Contents Page: NZJER, 2010, 35(3)
Name

Title

Page
NumberRaymond Markey

Introduction: Marking 90 years of the
ILO

Margaret Wilson

ILO – Role of New Zealand
Government: Reflections of a Former
Minister of Labour

6-15

Nigel Haworth & Steve
HughesSurfing History’s Waves: On the
Resilience of the International Labour
Organisation as an International
Institution

16-26

Raymond Markey & Grievance
Processes:
Research,
Katherine Ravenswood Rhetoric and Directions for New
Zealand27-39

Rupert Tipples &Richard WhatmanDanaë Anderson
Krish Naidu

Employment standards in world foodproduction
–
the
place
of
GLOBALGAP supply contracts andindirect legislation.
& The Land of Milk and Honey? The
contemporary working lives ofcontingent youth labour

Edward Dowding

The International Labour
Organisation: A View From Within
Stephen Blumenfeld & Unions and Union Membership in
Sue Ryall
New Zealand: Annual Review for
2008

1-5

40-60

61-79

80-83
84-96

96-103
Erling Rasmussen &Colin Ross

Chronicle: June–September, 2010

New Zealand Journal of Employment Relations 35(3): 1-5

Marking 90 Years of the ILO
RAYMOND MARKEY*
In 2009, the International Labour Organisation (ILO) celebrated its 90th anniversary,
against a backdrop of financial crisis and critical levels of unemployment around theworld. The ILO is the world‟s oldest and only tripartite international agency, created in
1919 as part of the Treaty of Versailles that ended World War I, to reflect the belief that
universal and lasting peace can be accomplished only if based on social justice. It was atruly global organisation before globalisation entered our everyday vernacular andfigured so prominently in our consciousness. Today the ILO has 183 member states.
The ILO is dedicated to bringing decent work and livelihoods, job-related security andbetter living standards to the people of all countries though social dialogue and tripartism.
The first annual International Labour Conference beginning on 29 October 1919 in
Washington DC adopted the first 6 International Labour Conventions. Since then, theILO has had a mandate from its worldwide members to establish a set of core principles.
Today, the ILO has 188 Conventions and Declarations and 199 Recommendations. In
1998 the 8 Core Conventions, were consolidated into 4 principles and rights in the
Declaration of Fundamental Principles and Rights at Work:
Freedom of association and the right to collective bargaining
Abolition of forced labour
Elimination of the worst forms of child labour
Equality of opportunity and treatment.

Symposium on 90 Years of the ILO: The significance for Australia and
New Zealand
On 19-20 November 2009, the Business and Labour History Group of the New ZealandWork and Labour Market Institute at Auckland University of Technology (AUT), in
association with the Auckland Labour History Group, organised a symposium to markthe 90th anniversary of the ILO, at AUT in Auckland. The title of the symposium was 90
Years of the ILO: The significance for Australia and New Zealand.
In addition to a number of specialist papers listed below, two national tripartite panels
discussed the significance of the ILO for their respective countries.
The New Zealand Tripartite Partner Panel on The Significance of the ILO for New
Zealand consisted of:Carol Beaumont, Labour Member of Parliament, former Secretary, NZ Council of Trade*

Raymond Markey is Professor of Employment Relations at AUT University and the Director of the New
Zealand Work & Labour Market Institute (NZWALMI)

New Zealand Journal of Employment Relations 35(3): 1-5
Unions, and former worker representative to ILO;Paul MacKay, Manager Employment Relations Policy, Business New Zealand andemployer representative to ILO; andMichael Hobby, Principal Adviser, International Services, New Zealand Department ofLabour.
The Australian Tripartite Partner Panel: on The Significance of the ILO for Australia
consisted of:Louise McDonough, Branch Manager, International Labour and Consultation,
Workplace Relations Policy Group, Australian Department of Education,
Employment and Workplace Relations;David Gregory, Director, Workplace Policy, Australian Chamber of Commerce &Industry and employer representative to ILO;
Linda Gale, Victorian State Organiser, National Tertiary Education Union, representing
Australian Council of Trade Unions;
Steve Marshall, ILO Liaison Officer in Myanmar (and former employer representative
to the ILO from New Zealand), provided a summarising overview as Rapporteur.
These were the overarching questions guiding the symposium participants:
What has been the significance of the ILO for Australia and New Zealand?
What influence have Australia and New Zealand had on the ILO?
What does the future hold for interaction of the ILO with Australia and New
Zealand?

1. What has been the significance of the ILO for Australia and New
Zealand?
One indication is to examine the impact of ILO conventions in Australia and New
Zealand. Conventions need to be ratified by member states. Once ratified, countries
commit themselves to applying it in national law. This occurs automatically in somecountries, but not in Australia and New Zealand. So what has our record been with core
conventions?
Table 1: Ratification of ILO Core Conventions by Australia and New Zealand
Convention and year adopted
Year ratified Year ratified
in Australia
in NZ
C87 Freedom of Association and Protection of the 1973
Right to Organise 1948
C98 Right to Organise and Collective Bargaining 1973
2003
1949
C100 Equal Remuneration Convention 1951
1974
1983
C111 Discrimination (Employment & Occupation) 1973
1983
Convention 1958
C105 Abolition of Forced Labour 1957
1960
1968

New Zealand Journal of Employment Relations 35(3): 1-5
Table 1 shows that the record is not strong in either Australia or New Zealand in terms ofearly ratification of the ILO‟s core conventions, with the exception of Abolition ofForced Labour. Both countries had periods of relatively strong ratification activity, in
1973-4 in Australia and 1983 in New Zealand. In addition, Australia has generally acted
ahead of New Zealand. It is noteworthy, however, that New Zealand has still not ratified
the convention on Freedom of Association, which Russia ratified as early as 1953 andZimbabwe in 2003. The Australia and New Zealand record of ratification does notindicate in itself a strong influence from an early stage for conventions in either country.
However, the case of Russia and Zimbabwe, as well as other countries, may also indicatethat there is not necessarily a strong correlation between ratification of a convention andits application in a country‟s industrial relations and political systems.
Is it possible to directly refer to Conventions as influencing our employment law? Insome cases, yes. A notable case occurred in New Zealand in the Employment Relations
Act 2000, which specifically referred to the C98 Right to Organise and Collective
Bargaining Convention and the 1998 Declaration of Fundamental Principles and Rights
at Work regarding collective bargaining and good faith bargaining. The AustralianIndustrial Relations Act 1993 was similarly influenced by this convention anddeclaration.
In the Australian federal structure of governance, with its multiple jurisdictions for labour
law, and the relatively weak powers given by the federal constitution in this sphere, ILO
conventions might be referred to by a national government to overcome state government
impediments to reform. This could be done by the High Court accepting ILO
Conventions as international treaties in relation to which the constitution gives thenational government exclusive powers to make laws. This was actually done in Labour‟s1993 Act in some areas, although that same Act‟s forcing of unions with less than 10,000
members into amalgamations was also amended because of an appeal to an ILO
Committee of Experts who found it in breach of Freedom of Association. In the recent
past, the possibility had been discussed for extending a national Labour government‟s
powers in industrial relations more extensively, but recent changes under a conservative
Howard government, ironically, have seen the substantial extension of national powers
by reference to corporations power in the constitution, and the states have ceded much of
their powers in this sphere to the federal government.

2. What influence have Australia and New Zealand had on the ILO?
Paul Mackay, employer delegate to the ILO from Business NZ, states that he considers
that New Zealand delegates „punch well above their weight‟ in terms of influence at the
ILO. At the symposium, there was consensus amongst all of the tripartite panelists fromboth New Zealand and Australia that this was the case for both countries. The panelists
attributed this influence to two factors. First, there has consistently been a high degree ofcollaboration between employer, worker and government representatives from eachcountry, and this is unusual in international terms. Second, there has also been
considerable collaboration between representatives of Australia and New Zealand. One of

New Zealand Journal of Employment Relations 35(3): 1-5
Nigel Haworth‟s papers referred to below addresses this issue for New Zealand in an
early period of the ILO‟s history.

3. What does the future hold for interaction of the ILO with Australia
and New Zealand?
An ILO Declaration on Social Justice for a Fair Globalisation was adopted in 2008. This
indicates the ILO‟s focus on the impact of globalisation on employment and social issues.
Many of the countries that have been the focus of this concern in terms of the lackof fundamental labour rights are in the Asia-Pacific region [our region]. However,the ILO lacks any powers of enforcement and has to rely on persuasion to gain
compliance (Lansbury 2009: 607) with core labour standards.
According to some observers, „the international legal framework is “outdated and illsuited to the challenges of globalization” and the prospect of “regulating for globalization
seems implausible”‟ (Ewing 2008 as cited in Lansbury 2009: 607). Nike and Gap havebeen high profile cases of companies agreeing to enforce labour standards amongst
suppliers and to produce annual CSR reports. The UN has established a Global Compact,which has been joined by a number of MNCs, and is based on core labour standards andhuman rights. But there is considerable skepticism about these endeavours. Some havelooked to cooperation with other international agencies such as the WTO, World Bankand IMF to enforce labour standards, but progress to date has been slow in this area. Twoof the symposium papers, by Nigel Haworth and by Ray Markey and Katherine
Ravenswood, specifically addressed these global issues.
The symposium speakers and their topics included the following:
Ray Markey, NZ Work & Labour Market Institute, Auckland University of Technology,
Introduction;
Margaret Wilson, Professor of Law and Public Policy, University of Waikato andformer Minister for Labour,
ILO – Role of the New Zealand Government: Reflections of a Former for Labour;
Nigel Haworth, University of Auckland,
Director-General Activism and the Extension of the ILO Agenda: The ILO since
1989;
Ray Markey and Katherine Ravenswood, NZ Work & Labour Market Institute,
Auckland University of Technology,
The impact of MNEs and FDI on aspects of working conditions as contained in1977 Tripartite Declaration of Principles Concerning Multinational Enterprises &Social Policy;
Nadine McDonnell, NZ Work & Labour Market Institute, Auckland University ofTechnology and Boaz Shulruf, University of Auckland,
OHS of Migrant Workers: an international concern;
Nigel Haworth, University of Auckland,New Zealand Journal of Employment Relations 35(3): 1-5
A Distant Detachment. New Zealand and the ILO 1919-1945
Danae Anderson, NZ Work & Labour Market Institute, Auckland University ofTechnology and Krish Naidu, University of Auckland,
The Land of Milk and Honey? The contemporary working lives of contingent youth
labour;Felicity Lamm, NZ Work & Labour Market Institute, Auckland University ofTechnology,
Worker Participation in Occupational Health and Safety: The Hidden Potential toChange Intensified Working Arrangements;
Rupert Tipples, Lincoln University,
Employment standards in world food production – the place of GLOBALGAP supply
contracts and indirect legislation
The papers by Margaret Wilson, Nigel Haworth (on post 1989), Ray Markey andKatherine Ravenswood, Danae Anderson, and Rupert Tipples have been reworked for
publication in this issue of the New Zealand Journal of Employment Relations.

Reference
Lansbury, R.D. (2009). Workplace Democracy and the Global Financial Crisis. Journalof Industrial Relations. 51(5): 599-616.

New Zealand Journal of Employment Relations 35(3): 6-15

ILO – Role of New Zealand Government: Reflections of a Former Ministerof Labour
MARGARET WILSON*
Introduction
The occasion of the 90th anniversary of the founding of the ILO provided an opportunity to reflect on therelationship between the ILO and New Zealand.1 In this article I shall discuss one aspect of that
relationship, namely, the relationship between the ILO and the Government during the time I was Ministerof Labour (1999 – 2004). The first observation is that the objectives enshrined in the constitution of the
ILO, and affirmed in the Philadelphia Declaration remain as relevant today as they did in 1919. It is worth
recalling the fundamental principles affirmed by the Philadelphia Declaration, in particular that:(a) Labour is not a commodity;(b) Freedom of expression and of association are essential to sustained progress;(c) Poverty anywhere constitutes a danger to prosperity everywhere;(d) The war against want requires to be carried on with unrelenting vigour within each nation, and bycontinuous and concerted international effort in which the representatives of workers, employers,
enjoying equal status with those of governments, join with them in free discussion and democratic
decision with a view to the promotion of the common welfare.
It is undeniable that while those principles remain as relevant today as they did in 1944, the reality of 30
years of neo-liberal public policies, the globalisation of capital and the growth of transnational corporations
dominating the means of production, together with the decline of trade union membership and collective
bargaining, combine to provide a challenge to the realisation of those principles. It is a challenge the ILO
understands and has risen to meet.

Origins of ILO
An understanding of the role of the ILO today requires knowledge of the origins and the conditions thatcreated and have sustained the ILO over 90 years. The seeds for an international organisation to promote
and protect minimum labour standards grew out of the appalling working conditions endured by workers in
the factories spawned from the growth in industrialisation of the 19 th century. Although the ILO wasestablished formally in 1919 as part of the Versailles Peace Treaty that ended the First World War, its
genesis lies in the discussions and activities of those concerned with the improvement of working conditions
and labour reform in the 19th century and early 20 th century.
For example, as early as 1818 at the Conference of European Powers at Aix-la-Chapelle, France, the British
industrialist Robert Owen and the French Industrialist Daniel Legrand, argued for a cooperativeinternational effort to reform the conditions of labour. Owens even proposed an international institution to
implement the reforms (Burkett, 2006). Although there were enlightened industrialists such as Owen andLegrand, who advocated labour reform; support for reform came from a cross section of concerned citizens
including academics, social workers, lawyers and legislators. The first of many international conferences
they organised to promote change was held in Brussels in 1856, followed by a Frankfurt conference thefollowing year that supported the creation of international conventions on working conditions.

*

Professor of Law and Public Policy, University of Waikato, former Minister of Labour 1999 – 2004

New Zealand Journal of Employment Relations 35(3): 6-15
This rise in social concern was mirrored by the development of international worker organisations with thefirst conference of the International Workers Association being held in Geneva in 1866. Workers were
inhibited from organising to protect and further their interests by legal prohibition of the formation ofunions. A group of workers gathering together to improve wages and working conditions was classified as
an unlawful conspiracy. To remove this fear of legal prosecution the laws had to be changed, which meantengagement with the political process and in the 19th century when workers were also denied the right tovote that required new forms of political representation. It was not surprising, then, that the formation ofsocialist parties in Europe in the latter part of the 19 th century resulted in the incorporation of a labour
reform agenda into their platforms. It is also not surprising that the relationship between industrial andpolitical labour movements was forged in a scarring historical experience that continues today.
While social and industrial concerns were well represented in these discussions in the 19 th century,
government recognition of the growing demand for reform was slower in coming. In 1890, the Swissgovernment promoted a conference to prepare for negotiations on an international agreement on the
improvement of working conditions. While progress at government level was slow, in 1912, the firstinternational labour convention was ratified on night work for women and the use of white phosphorous in
the match industry. By 1915, there were over 20 bilateral labour agreements covering subjects from social
insurance to the migration of workers. It is interesting to note how most of the issues raised in this period
remain relevant today. The First World War curtailed progress towards international conventions but it canbe seen that it was no accident that the establishment of an international labour organisation wasincorporated in the peace settlement. The efforts of advocates for over a century were being formallyrecognised. And for those who, today struggle for social and economic justice, it is an encouraging
reminder that political and social activism can produce change, even if it may not be our lifetime.

New Zealand and ILO – Early Period
Apart from a concern for social and economic justice, there was also another more pragmatic reason for theformation of the ILO. The rise of worker-led political movements, especially in Russia, but not only in
Russia, was a warning to countries that, unless reform was undertaken, political revolution was possible. In
the New Zealand context, it is interesting to note the government was also concerned with labour unrest
during this period. Roth (1973) notes the early workers in New Zealand in the 1880s and 1890s spread „awave of socialist feeling‟ gained from reading „collectivist tracts and listening to altruistic sermons‟
William Pember Reeves the first Minister of Labour espoused socialist views but enacted the Industrial
Conciliation & Arbitration (IC&A) Act, which ensured government regulation of the industrial relationship(Moloney, 2002). It is perhaps then not surprising to note the bestselling book of the time was the utopiannovel Looking Backwards by Edward Bellamy.
Stone also notes: “Labour discontent in New Zealand coincided with an upsurge of socialist agitation inGermany, France, Britain, the United States and Australia. New socialist ideas were abroad: sometimes
syndicalist, sometimes utopian, but invariably class-conscious” (1963: 203). The Industrial Workers of theWorld (often known as the wobblies) were the organising force behind the challenges to the arbitration
system in the 1908 to 1914 period when New Zealand experienced considerable industrial unrest (Shor,
2002). This period also saw a struggle for control of the ideological direction of the trade union movement –between the predominantly trades arbitrationist unions and the industrial syndicalist unions. The formationof the Labour Party in 1916 provided a political forum for the pursuit of workers‟ rights and labour reform,
but in the early period was seen as too conservative for the syndicalist unionists, who however by the 1930s
had come to support the Labour Party.
As Stephen Hughes and Nigel Haworth note in their excellent paper to be presented to this conference, A
Distant Detachment/New Zealand and the ILO 1919-1945, New Zealand became a founder member of the
ILO in 1919 because of the initiative of Great Britain that, in reality, controlled New Zealand‟s foreign
policy. The distinct lack of interest in the organisation at that time by the government was not unexpectedNew Zealand Journal of Employment Relations 35(3): 6-15
given the politics of the time. It was not unexpected, however, that the union movement and new Labour
Party took more interest in the new international labour organisation. Both movements had always beeninternationalist in outlook. The New Zealand government‟s interest and approach to the ILO has reflected
the ideology of the government of the time. It is also not unreasonable to surmise that business was also
aware of events overseas. New Zealand business appeared to show little interest in the ILO in the beginning
but its involvement has reflected its concern to ensure its class interest was represented in all contact with
the ILO.
For a variety of different but related reasons than workers, business and governments all had reasons forsupporting an international organisation that facilitated the promotion of international labour standards in theworkplace. The fact that the ILO has survived to be the oldest surviving international organisation owes
much to the skill of those who have managed the organisation, but it also owes as much to the perceptionthat a balance needs to be maintained amongst the interests of labour, capital and governments to ensure thewell being of all parties.

ILO Reinvented
The story of the survival of the ILO and its emergence today as a key international influence on social andeconomic global policy is one worth retelling. As Haworth and Hughes (2009) have noted, the ILO
developed a strategy that they characterised as of independence, relevance, and presence that has served itwell since its inception. The leadership skills of two recent Director-Generals, Michel Hansenne (19891998) and Juan Somavia (1998- current) have guided the ILO from one of questionable relevance in a
rapidly changing economic environment to one whose role is at the heart of global policy making. The
achievement of the Declaration of Fundamental Principles and Rights at Work (1998) positioned the ILO toprovide a relevant framework within which to engage with the new global and domestic policy frameworks.
When Juan Somavia became Director-General in 1998, he built on this foundation through guiding the
Declaration on Social Justice for a Fair Globalisation (2008) through the ILO (ILO, 2008). That
Declaration clearly stated the nature of the relationship between social and economic policy in a globalised
world. The Declaration not only provided support for the Decent Work initiative but also invited the ILO towork with other international and regional organisations to promote decent work. The link between tradeand financial policies and employment was made explicit. Labour standards must be considered as part ofany global trade, economic and financial policy.
The Declaration has been characterised as marking the most important renewal of the ILO since thePhiladelphia Declaration. It set in place and affirmed a new course of action founded on the 1998
Declaration of Fundamental Principles and Rights of Work and the Decent Work Agenda. It has marked therecognition by the ILO for a more integrated and holistic approach for the implementation of labour
standards. In particular, the need to work with civil society for the reduction of poverty and recognising therelationship between poverty and poor labour standards has distinguished the work of the ILO in recent
times.
On a local and regional level, however, perhaps the most important recent initiative of the ILO has been the
Decent Work Agenda. Juan Somavia has stated “The primary goal of the ILO today is to promote
opportunities for women and men to obtain decent and productive work, in condition of freedom, equity,
security and human dignity” (ILO, 2009). The strategies to implement this goal have been identified as:
the promotion and implementation of international standards and rights at work;
the creation of decent employment and income opportunities for all men and women;
the enhancement of coverage and effectiveness of social protections for all peoples; andthe strengthening of economic and social dialogue between government, employers and workers(ILO, 2009).

New Zealand Journal of Employment Relations 35(3): 6-15

On a practical level, the Decent Work Initiative is designed for the ILO to assist countries with theimplementation of these strategies. It has enabled the redirection of its resources to provide countries withtechnical support for the development of a national framework within which priorities can be targeted tomake that the decent work goal a reality and not just an aspiration.

