A corroded utopia, Don Aimer

Unions in Common Cause: The New Zealand Federation of Labour 1937-88
Peter Franks and Melanie Nolan (eds)
Steele Roberts, $39.99,
ISBN 9781877577338


Reconstructing New Zealand’s Labour Law: Consensus or Divergence
Gordon Anderson
Victoria University Press, $50.00,
ISBN 9780864736574


Looking back to the years 1936-1984, say, is like trying to imagine another country. The social earthquakes of the Lange Government, followed by the labour law revolution of 1991, were our version of the fall of the Berlin Wall. Now it seems like a faded dream. Only those of at least late middle age will really recall the experience of living under both our regulated and deregulated societies.

It was when the Labour Party swept to power in 1936 that the regulated society came to full fruition, as the government bedded in its social vision. Not many remember that nine members of the first Labour cabinet had been union leaders. According to James Belich, the legislation of the Labour Government was then regarded as the most left-wing outside the Soviet Union.

Before all this, only about 20 per cent of the workforce belonged to unions. Staff in shops, offices, the hospitality trade and small enterprises were not organised and most had no wish to be. White-collar workers were above that sort of thing, and striking was both unseemly and disloyal! They paid a price for these attitudes in their conditions of work.

The new legislation of the Labour Government swept them all into its grasp, both the organised and the unwilling. Alongside the unions that had learned to make their own way were rafts of new ones, many of them not much more than paper organisations.

The procedure was highly centralised, sweeping and almost brazen in its rationality. You defined an industry and registered a union. Membership was compulsory, and it gained a monopoly of bargaining rights with industry employers, plus access to compulsory arbitration, and awards that bound all employers. The authors of Unions in a Common Cause conclude that “within this statist and centralist consensus over the welfare state” based on full employment, an expanding economy and a stable currency, in which the National Party, the Labour Party and the FOL generally found agreement:

income inequalities were reduced to the narrowest on record, in the period 1937 to 1988 … . The FOL and its affiliated unions were able to protect the wages of ordinary workers to a greater extent than in the periods before or after.

It was a relatively simple closed system. The rates for skilled craftsmen, and changes in the cost of living, set the tone, all weighed and judiciously doled out by the Arbitration Court to the applicant Federation of Labour. It would only work while the economy was devoted to being a British farm with premium rates for produce. The more powerful unions could sometimes break through the web of relativity and there would be a burst of activity, while other occupations pushed to restore the relative status quo. But too much rage threatened the system, and the FOL was as determined as the government to defeat the threat posed in 1951.

By the 1960s utopia was beginning to corrode under the pressures from emerging industries, new technology and New Zealand being cast loose in the world by the British. The pent-up tensions finally burst in the tsunami of change from 1984 until 1991, first in deregulating society then in labour law.

In 1991 the centralist and statist labour apparatus was demolished root and branch by the market purists. Unions became unmentionable in the Employments Contracts Act, which promoted contracts of employment between employers and employees. The notion that workers had an investment in their jobs vanished. They were one of the consumables of output. In 2000 the law was rebalanced to some extent, but largely within the framework of the 1991 Act.

This is a 1066 and All That version of the fascinating landscape that together these two books provide of our labour organisation and law in the 20th century and up to 2010.

There is still no comprehensive history of the trade union movement in New Zealand, and Unions in a Common Cause does not pretend to be one. Nevertheless it is the best thing we have at present. It is an overview, a symposium with chapters by four authors – Peter Franks, author of Print and Politics (2002), a history of the Printers Union; Erik Olssen, author of Red Feds: Revolutionary Industrial Unionism and the New Zealand Federation of Labour, 1908-14 (1988), who covers the forerunners of the FOL; Melanie Nolan, author of Revolution: The 1913 Great Strike in New Zealand (2006), now of the Australian National University; and Raymond Markey, who deals with the transition from FOL to the Council of Trade Unions.

