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Unions and employee organisations

by Erik Olssen

By 1913 New Zealand was one of the world's most highly unionised societies. In 1936 the first Labour government made union membership compulsory. Unions have played an important role in improving working conditions – but their power has waxed and waned over time, in response to political and economic influences.


Early unions, 1840–1880

The first organisations that represented the interests of employees in New Zealand were small, local trade unions, generally formed by settlers from England and Scotland. They had often belonged to a union in their own country, and were certainly familiar with the idea of organised labour.

Around the 1870s, the New Zealand government was keen to bring farm labourers and skilled craft workers into the country. The National Agricultural Farm Labourers’ Union (NAFLU), formed by farm workers in Britain, told employers that if wages and conditions were not good enough, farm labourers would migrate to countries such as New Zealand. The NAFLU worked closely with the New Zealand governments of the 1870s to supply workers. Many other unions of skilled workers in Britain also used emigration to pressure their employers.

Unimpressed

John Lomas was a skilled coal-miner from the north of England. The Westport Coal Company brought him out to work in New Zealand without realising that he was also an experienced and committed unionist. As soon as he arrived he wrote home to the Barnsley Chronicle: ‘Things about this Colony are generally painted in too bright colours.’ Work was short and ‘everything is dear’.1 His employers were furious.

First local unions

There were few employee organisations before the 1870s. Those that were set up usually fought a single battle, then disappeared. When workers disagreed with their employers, they used tactics devised in Britain. Petitions, marches and boycotts were common, and were used during the 1850s to campaign for an eight-hour work day. People also walked off the job to obtain better pay or conditions.

Skilled craft workers had the strongest traditions of union organisation. As towns grew, so did many businesses, and where several skilled staff worked together they often formed a trade union. Typographers, who set the type for printers and newspapers, brought to New Zealand a tradition of unionising each workplace, forming a group known as a chapel. From time to time the various chapels sent delegates to form a wider union. Other unionists from Britain, especially members of the Amalgamated Society of Engineers and the Amalgamated Society of Carpenters and Joiners, formed branches of their unions in New Zealand.

The longest-surviving New Zealand union was the Carpenters and Joiners Union, formed in 1860. In the 2000s it became part of the Building Trades Union.

Unions gain legal recognition

The desire for an eight-hour work day and a 48-hour working week was often the trigger to form a union. Other triggers were the determination to resist piecework (which paid workers by how much they produced, instead of a fixed wage) and to establish a maximum number of apprentices in relation to skilled tradespeople. These early organisations all set up benefit societies to provide income for their members’ families in case of death or illness, and were generally respectable and conservative.

Most employers had served apprenticeships in their trades, then worked as journeymen (skilled tradesmen) for several years, so they were very familiar with the customs of their craft. Neither employers nor employees wanted conflict – they both believed that problems at work were caused by greed and selfishness. In most cases they reached agreement quite easily. In 1878 Parliament, without any debate, gave legal status to unions. The different regions of New Zealand had very little trade with each other, and most products were made locally, so these early employee organisations stayed small, local, and limited to skilled men.

Shearers, seamen and miners

Workers from Australia, who already had strong union traditions, became important in the rural workforce. In country areas, where most settlers and almost all Māori lived, workers formed influential unions. In the 1870s unionised shearers demanded a rate of £1 per 100 sheep shorn. In some districts they won, but as the price of wool fell in the late 1870s, they could not maintain this rate and their organisations collapsed.

Shearers and seamen believed that they should support each other, and they developed more forceful methods of negotiation than urban workers. In the 1870s Australian seamen’s unions crossed the Tasman to New Zealand to increase their bargaining power. With the growth of the railways and the increasing number of steamships, new and larger coal mines opened, mainly on the West Coast. The owners often recruited miners from Britain, who brought strong union traditions and set up permanent organisations in New Zealand.

Footnotes
  1. Quoted in Len Richardson, Coal, class & community: the united mineworkers of New Zealand, 18801960. Auckland: Auckland University Press, 1995, pp. 21–22. Back

Gain and loss, 1880–1890

The economic depression of the 1880s was a difficult period for working men. In the main towns the craft unions established trades and labour councils. They agreed on common demands and sometimes endorsed candidates for the House of Representatives, believing that the labour movement needed its own spokespeople in Parliament.

Two organisations sparked a strong upsurge in union membership. First, a group of railway workers formed a local version of the English union, the Amalgamated Society of Railway Servants (ASRS). Within months they had over 3,000 members and their employer, the government, quickly agreed to their demands. Second, the Federated Seamen’s Union set up its own shipping company to compete with the Northern Steam Ship Company, and won. Throughout New Zealand men – and a handful of women – began joining unions or forming new unions.