Role of New Zealand Government
Since the relationship between the Government and the ILO reflects the ideology and policies of theGovernment of the day, I shall focus my reflections on the role of the New Zealand government during theperiod I was Minister of Labour. In particular, I shall examine on the institutional support the government
gives to the ILO as an organisation; the legislative recognition of ILO Conventions 87 and 98 and thedevelopment of a policy to recognise the need to incorporate minimum labour standards into free trade
agreements. Before I look at three aspects of the ILO/government relationship, I shall make a few generalobservations about the role of governments in the ILO.
At present there are 183 member countries of the ILO. Their reasons for support of the ILO are likely to be
a combination of the factors identified on the ILO website, namely security, humanitarian, political andeconomic. The fear of political instability was an important motive for the formation of the ILO and still
remains so today. Industrial unrest is not only economically damaging, it is politically unsettling. The levelof support the ILO has received from countries varies according to domestic and international factors.
Signing up to Conventions and Declarations does not guarantee the countries implement the provisions
within their own jurisdictions. The provisions of the Conventions and Declarations are more often
considered aspirational than real. Also economic, social, political and culture conditions vary greatly among
the member countries. This is why the ILO technical programmes are so important. They assist the member
countries to find ways to implement labour standards that are appropriate to the conditions of the countries.
The ILO can only provide this assistance, however, if it is funded adequately and this is perhaps the mostimportant role of member countries.
Countries often show their displeasure by not paying their fees, withdrawing from active participating or on
occasions boycotting the activities of the ILO. The best example of the latter action was the withdrawal of
the United States from the ILO during the cold war period because of a fear that its support for workers‟
rights was support for the communist ideology (Potter, 2006). Although the ILO survived this period, it did
have an impact on the resources, the organisation and its capacity to pursue its agenda. Financial viability
and administrative efficiency are fundamental preconditions to the success of the ILO achieving its primaryobjective. The best way to stifle the effectiveness of any organisation, domestic or international, is to starve
it of resources.
In many ways, governments are the cement or the glue that ensures the continuing institutional existence of
the ILO. It is governments‟ financial and active support of the organisation that is vital. Hughes andHaworth (2008) have documented that, from the outset, the New Zealand government‟s support for the ILO
was lukewarm at best. There is an understandable tension between the ILO and its government members on
the most effective use of resources. One of the achievements of Juan Somavia has been to push foradministrative and budgetary reform within the ILO. Like many large well established organisations, theILO had become resistant to change, and questions were being raised about its relevance in an age when
neo-liberalism meant the new managerialism was the standard against which all institutions were being
measured.
When I became Minister in 1999, one of the decisions that confronted me was whether New Zealandsupported the Director-General‟s administrative and budgetary reform agenda. The 1999 Report of theProgramme, Financial and Administrative Committee to the Governing Body (GB 279/PFA/7 ILO 279 th
Session) noted the need to shift the focus from Geneva into the regions and to ensure to local programmes

New Zealand Journal of Employment Relations 35(3): 6-15
were results orientated with efficient management practices. It was a good introduction into the internal
working of the ILO and the reality that, as with all governance in large institutions, the organisation is as
good as the interest and commitments of its members. New Zealand strongly supported the budgetary andadministrative reform agenda and, in particular, the emphasis to decentralise the ILO technical programmes
into the regions and away from Geneva. I confess to not being very impressed at the first ILO regional
conference I attended in Bangkok and understand the feeling may have been mutual. Like many New
Zealanders, I underestimated the task of change in international institutions. I tried to explain that although
New Zealand was committed to the ILO, all expenditure had to be justified, including ILO fees and there
needed to be a greater allocation of resources in the Pacific region. Currently New Zealand pays $1,900
annual subscription to the ILO (Budget, 2009).
I also emphasised that I was a Minister of Labour in a government that recognised the reality of
globalisation and the need for New Zealand to actively participate in international organisations and events
to protect and further New Zealand‟s interests whether they were issues economic, social or security. For
the Minister of Labour, the primary international organisation was the ILO and participation primarily took
the form of attending the ILO annual conference held in Geneva in May/June of each year. The New
Zealand delegation consisted of representatives from the NZCTU and Business New Zealand. Officials
from the Department of Labour supported the delegation. New Zealand was fortunate in having very able
and knowledgeable officials who were familiar with the operation of the ILO but also facilitated the more
active role of Labour-led government in the organization‟s activities.
Like all such international events, the annual conferences are large, highly structured with short formal
presentations and little opportunity for participation, even in committee meetings. I can see why it ispossible to question the value of such gatherings. New Zealand is a small country of no or little significancebeyond what can be created through its own participation and efforts. During the time I was Minister I
attended four such conferences and came to understand the value of participation and the need to have along-term perspective. The opportunity to discuss developments in other member countries gave a valuable
insight into the way they handled common experiences. The regular meetings with the Director-General
were an opportunity to ensure the developments in New Zealand were understood and supported. I was also
invited by ILO officials to make presentations explaining the developments under the Employment
Relations Act and contrast them with the previous statutory regime. Such invitations were importantbecause they provided the opportunity to explain and discuss the situation in New Zealand with those
officials who received the reports on New Zealand‟s compliance with its ILO obligations.
For me, personally observing and participating in a tripartite social dialogue policy framework strengthened
my resolve to apply the same model to employment relations policy reform in New Zealand. It was themodel used for changes to the Holidays Act, the Health and Safety in Employment Act and the report on
contracting out and sale and transfer of businesses. It was a model followed by New Zealand for 90 years
and only abandoned as a tenet of public policy with the enactment of the Employment Contracts Act. I had
long felt that not only was our employment relations poorer for rejecting tripartism but also our democracy.
The reform of the employment relations statutory framework, therefore, seemed an appropriate opportunity
to revive the democratic notion of tripartism.
The reform of the statutory framework provided the opportunity to review whether New Zealand was in aposition to ratify the two most important ILO Conventions, namely, Convention 87 on Freedom of
Association and Convention 98 on the Right to Organise and Bargain Collectively. It is somewhat ironicthat New Zealand, as a founder member of the ILO, had developed an industrial relations system that madeit impossible to comply with these fundamental conventions. The IC&A system, as it developed, not only
prevented collective bargaining but also freedom of association. It is true that the system served theinterests of the parties well at various times and that New Zealand workers benefited through their wages
and conditions. The dominant role of the state, however, precluded New Zealand ratifying theseconventions.

New Zealand Journal of Employment Relations 35(3): 6-15
Although New Zealand did not ratify these Conventions, it did not prevent the employer and union parties atvarious times complaining to the ILO alleging a breach of the conventions (Roth, 2001; Novitz, 1996). The
fact that New Zealand was a member and, therefore, had agreed with the fundamental principles of the ILO
provided sufficient jurisdiction for ILO intervention through the Freedom of Association Committee toinvestigate whether or not a breach had occurred. Although in such instances, there was no enforcement
mechanism, the parties deemed the publicity surrounding the investigations provided leverage domesticallyto highlight the issue and support a campaign for change.
I came to understand the value and the limits of such ILO intervention during the process investigating the
NZCTU complaint to the ILO alleging the Employment Contracts Act breached of Conventions relating to
freedom of association and collective bargaining. I attended a meeting with others convened by Alan
Gladstone who carried out the ILO Direct Contact Mission investigation. Although this Mission‟s report
was not very critical of the government legislation, the final report of the Freedom of Association
Committee (Case No. 1698, 1994) was critical and recommended the government initiate a tripartite process
to ensure the Act was consistent with the principles of freedom of association and collective bargaining.
The then Minister of Labour Doug Kidd rejected such a notion.
The importance of this Report was not only its criticism of the ECA, but for me anyway, it highlighted therelationship between freedom of association and the ability to engage in collective bargaining. If workers
could not join unions and could not be involved in actions in pursuit of their right to collectively bargain
without the threat of legal action, then they did not have the right to bargain collectively. There could be nocollective bargaining without genuine freedom of association, which was not only the right to join or notjoin a union but to freely pursue collective action without legal penalty.
The Employment Relations Act was an attempt to comply with both Conventions 87 and 98. I suspected theattempt would fail because of the continuing restrictions on the right to strike when bargaining collectively,
for example, secondary boycotts. This turned out to be correct. Although there were extensive discussions
with the ILO officials, the ILO would only agree that the Act complied with Convention 98 but not 87.
The inclusion of specific reference to the two Conventions in the Employment Relations Act was, however,
to make explicit that the Act was founded on the principles in those Conventions and any interpretation of
the Act should be consistent with those principles. In particular, the ILO jurisprudence on the relationshipbetween the right to organise and the right to bargaining collectively are very useful when determining
whether in fact there has been „good faith‟ bargaining or „good faith‟ when unions try to organise workers,
especially in a new workplace.
New Zealand has ratified 60 Conventions of which 51 are in force. While I was Minister, an effort wasmade to ensure legislation did comply with the ILO obligations. I assume that practice continues. The
officials were aware of our obligations and, as part of their briefings to the Minister, would draw attention to
any relevant ILO matter. The shift in the ILO strategy to promote efficient management practices to ensure
implementation of the 1998 Declaration of Fundamental Principles and Rights at Work through the Decent
Work Agenda was endorsed by New Zealand when I was Minister (Hughes, 2005). The result has been thedevelopment of an extensive framework by the Department of Labour on how the Decent Work objectives
can be and are being implemented in New Zealand. There is insufficient time to explain this policy work indetail but it is important and I am sure will be covered in other presentations. It is important because it
provides a practical programme to measure New Zealand‟s compliance with the various ILO obligations. It
is an outstanding example of a policy framework that translates international obligations into domestic
legislative and policy terms.
Finally, I want to briefly mention one of other development when I was Minister of Labour that illustrated
the attempt by New Zealand to implement into legislation and policy the ILO commitments. It is theframework for integrating labour issues into free trade agreements (MFAT, 2009). The failure of the Doha
trade talks and the WTO to find multi-lateral agreement on free trade arrangements led the government toNew Zealand Journal of Employment Relations 35(3): 6-15
seriously enter negotiations on bi-lateral free trade agreements. This development raised concerns relating
to the undermining of working conditions in New Zealand through the use of cheap labour in the trading
partner country.
To address these concerns and also to comply with and further the objectives of the Declaration on
Fundamental Principles and Rights at Work, the government in 2001 adopted a framework to incorporate
labour related issues into free trade agreements. Among the objectives of the policy was the statement that
economic and trade partnerships were not an end in themselves:
The goal they serve is to improve living standards in the countries whose governments havenegotiated them. This government believes that to reach that goal, economic and trade agreements
need to be crafted in a way that promotes decent work. By this it means opportunities for work inwhich minimum standards are protected and adequate income is generated within an infrastructure
which ensures social protection (MFAT, 2009)
There is also an explicit statement that the government supports the ILO‟s objectives of decent work andadheres to the principles of the core labour standards reflected in the Declaration of Fundamental Principles
and Rights to Work. The statement concludes with the following:
While the details would need to be determined on a case by case basis, the government would look to
include any or all of the following elements in the framework of any bilateral/plurilateral trade andeconomic partnership agreements: a workplan of initiatives or objectives; a mechanism for regularreviews of objectives or initiatives, and regular dialogue on how to better promote decent work; amechanism for resolution of issues raised by the parties or the social partners (MFAT, 2009)
While this framework was an achievement, the reality is that it is a policy and needs to be implemented. In
my brief review of the free trade agreements I could access, I found it difficult to identify the above policy
being explicitly included in the agreements. I trust others who are more expert in the area than I am will
follow up to ensure this important development has not been lost in translation.

Conclusion
In conclusion, I want to acknowledge and thank Business and Labour History Group of the NZ Work &Labour Market Institute, and in particular Professor Ray Markey, for organising this conference. It provides
an opportunity not only to reflect on the contribution the ILO has made to the development of a regime ofminimum labour standards, but the relevance of the organisation to the countering the challenges ofglobalisation and the attempts through neo-liberalism public policies to make the market the only determinerof working conditions and wages. The ideology of neo-liberal argues that economic and financial matters
are the primary purpose of public policy. Matters of social justice have been relegated to accommodating
the economic imperative. Not only has such a policy failed on its own terms as the recent collapse of thefinancial system has demonstrated, it has created a society in which economic and social inequality has
become institutionalised and accepted by many as inevitable.
The ILO in its current reinvention has introduced a healthy dose of reality into international public policy
making. Whether or not New Zealand actively supports this leadership demonstrated by the ILO is for thegovernment to determine. I was reflecting on how much attention is paid in the media to international trade
agreements and how little to international initiatives that highlight the relationship between such agreements
and the level of employment and social justice within a community. The time is overdue, once again, tounderstand the interconnectedness of the economic, social, cultural and political factors that exist within ourcommunity. Until this is done there will be neither economic nor social prosperity. The ILO once again
provides a pathway to follow to achieve these goals.

New Zealand Journal of Employment Relations 35(3): 6-15

Notes
1

This paper was presented at the Symposium: 90 Years of the ILO: The Significance for Australia and New
Zealand organised by the NZ Work and Labour Market Institute, AUT in association with the Auckland
Labour History Group.

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ILO since 1989. Paper presented at the Symposium, 90 Years of the ILO: The Significance for Australia and
New Zealand on 19-21 November, 2009. Auckland, New Zealand.
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New Zealand Journal of Employment Relations 35(3): 16-26

Surfing History’s Waves: On the Resilience of the International Labour
Organisation as an International Institution
NIGEL HAWORTH* and STEVE HUGHES**
Abstract
This paper explores six factors which, when taken together, explain not only the survival of the ILO since its
creation in 1919, but also its capacity to maintain relevance and legitimacy, despite often adverse
circumstances in which it has operated. Whilst focusing primarily on the post-1980 period, it identifies
strands of organisation and strategic positioning, which have been central to ILO thinking since 1919.

Introduction
Cyclonic weather patterns often produce great swells, which, when they arrive on suitably configured
shorelines, give rise to highly challenging, but for the expert surfer, exhilarating opportunities to test
themselves against the sea’s elemental power. The surfer battles the swell, chooses the wave to ride, and,
applying knowledge and experience, hurtles across the wave’s face, constantly adjusting angle andpositioning to maximise the run (and also preserve life and limb). All being well, safety is gained and thesurfer returns to confront the inexorable swell in preparation for the next ride.
The metaphor of the surfer in cyclonic conditions captures well the history of the International Labour
Organisation (ILO) since 1919. The ILO was borne out immediately of a geo-political cyclone (the FirstWorld War) and, over a longer term, a similar sea-change created by the growth of militant working classopposition to the capitalist system. The subsequent history of the ILO has been marked by cyclonic shifts –the collapse of the League of Nations, the Second World War, the post-war accommodation, the Cold War,the neo-liberal revolution, and the rise of globalisation, to name but the most obvious. In each case, the ILO
has battled through the cyclone, found a wave, and ridden the storm. Today, perhaps against the odds and to
the surprise of some, the ILO, commanding resources, knowledge and skill, has not merely survived multiple
cyclones, but prospered to the extent that, in 2011, its status and position in the global order is as strong, if
not stronger, than has ever been the case.
Based on our previous research (Hughes and Haworth 2011a and 2011b), this paper outlines six dimensionsof that historical success, which, when combined, underpin the current status of the ILO. In brief, thedimensions are:
The founding strategy of autonomy, relevance and presence
The importance of leadership
Understanding the political-economy of the context
Strategic principles
Organisational adaptation
External engagement*

Nigel Haworth is Professor of Human Resource Development in the Department of Management & International Business,
University of Auckland. Private Bag 92019, Auckland, New Zealand. Email: n.haworth@auckland.ac.nz**
Steve Hughes is Professor of International Organisations at Newcastle University Business School, Citywall Headquarters,
Citygate, St James Boulevard, Newcastle upon Tyne. Email: s.g.hughes@ncl.ac.uk

New Zealand Journal of Employment Relations 35(3): 16-26

The paper assesses each dimension in turn, focusing particularly on the contemporary period (that is, sincethe 1980s).

The ILO in brief
The ILO was created in 1919 as an outcome of Part XIII of the Treaty of Versailles. Launched as an
institution within the League of Nations system, its origins lay in international debates begun in nineteenth
century about labour standards. Those debates had three important dimensions. The first was a humanitarianconcern about working conditions. The second was a primarily economic concern about the implications of“unfair” labour standards for trade (an early version of the “race to the bottom” argument). The third
addressed the rise of working class militancy, particularly under socialist and communist direction, and thethreat to Capital created by that militancy. The ILO and its unique tripartite model was the outcome of those
discussions. It was to be an organisation charged with the development and implementation of international
labour standards, which would address humanitarian, economic and political challenges posed by workers
and their working conditions.
Traditionally, the ILO’s core activities have been to develop, implement and monitor conventions andrecommendations relating to all manner of working conditions. There is also a strong commitment totechnical capacity building in labour standards, employment relations and many other dimensions of labour
market performance. The institutional heart of the standards-setting process is the International Labour
Office, located in Geneva. It currently employs about 2500 staff and in 2008/9 enjoyed a revenue of US$ 565
million. A network of regional and local offices provides “global reach”. 182 countries are members. As
noted above, a unique feature of the ILO is its tripartite nature. The Governing Body, the International
Labour Conference and many of the Other ILO bodies include government, employer and trade union
members1.
As we shall see, the ILO uniquely survived the demise of the League of Nations and the Second World War
to become an institution within the United Nations system. Moreover, despite a sometimes lacklustre
performance in the post-war period; since the 1980s, it has enjoyed an extended period of renovation andinfluence.

The Founding Strategy: autonomy, relevance and presence
The first two Directors General – Albert Thomas and his successor Harold Butler – combined idealism andcool pragmatism in their early positioning of the ILO. Idealism was manifest in Thomas’ belief that workers
in a post First World War world wanted stability in daily life and security against any renewed threat of war.
Hence, he saw the role of the ILO as reducing tension, not only in nations, but between nations. However,such an ambitious role required the ILO to move beyond a narrow agenda of labour standards into a broader
agenda addressing the political, economic and moral order of the post First World War world. Equally, an
ambitious agenda was also needed to give the ILO strong international mandate, unlikely to be offered by anarrow focus on labour standards. Thomas recognised that the ILO risked isolation and oblivion if it did notbuild a stronger, broader international presence. In modern parlance, Thomas understood that the survival
and impact of the ILO depended on it becoming “a player” in International Relations.
The inter-war strategy of the ILO can be reduced to three essential propositions: autonomy from themortally-wounded League of Nations (and a concomitant identity as an independent agency); relevance tocountries facing the impact of the inter-war crisis (in and beyond the developed economies); presence inNew Zealand Journal of Employment Relations 35(3): 16-26
countries and regions beyond the metropole, such that the status and purpose of the ILO was globally
recognised.
Autonomy from the League of Nations was a hard fought battle. Early on, Thomas and then Butler realisedthat the League was ineffectual in its response to deteriorating political circumstances in Europe, China, andto the impact of the global economic crisis. Their answer was to develop direct channels between the ILO
and the tripartite partners in countries outside the League’s mechanisms. Such links defined the ILO’s
autonomy from the League, an autonomy subsequently highlighted by US and USSR membership of the ILO
in 1934. As the political situation slumped towards the Second World War and the League foundered, theILO rode its wave of autonomy, crucially supported by the US. The role of the US in the later inter-war years
was vital for the survival of the ILO, for its membership bolstered the status the organisation, whilst
challenging the domination of European powers in ILO councils. Subsequently, it was the US’ engagementwith the ILO that provided an essential pathway to the integration of the ILO into the UN system, andsupported the post-Second World War agenda for the ILO encapsulated in the 1944 Declaration ofPhiladelphia.
Relevance has been a goal of the ILO throughout its life. An autonomous organisation without relevancewould founder as quickly as the League, as all Directors General have understood. In the inter-war years,
relevance was provided by the ILO’s technical role in identifying policy settings able to respond to theimpacts of the global economic crisis. Subsequently, in the post-Second World War period, the regional andfield networks of the ILO were developed to provide an extended level of technical support globally.
Relevance remains at the heart of the contemporary ILO, as we shall see below in our discussion of thecontemporary role of the ILO in the G20 discussions on the post-2008 global crisis.
Successive Directors-General have worked hard to couple relevance with presence. One way to establish
relevance was to be present, visible and engaged in countries’ policy setting. Presence required physicalpresence (hence the regional and field networks, and other networks at national level), intellectual presence(the provision of relevant and useful policy advice) and appropriate presence (by which we mean a presence
that eschewed neo-colonial Metropole-Periphery relationships). In the contemporary period, presence hasdeveloped to include another “location” – the engagement of the ILO in the work and debates of otherinternational institutions. As global governance develops, the ILO has actively positioned itself as a partnerin discussions with, in particular, the World Bank and IMF, the WTO, and the G20.

The Importance of Leadership
We have already hinted at the role of leadership in the strategic positioning of the ILO after 1919. Successive
Directors-General have, to greater or lesser extent, imposed their own individual mark upon the developmentof the organisation. However, some have been more “activist” than others, a possibility created by the
structure and nature of the ILO as an organisation. Directors-General are elected for five year terms, andhave the capacity to influence significantly the Governing Body and Conference of the ILO. An activist
Director General has been able to impose his mark forcefully on the ILO (all Directors-General of the ILO
have been men).
The power of the Director-General derives from multiple sources. Election places an individual in a majorinternational position, in which there is embodied an expectation of leadership and action. That position
allows the Director-General, if graced with diplomatic skills, to use his roles in the organisation’s councils to
implement bold strategies. Directors-General are members of an elite international order of leaders in the UN
system, a position which, if used astutely, can be a lever of internal power within the ILO. Directors-Generalcan, to some extent, play off against each other member countries and their social partners, the social partners

New Zealand Journal of Employment Relations 35(3): 16-26
within ILO institutions and the social partners and countries against the staff of the ILO (and vice versa).
Directors-General also have significant influence over staff issues at senior levels within the ILO, providing
another route for the exercise of power and direction within the organisation. Of course, any of these “routes
to power” depend on the political and institutional skill of the incumbent. Power and status inexpertly
wielded can drive a powerful wedge between, on the one hand, the Director-General and, on the other, thestaff and the social partners.
Albert Thomas (1919-32) and Juan Somavia (1999 to date) are quintessential “activist” Directors-General.
Thomas, a socialist and a French Munitions Minister during the First World War, seized the nascent ILO and,by force of personality and the wielding of great political skill, drove the strategy of autonomy, relevance andpresence outlined above. Enjoying the opportunities provided by an organisation-in-creation, he imposed his
own blueprint on the ILO, ably supported by his successor, Harold Butler. Thomas is the prototype of theactivist Director-General. Somavia, at the time of writing in his third term as Director-General, a Chilean
diplomat and the first “Third World” Director-General (and the first not made in the traditional ILO mould),
has been equally activist. As we shall see below, he has used the platform provided by his predecessor,
Michael Hansenne (1989-1999), to drive a powerful agenda for internal organisational change, the refocusingof ILO strategy into the “Decent Work” agenda, deeper engagement with other international institutions, allunderpinned by a commitment to inclusive responses to globalisation. Others might arguably fall into thesame category of “activist Director General” (such as Edward Phelan (1941-1948) and David Morse (19481970)).
Of course, for much of the history of the ILO, action has been needed. Directors-General have rarely enjoyed
the luxury of reflective leadership. Thomas and Butler (1932-1938) were forced to weather the cyclone that
destroyed the League of Nations. John Winant (1939-1941) and Phelan (1941-1948) had to preserve the ILO
and reposition it in the post Second World War era. Morse had to manage the Cold War’s impact on the ILO,
a job that exhausted him, and may have contributed to the early death of his successor, Wilfred Jenks (19701973). Francis Blanchard (1974-1989) was confronted by the global neo-liberal attack on much of thephilosophy upon which the ILO is based, and his successors, Hansenne and Somavia were confronted, notonly by neo-liberalism, but also the impacts of globalisation and, under Somavia, the worst global economiccrisis since the inter-war years. Leadership is important in the ILO because it can be displayed, and because it
has been a constant requirement of the ILO’s circumstances (Hughes and Haworth, 2009).

