated little evidence of being convinced that workplace partnership is in the long-term interest of their constituents. In saying that, it seems fair to suggest that they may not have given the concept a lot of consideration to date.
However, the current data shows a significant minority of employers with unionized workforces believes that a partnership style relationship with unions would be beneficial and a third of unionised employers believe that they presently have a partnership relationship with a union. That suggests that it may be timely for employer representatives to examine whether workplace partnership might offer some advantages over traditional approaches for those member employers who do deal with unions day-to-day and, realistically, expect to do so for the foreseeable future.
The Unions
If it can be said that employer lobbies have been slow to examine partnership, it has also to be said that there is no coherent approach to partnership across all unions. Apart from experimenting with tripartism and industry-level cooperation in the 1980s and the 1990s, there has been a growing commitment to partnership led by the CTU, including, for example, support for the Partnership Resource Centre and promotion of debate within the trade union movement.
The CTU executive and individual unions have undertaken occasional forays into workplace partnership advocacy and at enterprise level there have been some notable undertakings. However, it is clear that at any time to date a show of hands across the union movement on whether promoting partnership is an established strategy, or indeed would be a good strategy, would show divisions. This does not provide those in the union movement who seek to promote partnership with a strong platform to move forward.
It seems fair to say that, at this point in time, the union movement has no apparent cohesive strategy on workplace partnership and is seen by many employers as simply trying to leverage the "good faith" principles of the ERA to enhance bargaining power for utility purposes.
The experiences and thus perspectives of on-the-ground union officials are mixed. A minority of less than a quarter think that any form of collaboration with employers is ideologically wrong and a betrayal of the membership. A second group is still dealing with bad experiences in the relatively recent past and these union officials are cautious with many employers with whom they deal, but nonetheless generally open to partnership under the right circumstances. A minority are fully embracing workplace partnership concepts in theory and in practice.
On the whole, however, the data suggest that a significant majority of the union officials surveyed are supportive of partnership approaches on a reciprocal basis (that is, where employers are open to the same) and believe that it would be of benefit to their members, would benefit the employer, and would benefit the New Zealand economy. One would think that this platform of support would be the catalyst for unions to develop a deeper strategic approach at national and federation levels.
The research suggests that union organization on industry lines is/would be beneficial to stronger relationships with employers as the industry/employer knowledge and understanding factor came across very strongly in this research project. The union movement might note that employers who report an inclination towards partnership are likely to display attitudes and behaviours towards the partner union which unions would consider as long-term beneficial (particularly should the regulatory environment for employment relations change in the future). Put more bluntly, employers who report themselves to be in partnership with a union, also report a significantly lower propensity to deal out of, or around the union now and in the future.
Union officials do not act only according to their own principles and experiences, but rather are representative of the members whom they serve. In this manner some union officials who are open to workplace partnership are restrained in their dealings with employers by the views of their members at enterprise level. Some union officials report finding significant membership resistance to dealing with individual employers in any manner other than from a traditional "position of strength".
Union officials are often forced to deal within the constraints of the bargaining and workplace environment set by employers. Many have found in the past, and continue to find today, employers with whom they could not feasibly "partner", given the employer's aggressive stance against union involvement per se.
The Role of Government
It is known from international experience that the legislative environment provided by Governments has a telling effect on the fostering of workplace partnership practices. Many commentators believe that engagement at the national level between the parties is a pre-requisite to workplace level engagement as it provides an over-arching platform, ethic and set of practices. However it is also accepted that there are clear constraints on the extent to which legislation can practically prop-up enterprise level workplace partnership in a decentralised collective bargaining environment. Globally the "voluntarist" practice of partnership (i.e. based fundamentally on collective bargaining and then broader union/management initiatives at workplace and/or industry level) is relatively young and it could not yet be described as having durable and enduring status.
Some industry-level bilateral initiatives and/or Government-sponsored initiatives or economy-wide tripartite initiatives have occurred in New Zealand, and others are currently mooted. However this has not to date resulted in any broad support for social partnership structures in New Zealand. There is no sign that the present Government has any plans for a formal tripartite social partnership, and it is most unlikely that the alternative government would entertain such a notion.
Effective and mature collective bargaining is widely acknowledged by participants in the current research as a pre-requisite to broader workplace partnership. Employers in particular do not see broader social partnership or industry level liaison as the key to their becoming more open and inclusive with unions. They very clearly see enterprise level bargaining, conducted in a manner suited to their organizational climate and conditions, and conducive to developing appropriate "flexibility" in their business, as the only effective conduit to the development of broader workplace partnership with individual unions.
