Ross Wilson to PSA Congress, 2000

The Employment Relations Bill: a new challenge for unions. Speech by Ross Wilson, president NZCTU, to the PSA Congress, Mayday 2000.

Well its Mayday and for the first time in many years we actually have something very real and tangible to celebrate. In 91 days the Employment Contracts Act will be consigned to the dustbin of history!

From the 1st August we shall be working under a dramatically different new industrial relations framework. A framework that reflects the values of the new Government. That workers are not just commodities to be bought and sold like a sack of spuds. The philosophy of the ERB is that the focus should be on the human relationships involved.

So the Employment Relations Bill is more than just a Government delivering on its promises in a way that we haven't seen for more than 20 years; it is also an important component of a broader policy mix which will restore greater levels of economic, social, and workplace democracy.

Recognition of the legitimate role of unions is not just important because it will enable unions to organise more effectively and achieve better results for the workers who are the union. It is also important in enabling us to assert publicly the important role that unions play as the collective expression of the interests of working people in our democratic society.

We know that the Employment Contracts Act was intended to destroy unions. We have experienced a decade of relentless political and industrial hostility towards unions. We saw with the tragic death of Christine Clark at Lyttelton at Christmas how that political hostility has eroded respect in some people's minds for workers exercising collective rights.

Union members often ask why there is such hostility.

We saw during the election campaign the Employers Federation and National & ACT politicians endeavour to answer this question by reference to some isolated industrial disputes which occurred 20 or so years ago; Mangere Bridge, Cook Strait ferries and the BNZ building.

Although that sort of rhetoric does so us some damage in the public mind, (and we saw TV 1 oblige those employer interests with a Close Up piece showing clips from these old disputes on the day the Employment Relations Bill was introduced,) I think the experience of almost a decade under the Employment Contracts Act has helped most people to see through this sort of prejudicial portrayal of union activity.

When union members come to answer the question "why is there such hostility to unions?" they invariably answer "Because unions can be effective" There is no doubt that by working together as 'unions' workers can achieve better job security, better conditions of employment, and safer workplaces than they would as individual employees.

The additional strength of collectivity is also important at a political level. We all know that political change is crucial in achieving that ever elusive goal, social justice, which is the beacon for our political work as unions. I think we all probably now realise that there was a political aspect to the Employment Contracts Act. It is well known that some senior National politicians thought that by destroying unions through the ECA they would also destroy their political opposition and ensure their reign in government in perpetuity.

Well they didn't succeed but I think they went worryingly close to doing so. It seems likely that a National/ACT Government, if elected, would have completed that task that the ECA began. What that experience highlights is just how fragile our young democracy is in New Zealand. But on a more positive note it was also a triumph of electoral wisdom that New Zealanders could see the need for change.

They don't seem to have been impressed at all by the massively expensive union bashing advertisements by the Employers Federation, or by Jenny Shipley's absurd attack on the new CTU leadership as dangerous radicals. In fact it seems quite clear that the experience of the last decade has led people to review their views of unions. This was brought home to me last year when a TV reporter from the TV1 Breakfast show rang me, in a state of some surprise and wonder, to say that they had just conducted a telephone survey The survey asked viewers whether they felt there was any link between the decline in their conditions of work and living standards and the decline in union influence. 96% thought there was!

So the point I am making is that the Government has a very clear mandate for promoting the role of unions and collectivity, including collective bargaining, through the Employment Relations Bill.

This mandate is underpinned by the additional legitimacy of international law requirements. The Declaration of Philadelphia at the end of World War 2 recognised the importance of democracy and social justice to the maintenance of world peace. It also acknowledged that minimum standards of labour protection based on an acknowledgement of the inequality of bargaining power between employers and workers was an important part of ensuring social justice and democracy.

That is why international law, binding on more than 170 countries, requires Governments to pass domestic laws guaranteeing freedom of association (the right of workers to organise together in unions) and promoting and encouraging collective bargaining as the preferred means of ensuring fairness and workplace democracy.

So the Employment Relations Bill is not some new radical measure by a left wing government, as its opponents attempt to portray it. No, the ER Bill will merely bring New Zealand from way out in right field ....an area now described by Jenny Shipley as radical conservatism...... back into the mainstream of democratic nations.

The ER Bill will:

-Give employees a real choice about joining a union -Give employees a real choice about bargaining collectively -Give employees a real choice about the bargaining strategy and they will decide by ballot on such matters as multi-employer bargaining. -Give quicker access to mediation and adjudication -Together with other components of the Government's economic and skills development strategy start the process of more actively moving us towards a higher skill higher wage economy...the new economy of the future

I am not going to take you through the Bill in detail...you will be relieved to hear.... but I do want to dwell for a moment on the Good Faith and fairness concepts which are fundamental to the Bill and the new industrial relations culture it seeks to promote.