Understanding the Political Economy of the Context
To build relevance required the ILO to understand the changing context in which it operated. That
understanding, in turn, required strengths in two areas – the technical capacity to understand shifts in the
global economy and their implications for labour markets and the social partners, and delivery mechanismsthat turned that understanding into effective policies in member countries. We have seen already that, in theinter-war years, economic certainties were pummeled by economic crisis. Moreover, alternative solutions –fascism and communism – were emerging, rejecting the failed liberal policies of the European tradition.
Harold Butler understood the implications of this clash for world peace, economic stability and the future of
the ILO. And, as the Depression progressed, the standards-setting activities of the ILO diminished inimportance and pace.
Butler’s response to this challenge was masterly. He identified the salvation of the ILO (and, in a broader
sense, the world order) to be a reduction of the importance of European countries in the ILO, to be achievedby the US becoming a member. Once a member (after 1934), the US, fortified by Roosevelt’s New Deal as a
successful alternative to Hitler and Stalin, strongly supported the ILO (whilst condemning the ineffectual
League; but this was not simply a political success, consolidated in the inclusion of the ILO in the UN

New Zealand Journal of Employment Relations 35(3): 16-26
system. It was also the basis for an alternative policy package for governments responding to the inter-war
economic crisis, a package that the technical capacity in the ILO could develop to meet the needs of othercountries. Thus, US membership provided simultaneously a political defence of the ILO and a relevant andgrounded technical policy framework, which the ILO to promote.
More recently, Somavia has achieved a similar degree of success in positioning the ILO as a central
international agency in the development of a response to the post-2008 global crisis. When the global
economy “came to a halt” in the second half of 2008, unemployment mounted rapidly, and the potential forthe economic crisis to unleash global social unrest was widely recognised. The G20, in London in April,
2009, held a summit meeting on growth, stability and jobs, and called on the ILO to assess the employment
impacts of the crisis, existing measures taken in response to those impacts, and other measures that might be
implemented. Operating at its technical best, the ILO produced 54 country analysis in response to the G20’s
call and presented its findings at the Pittsburgh G20 meeting in September 2009.
Somavia’s success in entrenching the ILO in the G20’s councils mirrors Butler’s success in the 1930s. The
ILO achieved three key outcomes as an effect of its work with, and for, the G20. It confirmed the status of
the ILO in such august councils, itself a significant outcome. It reinforced the status of the ILO as the preeminent international body in labour market, employment and social protection issues. It positioned the
ILO’s technical capacity in these areas as unmatched. The ILO’s success in reaffirming its international rolein the post-2008 period has been buttressed by the on-going fear of “jobless growth” as the global economy
begins its rocky road to recovery. Countries echo the ILO’s concerns about “job rich growth” and its socialand political benefits, providing a context in which ILO influence and technical capacity can wax. Arguably,a key ILO success in this period is its capacity to ground its rhetoric and principles in crisis responses inmany countries, especially in terms of social dialogue and tripartism.
The ILO’s vehicle for employment-based growth is the Global Jobs Pact, endorsed by the International
Labour Conference in June 2009. Its key tenets are:
Guaranteeing credit flows to business, especially small and medium-sized enterprises (anecessary pre-condition for employment retention and creation)
Retention of viable jobs by means of a reduction in work hours and the targeted use of skill
development strategies (to minimise unnecessary lay-offs and labour market disruption)
Unemployment benefits targeted expressly to support job seekers
A strong focus on active labour market policies to reduce, first, the impact of unemployment
and, second, to minimise social exclusion. Employment guarantee schemes were particularly
highlighted.
An equally strong focus on measures to support youth in the labour market
Investment in job-rich infrastructure projects
The development of “Green” employment strategies to reinforce employment sustainability
The extension of social protection to vulnerable groups currently without such protection
The Pact positions the ILO’s response to the post-2008 crisis in classical ILO principles: social protection for
the needy, employment-led growth, the priority to be attached to “decent work”, the importance of active
labour market interventions, and a strong underpinning of social dialogue and inclusion of the social partners.
The line between Butler in the 1930s and Somavia in 2008 is direct and consistent.

Strategic Principles
Strategic principles and a capacity to adapt them have been at the heart of ILO success. Some principles –standards setting, tripartism, for example – are constants. Others have emerged and have been adjusted overNew Zealand Journal of Employment Relations 35(3): 16-26
time. Thus, for example, the traditional focus on standards-setting was a necessary but not sufficientcondition for the survival of the ILO after 1919. As noted above, Thomas understood quickly that survival
required the ILO to broaden its strategic principles to include the political, economic and morals rights ofindividuals in a market-driven system. Similarly, the Declaration of Philadelphia proclaimed that labour is
not a commodity, that freedom of expression and of association are essential to sustained progress, thatpoverty anywhere constitutes a danger to prosperity everywhere, and that the war against want should bebased on concerted and continuous international effort. However, it also placed Human Rights at the centreof the ILO’s functions. The reason for this was simple. Director-General Phelan was seeking to place the ILO
at the centre of the re-building of political democracy after the Second World War, thus, like Thomas andButler before, guaranteeing the status and relevance of the ILO in the post-war settlement.
Strategic principles have been at the heart of reform agendas in the contemporary ILO. Particularly underDirectors-General Hansenne and Somavia, the renovation and refocusing of ILO principles have been
important. In 1994, Hansenne addressed the International Labour Conference about the need for the ILO tounderstand and respond to the challenges and opportunities posed by globalisation. He was challenging the
ILO to revise its strategic principles and direction in a changing world. His thinking was driven by four
factors: continuing support internationally for the standards-setting role of the ILO, a parallel concern that themechanism for standards-setting needed to be reformed, an understanding amongst the social partners thatchange was needed in the ILO, and a related concern that the consensus between the social partners within
the ILO was breaking down, primarily as an effect of neo-liberal thinking in government and employer
groups.
Hansenne’s response, articulated at the 1997 Conference, was to propose that the ILO work in two
interdependent ways. The first, echoing the outcomes of the 1995 Copenhagen Social Summit, was, in effect,to specify core labour standards, which would capture key basic rights and, also, the “social rules of the gameof globalisation”. The second was a framework whereby the ILO “came alongside” countries as they
responded to the challenges of globalisation, encouraging them to integrate a social dimension into theireconomic strategies. This approach, as detailed by Hansenne in his 1997 speech, at once drew heavily on
traditional ILO values and practices, and yet moved the ILO into controversial new ground. The
identification of “core” labour standards was seen by some to cut across traditional ILO support for all
standards, whilst the “encouragement” of a social dimension in countries’ responses to globalisation seemed,in the eyes of some traditionalists, to move ILO activity from the application of “hard law” labour standards
to a softer, engagement-style relationship with member countries. Traditionalists were even more concerned
when the new approach was associated by Hansenne with “standards overload” (the tendency for all issues tobe reduced to standard-setting) and a view that standards-setting was but one dimension of ILO activity, andthat other activities, perhaps more topical and unrelated to standards, were also important 2.
Hansenne’s reform was consolidated in the hard-fought Declaration on Fundamental Principles and Rights at
Work, adopted unanimously by the June 1998 Conference. The final wording of the Declaration is concise
and can be reduced to four key elements. First, the Declaration confirms that, by joining the ILO, andendorsing the principles set out in the ILO’s constitution and the Declaration of Philadelphia, member states
are bound by the principles related to four fundamental areas of rights, which are:a) freedom of association and the effective recognition of the right to collective bargaining;b) the elimination of all forms of forced or compulsory labour;c) the effective abolition of child labour; andd) the elimination of discrimination in respect of employment and occupation.
Second, member states and the ILO, working together with other agencies, will support these fundamental
rights:New Zealand Journal of Employment Relations 35(3): 16-26a) by offering technical cooperation and advisory services to promote the ratification andimplementation of the fundamental conventions;b) by assisting those members not yet in a position to ratify some or all of these conventions in theirefforts to respect, to promote and to realise the principles concerning fundamental rights which are
the subject of those conventions;c) by helping the members in their efforts to create a climate for economic and social development.
Third, the 1998 Declaration will be promoted by means of an annual “follow-up” at member-state level incases where one or more of the four fundamental areas have not been addressed appropriately in terms of
convention ratification, and an annual “global report”, analysing one of the fundamental rights each year.
Fourth, labour standards should not be used for protectionist purposes.
These principles were and remain controversial. However, here, that controversy is secondary to our interest,
that is, the manner by which the ILO renews its principles as a necessary strategy in its constant search forrelevance and presence in a changing world.
The capacity to adapt strategic principles is seen in equal measure in the changes introduced under Somavia
after 1999, Building on Hansenne’s work, and the extended analysis undertaken by the ILO of the social
impacts of globalisation (ILO, 2004), Somavia has marshaled the work of the ILO under a single banner –“Decent Work” – from which, for the 2000-2005 period, depended four strategic objectives:
To promote and realise standards and fundamental principles and rights at work
To create greater opportunities for women and men to secure decent employment and income
To enhance the coverage and effectiveness of social protection for all
To strengthen tripartism and social dialogue
These examples illustrate how strong, yet adaptable, strategic principles have been both pillars of ILO
practice and a staunch defence against attempts to marginalise or undermine the institution. Those principles
have, since early days, been far broader than a defence of labour standards, and have appropriated to the ILO
a responsibility for a broader human rights and social inclusion agenda.

Organisational Adaptation
The organisational performance of the ILO has been a perennial issue for member countries and social
partners as much as the institutional leadership in Geneva. We have discussed above the founding strategies
of autonomy, presence and relevance, which required the elaboration of an institutional presence beyond
Geneva. We will discuss in the next section how contemporary engagement with other international agencies
involves innovative organisational measures. There have been three key phases of institutional developmentin what has, overall, been a constant search for an effective organisational model. The first was the founding
period in which the essential model of social partners and tripartism was elaborated, and in which the roles of
the key actors and institutions in the ILO, and the key outputs of ILO deliberations, were defined. Thomas
and Butler oversaw this period, though one might argue that it extends into the period that culminates with
the Declaration of Philadelphia and the insertion of the ILO into the post-Second World War UN system. The
second was the long period of Morse’s leadership (1948-1970), in which the quality and scope of ILO
technical assistance programmes was extended. That period also saw the creation of the International
Institute for Labour Studies and the Turin-based International Training Centre3.
However, in the recent period, Somavia has overseen a major overhaul of the ILO’s organisation, in a clear
attempt to create an organisational form that can meet the challenges posed by the 1998 Declaration and theNew Zealand Journal of Employment Relations 35(3): 16-26
unifying focus on Decent Work. At the heart of the new organisational model is the delivery of the key
strategic objectives, outlined in the previous section, which together comprise the Decent Work agenda.
Somavia has instituted reporting across the ILO against those objectives, most recently in the Strategic Policy
Framework (SPF) for 2010-2015. This emphasises outcomes-base reporting, in which measurement andreporting of results are important. Reporting to the Governing Body and the Conference are similarly
structured. Somavia has also restructured the delivery mechanisms for ILO activity. Thirty-nine programmes
have been reorganised into the four strategic objectives, entailing significant budget and staffing realignment.
A new senior management structure has been introduced.
Again, such changes are controversial (see, for example, Standing 2008). The social partners have broadly
supported change. However, staff have been divided between those who accept that there was a need tomodernise the institution and are comfortable with the model implemented, those who accept the need forchange but are critical of its particularities, and then a third group who, like Standing (2008), take a far morecritical line and suggest that organisational change under Somavia has fundamentally damaged the ILO.
Again, here, we are less concerned about the weight of contending assessments and more about the period oforganisational change under Somavia as reflecting a constant requirement for the ILO to adapt effectively tochanging external circumstances. As was the case in previous periods in the ILO’s history, the contemporary
period has seen organisational coherence and performance being tested as well as being a key to theinstitution’s survival.

External Engagement
The history of the ILO has been marked by a constant positioning of its institutions and activities relative toother external agencies. The early days of the ILO were, as we have mentioned, marked by a distancing of
the ILO from the League of Nations, and a concomitant building of autonomous relationships with social
partners in member countries, particularly the US and others beyond Europe. The period between 1938 and1948 was another period of positioning, this time in terms of the post-Second World War settlement, and thecreation of the UN system. Under Morse, the expansion of technical assistance programmes built wider
networks and relationships in developing economies. Here, however, we focus on the contemporary period,
commencing with Blanchard’s opening towards the international financial institutions in 1987.
By the early 1980s, the ILO was effectively sidelined by a combination of factors influencing the global
economy. The US had left the ILO in 1977, creating a short period of serious budget crisis and reflection on
the future of the ILO. Although the US rejoined in 1980, neo-liberal policies were in vogue, and stoodagainst many of the precepts upon which the ILO was based. Moreover, the major Bretton Woods institutions– the World Bank and the International Monetary Fund (IMF) (sometimes called the IFIs, or international
financial institutions) – were in the vanguard of neo-liberalism, especially in the developing countries into
which the ILO had expanded with many of its technical assistance programmes. Blanchard, a highlycompetent diplomat, argued that the way forward for the ILO was engagement with the IFIs, leading to the1987 high-level meeting between the three institutions, and a call for greater co-operation between them.
Blanchard’s opening towards the IFIs marked the beginning of external engagements that runs through to thecontemporary link between the G20 and the ILO (discussed above) and the close relationships that exist
between the ILO and the WTO, and with the World Bank. We have outlined the involvement with the G20
above. Here, we develop our argument with reference to the ILO and the IMF4.
Underpinning the G20’s contemporary “balanced growth” framework was a considerable body of work
undertaken across a range of international agencies, including the OECD, WTO, World Bank and the ILO.
That joint work became the basis of G20 decisions made in Toronto (June 2010) and Seoul (NovemberNew Zealand Journal of Employment Relations 35(3): 16-26
2010). At the heart of the balanced growth framework is a traditional ILO principle – growth and inclusion
in social benefits. In one sense, the ILO was pushing at an already open door, in that the G20 leaders werecommitted, formally at least, to inclusive, balanced growth. However, the presence of a strongly inclusionary
approach in G20 statements reflects also the relationship between the ILO and the IMF, and particularly
between Somavia and Dominique Stauss-Kahn, the IMF’s Managing Director. Strauss-Kahn strongly
supports policy settings that include simultaneously macroeconomic stability and social inclusion. His views
reflect differences within the IMF between strategists and the top echelon, who broadly support StraussKahn, and the country-level intervention teams, who, usually drawn into a country late in a crisis, tend to
draw from their standards tool-box of structural adjustment measures (Personal communication – Authors’interviews, ILO, November 2010).
The integration of traditional ILO concerns with IMF adjustment approaches is the outcome of a number ofprocesses. The first is the development of close personal ties at the senior leadership levels across the two
institutions. It is clear that Somavia and Strauss-Kahn are able to work together in some harmony. Second,
there is an institutional basis for co-operation, particularly derived from the positive outcomes of theSeptember 2010 joint IMF and ILO conference on “the Challenges of Growth, Employment and Social
Cohesion”, held in Oslo (see: www.osloconference2010.org/conference ).
Third, there are drivers for co-operation for both institutions. In the case of the ILO, there is the desire toensure that jobs, social justice and inclusion are at the heart of recovery packages. For the IMF, the impetus
for involvement is not just about the personal views of Strauss-Kahn. Before the 2008 crisis exploded, theIMF was in major difficulties. Its interventions were increasingly eschewed by countries, which had seen theimpact of such interventions in the 1990s and were critical of them, and which had also seen the success ofalternative packages, such as that applied in Malaysia in the Asian Financial Crisis of the late 1990s. It is notstretching the point to argue that the 2008 crisis gave a new lease of life to the IMF, but it also required the
IMF to reposition itself, opening up avenues in which co-operation with the ILO could prosper.
External engagement and co-operation has become a central strategic focus for the ILO. It has been present
in the ILO toolbox since its creation, but, in the era of globalisation, has become an essential mechanism inbuilding relationships with other key agencies in global governance. Under Blanchard, Hansenne andparticularly, Somavia, it has been taken to new heights, facilitated by the need for action to overcome theimpacts of the 2008 crisis.

Conclusions
We commenced this discussion by invoking the image of cyclonic swells and the skill and experience needed
to surf them. The ILO has been buffeted by such swells since its earliest days. Organisationally, it has had toact across the six areas discussed above in order to survive and prosper. It is much to the credit of the ILO
and its leadership that it has not only survived, but prospered. Yet, even now, in a period in which the ILO isstrongly placed, its position is still fragile, dependent upon its capacity to tie its technical analysis into thebroader work of the international agencies at the heart of global governance. The fate of the ILO is toconfront such swells constantly, and to adapt accordingly.
We have concluded our discussion on a high point. The ILO is at the “top table” of international agencies interms of responses to the post-2008 crisis. This is, as we have argued, because of effective positioning arounda traditional high competence. The social, inclusionary and employment aspects of globalisation havebecome more crucial as questions of sustainable political and economic stability gain greater currency.
Building on the 1944 Declaration of Philadelphia and its more recent repositioning in the 1990s and 2010s,
the ILO can make legitimate claim to the defence of those inclusionary aspects, and if they are sustained in
global agendas, that claim may well maintain the ILO in the first rank of international agencies in the future.

New Zealand Journal of Employment Relations 35(3): 16-26
Such a positioning will require that traditional combination of relevance, competence, presence, and, also,
leadership, which together has marked the history of the ILO since 1919.

Notes
1

For a brief description of the ILO system, see Hughes and Haworth (2011b, Chapter 2)

2

For a brief account of the controversy, see Hughes and Haworth (2011b, Chapter 4). It is fair to conclude
that Hansenne’s reform emerges from the debate in reasonably good health.
3

The ILO was awarded the Nobel Peace Prize for its contribution to peace through social justice in 1969, nota little due to that expansion in effective technical assistance.
4

A similar argument can be made for the relationship between the World Bank and the ILO, see Hughes andHaworth 2011a.

References
Hughes, S. and Haworth, N. (2009). Director General Activism and the Extension of the ILO Agenda: The
ILO since 1989. Paper presented at the Symposium, 90 Years of the ILO: The Significance for Australia and
New Zealand on 19-21 November, 2009. Auckland, New Zealand.
Hughes. S. and Haworth, N. (2011a, forthcoming). Decent Work and Poverty Reductions. Relations
Industrielles/Industrial Relations.
Hughes, S. and Haworth, N. (2011b). The International Labour Organisation (ILO): Coming in from theCold. Abingon, UK: Routledge.
ILO. (2004). A Fair Globalization: Creating Opportunities for All. Retrieved fromhttp://www.ilo.org/public/english/wcsdg/docs/report.pdf
Standing, G. (20080. The ILO: An Agency for Globalization? Development and Change. 39(3): 355-384

New Zealand Journal of Employment Relations 35(3): 27-39

The impact of MNEs and FDI on aspects of working conditions as
contained in the ILO 1977 Tripartite Declaration of Principles
Concerning Multinational Enterprises and Social Policy
RAYMOND MARKEY* and KATHERINE RAVENSWOOD**
Abstract
This article reviews the literature on the impact of multinational enterprises (MNEs) and foreign
direct investment (FDI) on employment and identifies the significance of this research, and where
further research is required. It proposes that further research is needed, in particular, in the area of
EEO and pay equity; the comparative effect on emerging economies, particularly the demand forskills and the impact on skills or training and knowledge transfer; minimum age of work and childlabour; and the impact on industrial relations in general.

Introduction
This article is based upon a report commissioned by the ILO on the impact of multinational
enterprises (MNEs) and foreign direct investment (FDI) on aspects of working conditions as
included in the 1977 Tripartite Declaration of Principles Concerning Multinational Enterprises andSocial Policy1. The article takes the form of a review of existing literature from 2007 up until theend of 2010. Sources that were relied upon for information on FDI flows and incidences andcharacteristics of MNEs were the websites of the OECD and UNCTAD, although otherorganisations‟ reports were also consulted i.e. the World Bank, IMF and World Trade Organisation
websites. The sources for academic research were through two electronic databases: Google Scholar
and Business Source Premier (EBSCO). The terms MNEs, multinationals, TNCs, MNCs, FDI andexport zones were all used as search terms, reflecting the range of terms used in the literature, alongwith the key terms associated with each area of the Declaration. The review is limited by the time
period covered, however, this period is one in which increasing interest in MNEs has occurred and,
therefore, the review does illustrate current research interests in the field as well as areas that needfurther development.
The Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy
was introduced ahead of its time, well before current discussion of corporate responsibility. In part,
because of this, it was controversial and took about 10 years to be formed and agreed on. The aimof the Declaration was to to encourage positive contribution of MNEs to economic and social
progress through cooperation with tripartite partners. As detailed in Figure 1, the 1977 Tripartite
Declaration of Principles Concerning Multinational Enterprises and Social Policy has four main
sections of Employment, Training, Conditions of Work and Life, and Industrial Relations.

*

Raymond Markey is Professor of Employment Relations at AUT University and the Director of the New ZealandWork and Labour Market Institute (NZWALMI). Email: rmarkey@aut.ac.nz**
Katherine Ravenswood is a PhD student at AUT University.