The Maritime Council

In 1889 representatives of the maritime unions, as well as coal miners, joined together to form the Maritime Council. The council was the first New Zealand-wide labour organisation. Its member unions were based in key industries, and it had enormous negotiating strength. It won victory after victory, sparking a massive movement as thousands of workers flocked to join unions. For the first time, women working in clothing factories formed their own union, in Dunedin. By September 1890 there were between 20,000 and 60,000 union members.

1890 maritime strike

Seamen and watersiders at Port Chalmers, Dunedin, walked off the job in September 1890 because of an industrial dispute in Sydney that involved their employer. Within days their fellow union members in other ports joined the dispute, and the country’s wharves came to a standstill. Then the coal miners walked out. The largest companies in the dispute, the Union Steam Ship Company and the Westport Coal Company, worked together to smash the unions. The government tried to mediate but failed. Within weeks one wharf after another was reopened as the employers broke the strike. Then the miners’ unions were beaten. The Seamen’s Union secretary later recalled that the unions had been ‘licked, and … also kicked and kicked very hard indeed’.1

Footnotes
    • Quoted in Neill Atkinson, Crew culture: New Zealand seafarers under sail and steam. Wellington: Te Papa, 2001, p. 122. Back

Reviving the unions, 1890–1913

1890 Liberal–Labour government

After the 1890 election, held during the maritime strike, the new Liberal government needed the support of pro-labour politicians. This Liberal–Labour government brought in new laws which allowed the union movement to recover.

The Industrial Conciliation and Arbitration (I C and A) Act 1894 prevented the formation of nationwide unions and required workers to form unions based on their craft, not their workplace. But it established an Arbitration Court and enabled workers to form unions which could choose to register with the court. Their employers were then legally obliged to negotiate with those unions. In 1897, in one of its first cases, the Arbitration Court required the Union Steam Ship Company to negotiate with the seamen’s union, which it had blacklisted after the 1890 strike.

The alliance between the unions and the government resulted in the 1898 introduction of the first old-age pension in the English-speaking world. Providing support to workers who could no longer look after themselves and their families was a common function of employee organisations. In New Zealand, however, the unions chose not to provide this support themselves, but to work with the government so everyone was supported through state policy.

Return to the unions

Between 1897 and 1907 more and more skilled workers began flocking back to their unions. The Arbitration Court set their minimum wages, determined working hours and conditions, and classified the skill levels of countless jobs. The court and union leaders also worked to exclude or limit potential competitors for the jobs of union members – including youth, women and racial minorities, especially the Chinese.

Union awards included ‘preference’ and ‘blanket’ clauses.

  • A preference clause meant that employers were legally required to hire union members in preference to non-union staff. By 1906, 115 out of a total 159 awards contained some kind of preference clause.
  • A blanket clause meant that when a union applied to the court for an award, it could specify the individual firms or businesses that award would apply to. Many businesses protested, but without success.

State sector unions

Many people expected that unions in the expanding state sector would register with the Arbitration Court, but they did not. The two largest unions in the public sector, the Amalgamated Society of Railway Servants (ASRS) and the Post and Telegraph Officers’ Union, negotiated directly with their employer, the government. In 1910 these were the only national unions in New Zealand, and also the largest. Almost one-sixth of all union members belonged to the ASRS, a general-purpose union covering unskilled and skilled staff in a wide range of trades.

Growth of unionism

The revival of unionism among the unskilled began in the main towns between 1900 and 1905. In 1901 there were 175 unions registered under the I C and A Act, with a total of 18,000 members. At first they had little influence, but they could still require employers to negotiate with them before the Arbitration Court, which would make a legally binding decision (an award). The growing popularity of socialism and syndicalism (the theory that a worker-run society could be established through a general strike) contributed to the growth of the union movement.

Between 1908 and 1912 more unskilled workers joined their local unions than ever before, and many of these unions formed national federations. By 1913 New Zealand was one of the most unionised societies on earth. In 1921, at the peak of the voluntary unionism era, there were over 400 unions, with almost 100,000 members in total. Over 20% of the male workforce was unionised.

Women and Māori unionists

Most unionists were men; in 1921 only around 2% of the female workforce belonged to unions. In industries where women were unionised, such as the clothing and textile industries, they played little part in running the union. Except in the Dunedin Tailoresses’ Union, all union leaders were men, and apart from Māori in the Shearers’ Union, almost all union members were Pākehā. Some believed that the unions should lobby the government for a ‘White New Zealand’ policy, to exclude non-white immigrants from poorer societies who might undercut their wages and conditions.