The authors’ insights and analyses flow from previous studies in the field, and are referenced accordingly. They also have the advantage of distance in time. In a different era, it is possible both to see the period covered by the FOL as an entity and to signpost the specific phases of development and decay. Finally, they bring into view some wider issues – the struggle by women for recognition, which FOL leaders found hard to handle, and changes in family composition, which undermined the traditional method of calculating the living wage. Each of these contributed to the direction of change, and led to the replacement of the FOL by the New Zealand Council of Trade Unions.

We turn to Gordon Anderson in his book Reconstructing New Zealand’s Labour Law for analysis of the switchback ride in labour law since the 1970s. He takes us through the Employment Contracts Act 1991, and what it led to; how the law was modified in 2000 following the return of a Labour government; where it sits now and what the future is likely to hold.

The headline fact is that, while public sector workers are more unionised and covered by collective agreements, in the private sector in 2010 only nine per cent of the workforce was covered by a collective agreement between a union and an employer, and only 20 per cent were members of a union. On the face of it, unions play little part in the lives of private-sector workers. Given popular notions about union power, this seems startling.

In one sense it marks a return to the level of union membership before the 1936 election. And perhaps this is a clue to an underlying continuity of community attitudes, which surfaced again after union membership was made voluntary. Certainly many unions in the clerical, retail and service fields simply melted away after 1991. The book does not explore this in depth, simply noting that for complex reasons workplace culture seems not to find union membership valuable. Conditions of employment and pay ranges tend to be standardised by advice from human resources specialists, and in a general sense are tolerable enough to fail to excite determined collective action.   

The great virtue of this book is that it moves beyond chronology. It takes a position in what Saul Bellow called “the culture wars of our time”. It sturdily subjects our labour law to a clear-sighted interrogation founded on the values of modern civilised societies, on the basis that workers are human stakeholders in their jobs, and deserve to be treated with respect and fairness. These are principles enunciated by the International Labour Organisation.

Anderson sets the scene by demonstrating that without statute law, workers have no rights. Common law is the law of master and servant. To pretend that a contract of employment is reached between equals is a fairytale, because an employer generally holds all the cards, while the employee has only the option of accepting or declining the position. Protection of workers’ human rights is achieved only by statute, and that is the purpose of labour law. Furthermore, workers really begin to obtain reasonable pay and conditions only when they combine in unions.

Anderson shows that the dismantling of labour law in the 1991 Employment Contracts Act, a rather extreme version of an international trend, delivered employees to court judgments based on common law. Employee influence on wages and conditions was cut back or removed, a huge reversal that bedded in remarkably quickly and has become the new norm.

In 2000, the new Labour Government rebalanced the law, but within the broad scope of the 1991 Act. Unions and the right to bargain collectively were written back, good faith bargaining was prescribed and the machinery for dealing with employment problems was strengthened. However, the reforms have had little impact on levels of membership or on the density of collective agreements.

The state has removed itself from the scene, except in supplying machinery to resolve specific disputes. Fixing wages and conditions is up to employers and employees, who can please themselves as to whether they join any union, or which one; while an employer can find ways of avoiding a collective agreement, and ways of making it easy for workers not to join a union.

Should it be made easier still for employers to treat employees as commodities and to avoid collective bargaining, or should we move to tighten up their obligations?  Is collective bargaining important to society at large?

The community doesn’t seem to have views on these questions, but they are not abstract ones. John Ryall, of the Service and Food Workers Union, has pointed out that it is almost impossible for low-paid workers to set minimum industry wage levels by bargaining with their employers. Instead, they have to depend on the statutory minimum wage. There is a price for this, not only for the workers and their families, but also in the increasing gap between our wage levels and those in Australia. At present the public do seem unaware they are paying a price, and this is where this book comes in.

You wouldn’t go to Reconstructing New Zealand’s Labour Law to prepare a legal case. It is an overview for lay people, and fills a real need. Anyone involved in human and industrial relations will emerge with an informed and balanced grasp of the legal ramifications of employment in 2011.


Don Aimer is a Wellington reviewer.


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