New Zealand Journal of Employment Relations 35(3): 27-39

Table 1. Key areas of the 1977 Tripartite Declaration of Principles concerning MNEs and Social Policy
AREA
Employment (paras. 13-28)

CONVENTION OR RECOMMENDATION
Employment promotion
Employment promotion(Convention 122, Recommendation 122 re
Employment Policy)
Equality of opportunity & employment(C111 and R111 Discrimination in Respect of
Employment and Occupation; C100 and R90 Equal
Remuneration for Men and Women Workers for Workof Equal Value)
Security of employment(R119 Termination of Employment at Initiative of the
Employer)

Training (para. 29-32)(C142 and R150 Vocational Guidance and Vocational
Training in Development of Human Resources)
Conditions of Work and Life (paras. 33-40)
Wages, benefits and conditions of work
(R116 re Reduction of Hours of Work; C110 and
R110 Conditions of Employment of Plantation
Workers; R115 Workers‟ Housing; R69 Medical Care;
C130 and R 134 Medical Care and Sickness Benefits)
Minimum age (C138 Minimum Age for Admission to
Employment and Work and C182 Elimination of
Worst Forms of Child Labour)
Safety and health (Cs 115, 119, 136, 139, and Rs 114,
118, 144, 147 re specific hazards eg. guarding
machinery, ionising radiation, benzene, cancer)
Industrial Relations (paras. 41-59)

Freedom of association and the right to organise(C87 Freedom of Association and Protection of Rightto Organise; C98 Right to Organise and Collective
Bargaining
Collective bargaining (C98; C135 Protection andFacilities to be Afforded Workers‟ Representatives inUndertaking; C129 Communications between
Management and Workers within the Undertaking)Consultation(R94 Consultation and Cooperation between
Employers and Workers; R129 Communications
within the Undertaking)Settlement of disputes and examination of grievances(R130 Examination of grievances within Undertaking;
R92 Voluntary Conciliation and Arbitration)
Source: 1977 ILO Tripartite Declaration of Principles concerning MNEs and Social Policy, 1977, Geneva (ILO, 1977).

MNE actions and FDI flows are playing increasingly important roles in employment worldwide.
Since the introduction of the Declaration “the numbers of multinational corporations…has
increased nearly eightfold from 11,000 in 1976 to 79,000 in 2007 and foreign direct investment(FDI) stocks almost threefold” (Royle, 2010: 249). MNEs employ about 77 million people globally,
accounting for about three percent of the global workforce (UNCTAD, 2009a; OECD, 2009b).
Most of the FDI in the OECD countries peaked in 2007, with developed countries being the mostimpacted by the economic crisis. MNEs are further shifting their focus to developing countries forNew Zealand Journal of Employment Relations 35(3): 27-39

outgoing FDI. Inward and outward FDI is changing, with India and China becoming moresignificant countries. It has been predicted that China will come out of the current global financial
crisis a more significant country in the global economy, and that its outward FDI flow will soon
exceed inward FDI (OECD, 2009a). These statistics are particularly interesting in light of theinformation in the following sections that indicate that MNEs operating in emerging economies
such as China and India commonly base their working conditions on the host country, which often
has lower regulated conditions than the country of origin. It will be of significance for future trends
as the importance of MNEs from these same emerging economies grows. That is, emerging
economies influence the lowering of working conditions in MNEs already, as host countries, andthis influence might become stronger as they increasingly become the home countries of MNEs.
Research, previously, has associated FDI location decisions with weaker regulatory environments,
however, recent research finds that “neither comparatively high labour costs nor strong unions andformalised systems of employee workplace representation are negatively related to FDI” (Brandl,
Strohmer and Traxler, 2010: 635).
MNEs are characterised by increasing diversity of national origin and industry sector of operations,and also by considerable concentration in host countries of operations and in financial assets. There
has been a recent trend towards activity in the services sector among multinational enterprises,
particularly in telecommunications, electricity and water services. In terms of location intensity, theUnited Kingdom is the preferred location, but China, Brazil and Mexico are also in the top 20
countries, with the remaining top 20 countries representing developed economies. The geographicalspread of the top 100 MNEs is not confined to developed economies, with MNEs from China,
Malaysia, Korea, Mexico and Singapore in the top 100. Emerging economy top 100 MNEs,
particularly, are responsible for increasing employment (UNCTAD, 2008).
Research into MNEs and FDI and their effect on employment tends to be concentrated in large
economies (Collings, Gunnigle and Morley, 2008) and/or OECD countries, which poses obvious
limitations. While more research is being undertaken in developing country MNEs, there is little on
the least developed countries (Cuervo-Cazurra and Genc, 2008). The research is also criticised for alack of representativeness, with bias towards “largest, most global, well-known, US based
manufacturing firms” (Lavelle, 2008: 51), but also with small samples and only partial coverage of
MNEs. An obvious gap in the literature is the increasing role of „macro markets‟ in FDI locationand the ensuing effect on employment (Brandl et al., 2010). This article reviews the literature on theimpact of MNEs and FDI on employment and identifies the importance of this research, and where
further research is required.

Impact on employment
The Declaration refers to employment growth, equality of opportunity and treatment, and job
security and turnover. Generally, there is not substantial research in these areas but the existing
research indicates that MNEs do impact on employment growth in host and home countries.
However, causality has not been established in the literature, particularly with reference to job
security and turnover. There is some evidence that, in the foreign affiliates of MNEs from the USA,
Germany and Japan (over the period of 1980-2003), the “ratio of foreign to domestic employment istypically higher in manufacturing industries than in service sectors” (Molnar, Pain and Taglioni,
2008: 101), and that foreign employment growth “is positively associated with domestic
employment growth” in the USA (Molnar et al., 2008: 104). Until 2008, increased FDI was
associated with an increase in the number of jobs in the foreign affiliates of MNEs. However, forsome countries and industries, there is evidence that “outward investment has a significant negative
association with the domestic demand for labour after controlling for domestic output and realNew Zealand Journal of Employment Relations 35(3): 27-39

wages” (Molnar et al., 2008: 111). On the other hand, some research on Swedish MNEs indicates a
positive impact, from increased competition through increased demand for skilled labour,
associated with a high presence of foreign owned MNEs in the same industry (Bandick and
Hansson, 2009).
The effect of MNEs on the equality of opportunity and treatment is especially under-researched.
What is known is that increased diversity is also viewed as one way of expanding the talent pool for
employers and boosting employees‟ motivation and commitment (OECD, 2009b). OECD-European
MNEs have the highest proportion of „equal opportunities systems‟ (work-life balance indicatorssuch as flexible working hours, job sharing, child care arrangements or statistics showing employee
demographics) at 82 percent compared to 16 percent in MNEs from the non-OECD/emerging
markets (OECD, 2009b). However, this may change as perceived skills shortages in Asia haveincreased awareness of measures, such as work-life balance policy, as a tool for widening the poolof employees from which to recruit (De Cieri and Bardoel, 2009). In terms of equal treatment, somestudies have shown that the MNEs in the UK that employ predominantly women are less likely to
pay above the median, in contrast to MNEs, in general, in the UK, which often pay above themedian rate (Edwards, Edwards, Ferner, Marginson and Tregaskis, 2007). Some research points to
low wages and poor conditions of workers in export processing zones, of whom 90 percent arefemale (Royle, 2010).
Research into job security in relation to MNEs is also limited. In an OECD survey of 2000 publicly
listed companies, less than 10 percent had clear evidence of job security systems. This was shown
to be linked to legislative requirements of the host country, and also to the level of union
representation in the company (OECD, 2009b). Turnover has been shown to be higher in MNEs
than in domestically owned firms (Brown, 2007; UNCTAD, 2009b) as MNEs tend to respond more
quickly to changes in labour and financial markets, through cutting back on numbers of employees,
as indicated by reports that labour costs may be cut in response to the global financial crisis(UNCTAD, 2009b). Some research has also suggested that with increasing offshore production,
labour demand becomes more elastic and the risk of job losses greater, but there is insufficientevidence for this to be a general observation (Crino, 2009); trends are likely to vary across different
sectors and occupations. Related practices, such as outsourcing and subcontracting, contribute to atrend of job insecurity (Royle, 2010). Global Framework Agreements (GFAs) between MNEs andGlobal Union Federations often include clauses on restructuring of the company, as can be seen in
discussion later in this report.

Training
Generally, there is limited, clear evidence regarding training systems in MNEs (OECD, 2009b).
Research that has been undertaken has largely focused on cultural and language training for
expatriates rather than on training for host country nationals (HCNs) (Zheng, Hyland and Soosay,
2007; Vo, 2009). Some issues that arise are whether MNEs increase the skill level of the hostcountry and whether the demand for skills decreases in the country of origin with increased
internationalisation. The pattern of skill development across developed and developing countries isalso of concern, as there is some evidence that MNEs locate low-skilled operations in countries thathave large numbers of low-skilled low wage workers, and consequently do not invest in skill
development for these workers. On a macro level, research has indicated that FDI will only
enhance skill development in countries that have a relatively high level of skills to begin with (TeVelde and Xenogiani, 2007). When foreign affiliates operate in high income countries, this also hasa negative impact on the demand for high skilled workers in the country of origin (Elia, Mariotti

New Zealand Journal of Employment Relations 35(3): 27-39

and Piscitello, 2009). This situation potentially leads to international skills inequalities (Te Velde
and Xenogiani, 2007).
In terms of the spread of investment, a recent study indicated that training expenditure, particularly
in Asian countries, is predominantly in service industries and targeted at managerial andprofessional employees (Zheng et al., 2007). There was also some evidence that non-Asian owned
MNEs invested more in training than Asian owned MNEs. A study of MNEs in Vietnam founddifferent approaches taken by US and Japanese MNEs. US MNEs had a higher tendency to appoint
Vietnamese nationals in managerial positions than Japanese MNEs. Furthermore, the US MNEs
then gave Vietnamese managers training and allowed advancement to corporate level in both local
and global spheres whereas Japanese MNEs allowed host country nationals to advance to “at least
two levels down from the top” (Vo, 2009: 1415) and had fewer training opportunities. Research
into global talent management indicates that, contrary to other aspects of work, country of origin is
not a significant factor, and that sector may impact more; for example traditional manufacturing
MNEs are more likely to have global talent management than high-tech manufacturing MNEs
(McDonnell, Lamare, Gunnigle and Lavelle, 2010).
There is some evidence that education levels may be improved by MNEs (Paus and Gallagher,
2008; Zhuang, 2008). However, there are few studies that systematically investigate the interaction
between MNEs and education and training, both within the subsidiary and for the host country
economy. This is significant because it appears that, due to the heterogeneity of the countries,
broad survey data does not indicate statistically significant connections between FDI or MNEs andskills, training or education (Zhuang, 2008).

Conditions of work and life
Conditions of work and life covered by the 1977 Declaration include wages, benefits and conditionsof work; minimum working age; and safety and health. There is little information, in general, on theeffects MNEs or FDIs have on conditions of work and life. In a recent survey of almost 2,000
companies, including some from emerging markets, the number of companies meeting ILO MNE
Declaration standards varied according to region and sector. Health and safety standards are met bymore companies in sectors that have high risks in terms of health and safety. There is also a link
between the size of the company and the likelihood of them having policy that is consistent with the
Declaration. This may be due to public profile and consequent pressure from investors, tradeunions, NGOs and consumers (OECD, 2009b).
MNEs generally pay better wages than domestic firms to employees (Almeida, 2007; Brown, 2007).
An OECD report places the difference in wages at 40 percent higher in foreign MNEs and 15
percent higher in domestic MNEs than in local firms. The differences between average wages inlocal firms and MNEs tend to be greater in developing countries (OECD, 2008). However, working
conditions in MNEs are not always better than in domestic firms, and in particular, working hours
have been found to be longer in foreign-owned firms (OECD, 2009b). With respect to labour
standards and conditions of work in general, MNEs have been shown generally to comply withminimum legal standards in the host country, and not to provide higher standards (Chinen, Wang
and Wang, 2008). Indeed, evidence indicates that MNEs usually do not export their labour
practices to foreign subsidiaries (OECD, 2009b). Large MNEs concerned with their public
reputation and brand have increasingly introduced voluntary codes of conduct (Edwards, 2011).
These often include minimum labour standards and extend the requirement of these standards totheir suppliers. Their content is similar to that of GFAs, but the codes are decided upon unilaterally
by the MNE. However, research suggests that despite these codes of conduct, low labour standards

New Zealand Journal of Employment Relations 35(3): 27-39

in supplier firms remain a concern (OECD, 2008). Further research on MNEs and voluntary codes
are clustered around global supply chains (Robinson, 2010).
There is less information on minimum working age and child labour in relation to MNEs and FDI(Chinen et al., 2008). However, contrary to general opinion, studies indicate that FDI does notincrease the demand for child labour (Iram and Fatima, 2008) and is associated with lower
incidence of child labour (Neumayer and De Soysa, 2005) and indeed, that child labour deters
inward FDI (Brown, 2007). Many GFAs contain clauses on minimum age and child labour,
although, as is explained further on in this report, the number of GFAs is still relatively small, andthere may be difficulties in enforcement of the agreements. One explanation for FDI being linked
with decreased child labour is that child labour has a negative effect on human capital stock as it
reduces human capital formation. Human capital stock has a positive effect on FDI, so where childlabour incidence is higher and human capital stock lower, it would follow that FDI will also be
lower (Brown, 2007).
Safety and health are considered important in terms of protecting the MNE‟s reputation andavoiding fatalities and regulatory fines (OECD, 2009b). As with all aspects of employment in
MNEs, country of origin effect is apparent. In a study of MNEs in China, it was found that HongKong and Taiwan based MNEs had significantly lower standards for health and safety (andenvironmental concerns) than European and US based MNEs (Chinen et al., 2008). Generally, there
is also a clear difference between MNEs operating in developed countries and those in developing
countries. Amongst OECD-European companies, 91 percent have „some evidence‟ of health andsafety systems compared with 55 percent of companies from emerging economies showing little orno evidence of health and safety systems. The sectors with the highest proportion of health andsafety systems are mining, chemicals and oil and gas (OECD, 2009b).

Industrial relations
The industrial relations section of the Declaration incorporates the freedom of association and theright to collective bargaining and consultation; the examination of grievances and settlement ofindustrial disputes and to organise. Much of the research is focused on Western based MNEs,
sometimes with subsidiaries in developing countries, but there has been little research into industrial
relations in MNEs originating from developing countries such as China (Shen, 2007). This is an
important gap in information as developing countries‟ industrial relations systems are often
characterised by weaker support for freedom of association and the right to organise (Egels-Zanden
and Hyllman, 2007). It might, therefore, be predicted that labour rights in MNE subsidiaries indeveloping countries will be lower than in developed countries. The „country of origin‟ effect iswidely discussed in the literature and this holds that MNEs‟ approach to industrial relations and
HRM in their subsidiaries will conform to their home country practices and policies (Shen, 2007;
Lavelle, 2008). However, it has been illustrated that “different national contexts provide
frameworks which allow MNCs greater or lesser flexibility for external management policies” (Voand Rowley, 2010: 234).
Overall, MNEs have a tendency to avoid unions while adhering to local legislation, particularly in
new sites. They do respond to union pressure (Edwards et al., 2007; Lavelle, 2008; Quintanilla,
Susaeta and Sanchez-Managas, 2008; Shen, 2007). The research indicates that MNEs are often
clearly unionised or do not have a union presence at all and in companies that recognised unions,the majority of employees were unionised (Belanger, Harvey, Jalette, Levesque and Murray, 2006;
Lavelle, 2008). There is a strong connection between the country of origin and level of unionNew Zealand Journal of Employment Relations 35(3): 27-39

recognition, with US MNEs less likely to engage with unions than Irish, United Kingdom (UK) andcontinental European MNEs as illustrated in figure 1 below (Edwards et al, 2007; Lavelle, 2008;
Tuselman, Allen, Barrett and McDonald, 2008). Where there is union presence, union activity isoften limited (Aggarwal, 2007; Braun, 2007). There is evidence that MNEs have taken punitive
action, such as dismissal, against employees who have tried to unionise workplaces, particularly indeveloping countries (Royle, 2010). Of further note is research that indicates that MNEs may
impact on the IR and HRM framework of the host country (Collings et al., 2008; Navrbjerg andMinbaeva, 2009).
Figure 1. Union recognition in MNEs in the UK by country of origin

Source: Edwards et al., 2007: 80.

Consultation generally occurs at a low level and is most likely to take place in unionised MNEs
(Belanger et al., 2006; Edwards et al., 2007). Overall, MNEs have advocated decentralisation of
bargaining arrangements to increase “scope for company negotiation within sector and inter-sector
agreements” (Marginson and Meardi, 2009: 28). Simultaneously, research indicates that non-union
forms of representation are increasing in MNEs (Edward et al., 2007), but that there is a lack ofaccess to collective representation for non-unionised employees (Belanger et al., 2006). Whilecountry of origin effect does influence MNEs, recent research indicates that of MNEs operating in
the UK, the differences overall were not as great as expected: “that these multinationals may beembracing voice regimes associated with dominant Anglo-American business practice and/or
escaping constraints on employee voice practice which domestic environments are perceived to
impose” (Marginson, Edwards, Edwards, Ferner and Tregaskis, 2010). Similarly to union
recognition, MNEs that recently engaged in acquisition had clearly different voice practices within
the organisation (Marginson et al., 2010).
There is scant research that investigates, in detail, the examination of grievances and settlement ofindustrial disputes, and national statistics do not distinguish between domestic companies and
MNEs. The research predominantly investigates HRM practices overall and how they interact withhost country industrial relations frameworks. One study of American MNEs in Ireland pointed to atendency to deal with grievances with employees individually rather than as a group or through theunion. This extended to group grievances (Collings et al., 2008). There is also the suggestion that
MNEs choose their locations, in part, based on the industrial relations framework of the hostcountry with factors such as weak unionisation and employment legislation and strong managerial

New Zealand Journal of Employment Relations 35(3): 27-39

authority preferred (Hewison and Chiu, 2009). It may be that MNEs operating under theseframeworks, and with unitarist goals, would avoid or suppress industrial disputes. Collective labour
disputes in Chinese-owned MNEs have been found to take place predominantly in manufacturing
and refineries where workers are largely blue collar. This study suggested that “because labour
standards in the case of Chinese MNEs were partly influenced by home standards, blue collar
workers were more likely to be employed under conditions from which disputes arose” (Shen,
2007: 422).

Global Framework Agreements
The incidence of Global Framework Agreements (GFAs) provides some indication of the coverageof the Declaration‟s clauses in MNEs. GFAs are agreements made between Global Union
Federations (GUFs) and individual MNEs for their worldwide operations. GFAs cover minimum
labour standards in their operations and usually encourage them in subcontractors and suppliers to
the MNE. The first GFA was agreed with a French company, Danone, in 1988. By December 2007,
61 GFAs had been agreed, covering a total of approximately 5 million workers (Papakakis, 2008).
As of June 2008, that number had increased to 68 agreements. Nearly all of the GFAs agreed havebeen with MNEs which are headquartered either in the European Union (EU) or the European
Economic Area (EEA). The remaining agreements have been with companies headquartered inSouth Africa (2), Russia (1), New Zealand (1), Canada (1) and the USA (1). Almost two thirds ofall GFAs were agreed to by MNEs based in Germany, France, the Netherlands and Sweden(Telljohan, da Costa, Muller, Rehfeldt and Zimmer, 2009). GFAs generally adhere to the ILO Core
Labour Standards and some include minimum conditions of employment such as wages, working
time and health and safety. Key differences among GFAs can be found in the scope of theirapplication, implementation and union rights. Many GFAs include a clause that the MNE willencourage its suppliers to conform to the GFA. Only 9 percent of GFAs assume responsibility for
the whole supply chain and 31 percent do not mention suppliers and subcontractors (Telljohan etal., 2009). Generally, GFAs represent quite exceptional cases that are heavily dependent on factors,
such as the presence of a strong trade union, management willingness to cooperate with unions
particularly as these are voluntary agreements, and a home country with cooperative industrial
relations (Telljohan et al., 2009).

Concluding comments
MNEs are becoming increasingly important as employers globally, and there are indications that
their approach to employment impacts significantly on many areas associated with the 1977
Declaration, such as national IR and HRM frameworks. The nature of their impact is mixed. On thepositive side, there are strong indications that MNEs tend to pay higher wages than domestic firms.
There is also no substantial evidence that MNEs are associated with the incidence of child labour.
On the negative side, however, they encourage unequal skills and training development between
developed and developing countries, and potentially further disadvantage employees in developing
countries. All indications are that MNEs operate at the lowest level of employment conditions
allowable by legislation in the countries within which they operate, and furthermore may contributeto other existing areas of difficulty such as pay equity.
Clearly, there are important gaps in the research into the effect that MNEs and FDI have on
employment, conditions of work, training and industrial relations on a national and global basis.
Further research is needed, in particular, in the area of EEO and pay equity; the comparative effectNew Zealand Journal of Employment Relations 35(3): 27-39

on emerging economies, particularly the demand for skills and the impact on skills or training, andknowledge transfer; minimum age of work and child labour and the impact on industrial relations ingeneral. The research across a number of the areas covered by the Declaration indicates thevariance of impact according to factors, such as the sector, home country conditions and hostcountry conditions. It would, therefore, be desirable for further research across a range of conditions
and countries.
Research has predominantly been undertaken in developed countries such as the USA, the UK and
Ireland. This is noteworthy because there appear to be significant differences between MNEs
operations in different host countries, depending on whether the hosts have developed or developing
economies, and depending on whether the MNEs‟ home base is in a developed or developing
country. With India and China becoming more important players in terms of FDI, there is aparticular need for research into the effect of MNEs in those countries. It also has been noted thatthe research is, predominantly, into large MNEs, and that more research is needed into small andmedium sized MNEs (Collings, 2008). Finally, there is little research into the effect of MNEs on
employment in Australasia, and while New Zealand is a small economy, as can be seen in recent
developments with Warner Brothers, MNEs may impact on the industrial relations framework in
New Zealand.