If collective bargaining is accepted as the foundation of the type of union-management partnership that is most likely to take hold in New Zealand - workplace-based partnership - then the evidence would suggest that, while Government legislation is capable of supporting the industrial parties and prescribing processes for determining pay and conditions, the extent of collective bargaining seems to have become somewhat immune to legislation. Since the shakeout in the early 1990s, the coverage of "real" collective bargaining between unions and employers has remained fairly stable despite a decade of hostile legislation and half a decade of quite supportive legislation. That seems unlikely to change as long as legislation allows for, but does not mandate collective bargaining.
However the research does support the notion that "good faith" behaviours in collective bargaining, if observed by both parties, are more likely to lead to further open relationships between the parties. What the legislation may actually do these days is not so much determine whether there is collective bargaining or not, but set the "tone" for the collective bargaining that does exist. In this sense, rather than promoting the spread of collective bargaining, the ERA goes to the nature of collective bargaining and provides a platform for promoting degrees of workplace partnership over more traditional, competitive styles of interaction.
Finally, if effective collective bargaining is accepted as a key pathway to broader workplace partnership, then Government via the Department of Labour has a key role to play in facilitating good collective bargaining behaviours. To the extent that the focus in the past has been on interventions in collective bargaining when things go wrong (as they sometimes do) and providing effective dispute resolution, then perhaps the role in the future should go further. The extension would be to promoting improved understanding amongst the industrial parties in New Zealand of 'mutual gains' (or similar) bargaining practices and of broader workplace partnership practices. Perhaps interventions should not end when immediate outcomes are reached in a collective bargaining dispute. Instead this could be followed with longer term assistance to get the parties behaving in a manner whereby the next time bargaining occurs another dispute is avoided.
Link to the Theoretical Models
At a high level the model of union-management partnership that fits best in the New Zealand context is that identified in the "theory" discussion as voluntary "pluralist" partnership. That is partnership based on:
- Employers accepting that employees' interests may be somewhat different to their own, despite their sharing common interests;
- Employers respecting the role of the union as the independent agent of the employees and accepting that the union is entitled to be involved in the organization in at least that capacity;
- Employers and unions dealing with each other principally but not exclusively in collective bargaining, with each party showing considerable restraint and some commitment to protecting and nurturing their relationship; and
- Beyond collective bargaining, employers being somewhat open to dealing with the union and somewhat inclusive in involving the union in consultation, but without necessarily fully accepting the union as "a part of our team".
The Opportunity for the PRC
An Identified Audience
As this report acknowledges earlier, the development of partnership in the public sector is generally well supported by the high union density and long-established relationships between unions and employers in the sector.
The theory, the data, and the analysis in this report all point to the best potential for the further development of union-management workplace partnership in New Zealand in the private sector lying in that part of the sector where managements and unions already deal with one another in collective bargaining.
The agenda for the PRC would not be about expanding the coverage of collective bargaining - the literature already shows an identifiable and relatively stable collective bargaining sector. Rather, the data suggest that the primary focus for the PRC ought to be on influencing the bargaining, consultation and collaboration behaviours of parties already in collective bargaining relationships. This work would logically begin with a process of education.
The data clearly say that the prospects for developing partnership are better as the union-management relationship matures. So, while not neglecting new union-management relationships, the best prospects for effective PRC intervention would be parties in longer term relationships. The research supports the notion that forming workplace partnerships takes time. The vast majority of employers who report being in partnership with a union and their employees had been party to collective agreements with the union for six years or more. And, at least when parties are left to their own devices, partnership tends to develop incrementally and pragmatically as parties experiment with, and gradually adopt partnership-type practices. More extensive extra-bargaining consultation practices may follow. While, again, not neglecting new relationships, the PRC would do well to direct its efforts and resources to the enhancement of longer term bargaining relationships.
It is notable that even those employers and union officials who are involved in or supportive of workplace partnership are not necessarily displaying all of the behaviours normally associated with partnership and arguably required to make their efforts fully effective or durable. Many employers in particular will be wary of changing their approaches. However, the data provide reason to be optimistic that many would be open to hearing more about the potential and practices of workplace partnership. By adding conceptual framing and understanding, and behavioural training to the parties' pragmatic approach, PRC intervention offers the opportunity for considerably accelerating the rate and completeness of adoption of partnership practices by bargaining parties.
The research shows that many of these employers and union officials believe that an increase in workplace partnership practices in New Zealand would bring benefits to the parties and to the economy. The research shows that employers who report being in partnership are more likely to be displaying some behaviours regarded by experts in the field as being conducive to better long-term agreements, improved workplace climate, and more flexible yet mutually respectful workplaces.
The research provides evidence supporting the notion that, to the extent workplace partnership-type interactions exist, bargaining is quicker, yet covers a broader agenda, and that both parties are likely to be more flexible on some issues. So there is no shortage of evidence for the PRC to work with in approaching employer and union parties with encouragement to improve their interactions.