I am sure nobody here has any problem with acting in good faith in negotiations and other dealings with the employer. I am sure that, by and large, we have always negotiated in good faith and the same applies to most employers and unions. But there will always be employers and unions who push the limits and the purpose of the new law is to require standards of conduct, and mutual respect between employers, employees, unions etc in a way that the ECA never did. Who can seriously object to that? Good faith has always been a requirement of the common law and I find the criticisms from some employer spokespeople, to the effect that the requirements are vague or North American, spurious and shallow.

The Bill of course provides for the negotiation of detailed code(s) of practice between employers and unions and the CTU welcomes the challenge of doing that with employers representatives nationally. I think that will be a good test of good will and maturity.

We are certainly going to try and learn from the experience of other countries and the CTU is bringing out from Vancouver this month a young but very experienced lawyer, Gina Fiorillo, who has had extensive experience as a lawyer representing unions in good faith bargaining cases. There will be a union conference on the 15th May, the anniversary of the ECA inception, in which Gina will participate. I hope the PSA will take the opportunity to be well represented there.

The financial disclosure requirements

Much has also been made of the requirement for disclosure of financial and other information relevant to bargaining. Again this is not a new concept. Many employers and unions already do this as a matter of course in contract negotiations. It has also been established law for many years in comparable countries such as Australia, UK, USA, Canada and most European countries. In practice the extent of the disclosure has been no more than public companies are required to disclose publicly for stakeholders.

Putting it into the context of a modern economy the requirement is nothing more than an acknowledgment that employees are entitled to be treated as intelligent human beings; ensuring that the negotiators are properly informed is likely to produce more intelligent bargaining outcomes.

So it seems clear that the Employment Relations Bill is intended to provide a framework for more mature and constructive engagement between employers and unions which will be informed by access to confidential information about the financial and strategic situation of the employer.

What then is the challenge to us as unions?

Obviously the first challenge is to provide the support to the Government to ensure that the Bill is passed. The CTU unions have launched the Fairness at Work Campaign which is intended to be an ongoing campaign of support for the Government with its various legislative initiatives including the Employment Relations Bill.

When Helen Clark came to our CTU Conference in October last year, and returned in December to our National Affiliates Council her plea was to continue our campaigning after the election. So we are doing that. We are not under-estimating the capacity of employers groups to mount a rear guard attack against the Bill.

A vital part of our campaign is asking people to speak out about their experiences under the Employment Contracts Act. Currently we are organising submissions from as many individual members as possible to the Parliamentary Select Committee considering the ERB. I ask you, if you haven't already done so to fill in one of the form submissions which are available here at the Congress. Numbers do count, as do your personal comments, and we don't want to be in a situation where the Opposition can say that there were more submissions against the ERB than there were in support of it.

The other challenge to us as unions is how to capitalise on the Bill and develop bargaining strategies and relationships with our employers which enable us to more effectively represent and promote the interests of the employees we represent.

The nature of the relationship between unions and management is a subject which has attracted a great deal of interest. There is a large literature related to this issue, and in the last 15 years in New Zealand we have witnessed debates in the union movement about the proposed Compact, 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.

There are of course different levels of "engagement". Starting at the lower level and working up, these include:

-management sharing information -the union having an opportunity to influence a management decision by giving feedback on what is already designed -the union participating in developing solutions, changes and proposals -the union having input in developing solutions and in final decisions as well as participating in monitoring and taking corrective action -the union as a full partner in reaching final decisions, formulating plans, monitoring and taking corrective action

So when we talk about strategic union/employer relationships we can be talking about very different levels of engagement.

As representatives of employees of an enterprise, whether public or private, union interests extend to a level deeper than wages and working conditions. They now include the critical decisions that affect workers' employment security and wages, such as the strategy of the employer, its allocation of resources, workplace organisation, the use of technology, and other decisions about quality and productivity.

In the new economy unions need strategies that can address these interests. They need strategies that enable them to influence critical business decisions. Such a strategy requires that unions are legitimately connected with the management decision-making process without being co-opted by it. Unions must not only serve their members needs but must also build and maintain organised union strength.

All unions enter into tactical relationships with management. This type of co-operation can sometimes be ad-hoc. It can mean that the same union (and official) can have a co-operative relationship with one employer and an adversarial relationship with another.