Notes
1

Raymond Markey and Katherine Ravenswood, The Effects of Foreign Direct Investment andMultinational Enterprises on the areas covered by the 1977 MNE Declaration of the ILO. A Global
Holistic Scan, New Zealand Work and Labour Market Institute, Auckland University ofTechnology, September 2009.
Original version copyright © 2010 International Labour Organization. Copyright of this version @2010 the Authors

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New Zealand Journal of Employment Relations 35(3): 40-60

Employment standards in world food production – the place of
GLOBALGAP supply contracts and indirect legislation.
RUPERT TIPPLES* and Richard WHATMAN**
Abstract
This paper evaluates two innovative systems which are encouraging higher employment standards
amongst those engaged in the world‟s food production. They are through retailer led supply
contracts, such as GLOBALGAP, and indirect regulation, such as the licensing of labour
contractors.
The former contractual initiative has evolved from EUREPGAP, an initiative of supermarket
retailers from Europe, which now extends worldwide. The paper outlines the evolution of
EUREPGAP to GLOBALGAP and how this retailer initiative has increased the focus on worker
welfare and development. The paper reviews how compliance with GLOBALGAP standards isachieved.
The second initiative is focused on the developed world where farm work is no longer popular.
Finding the labour supply for seasonal production processes is difficult. Consequently, migrantlabour is often utilised. However, compliance is problematic. Careful governance of labour supply
contractors can help ensure compliant employers and employees while also fulfilling the labourneeds of farmers and packers. A case study of the Recognised Seasonal Employer Scheme (RSE)
now operating in New Zealand is presented as an illustration. New Zealand has insignificant
unemployment, yet high seasonal labour needs for pruning, training, picking and packing of itsvaried horticultural produce. This is produced largely for export, and frequently has to comply with
GLOBALGAP. At the same time, there is an underutilised labour force in the Pacific. A tripartite
strategy has been developed between governments (both NZ and from the Pacific), New Zealand
farmers and growers, and New Zealand trade unions. This gave rise to the RSE temporary
migration policy. RSE requires compliance and worker care. Such a policy fits with a „Work, notaid‟ philosophy for helping impoverished Pacific neighbours, and facilitates substantial remittances
to source countries, potentially creating a „Win:Win:Win‟ situation for participants.

Introduction: rural employment relations
Food production, which is predominantly rural, is vital to us all. The rapid rise in many basic foodcommodity prices in 2008 was a salutary reminder that feeding the world‟s growing population
engages a significant part of the world‟s workforce, many of whom are subsistence farmers. In
2005, the world‟s total agricultural workforce was estimated to be 1.1 billion, of whom some 450
million held a waged status and some kind of employment relationship (FAO-ILO-IUF, 2005).
In developed countries, only a small part of the population is still engaged in „on-farm‟ foodproduction pursuits; more are involved in related sectors, often rural too, of primary produce
packing and processing. Most research and writing on employment relations, inevitably, has astrong urban focus. With the primary production sector (agriculture, forestry, horticulture,*

Dr Rupert Tipples is a Senior Lecturer at Lincoln University, Canterbury. E-mail: Rupert.Tipples@lincoln.ac.nz
Richard Whatman is an independent consultant (formerly at NZ Department of Labour) in Wellington, New Zealand.

**New Zealand Journal of Employment Relations 35(3): 40-60
viticulture etc.) forming such a significant part of the New Zealand economy and external trade, theemployment relations of the sector are vital for continued increases in production and productivityof the New Zealand economy as a whole.
However, today, rural employment relations are not just a concern of farm managers, but affect all
sectors of the economy that are not distinctly urban. Agricultural production is conceived as a
paddock to plate enterprise, with farmers being concerned about their inputs through to the ultimate
consumption of their produce. Employment relations are a concern to them anywhere down the
supply chain, especially where it impacts on their business operations (Tipples and Martin, 2006).
In urban situations, employment relations are often more collective in nature, in contrast to ruralones, where there is less collective activity among the workforce. In developed economies,
particularly, there may be a high level of legislative and judicial intervention, which sets basic
conditions of employment. That is less apparent in the developing world where the labour market isless fettered by regulation. In the rural sector too, regulation is not popular and even in developed
economies, such as in Australasia, compliance can be difficult to achieve. Further, because of thesmall scale of many businesses there is little effective collective activity among the labour force(Tipples, 1987).

Government interventions
Australia and New Zealand have had some of the most interventionist employment regimes,
particularly under the arbitration systems which existed from the end of the nineteenth century(Holt, 1986; Macintyre and Mitchell, 1989). There were attempts to extend these largely urban
employment relations regimes to rural employment too. Initially, this was partially successful forthe more collective rural enterprises such as shearing, nursery plant production and landscapegardening (e.g. Martin, 1987, 1990; Tipples, 1987). Such regimes tended to be enhanced in periodsof governments sympathetic to collective employed labour. In New Zealand, these would havebeen the Liberal and Labour governments from 1894-1910, 1935-1950 and 1999-2008, particularly.
These enhanced regimes were undone in periods of governments sympathetic to employer interests.
In New Zealand, these were the Reform and later National Party dominated governments of 19101935, 1950-1984, and 1990-1999.
The National Party led Government (1990-1999) abolished the New Zealand arbitration systemwith the Employment Contracts Act 1991. Labour market deregulation under the Employment
Contracts Act led to the collapse of collective bargaining in the rural sector (Tipples, 1995; 2007),leaving employees‟ protections to the minimum codes set by the state and price setting by themarket. The organisation of the rural labour market has been brought back into focus too by the ongoing recruitment and retention problems experienced across Australasian primary production andprocessing today. A broad interdisciplinary view of the labour market called the Human Capability
Framework was developed by the New Zealand Department of Labour in the late 1990s(Department of Labour, 1999). This has been used to investigate rural and occupational labour
markets in several different studies (Tipples, 2004). The individual employment relationship 1 canbe considered to be a microcosm of the labour market. Very similar factors interplay and the labour
market, for any area or occupation, may be considered to be the sum of all their individual andcollective employment relationships.

The Present
Today‟s issues of recruitment and retention continue to challenge the primary industries indeveloped economies, much as they have for the past half century. A recent issue of theNew Zealand Journal of Employment Relations 35(3): 40-60
Employment Relations Record2, „Changing Rural Employment‟ (Tipples, 2008) explored new waysof looking at these problems and highlighted the effects of demographic changes and the continued
attraction of urban life and employment, which draws the young away from rural areas and jobs.
What it did not do was examine the role of migration from developing countries with an oversupply of under-employed labour to developed ones with shortages in many and especially ruraloccupations. This is an area which needs more study. International experiences with short-term
migratory groups have been a widespread phenomenon, but often not a happy experience for the
short term migrants. For example, the Parliamentary Assembly of the Council of Europe wasrecently advised:
Reliance on migrant labour has become a characteristic feature of agriculture in southern
European countries, especially for seasonal activities, where a large workforce may be neededat short notice for brief periods. The work of many of these migrants is undeclared. As aresult, they have no rights to receive minimum wages or make social security contributions
and are often subject to abuse and exploitation (De Zulueta, 2003: 1).
Similar recent views can be found about other developed countries such as the UK and the USA(Rogaly, 2008; Taylor, Martin and Fix, 1997; Martin and Taylor, 2003: Weil, 2009).
That is something of concern as New Zealand and Australia consider ways to utilise the large
potential source of labour on their doorstep in the Pacific. In New Zealand, this has already begun
with the Recognised Seasonal Employer scheme. Does this scheme deliver the Win:Win:Win
outcome for New Zealand growers, New Zealand and Pacific Island governments, and Pacificworkers and their communities? Further, if countries like Australia and New Zealand have a
tradition of difficulty getting farmers and growers to be compliant with employment legislation, arethere any other new developments which may help ensure marginal groups of employees likemigrants get a better deal?

Higher employment standards from private codes
Economic liberalism in the late twentieth century led to the state withdrawing from many parts ofthe economy where it had previously played a central role. Campbell and Rosin (2007) have argued
that this deregulation was meant to unleash a burst of innovation and development from privately
funded sources, but:
What actually happened was that de-regulation left a void that was filled, in part, by theleast likely of sources. New Zealand food exports have become increasingly
characterised by new forms of governance emanating from the private sector, or fromhybrid alliances across private sector, public groups and sometimes government
agencies…we are in the midst of a rise in retailer led governance and that this hascreated the need for a shift from „economies of quantity‟ to „economies of quality‟
among food exporters. Organisations, industries and sectors that can make the jump
into the new „economies of quality‟ will not only survive, but can actually thrive in thisnew global trading environment. (Campbell and Rosin, 2007: 12)
The New Zealand Vegetable Growers‟ Association was the first primary industry group in New
Zealand to realise the significance of this change in about 1996 when an amendment to the Food
Act 1981 was passed. Appreciating future competitive advantage and, particularly, access to large
food purchasers like supermarkets was going to lie with quality production, they set up a $400,000
research study with HortResearch to improve their product quality over four years. That study led
to the New Zealand Approved Supplier Programme (NZASP) from 1999, which was a pro-active

New Zealand Journal of Employment Relations 35(3): 40-60
move by growers to face consumer concerns about food safety, the environment and quality issues.
It was a quality assurance system which provided a traceable, accountable, HACCP 3 based systemfrom crop production to consumer. Subsequently, it was extended to fruit (in 2000) and flowers (in2003) and its name went through changes reflecting Horticulture New Zealand‟s international
stance and a planned benchmarking to EUREPGAP; a quality assurance initiative of supermarket
retailers from Europe, which now extends worldwide. In 2006, it was re-branded to New Zealand
Good Agricultural Practice (NZGAP) and then in 2007, re-benchmarked to GLOBALGAP, the newname for EUREPGAP.
One feature of these changes which was not part of the original NZASP was the inclusion of clauses
concerned with employment issues. In EUREPGAP these related to health and safety issues like
protective clothing and pesticide operator training. Such factors were already covered by New
Zealand‟s Health and Safety in Employment Act 1992, but were now made part of the private
supply contracts associated with the programme. So such standards of employment were also
derived from private contractual sources which had evolved from quality assurance programmes
like EUREPGAP.

New Zealand Horticultural Industries
New Zealand is only a small country with 4 million inhabitants, situated some 2,000 kilometres tothe east of its much larger neighbour Australia. It depends, for its economic livelihood, on its
primary sector exports, but unlike Australia, does not have extensive mineral resources. Since the1970s, and particularly since Britain‟s entry into the EEC, the horticultural industries in New
Zealand have expanded almost exponentially with horticultural exports increasing from $NZ115
million in 1980 to $NZ2.9 billion in 2008. That was 2 percent of all New Zealand merchandise
exports in 1975, growing to 6.9 percent in 2008 (Plant and Food Research, 2008). Kiwifruit exports
with $NZ870.7 (million, fob) was the major horticultural export, wine followed with $NZ793.7(million, fob) and apples were third with $NZ344.9 (million, fob) exports (Figure 1).
Figure 1
Source: StatisticsNZ

New Zealand Journal of Employment Relations 35(3): 40-60
Traditionally, apples were the major export, now superseded by kiwifruit, shortly to be superseded
by wine. All of these crops have highly seasonal demands for labour, for apples and kiwifruit for
pruning and picking and for grapes for pruning alone, although grape varieties less suited tomechanised harvesting still need staff for grape picking and there are a variety of other jobs, likebud rubbing, that also require labour. These needs vary regionally as well as by crop. The
estimated labour demand for fruit production is shown in Figure 2.

Figure 2 Estimated seasonal labour demand for the New Zealand Fruit Industry, (2004)

Source: Horticulture and Viticulture Seasonal Working Group, 2005

Supermarkets
Paralleling the development of the horticultural industries in New Zealand were other majorchanges in the retail sector. More and more food came to be sold through supermarkets rather thansmall specialty stores. The old pattern of small producers sending their produce to market andretailers buying their supplies from there was overtaken by a smaller number of large purchasers –the supermarkets – buying directly from larger growers on formally agreed supply contracts. Thus,
their supplies were guaranteed throughout the year by complementing northern and southernhemisphere production seasons. Supermarkets as large corporate enterprises are concerned withmaximising their returns for their shareholders and are very risk adverse. Anything which might
damage their corporate brand image is to be avoided. Thus, they became interested in suppliercodes of conduct to ensure no „bad news‟ stories appeared about where their produce came from,what it contained and how it was produced. There is now extensive literature on such codes ofconduct (e.g. Fulponi, 2005; Hatanaka, Maki, Bain, Carmen and Busch Lawrence, 2005; Hatanaka,
Maki and Busch Lawrence, 2008), which have been used not only to avoid risk with their supplies
but also to give them a competitive edge because they are more appropriately sourced than otherproducers. Thus in the United Kingdom, Marks and Spencer sell under their „Field to Fork‟ banner,
while Tesco sell as „Nature‟s Choice‟.
As a very small player on world markets, New Zealand producers have to remain closely attuned towhat consumers are seeking by way of horticultural produce. Thus, they have to be sensitive tosupermarkets‟ requirements. Exports went to 118 countries in 2008, with most going to Australia
and Japan, but almost as much to the United Kingdom and the European Union on the other side of
the world (Plant and Food Research, 2008). That requires New Zealand growers, as niche
suppliers, to stay aware of those markets. Food scares around the millennium about the presence of
E. Coli , BSE and spray residues raised public awareness of the safety of food consumed. They

New Zealand Journal of Employment Relations 35(3): 40-60
were accompanied by concerns as to how sustainable food sources were, with the result thatretailers began to develop schemes to reassure consumers and to give themselves a market edge for
their produce. These all came together in a protocol called EUREPGAP – the Euro Retailer
Produce Working Group and Good Agricultural Practice, which was launched in May 2002.
Initially, it targeted fresh produce with the intention to be expanded to cover all agricultural sectors
and to provide critical mass and efficiencies greater than individual retailers would have on theirown. This initiative was a commercial retailer initiative and not a regulatory requirement. Further,
it applied to all supplying growers and suppliers and related coolstores and packhouses, and wasbased on documents (Rabobank, 2002).
Initially, EUREPGAP had 21 large EU food-based retailers chiefly from the UK and Netherlands.
These were allowed to overlay the EUREPGAP protocols with their own „in-house‟ requirements.
Thus, Tesco‟s „Nature‟s Choice‟, which was started in 1993, continues to profile that retailer‟s
produce. As EUREPGAP expanded and covered more produce and suppliers from more of theworld its title was changed to GLOBALGAP in September 2007.
GLOBALGAP standards can now be obtained on-line from www.globalgap.org. Certification by
GLOBALGAP permits New Zealand growers to access European markets because evidence iscollected showing that their production practices meet the GLOBALGAP standards, which include:“A commitment to maintaining consumer confidence in food quality and safety
Minimising detrimental impact on the environment, whilst conserving nature andwildlife
Reducing the use of agrichemicals
Improving the efficiency of natural resource use
Ensuring a responsible attitude towards worker health and safety” (AsureQuality,
2009)
It is the last of these bullet points that leads us directly into our area of interest: “Ensuring a
responsible attitude towards worker health and safety”. At the Geneva Regulating for Decent Work
conference in 2009 there was a focus on such non-core labour standards as “…the regulation ofwages, working hours, work/family, health and safety, security of employment and social
protection, including the ability of vulnerable workers to access these rights” (ILO, 2008).
The first part of this paper is premised on the belief that the contractual requirements needed for
GLOBALGAP accreditation reinforce local labour standards of the types specified. Not only dothey require compliance and annual inspection to ensure that, but also, they hold a far greater
sanction than the state over non-compliant suppliers. The severity of this sanction is best
demonstrated by Wal-mart, who rather than try and work with a non-compliant supplier to resolve
any employment relations concerns, terminates the relationship immediately and thus, ends thedamage potentially caused by a „bad news‟ story about the supplier – the relationship was ended
because they were „bad news‟! (Christopherson and Lillie, 2005). That is, of course, a most severe
sanction and many certificating bodies actually work with non-compliant suppliers to help them
improve and reach a satisfactory standard. The whole point of the kaizen (continuous
improvement) principle upon which all true Quality Assurance programmes are based is just that,„continuous improvement‟. Many GLOBALGAP related organisations work with this continuous
improvement strategy firmly in mind (see Box 1 describing Tesco‟s Nature‟s Choice policy). Thisis most clearly shown by the Good Risk-based Agricultural Social Practices (GRASP) initiative, but
before that is discussed it is necessary to be rather more specific about GLOBALGAP labour
standards.

New Zealand Journal of Employment Relations 35(3): 40-60
Box 1

TESCO – Nature’s Choice
Is a private quality assurance scheme applying to all fresh produce supplied to Tesco UK. It started
in the UK in 1993 and was extended worldwide in 2004. After an audit a supplier may be awarded
one of three levels of attainment: Gold, Silver or Bronze. Continuous Improvement is a key
principle, which can be based on the annual percentage audit score. Tesco have some 11,400 farm
suppliers worldwide from 66 countries. They are audited by 28 companies with 204 auditors.
The major drivers of the scheme are first customer food safety concerns and expectations. They seek
to demonstrate corporate social responsibility and seek to harmonise farm operating systems andprocedures in the global supply chain for fresh produce to give a level playing field for all producers.
The Nature‟s Choice protocol has 238 control points in seven groups:
Rational use of plant protection products
Rational use of fertilisers and organic matter
Pollution prevention
Protection of human health
Efficient use of energy, water and other natural resources
Recycling and re-use of materials
Wildlife and landscape conservation and improvement
Trained auditors with a local knowledge of crops and the local language are used where possible, but
quality control procedures are centralised to provide technical consistency and keep the integrity ofthe scheme.
Tesco, as a mass merchandise retailer, seeks to give outstanding value to its customers in thesourcing of all its foods, at best prices. To help ensure decent labour standards throughout its supply
chain:It seeks good suppliers sharing its values
It monitors performance to identify any issues. Where there are difficulties keeping highlabour standards it needs to know what they are. Audits are based on the risk associated witha particular supplier from a particular country. High risk means annual audits; low risk may
permit self-assessment, which is monitored by Tesco. Spot audits are also conducted.
Where problems arise it addresses them. For labour standards priority is given to no child,forced or bonded labour; or any abuse in the supply chain. Correction plans are expected to
be implemented within 6 months and the aim is to make the businesses concerned strong
partners and not let „difficult‟ situations or countries cause Tesco to „cut and run‟. Those thatfail to meet standards and refuse to put in place the corrective actions required are terminatedas suppliers.
To prevent problems arising it builds up the labour standards capabilities of the supplier andits own buying and technical staff. High risk suppliers are required to attend a „Supplying
with your eyes open‟ course to help attain good labour standards.
Where these problems are complex and intractable, it works with others to solve them. In
2007 Tesco worked with Ethical Trading Initiative (ETI), Global Social Compliance
Programme and Sedex (Supplier Ethical Data Exchange) on such problems.
Sources: The TESCO plc website downloaded on 15 May 2009:http:tescoplc.com/plc/corporate_responsibility/resp_buying_selling/ethical_trade and a Tesco powerpoint to a joint
UNCTAD/WTO Information session found on 23 May 2009 at:www.unctad.org/trade_env/test1/meetings/wto1/Tesco%20Nature‟s%20Choice%20Cox.pdf

New Zealand Journal of Employment Relations 35(3): 40-60

GLOBALGAP Labour Standards
GLOBALGAP standards are designed to reassure consumers about how food is produced on thefarm by minimising damaging effects of various kinds and ensuring a responsible approach to thehealth of employees and their safety (GLOBALGAP home, 2009), but it has to be recognised thatmany, lacking other viable alternatives, agree to work with poor social conditions. The labour
standards are introduced as follows:
People are the key to the safe and efficient operation of any farm. Farm staff and contractors
as well as producers themselves stand for the quality of the produce and for environmental
protection. Education and training will help progress towards sustainability and build onsocial capital. This section is intended to ensure safe practice in the work place and that all
workers understand, and are competent to perform their duties; are provided with proper
equipment to allow them to work safely; and that, in the event of accidents, proper and timely
assistance can be obtained. (GLOBALGAP, 2007)
The emphasis is on documents – a written risk assessment and a written health, safety and hygiene
policy; records of training and certificates of competence against specified control points, especiallywhere handling or administering any chemical; documented hygiene instructions and related
training. Concern is also given to whether these policies and procedures are carried out e.g.
whether subcontractors and visitors are made aware of them, and of hazards they may encounter,with appropriate advice on how to react to them if necessary. Availability and handling ofprotective clothing is also addressed. In addition a member of management has to be identified as
responsible for workers‟ health, safety and welfare (GLOBALGAP, 2007).

GRASP – Good Risk-based Agricultural Social Practices
As the call for social responsibility has emerged in global food supply chains consumers and civilsociety have drawn attention to the need for meaningful approaches to these social requirements on
farms, and in agricultural supply chains. From 2005, trials were undertaken to develop a tool tosupport farmers who were trying to show their compliance with international as well as national
labour legislation. This was not for a full social audit because it was recognised that the agricultural
mass market could not afford the cost of a full audit or high costs of compliance. However, it
provided various support devices for those wishing to improve their performance based around 14
control points. Mostly based on management documentation, only limited interviews wererequired. Farmers‟ compliance was encouraged by giving them detailed guidelines adapted to theirlocal situations. These criteria were developed in a tri-partite process between the GLOBALGAP
secretariat, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH and Coop
Switzerland. They were trialled in Kenya, Brazil, Viet Nam, Spain and Morocco.
While the GRASP module does not form part of the GLOBALGAP standards, it complements themin laying out a set of 14 control points and criteria for compliance in a similar system.
Development of the research based GRASP protocol formed an important part of informing therevision process for worker health, safety and welfare revision of the GLOBALGAP 2007 standard(Anwander, 2008). Nigel Garbutt, Chairman of GLOBALGAP, wrote:
It was reassuring to note that GLOBALGAP certified farms tended to demonstrateoverall better performance against certain social criteria. In part this can be attributed toNew Zealand Journal of Employment Relations 35(3): 40-60
the high attention paid to establishing management systems of monitoring and control
on these farms (as cited in Heise, Uhlig, Vonwiler, 2007: 2).

