Enterprises in New Zealand are mostly small in size. Less than 25 per cent of factories, for instance, employ more than 10 persons. In such a situation the relationship between management and workers is usually direct and personal, and disturbed industrial relations are rare. As a general rule the great majority of strikes occur in four industries – coal mines, construction, freezing works, and waterfront – where there are less personal employer-employee relationships, or particularly unpleasant or hazardous conditions, or a high proportion of casual or seasonal employment, or a combination of such factors. The incidence of industrial strife has varied considerably from year to year, but there have been only three occasions on which anything in the nature of a general stoppage of work over a widespread field of activities has occurred – the maritime strike of 1890, the general strike of 1913, and the waterfront strike of 1951. In certain industries there have been some stoppages of special severity, including the nationwide freezing works strikes of 1906, 1912, and 1926, the Waihi strike of 1912, the seamen's strike of 1922, the nationwide coal mines strike of 1932, and the nationwide railways strikes of 1923 and 1950. In over three-quarters of New Zealand's economic activities, strikes are almost unknown and conciliation and arbitration procedures are the recognised means of settling disputes.
From time to time the comment has been made that New Zealand employers' and workers' organisations meet each other only when in dispute and that on those occasions their discussions are limited to the disputed matters. There is no provision for them to meet to discuss the broad problems of industry, to reach a good understanding of the common ground between them, and to formulate joint general policies. Under the Industrial Relations Act 1949, an Industrial Advisory Council was appointed in 1951 comprising national leaders of workers' and employers' organisations for the purpose of discussing such matters, making recommendations for improved industrial relationships, and formulating a common approach to problems of mutual interest. The Council has continued to meet several times a year and has made a number of agreed recommendations on matters such as joint consultation, increased productivity, and incentive schemes. The Act also enables a compulsory conference of the parties to a dispute to be called where a strike is threatened or in progress and concerns a matter which is not amenable to normal conciliation and arbitration procedure.
Industrial Conciliation and Arbitration
The Industrial Conciliation and Arbitration Act was first enacted in 1894. The Act was the political culmination of efforts of trade unions to secure recognised status and to obtain the protection of enforceable minimum wage rates and conditions of employment. In the preceding decade the young and insecure trade union movement in New Zealand had attempted to obtain these things sometimes by negotiation with employers and sometimes by strike action. Direct negotiation with employers had met with little success except where (as with the tailoresses' union in Dunedin) there had been third-party mediation. In 1890 strike action was heavily defeated. Trade unions generally had lost confidence in their own strength when in 1891 a widening of the franchise gave them the opportunity of electing a Government with Liberal-Labour sympathies. At the same time, the community more generally felt concern at the 1890 strikes and wanted some measure which would avoid the continuation of such industrial turbulence. The Act of 1894 recognised industrial unions of workers on the one hand and individual employers or industrial unions of employers on the other as the responsible parties in negotiating wages and other conditions of employment under the Act. They could obtain this recognition by registering under the Act. Once they were so registered, it required them, if they were in dispute with each other, to meet each other in conciliation proceedings and, if they failed to reach agreement, then to submit the matter to arbitration. It made the industrial agreements or awards thus reached enforceable at law. Registration under the Act was voluntary. These basic features of the system have continued unchanged although the Act has been amended on numerous occasions and re-enacted several times. It was last re-enacted in 1954.
After some 70 years of operation, the industrial conciliation and arbitration system has become a firmly accepted – perhaps even a traditional – way of determining minimum wage rates and handling industrial disputes. It has been subject to many criticisms from time to time, and occasionally to heavier sectional attacks, but no suggestion for its abolition has ever succeeded in gaining any significant measure of support from the employers' and workers' organisations, which use the system, or from the community generally. Much of its strength has accrued from the outstanding qualities of the Judges who have presided over the Court and who have succeeded in keeping formality at a minimum, in demonstrating a wide and practical grasp of industrial problems and human relationships, and in winning the confidence of those who appeared before them. The Court has been presided over by the following Judges:
J. S. Williams, 1896–97; J. E. Denniston, 1898; W. B. Edwards, 1898–1900; J. C. Martin, 1900–01; T. Cooper, 1901–03; F. R. Chapman, 1903–06; W. A. Sim, 1907–13; T. W. Stringer, 1914–20; F V. Frazer, 1921–35; E. Page, 1935–37; P. J. O'Regan, 1937–40; A. Tyndall, 1940–65; A. P. Blair, 1965–.
