Historically New Zealand has had an industrial relations system based on principles of collective bargaining, with union and employer representatives negotiating minimum employment terms and conditions. The Industrial Conciliation and Arbitration Act of 1894 established principles of; wage fixing through conciliation and arbitration; multi-employer awards; blanket coverage of conditions; compulsory union membership; and compulsory arbitration. This system served New Zealand for almost a century with only minor changes. However, during the 1980’s and 1990’s a governmenta impetus towards market oriented policies resulted in legislation that meant a major shakeup and reorganisation with industrial relations.The Industrial Relations Act 1987, the Private Sector Act 1988, and most directly the Employment Contracts Act 1991 were legislation that resulted in significant changes for employers, employees and unions alike.
Fuelled by the economic shocks of the 70’s the Muldoon government intervened in the labour market to deal with increasing inflation – general wage orders, a wage and price freeze were introduced. By the mid-80’s National was replaced by the Fourth Labour government in the 1984 general election and the strategies were reversed. Policy was implemented that set about to deregulate what was at the time one of the most regulated Western economies (Dept. of Labour, 1998). While compulsory arbitrationwas immediately removed, further reforms in the labour market were implemented a few years later through the Labour Relations Act of 1987.
The Act maintained the essential ethos of the existing conciliation and arbitration system. It provided for registered unions, guaranteed bargaining rights, enforced agreements, personal grievances and disputes, restrictions on us activities and size, and some restrictions to strikes and lockouts (ibid). Yet while the Act made changes to some aspects of existing industrial relations legislation it was viewed by some as too dilute (Boxall, 1991).
The issue of wage-fixing was one that employers groups felt held back productivity in industry by giving workers groups the upper hand. The Act attempted to address this by allowing for and promoting enterprise bargaining, however success was limited. Similarly attempts to ‘rationalise’ the bargaining process though the introduction of single-set negotiations did not have the intended result (ibid).
There was a general agreement that the measures of the Labour Relations Act were minimal in their success and that progress was neither widespread or swift enough (ibid).
However, the impact of governmental decentralisation policies were more dramatically felt in the public sector by the introduction of the State Sector Act 1988. Until this period two separate industrial relations systems had been operating – one for the private sector which involved conciliation and arbitration; while the public sector had a system of pay fixing based comparatively with the private...