It was only in the white-collar organisations that women were a significant proportion and were actively involved in running their organisations. In 1905 women members of the New Zealand Educational Institute, the professional organisation for the country’s teachers, secured equal pay for male and female teachers. However these organisations did not see themselves as unions. Most registered as incorporated societies if they wanted legal status. Some, like the Nurses’ Association, were actually hostile to unions.


Red Feds, 1913 strike and Alliance of Labour, 1913–35

From 1908 to 1912 the most militant unions took part in a series of strikes with the backing of the ‘Red’ Federation of Labour (FoL). The Red Feds, as they were known, were inspired by European syndicalists and American ‘Wobblies’ (Industrial Workers of the World). They preached class war, industrial unionism and direct action. They scoffed at the Arbitration Court as ‘labour’s leg-iron’,1 laughed at craft unions as dinosaurs, and dismissed the main political parties, Liberal and Reform, as tools of the capitalist system.

The FoL made significant progress in winning wage increases and building up membership until 1911–12, when major defeats, including the Waihī miners’ strike, stalled its advance. The leaders of the federation then tried to find common ground with the craft unions, which were still organised into trades and labour councils. In 1913 two huge Unity Conferences brought together the militant and moderate unions in the United Federation of Labour (UFL). Small groups of activists on the wharves and in the mines believed that this new federation should call a general strike to create a socialist republic.

1913 strike

The confrontation these activists hoped for arrived in 1913, with a series of strikes which closed all the main ports and many of the mines. As in the disastrous strike of 1890, employers brought in large numbers of strike-breakers – except this time they were organised into separate unions registered under the Industrial Conciliation and Arbitration Act. The strikers were defeated after widespread violence.

After the strike, the government made it harder for unions to leave the arbitration system and the Court of Appeal made it illegal for arbitration unions to take action not associated with obtaining an award.

Alliance of Labour

After the 1913 defeat the UFL adopted a cautious strategy. But in 1917–18, as the First World War ended, militant unionism was revived. The Bolshevik revolution in Russia and a new wave of syndicalism terrified conservatives. The UFL began to promote the idea of One Big Union and worker control of industry. Many union members were alarmed at this and dropped out of the movement.

In 1919 the UFL was taken over by a new organisation, the Alliance of Labour, which advocated industrial unionism, class war and direct action. Its constitution stated that the One Big Union, representing all union members in the country, would overthrow capitalism in New Zealand and introduce a socialist society.

Ready for revolution

 

The minutes of the Petone Marxian Club show that its members, along with many other people, believed that New Zealand’s socialist revolution was just around the corner. The club resolved, at its first meeting in October 1912, to meet at 8 p.m. every Monday ‘right up to the day of the Revolution’.2

 

The Alliance fought with the newly-formed Labour Party for the loyalty of the workers, insisting that socialism could only be achieved through industrial organisation and struggle. The government finally succeeded in forcing the Amalgamated Society of Railway Servants to withdraw from the Alliance, and encouraged the formation of another craft union, the Railway Tradesmen’s Association. A new mood of caution affected the entire labour movement, including the communists, who had considerable influence within the Seamen’s Union and the Miners’ Federation for a time.

Economic depression

Unemployment soared during the economic crash of 1930–33, until almost 13% of the adult male workforce was jobless or on relief work. The unions lost members and influence. Craft unions in the building trades, the worst affected, almost collapsed. The leaders of the most powerful national union federations – F. P. Walsh of the seamen, Jim Roberts of the watersiders, and Angus McLagan of the miners – spent more and more time fighting against each other.

By 1933 the Unemployed Workers’ Movement was larger than any union in the country and the New Zealand Legion, a semi-fascist body, had more members than the Labour Party. Many of the unions which relied on the state as an employer collapsed or became inactive. Union membership fell and the number of strikes shrank to almost none.

Footnotes
    • H. E. Holland, Maoriland Worker pamphlet, 1912. Back
    • Petone Marxian Club minutes, 21 October 1912. H. O. Roth Mss, 94–106, 07/01, Alexander Turnbull Library. Back

The second Federation of Labour, 1935–45

The election of a Labour government in 1935 offered the union movement a new beginning. Peter Fraser, a former leader of the first Federation of Labour (FoL) and now deputy prime minister, pressured the squabbling factions of the union movement to bury their differences and achieve unity. In 1937 delegates of almost every blue-collar labour organisation in the country met to form the second New Zealand Federation of Labour.