The Court of Arbitration
The Act provides for a Court of Arbitration consisting of a permanently appointed Judge who presides over it and who must be a barrister or solicitor of not less than seven years standing of the Supreme Court, and two nominated members who are appointed for three years in the first instance on the recommendation of industrial unions of employers and of workers respectively. The Act also provides for the appointment of Conciliation Commissioners, of whom there are three. They are appointed for three-yearly terms and are eligible for reappointment. The Act further provides for the appointment of a Registrar of the Court, a Registrar of Industrial Unions, and Clerks of Awards, as well as for certain other appointments.
In addition to the making of awards, the Court of Arbitration is empowered, inter alia, to give interpretations of awards, industrial agreements, and other matters within its jurisdiction; to deal with offences and enforcement under the Act, and to inquire into alleged irregularities in union elections.
Industrial Unions and Associations
The I. C. and A. system is based on the voluntary registration of industrial unions and industrial associations. To be eligible for registration under the Act, a society of employers must have not less than three members and a society of workers either not less than 15 members or not less than 25 per cent of the total number of workers engaged in the industry in the district or locality concerned and with an absolute minimum of not less than five members. An incorporated company may be registered as a union of employers. The members of such a society of employers or workers must be lawfully associated for the purpose of protecting or furthering the interests of employers or workers engaged in a specified industry or related industries. Any such society may apply to the Registrar of Industrial Unions for registration. When registering the society, the Registrar must also record its rules, the Act specifying various matters for which the rules must make provision. Where the rules fail to make provision for such matters, the Registrar may amend them so as to comply with the Act. All subsequent amendments of rules must also be recorded by the Registrar. He may refuse to record a rule or an amendment of a rule which, in his opinion, is in any way unreasonable or oppressive, but such a refusal is subject to a right of appeal to the Court (e.g., Book of Awards, Vol. 54, p. 734; and Vol. 59, p. 475).
Provided an applicant society complies with the requirements of the Act, the Registrar must register it unless there is already an industrial union (of employers or of workers as the case may be) already registered in respect of the same industry in the same industrial district, or unless there had been such a union previously registered whose registration had been cancelled by the Minister of Labour because of a discontinuance of employment by its members causing serious loss and inconvenience (section 198 of the Act gives the Minister this power). In the latter cases the Registrar must secure the concurrence of the Minister before registering the second union. The New Zealand trade union movement has generally viewed this restriction on duplication of unions as a valuable safeguard against the weakening effect of a multiplicity of rival unions. This safeguard against unnecessary duplication operates also in respect of amendments of rules and enables a fairly clear definition of trade union frontiers to be maintained, with overlaps and consequent conflicts between unions kept to a minimum.
For the purposes of the I. C. and A. Act, New Zealand is divided into eight industrial districts, and industrial unions may be registered in respect of a particular locality or localities within the one industrial district, in respect of an industrial district as a whole, in respect of two or more industrial districts as a whole, and in respect of New Zealand as a whole, the North Island as a whole, or the South Island as a whole. The broad principle of these provisions is that a union, to extend beyond one district, must cover the whole of all of the districts in which it operates, but in certain circumstances the Minister may allow exceptions to this – usually to enable some well-established local union to maintain its identity after the registration or extension of another union to cover the district as a whole. The Act also makes provision for unions in the same industry or related industries to join together in industrial associations and be registered as such. Awards and industrial agreements may then be negotiated by the association instead of by the individual unions.
The objects of industrial unions and associations may not go beyond industrial matters, and union funds may not be applied to matters outside the scope of the Act. (See, for example, Book of Awards, Vol. 18, page 1059.)
At December 1964 there were 258 industrial unions of employers with 22,233 members, and 380 industrial unions of workers with 346,338 members registered under the Act. There were also 17 industrial associations of employers and 39 industrial associations of workers. About 42 per cent of all wage and salary earners were subject to awards and industrial agreements.
Rules and Management of Industrial Unions
The rules of an industrial union must include provision for the election and removal of officers and members of the committee of management by secret postal ballot of the financial members or by some near equivalent of this procedure approved by the Registrar. They must set out the powers and duties of the committee and officers, the manner of calling general or special meetings, and their powers and the mode in which industrial agreements and other instruments may be made and executed. They must also provide for the maintenance and purging of a register of members, the control of property and funds, the inspection of the books and the register of members by anyone having an interest in the funds, resignation subject to not more than two weeks' notice, and various other matters. Entrance fees may not exceed 5s. and subscriptions may not exceed a rate of 2s. per week unless a higher rate is adopted on a majority of the votes cast in a secret ballot of financial members. No levy is payable except in accordance with a resolution passed by a majority of the votes cast in a secret ballot of the financial members. Union accounts are subject to audit and a copy of the auditor's certificate must be lodged with the Registrar of Industrial Unions who may, in certain circumstances, require an audit of a union's accounts. Books of account must be kept for at least seven years.