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 working lives -union members wanting their union to be more than a "bargaining agent" -a recognition by the parties that their relationship should not be confined to contractual bargaining of wages and conditions -a recognition that management is seeking tangible benefits from such engagement -a recognition of the legitimacy of workplace rights and democracy as a human right guaranteed by ILO Conventions -an improvement in union organisation 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 real substance and concern to union members -a shared and strong commitment to fundamentally change the culture of the workplace.

Just as there is debate among unions about relations with employers, there is a huge literature on how employers should approach their relationships with workers, and in some cases, unions. This literature traverses issues such as: worker participation; stakeholder theory; gain share; quality circles, works councils, employee assistance programmes, unions and productivity......it is a long list!

There are of course many employers that do not want to concede any managerial prerogative. There are others who are simply sceptical about how they can reconcile their role as the agent for the shareholder (principal), with a strategic relationship with the union. Then of course there are employers that believe that involvement of employees is a way of enhancing their loyalty to the company, improve performance, and .... the bottom line. But "why the union?"

One reason why employers gain from strategic relations with unions is that the unions exist as a form of collective organisation. If an employer wants to advance proposals that have a collective application, then the union can be a sort of "clearing house" for all the individual views on an issue, and provide a leadership role in advancing members' interests.

Another reason why employers engage with unions at a strategic level is to deliberately widen the scope of formal relations beyond simple bargaining over wages and conditions. Involvement in issues such as training, product or service quality, product/service planning and development may provide an opportunity for these considerations to influence the bargaining process.

Harvard University research has highlighted the real value that employees and their unions can play in generating debate about the direction of the organisation, and operational aspects so that employees and unions can add value to management decisions and the planning process for their common benefit.

A more cynical view is that management may invest in strategic relations with unions as a way of getting union officials to soften a membership view. Or management may decide that rather than "take the union on", they will set up procedures that encourage union delegates to get alongside management, so that the union is effectively excluded.

Therefore, to answer the question "why the union?" my response is that it is fundamental to successful management in the new economy that employers should recognise the right of unions, as representatives of employees, to be involved at a more strategic level.

At the ICFTU Congress I recently attended the Director General of the ILO Juan Somavia, drawing on the words of the US auto union leader Walter Reuther, put it this way:

"Just as Walter Reuther said you cannot build an automobile economy on bicycle wages .....you cannot build a knowledge economy while ignoring workers' rights".

But, unions will want to be involved on the basis of a recognised organisational strength. There is little respect between the parties, or ability to achieve shared goals, if one party has little bargaining power. So, we will must be very mindful of the need to build a strong platform of informed and organised membership involvement for such engagement.

In the current environment the PSA has a unique opportunity to develop such a relationship with the new Government through its employing authorities.

In fact that PSA has carefully laid the groundwork for this with the Partnership for Quality and the Minister of Stae Services will be making a statement on that to Congress this afternoon.

The point I want to emphasise to you as delegates is the crucial importance of your role in making this new relationship work for PSA members. The relationship cannot reflect the views and aspirations of rank and file members without their active involvement in the debate around issues which must occur on an ongoing basis in the workplace.

I have huge respect for union members who take on the honorary role of delegate. It can be a real burden at times and the rewards are fairly intangible, but they are the important rewards of knowing that you are the lynchpin for union activity in your workplace.

PFQ is at the early, and sometimes difficult, stage of its development. There is debate about what it is and what it can achieve. It is your particular responsibility to help make sure that there is debate around issues, that those issues are taken up within the PSA and with the employer, and that the partnership process does serve you members needs. As the union publicity material makes clear PFQ:

-Is about participation and involvement. It is not simply information sharing or consultation -Is about the active involvement of all PSA members and staff in advancing our agenda. It is not about the passive acceptance of other agendas

The final challenge for unions I want to discuss with you is the need to look broader and to see the union movement re-building and re-moulding as something we face collectively and must work on collectively.

We do tend to be conservative organisations and the challenges we face ahead are radical challenges which may require radical and innovative thinking and solutions.

The challenges of the new economy are going to be very real. The diversity of work and labour market situations in the modern world mean that a traditional standardised trade union agenda can be neither practically effective nor ideologically resonant. The challenge for us organisationally is to move from the old model of mechanical solidarity to a new model of organic solidarity; or as one commentator (Hecksher C C The New Unionism 1988) put it "a kind of unionism that replaces organisational conformity with coordinated diversity.

That means embracing the diversity that is reflected in our union membership and in the structures like Nga Toa Awhina Runanga and other structures throughout the union movement which provide a special vehicle or waka for the aspirations of the unionists who organise around them.

The CTU wants to promote a social movement unionism where we are working together, nationally and internationally with a wide range of organisations, reflecting very diverse peoples and their aspirations. It is a huge challenge which we all face together.