The Recognised Seasonal Employer Scheme
The second part of this paper is focused on the developed world where farm work is no longer
popular. Finding the labour supply for seasonal production processes is difficult. Consequently,
migrant labour is often utilised (De Zulueta, 2003; Rogaly, 2008). However, casual employment
often presents compliance problems. Farmers are often tempted to operate a cash-based,
undocumented approach because it is easier. Now, however, with the need to satisfy quality
assurance schemes and audits for the right to supply international retailers such a casual and often
illegal approach is unacceptable. In New Zealand, at the beginning of the new millennium, these
two issues became apparent at the same time – the need to maintain duly certified quality
production and the need to have the labour supply to deliver that quality product. During theLabour led government from 1999, unemployment levels continued to fall as the economy hadboomed, to the point where there was little employable labour available for seasonal tasks such as
in horticulture. High seasonal peak demands for fruit picking and packing (see Fig. 2), exacerbatedby the tight timelines for those processes needed to meet QA requirements and by the growth intotal production, were further complicated by the nature of the labour force utilised.
In the 1980s, the seasonal labour force had operated with lots of students and local families, but by
2000, the task had grown and the work had become much less attractive to students. A review of
MAF Research Reports on rural social affairs revealed the stresses in rural society, many of them
about employment (MAF, 2000). In May 2001, the Central Otago District Council drew attention
to the rapid growth in requirements for harvest labour and the difficulty of attracting labour when
the limited accommodation facilities were also under pressure from tourists. In July 2002, a Human
Resources in Agriculture Workshop resulted in Rotorua for the whole agricultural sector (MAF,
2002). It set out to define the problem, take stock of what had been done, identify gaps and suggest
immediate and longer term initiatives. Horticulture representatives reported that they had beenworking on the issues of future horticultural employment with government for some time. Ongoing changes in the industry and the difficulties of retaining staff season to season were noted:…a lot of numbers are involved in harvesting, especially fruit harvesting, and in theforeseeable future this will stay a manual job, maybe even bigger due to the technicalneeds of the market. We still need the numbers, but we need the supervisors, and the
QA people in pack-houses checking quality (MAF, 2002).
They also noted the change in demographics and suggested the industry needed to undergo a culturechange. A new organisation for governance was established: Human Capability in Agriculture andHorticulture, but its subsequent focus was more on the problems of full time staff across the sector.
By 2002-2003, the emerging employment problem, with the decline in the number of unemployedavailable for picking and the falling skills base, was being noted. There was a piecemeal response
and crisis management of the seasonal problems over the period 2000-2004 (Silcock, 2005).
By 2004, regional discontent became national and the Minister of Immigration was put on the spotin a televised debate by a squash grower who believed Thai immigrants worked better than New
Zealand‟s unemployed. The Minister did not want the issue getting out of control at a sensitive
time and called the heads of the relevant grower associations and four other related ministers
together to discuss the issue. A key meeting in which the Minister laid down the principles uponwhich the government was prepared to help resolve the industry‟s problems then followed. First, heoutlined the respective roles of industry and government. Industry had to share responsibility forNew Zealand Journal of Employment Relations 35(3): 40-60
their labour needs, actively plan for the future, and attend to recruitment and retention through good
employment terms and conditions, wages and staff training. Government would help throughgetting the mix of interventions right and help with the development of a strategy. Secondly, hedifferentiated between absolute labour shortages, with them being the concern of government andrecruitment difficulties, short term concerns more for employers. Only for absolute labour
shortages were immigration responses appropriate. Local labour had to have the priority and to be
fully utilised. He urged that “…a standard, strategic approach is required to seasonal labour
shortages rather than continuing to respond in an ad hoc manner” (Swain, 2004). He also outlined
possible short-term (2004/05), medium-term (2005/06 – 2007-08) and long-term (2008/09 onwards)
scenarios. Appropriate, good recruitment (attempting to recruit locally, engagement with Work andIncome (New Zealand‟s benefit and work broking agency), addressing housing and transport
problems, use of lawful labour and credible agents) and employer (improved business compliance,such as health and safety) practices were outlined. Government responses to industry were to becontingent upon them working together, not just on the labour shortages but also developing
industry skills and productivity. Finally, he wanted a report on industry strategy development by
Christmas 2004. However, that was to be Christmas 2005.
In the next season (2004/05), an election year, there were stories of fruit left to rot on the tree,
coupled with tales of illegal immigrants because growers were so desperate. With New Zealanddependent on its export markets, these were not „good stories‟ for overseas buyers . Also, kiwifruit
suffered serious production problems. Zespri estimated that the shortage of staff and poor quality
had cost some $20 million (Whatman, 2009 personal communication, 11 May, 2009) as well asother production damage through adverse weather conditions for total losses of $100 million.

The path to Recognised Seasonal Employers
The path from this point is difficult to follow. There were a number of different threads developingat the same time and interacting, which have been reported elsewhere in more detail than is possible
here (Hill, Capper and Wilson, 2005; Whatman, Wong, Hill, Capper and Wilson, 2005; Hill,
Capper, Wilson, Whatman and Wong, 2007; Whatman and Van Beek, 2008; Institute of Policy
Studies, 2008; Carroll, Blewden and Witten, 2008; Spoonley and Bedford, 2008; Bedford, 2008;
Ramasamy, Krishnan, Bedford and Bedford, 2008). The key ones will be outlined in turn.
1. Behind the specific seasonal labour shortage problems developing in New Zealand was awider policy context of relations with New Zealand‟s Pacific neighbours: New Zealand‟srole in the South Pacific (Ramasamy et al., 2008), the role of the World Bank, and the roleof the United Nations. The latter two wanted to tackle some of the economic anddemographic problems of Pacific countries by helping them gain access to the labour
markets of the two major developed economies of the Pacific, Australia and New Zealand.
In contrast to the ageing populations of Australia and New Zealand and their relatively low
levels of unemployment, Pacific countries tended to be have fast growing more youthful
populations and have relatively few employment opportunities (Bedford, 2008). Pacificleaders were advancing their case for access from 2004, which gained particular potencyfrom a UN General Assembly debate in 2006, just before the Pacific forum met (Ramasamy
et al., 2008).
2. The quality problems of fruit harvesting had come to the fore and yet the harvest seemed tobe miraculously gathered each year in spite of the increased labour market problems. The
standard top-down policy formulation out of Wellington via a literature review and limited
discussion did not seem appropriate, but fortuitously the Co-Chair of the working party had
an interest in an alternative form of policy development. It was more „bottom-up‟ andNew Zealand Journal of Employment Relations 35(3): 40-60„outside-in‟ than a model system in approved Cabinet Office mode driven from Wellington.
It came to be known as „practice making‟ (Whatman et al., 2005). Further, it was based on
primary research funded securely from an inter-departmental fund, thus avoiding earlytermination of the research.
3. The primary research was based in the field with workshops in industry training space inHastings, in the middle of the biggest area of apple production. The workshops:…involved practice-making by engaging the various regulators and all theelements of the industry – apple growers, contractors, quality controllers – toshare knowledge about what happens on the ground and co-design the changes
that industry needed to make, with the support for those changes from
immigration and employment environment required to transform the apple
industry…Without the primary research and understanding having been
completed, it would have not been possible to respond quickly when the top
down window of opportunity popped open (Institute of Policy Studies, 2008:
66).
4. Participants were exposed to multiple and conflicting perspectives, but managed to develop
a real understanding of how the system of „Appling‟, as it became called, really worked.
That took time, but enough time was available to develop a shared understanding…that things looked very different in practice depending upon whether you
were a low paid and poorly treated worker, the legitimate orchardist who was
at a cost disadvantage compared to the shady operator, or the regulator worried
about illegal and overstaying temporary workers, occupational health andsafety issues, tax compliance and poor social assistance and housing issues(ibid).
So the harvest was no longer perceived as a miracle but a disaster.
5. One of the key moments in the workshops was when a quality controller perceived
that there were:…disconnects between pickers rewarded on quantity, growers who wererewarded on quality, and a casualised, informal workforce; employers had no
incentive to invest in productivity with a system that worked in that way. The
key insight was that „the moment that value is added or destroyed is themoment of choice by the individual picker (ibid).
Thus to maximise crop value a sustainable workforce with the skills of repeat workers
was essential.
6. Besides the „secure funding‟ for the research, another key aspect was that it was
facilitated and conducted by outside researchers (WEB Research) working with
officials from the Department of Labour. This added a degree of independence andobjectivity with their evaluative skills, together with their knowledge of workplacelearning (Hill et al., 2007)
7. Another key feature was the risky role taken by a „policy entrepreneur‟, who kept the
project moving in the department, although there were regular changes in senior
management and there were potential personal costs attached.
8. When the policy development process could have fallen down there was significant
media attention focused on seasonal labour shortages that caused the responsible
minister to call the Strategy Group together. Because of the prior established mutualNew Zealand Journal of Employment Relations 35(3): 40-60
trust and understanding between officials and industry leaders, policy solutions
quickly resulted.
9. A serendipitous moment was added by the eventual policy paper going to Cabinet atthe same time as a paper on Pacific Labour Mobility, with the result that the RSE took
on a more specific Pacific character, which is thought to have helped its progress frombeing just a possible policy to actually being implemented. It also assisted with theimplementation of RSE because of the previously developed relationships between the
Pacific Island States and New Zealand, and the relatively more manageable scale ofundertaking a Pacific focussed RSE compared with a World-wide scheme.
10. Finally, the plans allowed for there to be some problems in the first year of operation
with sufficient resources for a response. As the Institute of Policy Studies concludes:“Working together is hard and success is not guaranteed. Sometimes however, oneplus one can equal five” (Institute of Policy Studies, 2008: 67).
Two concrete policy outcomes from these intermingled threads stand out. First, the delayed
Seasonal Strategy, which outlined how the problems would be tackled in short, medium andlong-term on 8 December 2005 and the introduction of the Recognised Seasonal Employer
scheme on 30 April 2007. To avoid having to discuss each in full, in this analysis the focus
will be on labour contractors as employers.

Labour contractors in the strategy
The problem of illegal labour was highlighted in the Strategy (Objective 2, H&VSWG, 2005),
with the presence of illegal workers being a problem in both domestic and international
markets. Illegal labour was to be progressively eliminated but without disrupting the overall
labour supply. The main section concerning contractors was Action Area 5.4 „Ensuring
compliance and moving beyond compliance‟. The competitive position of law-abiding
growers and labour contractors was undermined by illegal activity. „Illegals‟ were
fundamentally unreliable and compromised the quality, value and reputation of the industries.
Consequently government agreed to progressively enforce standards and eliminate illegal
behaviour, especially where it concerned serious exploitation and fraudulent activity.
To prevent the problems from re-appearing it proposed a national contractor certification scheme.
While most seasonal labour suppliers and growers wanted to build up long-term sustainablebusinesses, „rogue‟ contractors using illegal labour undercut the good business practices of the lawabiding ones. The contractor certification processes for horticulture and viticulture were to be
based on compliance with:
Established minimum pay and conditions
Immigration requirements
Inland Revenue requirements
Occupational safety and health requirements. (H&VSWG, 2005, Action Area 5.4)
Achievement of compliance was to be gradual with public agencies focusing enforcement activitieson „rogue‟ operators, while supporting those seeking to become legitimate. Industry was topromote contractor recognition and discourage illegal activity. The positive benefits of registration
were to be highlighted:

New Zealand Journal of Employment Relations 35(3): 40-60
Decreased risk of being prosecuted for tax, employment and immigration breaches
Support with compliance with the conditions of market assurance programmes andstandards e.g. EUREPGAP, British Retail Consortium standards
Protection of the industries‟ reputation and image (H&VSWG, 2005, Action Area 5.4).

Master Contractors and the RSE scheme
The roots of a Master Contractors‟ association had been laid in the Bay of Plenty (the mainkiwifruit area) back in 2003 among contractors who wanted to differentiate themselves ascompliant compared to others. New Zealand Kiwifruit Contractors Inc had about 70
members, who wanted recognition for their excellent business practices and ethics (Wood,2007). This pattern was readily accepted nationally in 2006 and New Zealand Master
Contractors Inc (NZMCI) was launched by the Minister, Shane Jones, in March 2008, to aid
the Recognised Seasonal Employer scheme (Jones, 2008). Not just compliance but also
industry „best practice‟ was sought (Kuiper, 2008). To ensure adequate standards NZMCIestablished a Code of Conduct and an audit procedure. The Code focuses on employment
law, and the health and safety of its staff as well as „best practice‟ (NZMCI, 2009).
Throughout, its intention has been to raise the quality and compliance bar in the industry.
With a sustainability and training focus, they are now working with post-harvest facilities topromote the organisation in the industry and improve their compliance and practices (Wood,2008). The productivity of contractors is being developed, using tailored business training
based on Government financed productivity research.

The Recognised Seasonal Employer scheme
The product of the extensive policy development process eventually came into effect on 30
April 2007. To become a Recognised Seasonal Employer (RSE) six requirements had to bemet:
To meet the policy definition of a New Zealand employer
To have a high standard of human resource policies and practices
To have good work practices
To be committed to recruiting and training New Zealanders
To be in a sound financial position
To be willing to pay market rates and „take care‟ of their RSE workers (Department ofLabour, 2009a)
Employers also had to be responsible for:
Paying half the travel costs for workers flying to and from New Zealand
Paying for at least 240 hours work
Providing at least 30 hours per week work over the period of their employment
Providing evidence of pastoral care of their RSE workers e.g. suitableaccommodation, translation, transport, availability of suitable churches to attend,
recreation facilities, and an introduction to life in New Zealand
A commitment to pay at full market rates
A commitment to contributing to the cost of removal of overstayers, if that shouldarise (Department of Labour, 2009a).

New Zealand Journal of Employment Relations 35(3): 40-60
RSE status is approved for two years but has to be accompanied by an Agreement to Recruit(ATR). Applications for ATRs are dependent on applying in the approved form, paying thefee and supporting the case with evidence showing the requirements are met. These relate to
the jobs to be filled, their terms and conditions and from where they are to be filled. With
RSE status and ATR approved, they begin their own recruitment. RSE officers are available
to help where necessary. To be suitable for recruitment workers must be:
At least 18 years old
Have an employment agreement
Have a return ticket
Satisfy health and character requirements, andBe able to show they only want to stay in New Zealand temporarily (Department ofLabour, 2009a).
Pacific countries are given priority in providing potential RSE recruits. These include
Federated States of Micronesia, Papua New Guinea, Nauru, Palau, The Republic of the
Marshall Islands, Solomon Islands, and Kiribati, Tonga, Tuvalu, Samoa and Vanuatu, thePacific „Kick Start‟ states. The latter were helped to take advantage of RSE through New
Zealand‟s Department of Labour helping develop pre-departure training and the setting up of
work-ready pools of potential recruits (Department of Labour, 2009b). Recruiting from
elsewhere requires demonstrating that a reasonable attempt had been made to recruit from the
Pacific, or that they had a previous relationship with another country. While the number ofpotential workers was originally capped at 5,000, that depended on the state of the New
Zealand labour market and whether there were any Kiwis seeking jobs. The cap was raisedby the previous government to 8,000. 3,994 workers came to New Zealand over the initialperiod (2007-2008), 74 percent from „kick-start‟ countries in the Pacific, 6 percent fromanother non „kick-start‟ country and 20 percent from other countries, mainly Asian. 273
workers had returned home at 30 April 2008 and 3,721 were still in New Zealand(Department of Labour, 2008). Just over a year later (28 May 2009) 5,408 RSE workers werein New Zealand and 5,327 had gone home. They had been employed by 411 approved
employers (Department of Labour, 2009c).

Initial Outcomes of the Recognised Seasonal Employer Programme
While it is very early to speculate on the success of this programme, there are already some very
positive indicators that it is indeed supplying the Win:Win:Win outcome suggested earlier. First,
the World Bank initiated some tough evaluative studies of the scheme. A survey of 2,000 Tongans
revealed that the RSE scheme had opened up the prospect of seasonal migration opportunities tomany poor, rural households in Tonga. Some 20 percent of men of working age were offering
themselves as part of a work-ready pool, with some 800 having the chance to work in New Zealand(Gibson, McKenzie and Rohorua, 2008). Of those who wanted to come from Vanuatu, those with
better health records, more work and overseas experience, and with better English literacy tended to
be favoured. They tended to be males between late 20s to early 40s, with some relatives in New
Zealand and less likely to smoke or drink. More than 1,600 ni-Vanuatu had been allowed to workin New Zealand by May 2008. Poor information had discouraged some prospective applicants andreturned RSE workers are suggested for briefing new contingents. Workers had a predominance offinancial and individual motives and a desire to have the chance to learn English (McKenzie,
Martinez and Winters, 2008). In terms of short term financial gains, the households of Tongan

New Zealand Journal of Employment Relations 35(3): 40-60
participants of the RSE scheme had per capita income increased by almost $US 300, but there was
no apparent impact on their consumption (Gibson and McKenzie, 2008).
Informal comment suggests that remittances, which vary widely from a maximum of about$NZ16,000 in one Tongan case and an average of $NZ7,000, have made real differences for things
like siblings‟ education rather than conspicuous consumption (Department of Labour, 2008).
Besides the remittance taken home and their economic multiplier effects, there are also the formal
work skills that may be transferable; also, the other social skills and informal learning from being ina different and more developed country. Then there are the less tangible benefits of eyes being
opened to a different reality, choices extended, of human capabilities being built up (Sen, 1999),
and enhanced self esteem having travelled, flown, and lived in New Zealand.
The great advantages of the scheme for the „sending‟ communities has best been summed up by
Tuatagaloa Joe Annandale, a senior matai of Poutasi village on the southern coast of Samoa. He
came to appeal to the Pathways migration conference in Wellington on 3 November 2009 to keep
the RSE scheme going because it gave hope of significant employment for his people. But he hadcome at a time of great personal trauma, having lost his wife, six family members, his business andall the 2010 RSE paperwork in the devastating tsunami which had hit his community only a few
weeks previously. That he had come at such a time was quite unexpected by the conference
organisers but spoke eloquently of the seriousness of the issue of the RSE scheme to his community
so soon after the tsunami. Further, he appealed to have the paperwork involved in the scheme
reduced because it was such a burden and its loss would slow down his people getting involved in
the RSE in 2010 (Annandale, 2009).
Besides the benefits to workers and their communities, growers and employers have also benefitted.
Initial teething troubles threatened to undo the scheme in the first year but the organisers had
allowed for problems and were prepared for difficulties. A colleague taking a Lincoln University
student field trip to the Central Otago apple growing area in April 2008 reported that the workers
had learned how to get time off work for injuries received in work accidents at public expense andthe growers encountered had tales of woe. After the similar trip in 2009, his report was quite
different. Growers had suddenly discovered the virtues of the scheme with a certain workforce,
returning workers who did not have to be trained again, and who could help their „new‟ colleagues
get to grips with the work and living. Further, there were also stories of New Zealand growers
making efforts to help the communities from which their workers came. So, the RSE scheme seems
to be achieving a Win:Win:Win outcome, which will be more thoroughly investigated with thepassage of time. A positive official Summary of Evaluation findings from Recognised Seasonal
Employer (RSE) Policy – First Season (2007-08) was published in June 2009 and the government
announced that the strategy would continue, with minor improvements. HortNZ CEO, Peter
Silcock, said:
It is simply a case of being able to pick an apple when it is meant to be picked, not a
week before, or a week after. Pick it at its best and it will store better, travel better andlook better on the shelf (Horticulture New Zealand, 2009).
The final word should rest with a representative opinion of the fruit trade, the UK‟s Fruit Produce
Journal:Pacific Islands labour in New Zealand is proving a bigger factor than even an improving
new variety profile in helping growers deliver high quality fruit to market, the country‟s
top-fruit industry body has said…‟New Zealand apples are taking the place of othersouthern hemisphere apples in our markets offshore because the quality is higher‟…‟We
have one of the best-quality crops we have ever had, but Pacific Islands labour has

New Zealand Journal of Employment Relations 35(3): 40-60
fundamentally changed our ability to deliver quality to the market. It is bigger eventhan changing varieties – being able to pick the crop at exactly the right time in terms offruit maturity is a huge fundamental change (Hammond, 2009: 1)

Notes
1

The employment relationship has been described as a notion creating a legal link between an
employee and an employer to “…whom she or he provides labour or services under certain
conditions in return for remuneration” (FAO-ILO-IUF, 2005: 13). It is a concept common to alllegal systems and traditions but the obligations, rights and entitlements associated with it vary fromcountry to country.
2

The Employment Relations Record is the refereed Journal of the Pacific Employment Relations
Association (PERA).
3

Hazard Analysis & Critical Control Points.

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New Zealand Journal of Employment Relations 35(1): 61-79

The Land of Milk and Honey? The contemporary working lives ofcontingent youth labourDANAË ANDERSON* and KRISH NAIDU**
Abstract
The 90th anniversary of the International Labour Organisation (ILO) in 2009 and its „Decent Work‟
campaign presented an opportune time to investigate contingent youth labour and, more
specifically, student migrants. Underpinning this investigation is the fact that the export educationindustry is one of New Zealand‟s fastest growing, high-value, service export sectors and is the fifthlargest export earner. This paper examines the type of employment involving youth international
students and presents tentative evidence to show that many international student workers are forced
into exploitative and illegal forms of employment. It is also argued that given that the international
education market is a significant contributor to New Zealand‟s economy, this area of research has
wide policy implications. Finally, we ask the question: what potential reach does the ILO have to
mitigate concerns associated with student migration?