Any 10 financial members of a union, if they claim that there has been an irregularity in connection with an election, may within one month of the completion of the election apply to the Registrar of Industrial Unions for an inquiry by the Court of Arbitration into the matter. In the event of an inquiry being held, the Court has power to set aside the election and order a new one. Any industrial union may request the Registrar to conduct an election, but the great majority of unions prefer to conduct their elections themselves. All ballot papers and other papers connected with a union election must be kept for at least a year.
Awards and Industrial Agreements
Part V of the I. C. and A. Act provides for the making of industrial agreements between industrial unions or industrial associations of workers on the one hand and industrial unions or associations of employers or individual employers on the other hand. An industrial agreement is binding on the parties to the agreement and on every member of any union or association which is a party thereto. (An award is binding on all employers and workers engaged in the industry to which the award relates in the locality or district which it covers.) An industrial agreement may be varied, renewed, or cancelled at any time if all the parties so agree. The parties concerned may reach agreement between themselves without creating a dispute, and such an agreement, to become enforceable under the Act, must be filed with the Clerk of Awards within 30 days. If, however, the parties on one side make claims which the parties on the other side do not accept, a dispute is thereby created and the Act requires the dispute to be referred to a Council of Conciliation convened by a Conciliation Commissioner. In conciliation proceedings the two sides are represented by equal numbers of assessors. The Conciliation Commissioner presides over the meeting but exercises no vote in the proceedings and has no power to determine the dispute which can only be determined by the agreement of the assessors. If the assessors cannot reach complete agreement on all the matters in dispute, the Clerk of Awards must refer the dispute to the Court of Arbitration for hearing and the making of an award. In doing so he may transmit to the Court any partial agreement reached in conciliation although the Court is not in any way bound to take notice of such partial agreement.
In over 75 per cent of cases, however, the parties reach complete agreement in conciliation proceedings. Where complete agreement is reached, it may either be filed with the Clerk of Awards as an industrial agreement or, if the parties agree, it may be referred to the Court and the Court may incorporate the terms of the settlement in an award without any hearing of the dispute. Because of the wider coverage of awards, this latter procedure is the one more usually followed and the majority of awards are based on complete agreement reached in the conciliation proceedings. Where parties who were not original parties to the agreement subsequently become bound by the resulting award, there is provision for them to apply to the Court for a complete or partial exemption from the provisions of the award.
In each award and industrial agreement an expiry date must be specified. No award or industrial agreement may have a term longer than three years and in most cases the term is from one to two years. The provisions of an award or industrial agreement continue in force, however, beyond the expiry date until a new award or agreement is made, except where there is cancellation of the registration of a union concerned. There are some 400 awards and 275 industrial agreements in operation.
Action for breach of an award or industrial agreement may be taken by any of the parties or an Inspector of Awards in a Magistrate's Court or by an inspector in the Court of Arbitration.
Since 1936 the I. C. and A. Act has required that the Court of Arbitration shall fix at not more than 40 the maximum number of hours, exclusive of overtime, to be worked in any one week by any worker bound by the award; further, that it shall endeavour to fix the daily working hours so that no part of the working period falls on a Saturday. There is provision for exceptions to be made if a 40-hour week is impracticable, but the 40-hour five-day week has become almost universal.
From 1936 to 1961 the Act required every award and industrial agreement to contain a provision making it unlawful for any employer bound thereby to employ or to continue to employ in any position or employment subject to the award or agreement any adult person who was not a member of a union of workers bound by the award or agreement.
(Prior to 1936 the Act permitted the inclusion in awards and industrial agreements of a provision for preference of employment for members of the union so long as there was a member of the union equally qualified to do the work and ready and willing to undertake it.)
In 1961 the Act was amended by removing the compulsory unionism provision and substituting for it two alternatives. Membership of a union would continue to be obligatory if the representatives of the parties in conciliation agreed to the inclusion of a clause making membership of the union a condition of employment, or if more than 50 per cent of the workers in the industry concerned desired such a clause to be inserted in the award. Otherwise a qualified preference clause on the lines of the pre-1936 clauses would be inserted in the award or industrial agreement.
The Act enables any worker who has conscientious objection to union membership to apply for a certificate of exemption from any requirement in an award or industrial agreement requiring him to be a member of a union.