The FoL soon grew to play a major role in a government-backed system for setting wages for specific industries at a national level. This system dominated employment relations from the 1940s until the late 1960s. The FoL also negotiated directly with successive governments and took cases to the Arbitration Court for universal wage increases. It helped to establish a basic living wage for all, which became a vital part of the welfare state.

First Labour government and unions

In 1936 the Labour government introduced compulsory unionism. Within two years the FoL more than tripled in membership, to 233,000 members in 500 unions. It organised in industries where no unions had previously existed, especially farm workers, clerical workers and shop assistants. The government introduced the world’s first non-income-tested pension, available to everybody at retirement age. It was a demonstration of the close partnership between the union movement and a government with similar social objectives.

Peter Fraser, who became prime minister in 1940, and F. P. Walsh, who dominated the FoL, worked closely together throughout the 1940s. During the Second World War, although women and Māori entered the workforce in growing numbers, the FoL and its affiliated unions mostly represented the white, male, manual-working class. In 1944 FoL leaders backed demands by engineering workers in the Hutt Valley for two weeks’ paid leave at Christmas. The Labour government opposed the campaign at first, but then agreed to introduce the first legislation guaranteeing holiday pay for all workers.


Unionism after the Second World War

1951 waterfront dispute

Tensions between unions and employers increased during the Second World War, and erupted once peace came. The increasing influence of Communist Party members in unions such as the carpenters, drivers and tramwaymen was a growing challenge to the Labour Party–Federation of Labour (FoL) alliance. In 1948–49 the militant left-wing unions walked out of the FoL and formed the Trade Union Congress.

In 1951 the country’s largest ever industrial showdown began when employers locked out waterside workers who refused to work overtime. Other unions joined them in what became the 1951 waterfront dispute. The militant unions were destroyed, their leaders were blacklisted, and the FoL strengthened its power within the labour movement.

Decline of union influence

Although the FoL remained a major force in the national economy, advances in technology meant that the union movement steadily declined in numbers, strength and political influence after 1951. Through the 1950s many of the country’s major mines, traditionally the strongholds of revolutionary unionism, closed down. New technologies allowed smaller crews to sail larger ships, and increasingly the British shipping companies hired labour from Third World countries, so the Seamen’s Union also lost much of its former power.

The labour movement was steadily transformed by post-war prosperity and inflation. The most important issue for most manual workers was rates of pay, rather than overturning the system.

Public-sector organisations

The nine state-service organisations – covering the public service, post office, railways and teachers – had first formed a Central Committee of Combined Service Organisations (CSO) to fight pay cuts and lay-offs in the economic depression of 1931–32.

After the Second World War the CSO became quite powerful in negotiating on issues that all state-sector employees shared, such as superannuation. Wages and conditions improved, but not fast enough for members’ liking. Left-wing influence in the unions grew rapidly. In the mid-1950s women public servants demanded equal pay for equal work, and when the government introduced the Government Service Equal Pay Act in 1960, the Women Teachers’ Association was the first to take advantage of it.

Sisterhood is powerful

 

In 1956 a 25-year-old Inland Revenue clerk, Jean Parker, became the first woman to successfully challenge the appointment of a male cadet to a higher-paid position – but the Public Service Commission told the department to reduce her pay and responsibilities. The nation’s women erupted in indignant protests. The government forced the commission to back down, and women’s organisations formed the National Council for Equal Pay and Opportunity.

 

Industrial unrest began to grow in 1944–45, and peaked in 1951, one of the few years of the 20th century when New Zealand had more industrial unrest than Australia. The percentage of unionists who belonged to the Federation of Labour fell steadily over this period, from about 80% during the Second World War to 67% in 1956.

Transforming the workforce

The proportion of professionals working for salaries increased rapidly after the Second World War, and the organisations which represented them began negotiating their salaries and conditions of employment. When inflation began to soar in the 1970s, these very respectable organisations became more active in demanding better conditions for their members. The Association of University Teachers actively recruited new members so they could pressure the government for compensation for inflation, and rates of pay equivalent to colleagues in Australia (pay parity).

The FoL and its member unions were becoming increasingly out of touch with the workforce. FoL president F. P. Walsh was succeeded by his deputy, Auckland plumber Tom Skinner, in 1963. The following year Jim Knox, a tough wharfie, became Skinner’s deputy, and by 1969 the two men succeeded in expanding the FoL to cover 85% of all registered unionists. But professional organisations rarely joined the FoL, and women, Māori and Pacific Islanders – who took on most part-time and unskilled work – were not represented on its executive.


Unions after 1960

By 1960 all New Zealand unions had a full-time paid secretary; and large unions often had one in each main district. An increasing number of unions covered several occupations and had to try and provide adequate representation for each of them.