Introduction
Financial, cultural, and educational exchange in a “shrinking world” (Infometrics, NRB and
Skinnerstrategic, 2008: 12) means nearly three million tertiary students worldwide are involved informal education outside their own country (Binning, 2010). Indicative of worldwide trends, export
education has become increasingly important for the New Zealand economy, making up nearly 7
percent of New Zealand‟s export earnings and generating $2.3 billion in foreign exchange earnings
for the local economy (Butcher, 2009). Export education foreign exchange earnings are higher as aproportion of GDP for New Zealand than any of the other main destination countries New Zealandcompetes with for foreign students (see Tables 1 and 2; Education NZ, 2008a). In 2008/09, 73,926
international students were approved to study, a 6per cent increase from 2007/08 (Education New
Zealand, 2008b; New Zealand Visa Bureau, 2009). The largest category of student approvals was
fee-paying students (82 percent), the main approval category being for those aged 18 to 24 years.
Traditionally, students have come from China, South Korea, and Japan but numbers from thesecountries are falling, with Indian student numbers increasing. Changes in demographics are salient,reflecting not only how New Zealand is perceived as an education provider domestically, but also
its reputation overseas1.
Table 1: International University Students/Overall Population

Country / Population

Int. Unit Enrolments

Australia
21,487,000UK
61,186,000
New Zealand
4,286,000
Canada33,432,000USA
305,682,000
Source: Education NZ, 2008a177,760
237,765
21,13690,000623,805*

Int. Students
population
8.27
3.89
4.93
2.69
2.04

per

1000

Danaë Anderson is a Lecturer in Employment Relations at AUT.
Krish Naidu is a Masters student at the University of Auckland and a Lecturer at the Auckland Institute.

**New Zealand Journal of Employment Relations 35(1): 61-79
Table 2: International Education as a percentage of GDP

Country
New ZealandAustralia
UK
CanadaUSA
Source: Education NZ, 2008a% of GDP
1.13%
1.06%
0.40%
0.25%
0.16%

The international educational sector has not only grown considerably in the past decade but it has
generated a number of interconnecting issues, including the transnational migration of people,
economic imperatives of education, and potential conflict between education and paid work. While
research to date has focused on migration outcomes (Ward, 2008; Bauder, 2006; Coppel, Dumont
and Visco, 2001; Deshingkar and Start, 2003; Khoo and Birrell, 2002) or educational results, there
is limited analysis delving into student migrants who are students and are also working (Nyland,
Forbes-Mewett, Marginson, Ramia, Sewer and Smith, 2008). Existing research indicates that
migrants are overrepresented in negative work outcomes, including poor occupational health andsafety (Benach and Muntaner, 2007; Loh and Richardson, 2004). For many student migrants, theirvulnerability may be increased when employed in jobs characterised by low wages, insecurity, andunclear employment relations legislation (Haque, 2002; Mackenzie and Forde, 2009; May, Wills,
Kavita, Yara, Herbert and McIlwaine, 2006).
This article explores the work experiences of student migrants in order to ascertain whether the
students participating in the study are experiencing marginalised and precarious conditions of
employment. Beginning with a background of the issues inherent in student migration to New
Zealand, a description of the characteristics of the student migrant worker will then be outlined.
Finally, the initial findings of exploratory research will be presented, including the potential role for
the ILO to address prospective labour market issues.

Student Migrant Work
While sizeable research quantifies the value of the education export market (Infometrics et al, 2008;
Education NZ, 2008a; OECD, 2010a; b), there has been little evaluation of the experiences students
have while studying in New Zealand (see Ministry of Education, 2006; Deloitte, 2008). As statedpreviously, to date the discussion has largely concentrated either on the working experiences of
migrants or the educational experiences of international students rather than examining the working
experiences of student migrants.
While little is known about the working experiences of student migrant workers, they arenonetheless emblematic of the internal and external diaspora of labour and increased
interdependence between countries in terms of the exchange of labour (Cerny, Menz andSoederberg, 2005; Gill, 1995). The “subsequent fragmentation of employment relationships and thedeclining rate of trade union membership and collective action” (Council for Europe, 2005: 237)
have further eroded worker protection, particularly for those more vulnerable workers. Researchalso shows that there has been exponential growth in precarious, non-standard employment
arrangements in which employing migrant labour is now widespread, particularly in industries
where non-standard, precarious employment is the norm (see Dyer, McDowell and Batnitzky, 2008;
McLaren, Firkin, Spoonley, Dupuis, de Bruin and Inkson, 2004; OECD, 2009). Young workers also
share a number of employment characteristics with migrant workers in that they are more likely totolerate „flexibility‟ and unpredictability in their employment conditions, as discussed below(Nicole-Drancourt, 1992). Moreover, by the very nature of their immigration status, student migrant
workers are contingent labour. As with most other countries, the New Zealand immigration

New Zealand Journal of Employment Relations 35(1): 61-79
regulations covering migrant student workers dictates that they can only work twenty hours per
week. Nonetheless, this is not to conclude that all student migrants are involved in precarious work,
rather that many may have poor employment conditions due to a variety of factors such as language
difficulties, qualifications, work experience, and discrimination (Deloitte, 2008).
International research has also begun to explore the possible effects on wellbeing of different formsof work, such as shift work, being on-call, temporary, and part-time employment (Reitz, 1998;
Pledger, Cumming, McDonald and Poland, 2009). In particular, researchers have begun to make alink between precarious and hazardous employment, conditions, poor pay, low union density andthe use of vulnerable workers, such as migrant labour (see Quinlan, Bohle and Lamm, 2010;
Funkhouser, 1993; Pollert and Charlwood, 2009; TUC, 2008; Cellier, Eyrolle and Bertrand; Ehrlich
et al, 2004; Sargeant, 2009; Sargeant and Tucker, 2009). There is growing evidence that workers
employed in informal work arrangements also have an above-average level of injury and illness,and report higher levels of work-related stress compared with workers employed in more formal
working arrangements within the primary labour market (Virtanen, Kivimaki, Joensuu, Virtanen,
Elovainio and Vahtera, 2005; Quinlan et al, 2010). In particular, there is emerging research toindicate migrant workers are frequently exposed to hazardous work conditions, and have higher
rates of injury and illness compared to non-migrant workers in standard employment (McKay, Craw
and Chopra, 2006; Bohle, Quinlan, Kennedy, and Williamson, 2004).
While there is some labour market data to indicate that youth international students are overrepresented in sectors where temporary and casual work is endemic, including agriculture, theservice sector, and hospitality, there has been, generally, a lack of focus on youth labour and, inparticular, on international students; and a paucity of information about the impact of student
migration on the workforce in New Zealand. Further, the incomplete statistical information
available captures only those engaged in the formal economy whereas the secondary labour market
is where contingent work is situated. Complexities arise in capturing meaningful data sets fromsuch workers as limited statistical data is collected (see Department of Labour, 2007b; Coppel et al.,2001). Literature tends to focus on quantifying the proportion of students employed and financial
imperatives (Bexley, Devlin, James and Marginson, 2007; Curtis, 2000) or the effect employment
has on academic results and wellbeing (Manthei and Gilmore, 2005; Merwood, 2007; Riggert,
Boyle, Petrosko, Ash and Rude-Parkins, 2006; Zimmer-Gembeck and Mortimer, 2006).
Nonetheless, the adverse effects of working while studying have been highlighted by McDonald,
Bailey, Oliver and Pini (2007). The authors note that student workers are vulnerable to employer
exploitation because of their limited work skills, high unemployment, under-employment, and poor
knowledge of their rights. Many students find it necessary to work while studying, given thefinancial constraints they face while living in a foreign country, away from the economic security
blanket of their home environment.
In 2007, the Ministry of Education and the Department of Labour (in Deloitte, 2008) acknowledged
the lack of knowledge by integrating a number of new questions into the National Survey ofInternational Students focusing on international students‟ experiences of working in New Zealand.
Thirty-five percent of the students surveyed indicated that they were currently in part-time
employment, mainly in hospitality or retail sectors. The main reasons students gave for opting towork part-time were to meet living and tuition costs, with 47 percent of students stating this wastheir main reason for working. Just over a quarter of students (26 percent) sought work experience
directly relating to their area of study and a further 21 percent of students worked part-time simply
to gain general work experience in New Zealand. Nonetheless while many student migrants work inaddition to their study significant quantitative or qualitative information is not routinely collected to
inform policy or debate.

New Zealand Journal of Employment Relations 35(1): 61-79

Methodology
Initial concerns regarding student migrant workers were signposted during research for two Masters
theses Safe Enough? The Working Experiences of New Zealand Children (Anderson, 2010) and
Employers’ Use of Professional Contractors: Supplement or Substitute? (Naidu, 2011). More
broadly, the research sought to discuss the working conditions of student migrants and whether
there is cause for concern. Auckland was considered an appropriate location to base the research as
it is the primary youth migrant location (Department of Labour, 2007a). The numerous difficulties
associated with researching migrant labour are acknowledged, as with any other vulnerable group(see Boocock, Hannif, Jamieson, Kjaer, Lamare, Lamm ... Wagstaffe, 2010; Jayaweera andAnderson, 2009). In particular, it is often problematic locating research participants who arewilling to speak about their experiences, while language or cultural differences may affectcomprehension of the issues as well as fear of „being found out‟ for working illegally. Therefore, it
is important to recognise that „official measurements‟ may fail to capture detailed work experiencesand definitional issues as well as inconsistencies are inherent in attempting to gather data of thiskind. For this reason, a qualitative methodology was considered most appropriate to gain a more
complex understanding of student migrants‟ working experiences reflecting multiple „realities‟, andacknowledging major differences in ethnicity, place of study and language competency (Patton,
2002; Denzin and Lincoln, 1998; Golafshani, 2003).
Questions were asked in a survey where most questions followed a yes/no format, while otherquestions were open-ended, allowing respondents to voice their opinions in greater detail. Duringinitial exploratory research, 74 surveys were collected. A further 10 student migrants wereinterviewed using open-ended, semi-structured questioning to further explore themes identified
during the surveying phase. In all cases, participation in the research was anonymous and voluntary.
Survey respondents were all university students, while the interviewees were from private training
institutes and university. The student population here represents a number of ethnicities (see Table
3). All participants were aged between 18 and 25, consistent with definitions of youth and thedominant age group for migration for tertiary education (Kritz, 2006; Docquier and Marfouk, 2006).
Table 2: Gender
GenderNumberFemale32 (43.2%)
Male
42 (56.8%)
Total
74
Table 3: Ethnicity of Survey Respondents

Ethnicity
Asian:
Chinese (27),
Malaysian (5),Japanese (3)Indian (38)AfricanEuropean: Russian (4),German (2), French (2)Total

Number of
respondents
63 (85.1%)

3 (4.1%)8 (10.8%)74

New Zealand Journal of Employment Relations 35(1): 61-79

Key Findings and Discussion
Survey questions were designed to explore typical working experiences, centring on the themes ofjob types, wages and hours worked, working conditions, and health and safety. As questions were
designed to capture the working experiences of a different cohort, some detail was missing.
Therefore, the interviewing phase was intended to capture greater detail as well as seeing if survey
findings could be indicative of concerns in the broader student migrant population.
Types of Work
Candidates were asked what jobs they worked in and while the types of work engaged in werevaried, for the size of the survey (n = 74), over half the workers (42) were clustered in thehospitality and service sectors while a small but significant number were in agriculture (12 in total),
typical of the New Zealand workforce (Callister and Didham, 2010) (see Table 4), but also sectors
where illegal workers are significantly represented in (Garson, 1999; ICFTU, 2001; Allen and duGay, 1994). Of note was the lack of professional positions listed, consistent with Deloitte‟s 2008
findings. This indicates student migrants may be concentrated in jobs at periphery of the labour
market (see Atkinson, 1984; Walsh and Deery, 1997). In positions such as agriculture, there has
been sustained media commentary that these jobs are unable to be filled by the domestic population,
but “in most cases the pay and working conditions are poor and this is the key reason these jobs are
not filled locally” (Minto, 2009). A number of those interviewed mentioned the difficulty forthemselves or friends finding work in the current recessionary climate, citing lack of New Zealandexperience, racism and not having networks through which to find work as the primary obstacles.
Table 4: Types of WorkJob category
Types of work
Manual labour
labourer, tiling, maintenance for a hire firm, light labouring, bulldozer operator,
house painter
Agriculture/
tomato packing, hothouse work, agricultural production, stable hand, milking
horticulture
cows, strawberry picking, fruit picking
Administration
receptionist, office administration, data entry
Retailgift shop, clothing, checkout operator, fast food, cashier
Hospitality
bar waitress, bartender, pub work, translator, receptionist, delivery driver,dishwasher, waiting tables
Other
cleaning, paper round, factory work, housecleaning, computer repairs, cargroomer, busboy, shelf stacker

Wages
Of the survey respondents, 28 out of 74 (or 37.8 percent) of respondents had been paid below thestatutory minimal (at the time $12.50 per hour). This is a significant proportion, meaning almost 4
in 10 workers were being paid illegally and (presumably) cash in the hand. Particularly low pay
rates were widespread in agriculture and horticulture where almost all workers (21/23 or 91.3
percent) were paid illegally, with 75 percent of all workers reporting illegal pay rates. This isconsistent with Ross and Rasmussen‟s (2009: 96) contention that “migrant workers are foundworking in horticulture „under the table‟ for as little as $6 an hour (less than half the statutorywage)”. Of all 74 respondents, only 7 were earning significantly above minimum wage ($20+ perhour), with most (n = 26) earning between $12.50 and $15.00, and a few (n = 13) earning between$15.00 and $20.00. Those reporting persistently low, and in many cases illegal wages are cause forconcern:

New Zealand Journal of Employment Relations 35(1): 61-79
Chinese female, 18 years. Working at a discount store: „I couldn‟t find anything. I know the (minimum)
wage is more than $10 ($12.50) but (I) am lucky to work. Most of my friends can‟t find anything- so $7.00
is ok‟.
Indian male, 23 years.Works in a shop: ‘It (the pay) should be $15 to $18/ hour because expenses in city ismuch more as room rent is $130/week without grocery‟ (paid $10.00 per hour).
Indian female, 20 years. Washes dishes in a restaurant: ‘They said they would pay the minimum wage.
But when I got my pay it was only $8.00 (per hour). I asked them (why) and they said business was quiet
and it was better if they paid cash to me. I know this is not allowed but I have no choice‟.

Hours of work
Limited research suggests many migrants work far in excess of stipulated hours although
information of this type is difficult to gather (for further discussion, see Chen and Madamba, 2000;
Green, Owen and Jones, 2007). This is consistent with others engaging in low-skilled work, where
the general trend is for longer hours further exacerbated by low pay rates (Boniface, 2007). In thecase of student migrants, most are able legally to work up to 20 hours per week during semester
time, and through the holidays if they have a visa allowing entry for longer than one year
(Immigration New Zealand, 2010). However, students may work in excess of their visa conditions
due to financial imperatives, such as repayment of educational loans as well as finding the cost ofliving in the host country higher than anticipated2. Initial findings indicate that pressure for extra
hours is usually from the employer‟s side, and indications are that long hours may compromise thestudent‟s attendance and performance at their tertiary institution (Curtis and Shani, 2002). The
adverse effects of working while studying were highlighted by McDonald et al (2007) in Australia;
while research by Neill, Mulholland, Ross and Leckey (2004) identifies fifteen hours of work as apoint beyond which “there may be a detrimental effect on academic performance” (ibid:136).
Survey responses indicated the majority of respondents worked between 15-20 hours per week (42,or 56.8 percent). However, the second largest proportion admitted typically working over twenty
hours (22, or 29.7 per cent), while eight declared they worked fulltime (40 hours or more). Thismeans over a third of the sample were working in clear violation of their visa conditions while
many in the sample were „on call‟ and working on a casual basis (28 out of 74, or 37.8 per cent).
Such conditions are not illegal, but in the current economic climate, with a lack of jobs in general,
the employment environment for migrant workers can be seen to have worsened (see Wu, Guo andSheehan, 2010; ILO, 2010).
Due to the high incidence of precarious work indicated by surveying, interviewees were asked, in
more detail, about the hours they worked. All ten interviewees said they had been asked to, or had
worked more than the allowed 20 hours per week. This result is inconsistent with Deloitte‟s 2008
findings where only five percent of the student population surveyed outlined that they worked morethan 20 hours per week, 47 percent stating they normally worked between 16 to 20 hours per week.
However, McInnis and Hartley (2002) believe that many international students are unwilling toadmit to working more than 20 hours per week as the consequence for working outside this limit
involves withdrawal of the study visa. Therefore, one could reasonably assume that when student
migrants are speaking to a regulatory and enforcement authority they may not necessarily give an
accurate picture of their working hours or conditions. Responses below indicate instability ofguaranteed hours, but also pressure to work longer hours if and when it suits the employer:
Korean male, 24 years. Working in horticulture outside Auckland: “It‟s (the job) not so bad. Too muchtravel - but they pay for that. Sometimes it is hard to fit in study, but I need a job. They want me more hours(than I am allowed). And they are not nice to me. Boring? Yes, but I have a job”.

New Zealand Journal of Employment Relations 35(1): 61-79
Thai male, 21 yr old hospitality student: “I work a lot at a Thai restaurant in the city, there are no fixed
hours, and I get called whenever a function is scheduled or large booking are made during the weekdays. In
the weekends I am always working all day. I thought doing a hospitality course will open doors for me, but
all I can find work is in Thai takeaways or restaurants. The pay is minimum wage and usually weekend
Saturday work is more than10 hours with no extra benefits, last week I came to work on Sunday and it was
not busy during the day and I was told to go home and that the manager and the wife will manage it”.
Malaysian female, 20 years. Works in a restaurant, waitressing: “Good to earn some money, but latenights, long hours. It is hard to get home (at that time). And I can‟t get time off when I need, only when hewants. There is no minimum working hours - makes it difficult when there is no work”.

Health and Safety
Growing evidence indicates migrant workers are frequently exposed to hazardous work conditions,and have higher rates of injury and illness compared to non-migrant workers in standard
employment (Bohle et al., 2004; Sergeant and Tucker 2009; McKay et al 2006; Bennett, 1993). In
addition, workers employed in informal work arrangements are much more likely than formal
workers to be exposed to poor working environments, low safety and health standards andenvironmental hazards, and report higher levels of work-related stress compared with workers
employed in more formal working arrangements within the primary labour market (Withiam, 1997;
Quinlan and Mayhew 2001; Virtanen et al, 2005). As a result, there is acknowledged difficulty inaccurately measuring the wellbeing of all migrant workers as government databases rarely capture
the working experiences, occupational injury, fatalities, and compensation claims of precariouslyemployed workers (Boocock et al, 2010).
Taking an encompassing view of health and safety by recognising factors, such as workplacesecurity and working conditions, survey respondents were asked whether they felt safe in theirworkplaces, and why or why not. Of the 74 surveys, five chose not to respond while 46 (62.2
percent) answered that they did feel safe. However, a number answered with qualifiers such as “butI get left alone at night”, “drunk men make me feel nervous” or “I know some of what I do is not
my job and I shouldn‟t (be performing the tasks), but that‟s ok”. The remainder (23 or 31.1
percent) answered that they felt unsafe in the course of their work and had experienced unsafe
working practices:
Chinese female, 19 years. Enrolled at a private training institute. Working in a gift shop (Solecharge): “Often I don‟t feel safe… Late nights and by myself. I worry… hope they (the customers)
are not shoplifting. My English is not good to tell them no”.
Vietnamese, male, 24 years. Cleaning in a hotel: “Language difficulties you know. Sometimes it
hard to understand what they (bosses) saying. Cleaning job is so hard, and it makes a lot of physicalproblems”.

Working Experiences
While the variety in students demonstrates diverse working experiences, universal themes wereidentified relating to job types, equity issues as well as workplace safety. Indicators of vulnerability
were also identified, namely working hours in excess of visa conditions, rates of pay below legal
minima, and insecurity of work: either through contractual arrangements or in the type of work
engaged in. Nevertheless, not all findings were negative; with 35 per cent (26 out of 74) of survey
respondents citing gaining New Zealand work experience, meeting New Zealanders and financial
security as positive factors of their work. Overwhelmingly though, at both surveying andinterviewing stages recurring themes of fairness, equity and poor working conditions were evident:New Zealand Journal of Employment Relations 35(1): 61-79
Indian female, 19 years. Works for an Indian restaurant, cleaning dishes: “I got the job from a
guy I met here, he knew the family. Everyone is Indian, they know we work hard. The job is bad, but
I have a loan, and if I stay I need (work) experience. They (the owners) are not friendly - if you ask foranything they (the owners) let you go. So I just do my job”.
Indian male, 20 years: “It took me 5 months to find a part time job in Auckland, when I finally found
one as store man in a large Indian grocery store I was asked to do 3 weeks free training, I said yes
because I thought training will allow me to get the job, but after my training finished I was told its notbusy now and that I will be called when it gets busy again, I later found out that the manager did thisfor other students before me. Not only did I waste my time I did not get paid for training”.

A common trend was identified where a number of students felt that they had been given inaccurate
information before arrival regarding high living costs in Auckland, as the statement below illustrate:
Malaysian male, 22 years. Working as a liquor store manager without a manager’s license: “It‟sexpensive to live… more than they said. So sometimes I miss class, for extra money. I don‟t like it(the job), but I need to work”.
Russian female, 21 years. Working in a clothing shop and office cleaning: “I was told there weregood jobs in New Zealand, better (than Russia). (That may be) true but I cannot get them”.

Interviewees were asked whether they knew their employment rights. All ten had extremely limited
knowledge of legislation governing employment practices while some had been threatened withbeing reported to immigration if they questioned the terms of their employment. They also indicatedthat jobs are quickly obtained through „word of mouth‟ within ethnic communities, where student
migrants assume positions in low-skilled manual labour, service and hospitality, or in agricultural
positions such as fruit picking. Often positions are organised through networks soon after arrival,
and pressure is applied so more hours are worked than the legitimate twenty. This type of work has
been found to be over-represented in having poor and/or illegal working conditions (Shelley, 2007;
Pai, 2008; Minto, 2009).
Responses indicate that the scope of contingent youth labour practices is not just limited to young
people simply having part-time jobs while studying. Initial findings indicate workers on overseas
student visas provide a supplementary source of labour, with relatively little protection of work
availability of conditions. Indicators of vulnerability were identified, namely working hours inexcess of visa conditions, rates of pay below legal minimum, and insecurity of work, either throughlack of protection or the type of work performed evident is that fear and poor knowledge are used astactics by some employers of student migrant workers to mitigate wage demands and employment
conditions. The Department of Labour‟s 2010 Life After Study: International Students’ settlement
experiences in New Zealand indicates that 69 percent of international students surveyed did nottransition to work or residence, and most had left New Zealand within five years of getting theirfirst student visas3. These concerning findings indicate structural problems in New Zealand student
migrant protections where student workers may be vulnerable not only due to their working
conditions, but also limited in their future opportunities within the labour market. It is therefore,
appropriate to discuss the ILO‟s role in multilateral governance, and its potential influence on
domestic regulation.