It is appropriate to reiterate that employers who report being in partnership with a union typically exhibit some partnership-type behaviours, but seldom all and seldom with an awareness of workplace partnership as a cohesive "way of doing business". On the other side of the coin, many of the employers who do not see themselves as being in partnership with a union, nonetheless have pragmatically adopted some behaviours that are quite consistent with a partnership philosophy. Both groups of unionised employers offer fertile ground for PRC endeavours. Training, coaching, and other PRC support will be important to build on existing situations such that both these groups, as well as their employees and unions, have a good chance of achieving real benefits from the partnership experience on an enduring basis.
The Basis Established to Solidify Support from the Union Movement
A very large majority of union officials participating in this research favour a reciprocal partnership approach (where the employer is open to it as well). Union officials are also saying, pragmatically, that they think partnership would be beneficial to their members. There is, however, considerable scope for the union movement at national and federation levels to provide some strategic leadership in the area, and with that comes an opportunity for the Partnership Resource Centre to help facilitate a strategic approach on the issue.
Certainly, there is some suspicion of the concept of partnership among some union officials. But most endorse it, sometimes even despite having suffered some rejections and exclusions by some employers. The PRC's work might begin with some education on the suite of practices that amount to workplace partnership, and importantly on what partnership does not mean in terms of behaviours and the meeting of responsibilities to members, and on the benefits to New Zealand business, workers and the economy to be had from the wider spread of partnership. This sort of assistance with context might well set the foundation for the union movement to take a strategic look at partnership as an avenue for future progress.
The Basis Established to Increase Support from Employers
It is most encouraging for the PRC agenda that forty percent of employer respondents to the survey supported workplace partnership as likely to help New Zealand business. This would seem to provide scope for the central employer representatives to be supportive of voluntary workplace partnership in place of more combative approaches where union - management relations exist today. A policy beyond mere union avoidance would seem appropriate to guide employers who are dealing with unions, without compromising other established policy agendas.
The vast majority of employers responding to the survey - and these are employers who deal with unions - do not believe that dealing with unions adds value to their organisations. Those adopting partnership practices do so pragmatically because they believe that dealing constructively is often, and when it is possible, better than dealing combatively. That is the message that the PRC has available to unionised employers - if you are going to be dealing with a union, consider partnership approaches, or more of them, in lieu of more combative or aloof ways of dealing with the union.
Another pragmatic fact that renders the PRC's work more critical for the economy is that the sector of the economy which is today dealing with unions is, on the whole, made up of significantly larger employers than the average New Zealand business.
New Zealand employers and union officials are evidently concerned about low-cost competitors from Asia; they are conscious of that threat. Those with those concerns have not turned to partnership to any greater extent than those without those concerns, according to the data, but that conscious concern could certainly create an opportunity to show them better ways of dealing together.
The PRC has a clear role to play in providing the answer to the pragmatic question of most employers and employers' representatives, namely: why would we embrace workplace partnership - where is the value for business? Generating a robust and credible response is the challenge and the opportunity for the PRC, but the sources for the response are here in the data.
It is fair to postulate that education and awareness, particularly for employers dealing with unions today at enterprise level, about what partnership would mean, in practical terms what it can offer, and what is required to make it work would be required to enable a greater penetration of partnership practices in the private sector.
Overarching Support from Government
To a very considerable extent the support mechanisms required by the PRC from the Government for a voluntarist pluralist form of workplace partnership are in place today. The good faith obligation in the Employment Relations Act provides the philosophical underpinning, and the funding of the PRC and its initiatives provides the wherewithal for working with employers and unions to improve the quality of their relationships.
Opportunity for Integration Within the Department of Labour
The work of the Partnership Resource Centre is naturally linked to the "productivity" agenda being discussed in other forums established by Government and industry, including within the Department of Labour. It would be natural and productive for the Centre to have direct links into this work.
Currently when the parties in collective bargaining are having serious difficulties in concluding a collective agreement they utilise the services of the Department of Labour Mediation Service for mediation assistance. This would appear on face value to present a significant available "pipeline" for penetration of workplace partnership values and training in exactly the place, based on the current findings, where workplace partnership initiatives need to be focused.
A clear delineation could be struck whereby the existing intervention by the Mediation Service in the bargaining dispute is maintained, but with a referral from mediation to the PRC once an immediate dispute is resolved, to work with the parties to change their relationship such that a further breakdown is less likely next time around. This sort of intra-department cooperation obviously needs to begin with some dialogue between the PRC and the Mediation Service over the PRC's focus and capabilities, and how and under what circumstances a referral by a mediator for longer term consultation might be appropriate.
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This report was commissioned by the Partnership Resource Centre and produced by Matt Ballard, Senior Manager, Deloitte and Dr Ian McAndrew, Senior Lecturer, Department of Management, University of Otago.
The views expressed in this occasional paper do not necessarily represent the views of the Department of Labour.
ISBN 0-478-28054-8
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