The unions’ influence with the government and employers was shrinking. In 1968 the unions failed to prevent the government from making a nil wage order, meaning that, in spite of rising inflation, wages for all unions remained static for that year. This defeat meant that the 80-year-old arbitration system was doomed. Unions turned instead to more confrontational tactics such as stop-work meetings, one- or two-day ‘lightning’ strikes and working to rule. The 1970s was the decade with the largest number of industrial disputes in New Zealand’s history.

Women and Māori

A growing number of New Zealanders had come to view unions as selfish and narrow-minded, prepared to inconvenience the public to achieve their demands. Feminists and Māori activists also criticised unions for inadequately representing women and Māori.

In 1975 the Working Women’s Council was formed, led by Sonja Davies. Two years later it issued the Working Women’s Charter, a bill of rights for working women. In 1978 Davies won a seat on the executive of the Federation of Labour (FoL). Joyce Hawe, the first Māori woman, followed in 1981. In 1986 a large hui (meeting) of Māori unionists, and representatives from other organisations, laid down conditions for remaining within existing unions. So did radical feminists. As well as traditional union concerns, wider social issues such as the Vietnam War and apartheid were now hotly debated at FoL conferences.

Unions on the defensive

In the early 1980s unemployment rose as two key industries, textile-clothing manufacture and freezing works, were restructured. Te Roopu Rawakore, a national organisation representing unemployed people and beneficiaries, with a membership of around 100,000, challenged the unions with failing to protect their members from the economic changes.

When the Labour Party won the general election of 1984, restructuring speeded up. For the first time in a century, many unions were suddenly on the defensive. They were described as old-fashioned relics from an earlier age of state-regulated institutions, ‘overtaken by nimbler forms of evolution, like Treasury analysts’.1

Council of Trade Unions

In 1987 the FoL and the Public Service Association recognised their weakness and united in a new organisation, the Council of Trade Unions (CTU). After a fierce debate and an astonishingly close vote – 265,489 to 265,187 – Māori and women were given separate representation on the national executive and at all levels. The Maritime and Transport Workers’ Federation led a protest of dozens of blue-collar unions against the merger with the predominantly white-collar unions in the state sector. Yet these white-collar workers and professionals – clerical workers, nurses, teachers, airline pilots, and even junior doctors – proved to be the most militant unionists in the labour movement.

See ya later …

Jim Knox, the tough-talking, gravel-voiced president of the Federation of Labour during the 1980s, was known for his slips of the tongue. On one occasion he is said to have told journalists that certain allegations had been made about the FoL executive, and that they intended to find the alligator.

End of compulsory unionism

As more areas of the economy were opened up to competition, the Labour government’s failure to fully deregulate the labour market became a political issue. The Labour Relations Act 1987 ended compulsory arbitration but left intact compulsory unionism, blanket award coverage and the unions’ exclusive right to represent workers. The CTU tried to reach agreement with the government on a future role for the unions, but failed until just before the 1990 election, which Labour lost heavily.

One of the new National government’s first measures was the Employment Contracts Act 1991. This deregulated labour markets and turned all collective contracts into individual contracts between an individual employee and his or her employer. The Arbitration Court was replaced by an Employment Tribunal and an Employment Court. The act abolished national awards and ended compulsory unionism. Unions themselves lost their exclusive right to represent workers. The term ‘union’ did not appear in the new law, so employee organisations could only gain legal recognition by becoming incorporated societies, with a minimum of 1,000 members.

Collapse of the unions

Although New Zealand still had one of the highest rates of union membership in the world, unionism after 1991 was the weakest it had been since 1897. When the railways and then the post and telegraph department were privatised, even the state’s once powerful blue-collar unions began to collapse. The only unions which remained in a fairly strong position were the state sector’s white-collar unions and other professional organisations.

The 2000s

With the election of Helen Clark’s Labour government in 1999, new legislation meant that unions could again rebuild their memberships. Employers and unions were required to negotiate in ‘good faith’. The Employment Relations Act 2000 restored the term ‘union’ and specified that only unions registered under the act could represent employees in collective bargaining. Even so, unions still had far less legal protection than they did under the Labour Relations Act 1987 or earlier industrial laws.

Globalisation, which allows employers to find the cheapest labour anywhere in the world, has since created new challenges for the union movement.

Footnotes
    • Denis Welch, New Zealand Listener, 14 October 1989, p. 9. Back

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How to cite this page: Erik Olssen, 'Unions and employee organisations', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/unions-and-employee-organisations/print (accessed 18 November 2017)

Story by Erik Olssen, published 11 Mar 2010