The Act provides that an award or industrial agreement may contain provision for the setting up of a disputes committee to handle any dispute which may arise while the award or agreement is in operation, provided that the dispute concerns a matter arising out of or connected with the award or agreement but not specifically dealt with in it. The limitations are important. If an award specifically deals with a matter, the parties are bound by that specific provision and no dispute on the matter can be recognised within the jurisdiction of the Act. On the other hand, if a matter in dispute lies entirely outside the scope of the award, there can be no jurisdiction to deal with the matter under the award. In this latter case, however, the Industrial Relations Act 1949 makes provision for calling a compulsory conference of the parties in certain circumstances. A disputes clause normally provides for a right of appeal to the Court of Arbitration if the disputes committee fails to reach a settlement of the matter.
Strikes and Lockouts
The Act makes it an offence subject to severe penalties for a union or any number of its members bound by an award or industrial agreement to engage in a strike or lockout. The penalties are increased where a strike or lockout takes place without a prior secret ballot on the issue. The definition of a strike includes unauthorised stop-work meetings and the adoption of go-slow tactics. For a stoppage to be a strike or lockout there must be intent either to compel or induce another party to accept demands; or to cause loss or inconvenience; or to incite, aid, abet, instigate, or procure any other strike or lockout; or to assist any other party in compelling or inducing the acceptance of demands.
In recent years New Zealand has been relatively free of industrial disturbances. The Labour and Employment Gazette of May 1965 published figures for working days lost per 1,000 civilian wage and salary earners. These showed that in 1963 Australia lost 175 days, the United Kingdom 79, the U.S.A. 284, Canada 177, and New Zealand 69. In nine of the years from 1952 to 1962 the New Zealand figure was even lower.
It is not usual to proceed for penalties when strikes or lockouts occur. The first consideration is necessarily the restoration of good working relationships between the parties, and legal proceedings are not usually conducive to such an end. It is, however, probable that the provision of penalties acts as a restraint on irresponsible action.
Standard Wage Pronouncements and General Orders
The Court of Arbitration has always had the inherent power to make a pronouncement at any time concerning its intention of generally adopting a specified wage rate as a standard rate for unskilled, semiskilled, or skilled adult-male labour as the case may be.
The I. C. and A. Act, however, gives the Court no power to amend the provisions of an award during its currency except: (a) for the purpose of remedying any defect therein or giving fuller effect thereto; or (b) where all the original parties to the award are desirous that it should be reviewed by the Court. Similarly, industrial agreements may be varied, renewed, or cancelled only by agreement of all the parties thereto. Hence, although the Court may make a standard wage pronouncement, under the I. C. and A. Act it is unable to give effect to such a pronouncement otherwise than by incorporating the standard rate in each new award if and when it is made following the expiry of the current one. Under the I. C. and A. Act, the Court thus has no means of effecting a general, simultaneous, and immediate variation of the minimum wage rates specified in awards and industrial agreements.
When circumstances make general, simultaneous, and immediate variations of wage rates in awards and industrial agreements desirable, the legislature therefore has to give the Court special power to amend them during their currency. The nature of the power so given to the Court has varied from time to time. Where a flat-rate increase or decrease has been desirable, the Court has usually been empowered to make a general Order varying all awards and industrial agreements (with or without exceptions) and it has usually done so in the form of a percentage change. Where it has been desirable that each award or industrial agreement receive individual attention, the Court has been empowered to make a standard wage pronouncement and then to review and amend as it thinks fit each award and industrial agreement. Sometimes the Court has been empowered to use either method at its discretion. Before making a standard wage pronouncement or general order, the Court holds a general hearing in public at which interested parties and expert witnesses are able to set forward evidence and opinions which are relevant to the matter.
In recent years the Court's authority to amend awards and industrial agreements during their currency by means of general orders has been provided in the Economic Stabilisation Regulations of 1953. At present the Court has no such power regarding standard wage pronouncements. Standard wage pronouncements and general orders made by the Court are recorded in Books of Awards as follows (volume and page number): 20/166; 20/403; 21/513; 21/2103; 21/2233; 22/804; 23/129; 23/333; 23/354; 23/631; 23/964; 23/999; 24/179; 24/887; 25/1; 25/47; 25A/800; 31/145; 36/715; 37/1648; 40/1153; 42/258; 45/75; 47/1345; 49/641; 50/667; 51/2; 52/835; 53/1313; 54/1345; 56/1730; 59/842; 62/1284; 64/–.