A Role for the ILO?
As we have argued, the 90th Anniversary of the ILO was a fitting time to examine the organisation‟srole in establishing multilateral convention framework aimed at protecting and promoting the rights

New Zealand Journal of Employment Relations 35(1): 61-79
of all workers and, more specifically, to see whether or not the ILO is capable of exerting pressure
on domestic policy to ensure the legal protection for student migrant workers. Notwithstanding, therole played by the ILO in influencing labour rights policies in various contexts is a matter ofcontention (Simpson, 1994; Alston, 2005; Rodgers, 2007) and while it may appear that the student
migrant workers are covered by multiple conventions, there are inherent difficulties and a level ofambiguity for a number of reasons.
First, at an initial glance, student migrant workers are not only covered by conventions related toeducational access, namely ILO Conventions‟ Numbers 169 and 182, (which is considered a social
protection in and of itself), but they could also covered by the ILO Conventions Numbers 97 and143 pertaining to migrant workers. In addition, the Decent Work Agenda4, which seeks to address
exploitative and hazardous working conditions and poor wages, may also extend to student migrant
workers. The Decent Work Agenda (which is not subject to ratification) is an articulation of the
ILO‟s four strategic objectives of creating jobs, guaranteeing rights at work, extending social
protection, and promoting social dialogue (ILO, 2010; International Labour Office, 2009).
However, under closer scrutiny, student migrant workers, per se, are not necessarily classified as„vulnerable workers‟ under standard ILO definitions and are specifically excluded from the ILO‟sdefinition of migrant workers (see Elder, 2009 for further discussion; Nyland et al., 2004). Deumart,
Marginson, Nyland, Ramia and Sawir (2004) argue, however, that student migrant workers ingeneral should be covered by ILO protective conventions as they are indeed “vulnerable workers”
given that as...a globally mobile population they fall between the borders of the two national citizenshipregimes, the nation of origin and the nation of education. There is no bilateral or multilateralframework whereby these national regimes are reconciled. Nor do the international agencies
take up questions of student security (ibid: 1).
Second, for those young, student migrant workers employed in hazardous working conditions forlong, non-standard hours and poor pay, there is a raft of protective ILO Conventions, commencing
with the most basic rights pursuant under Conventions 1, 2, 5, 6, and 7 that pertain to minimum
working age, including restrictions around working at night. But for many of the interviewees andrespondents in this study, working in the informal economy was a reality; and while the ILO
Conventions are as relevant in the informal economy as they are in the formal economy, there is atension within the ILO between its position of „promoting‟ employment in the informal economy asa convenient, low-cost way of creating jobs versus eliminating the often appalling conditions andpay inherent in this segment of the economy (see ILO, 1991; 2002 for further discussion).
Moreover, the lack of resolve by most governments, including New Zealand, to either ratify or
enforce the ILO Conventions or enact related regulations remains a significant barrier to universal
protection of young student migrant workers.
Third, in a world where there is an unprecedented diaspora of labour and where businesses typicallyoperate across jurisdictions, combined with a demand for labour market flexibility and increased
labour productivity, questions are being raised as to the efficacy of both the ILO and governments
to address the needs vulnerable workers. Constrained by its tripartite structure, its generally
pragmatic approach and the inability to reconcile the divergent national interests have undermined,some would argue, the ability of the ILO to be effective in maintaining a coherent protective
framework for “invisible” vulnerable groups of workers, such as student migrant workers (Douglas,
Ferguson and Klett, 2004). Keohane and Nye (1977) also argue that given the multitude ofdifferent agendas operating within the multilateral institutions like the ILO, the line between
domestic and foreign policy becomes blurred. However, Cerny et al (2005) negate the conception ofinternational and domestic politics as being two separate arenas, “but parts of an interpenetrated setof webs of politics and governance that increasingly cut across and entangle the nations of theNew Zealand Journal of Employment Relations 35(1): 61-79
world…” (ibid: 1), consistent with Ohmae‟s (1990) early theorising of globalisation as moving
towards a “borderless world” (ibid: 7).
Moreover, migrants and youth rarely engage with established institutions or organisations that could
represent their interests, such as trade unions, either at a local or international level. As the survey
and interviews revealed, no respondents belonged to a union and no interviewees had noticed aunion presence in their workplaces. Some of the reasons for the lack of trade union membershipamong student migrant workers are their lack of knowledge of trade unions and, because of thediminishing resources, an absence of union reach into the sectors where the student migrant work.
Thus, attempting to develop and maintain protective standards and rights for vulnerable workers isclearly difficult when reliant on reconciling the divergent international and national interests while
set against a changing labour market and declining trade union density (Employment Relations
Service, 2009).
Finally, while New Zealand is a signatory to numerous ILO Conventions, regrettably the rhetoric ofworker protection is not matched with government legislation or enforcement. Althoughimmigration policies are touted to “attract and retain international students” (Merwood, 2008: 6), alack of commitment by successive governments and their agencies to investigate or reform thisproblematic area of the labour market indicates that this is not the case. Improving labour
legislation is the responsibility of domestic governments but the available national data does notconsistently or accurately reflect what is occurring in New Zealand‟s labour market. This
information deficit has been noted in the ILO‟s 2002 Report where New Zealand data was listed as
not available. Furthermore, New Zealand domestic monitoring and enforcement capabilities areconstrained by lack of numbers as well as funding. Combined with a lack of policy coherence,
reporting and monitoring capacity between the ministries responsible for migration, labour andeducation, such weaknesses cannot be addressed by a multilateral mode of governance. Suffice tosay, domestically, the government must work to establish a framework to ensure student migrants
are adequately protected as the ILO‟s reach is influenced by the quality of information it receives toprovide recommendations.

Conclusions
There continues to be criticism that the ILO has more bark than bite, given its weakness inmonitoring or enforcement capability. By lacking the capability or capacity to enforce labour
standards, its role could be seen as limited to advising and reprimanding. This has led to frequent
allegations that the ILO „has no teeth‟ and that its work consequently makes little difference in thelabour practices of governments (Claude and Weston, 2006; Langille, 1997). Further, interpretationof multilateral legislation, domestically, does not give policy uniformity across countries, and theratification and application of standards is uneven. Therefore, while the ILO advocates a „bestpractice model‟ of legislative compliance, its reach is weakened by the need to ensure „buy in‟ fromcountries to apply labour standards. Nonetheless, the rhetoric of multilateral governance iscountered by the continued primacy of domestic legislation. In New Zealand‟s case, geographic
isolation and distance from the seat of power means the ILO may not be perceived as relevant or
useful by stakeholders.
Recently, there has been considerable interest in poor working conditions experienced by migrant
workers. This has arisen against the backdrop of broader debates surrounding precarious work anddefinitions of worker vulnerability. Nevertheless, little concern has been raised regarding theworking lives and experience of student migrants despite their comprising an important category of
migrant workers. Research to date has primarily concentrated on either the working experiences of
migrants or the educational experiences of international students, rather than examining the working
experiences of international students – many of whom can be considered a growing component of

New Zealand Journal of Employment Relations 35(1): 61-79
the migrant workforce. Initial exploratory research indicates that international students‟ working
experiences are typical of migrant workers: they are often located in contingent and precarious
employment, working long hours in hazardous conditions for low wages, in dangerous positions,with little regulation, supervision, and poor remuneration. While these working conditions are often
illegal, there appears to be little government impetus for monitoring or enforcement. Additionally,
for many migrants, the working conditions they routinely labour under add little to their prospectsof securing permanent residency or work related to their studies. While a small sample size,
findings are consistent with other overseas studies showing that migrants exhibit many of theworking conditions that would classify them as vulnerable workers.
Such findings have significance for the ILO‟s role within the multilateral system, but there are anumber of limitations. It remains to be seen whether the Decent Work Agenda and associatedconventions can be translated into sustained and more effective promotion of international labour
standards, and if the ILO actually has scope and reach in mitigating concerns associated withstudent labour. The answer ultimately depends on whether the commitment to the ILO‟s goals is
more than skin-deep for member states (Elliot, 2000). Inconsistencies are evident within the ILO‟sapplication of governance, combined with conflict between domestic and international policy
imperatives. These weaknesses may a mean a „watering down‟ of public policy in the tripartite
structure and the „one size fits all‟ model will successfully address the myriad of employment issues
associated with student migrants. Combined with a lack of monitoring and enforcement of labour
regulations, perhaps the ILO continues to be an institution of compromise within a flawedmechanism (Alston, 2005). Further research is needed to ascertain whether student migrants ingeneral are manipulated and mistreated within the current New Zealand immigration andemployment legislative policy framework; and whether the ILO is able to play a greater role inaddressing the concerns associated with this vulnerable worker cohort.

Notes
1

Export education industry was adversely impacted in 2002-2003 when crimes committed on andby Chinese students in New Zealand made headlines internationally, leading to a sharp decline instudent numbers
2

While there is an assumption many students coming to New Zealand to study are wealthy, this isoften not the case. Some may have their parents financially supporting them, but this may be seen
as an investment, to be „paid back‟ in kind later. Many will be the first in their family to attend atertiary institution so will have considerable financial pressure, as well as familial expectations.
Cases of borrowing dowry money and obtaining loans through money lenders were mentioned in
the interviews.
3

To counter, it could be argued that greater opportunities are afforded so they are able to pursue
overseas work. Also, those who remain in New Zealand and gain residency are able to move to live
and work freely in Australia. As this data is not collected, little is actually known about the finaldestination of student migrants leaving New Zealand.
4

The ILO actively promotes the ratification of International Labour Conventions No. 97 and No.
143 and the International Convention on the Protection of the Rights of All Migrant Workers andMembers of their Families. The 1949 Convention No. 97 Migration for Employment Convention
stipulates that legal foreign workers must have equal access to social security and trade union
membership, good conditions of work, and equal pay compared to local employees. The 1975
Migrant Workers (Supplementary Provisions) Convention, no 143. protects “the interests ofworkers when employed in countries other than their own” (ILO, 1975), preventing trafficking andillegal employment of such workers, and promote equality of opportunity and treatment of migrantNew Zealand Journal of Employment Relations 35(1): 61-79

workers legally within a country. However, 1998 General Survey the International Labour
Organisation found member states had difficulty in applying the detail and ratification (Claude andEston, 2006). Convention No. 143 has not been ratified by New Zealand.

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New Zealand Journal of Employment Relations 35(3): 80-83

The International Labour Organisation: A View From Within.
EDWARD DOWDING*
Chance often plays an important part in one’s life and it certainly did in mine. While I was working on a
New Zealand Government sponsored project for the training of technical teachers at the Teacher Training
College in Sri Lanka, I met a field expert working for the ILO in the field of labour relations. The
information he gave me about the ILO was instrumental in my applying for a posting, and I was offered one
in a project with the Ministry of Industry in Egypt. After two years and on my return to New Zealand, I
worked for one month with a management specialist from Headquarters on a survey of industrial training
needs in Cambodia. Some months later and much to my surprise I received an offer of a one year contract towork at ILO headquarters in the Vocational Training Branch. Such an opportunity could not be turned
down. The Branch undertook research, documentation and publication of training material and was
responsible for all technical co-operation industrial training projects. This was the start of a longinternational career.
During the introduction to the office on the edge of Lake Geneva, now theheadquarters of the World Trade Organisation, and entering the conference rooms for the first time, one
could almost feel the history of the ILO. Professor Margaret Wilson, in her paper, has very ably described
the reasons which brought into focus the need for an international body to improve the working conditionsin industry and thus the establishment of the ILO.
Created by the Treaty of Versailles along with the League of Nations in 1919, the ILO, probably due to its
tripartite structure, survived the collapse of the League and continued as an independent body and remained
based in Geneva. This city has always been the home of the ILO except for a period during the second
Word War when it moved to Canada. Strange as it may seem, Switzerland, although it has always hosted
the ILO, only became an actual member after it joined the United Nations Organisation in 2002. When the
United Nations Organisation was established, the ILO became a Specialised Agency. This arrangement
provided additional funding without limiting the ILO’s freedom to continue its principal work ofencouraging social justice throughout the world. The term ILO, in English language, is a generic form andrepresents both the Organisation and the Office. The French language does it rather better. BIT (Le Bureau
Internationale du Travail) represents the Bureau (Office) and OIT (L’Organisation Internationale du Travail)signifies the Organisation. From the outside, the two may seem synonymous but from within there is a vastdifference. The Office is responsible for implementing the decision of the Organisation and, in the earlydays, was a highly centralised body and responsible for all research, documentation and publication
concerning the drawing up of Recommendations and Conventions dealing with labour standards. If
countries were to be in a position to not only ratify ILO Conventions as agreed by the Organisation but also
to implement them, it was essential that there was an active industry development programme and theemployment opportunities that would result. This resulted in the start of technical assistance programmes fordeveloping countries, later called technical co-operation.
Once the ILO became involved in technical co-operation, there was a considerable change in the number of
its staff and in their qualifications. As much of the technical assistance was geared towards industrial
activities, many of the new staff had managerial and industrial training experience. It also tended to spreadthe nationalities of staff over a larger geographic area People who had languages in addition to one or moreof the three official languages of the ILO – English, French and Spanish – could be of great value whenworking in developing countries. This was particularly so with the large number of projects being
established in Arab countries. The establishment of the United Nations Special Fund and the greater amountof finance made available permitted the growth of much larger projects with ten and more staff. The ILO
has always had a very closely knit headquarters staff but this gradual change of emphasis within the ILO,
tended in some ways, to bring about a certain separation of the traditional type of staff and the new arrivals.
*

Retired Director – the ILO.

New Zealand Journal of Employment Relations 35(3): 80-83
This was accelerated when an annex was established in Petit-Saconnex to house those involved in thetechnical co-operation programme. After a few years, the annex was destroyed by fire but rebuilt after aperiod of some months. Headquarters continued to maintain a strict control of technical co-operation
projects for many years through project officers responsible for a number of projects. These project officers
had, in most cases, worked in the field on similar activities and were well aware of the difficulties inestablishing new industries in countries which, at that time, had limited staff with the required knowledge.
These were exciting days for me, personally, as I had been brought to Geneva after working on field
assignments and at the time when there was a sudden increase in the work of ILO in developing countries
It gave me, personally, a wonderful opportunity to visit many countries and assist the governments in
preparing plans for training the workforce to meet their industrial development requirements. While all thisactivity in technical co-operation was gaining momentum in the ILO, other international organisations werealso increasing their activities and overlaps were starting to appear. To help avoid these, committees were
set up to meet as needed. This brought me into close contact with senior officials in other United Nations
Agencies and after the United Nations Industrial Development Organisation body was established in 1966,
much of the work of the ILO in this field was gradually being taken over by UNIDO. Many of the activities
undertaken by the ILO, at that time, had come about because no other organisation had taken that
responsibility and today would not be considered typical ILO work.
While this new emphasis on technical co-operation absorbed a lot of staff time, the basic activities of the
Office continued and each May/June the Annual Conference was held in Geneva. Two governments, one
employers’ and one workers’ representative arrived from each member country; this gave officials a chance
to meet their national representatives and representatives from developing countries’ direct contact with
officials handling their projects. Apart from the long hours of work the conference involved, it was a timeof cocktail parties, lunches and dinners and most officials were pleased to get back to normality when theconference was over. However, several of the friendships developed during these times lasted for life. It is
this part of ILO’s work that is probably best known from the outside and remains crucial to its whole
structure. While every member country has an equal vote irrespective of size, the posts in the ILO are
allocated by the amount of the budget each country pays. Thus New Zealand, as a small financial
contributor, had, at that time, between 3 and four posts available and like other small countries, often
exceeded the quota. Large countries, particularly the USA, often failed to fill the posts allocated to themand the available funds were used to pay the salaries of staff from other countries.
International organisations have always been and will continue to be subject to political pressures when
decisions, which affect member government interests, are made. In 1970, a Soviet citizen was appointed toa post as Assistant Director General and there was an immediate reaction from the USA, which reduced its
financial contribution to the ILO by 50%. As the USA pays 25% of the total budget, this raised a serious
financial problem and staff took a voluntary 10% cut in salary for two years to help cover the loss. A few
years later, after the admission of the Palestine Liberation Organisation as an observer, the USA withdrew
for a period in protest but later resumed full membership.
The Director General has a considerable influence on the internal activities of the Office and changes ofemphasis soon become apparent to officials. In the early 1970s, the centralising of power in Geneva,
particularly for technical co-operation, was starting to be questioned and operational staff were beingtransferred to regional offices in Africa, Asia, Latin America and the Middle East. Research anddocumentation remained firmly in Geneva. With this change in emphasis, an Operations Branch was set up
to handle the supervision of existing projects and as deputy chief of this branch I saw it was time for me topart company with headquarters and to go to the field. When it was mooted that an office for the South
Pacific might be established, I let it be known that I would be interested in taking over that office and I duly
negotiated the agreement with the then Prime Minister of Fiji, Ratu Sir Kamasese Mara and took over as
director for the South Pacific. This office presently serves 22 South Pacific countries, eight of which are
members. It is unlikely that the number of South Pacific members will increase notably because of theirsmall populations but all countries can and most do benefit from the work of the Organisation.

New Zealand Journal of Employment Relations 35(3): 80-83
The activities of the office in Suva have changed considerably over the years from being mainly involved
with technical co-operation projects and organising a few conferences and meetings to being much more
active in the traditional activities for which the ILO is well known – the collection and publication of
information on labour matters and meetings and seminars to discus and disseminate such important facts.
To work in such a beautiful part of the world and to bring the work of the ILO to these smaller countries wasa great privilege and to finish a career close to home had many advantages. When one looks back at thework of the ILO in the training of workers and managers in countries in all parts of the world, there havebeen some great successes and some of the powerhouses of industry such as those in Asia can be grateful forthe help which ILO gave at the critical time. However, not every project was a success. Some failed due tochanges of government in the recipient country and the consequent changes of policy, some where thehuman element played a role and necessary adjustments to the approach were not made with sufficient
speed.
Much of what has been described happened by calendar years quite a while ago but to me seems likeyesterday. As stated earlier, the staff of the ILO have always been a closely knit group and a very active
Section of Former Officials continues to keep retired staff well informed. There are regular meetings in
Geneva and every five years, there is a major gathering when retired officials from all over the world meetand socialise with their old colleagues and present staff. Also thanks to the internet, it is possible to follow
closely the programmes and actions of the ILO. While there will always be criticism of international
institutions, often due to their cost and often their bureaucracy, the world would be a poorer place without
them and the ILO will continue to evolve to meet the needs of workers throughout the world.

New Zealand Journal of Employment Relations 35(3): 84-96

Unions and Union Membership in New Zealand: Annual Review for
2008
STEPHEN BLUMENFELD* and SUE RYALL**
Introduction
This report continues the series of annual surveys on trade union membership in New Zealand, which
Victoria University of Wellington’s Industrial Relations Centre (IRC) began in 1991, when the
Employment Contracts Act (ECA) ended the practice of union registration and the collection of union
data. Although the Department of Labour subsequently recommenced both the process of union
registration and the collection of official union data under the Employment Relations Act (ERA), theIRC has continued to conduct its survey of union membership. We are, therefore, able to report on
trends in union membership, composition and density from the enactment of the ECA to the present.
In this report, we update our reporting of those trends to include the period extending from December
2006 to December 2008. Between 1991 and 2006, information pertaining to membership of tradeunions was compiled through an annual survey carried out by the IRC, with funding from the Public
Good Science Fund, administered by the Foundation for Research Science and Technology.
Following more than a year without such funding, the IRC has recommenced running that survey andreporting its results with publication of this report. Since the IRC did not conduct a survey in 2007,
comparisons in union membership in this document are based on the IRC’s 2006 survey data.

Union membership survey
The IRC’s union membership survey for 2008 includes those unions registered as at 1 March 2009, as
per the Department of Labour’s (DOL) list of registered unions reported in the Department’s Union
Membership Return Report 2009 on its website, www.ers.dol.govt.nz/union/registration.html (DOL,
2009a). In late May of 2009, each registered union in New Zealand was sent a survey requesting
membership numbers as at 31 December 2008. Thirty-six unions, representing 93 percent of total
union membership reported by the New Zealand Department of Labour in its 2009 Annual Report(DOL, 2009b), responded. For those that did not, details were obtained from the DOL Union
Membership Return Report 2009 and the industry distribution for that union was carried over from thedata included in the IRC’s 2006 union membership survey (DOLc). In addition, to enable comparisonand monitoring of trends in future years, the DOL figures reported in the Union Membership Return
Report 2008 have been added to our database as 2007 data. It is important to note, however, that the
DOL survey is for the year ending 01 March, while the IRC survey is to 31 December the previous
year.
Ten unions that remain officially registered did not provide survey returns to either the IRC or the
DOL for 2008; all have been designated ‘inactive’ for this report and no membership figures areincluded for those unions herein. In the time between the 2006 survey and the return of this year’s
survey, 13 new unions were registered, 12 unions deregistered and a further 2 went into recess, 2
unions (ASTE and AUS) amalgamated to form one union (TEU), and a further union (Clothing,*

Stephen Blumenfeld, Director of the Industrial Relations Centre. Victoria, University of Wellington
Sue Ryall is the Senior Administrator of the Industrial Relations Centre. Victoria, University of Wellington.
The authors are grateful to the union officials who contributed to this research; and to Dilip Mathew, Research Assistant at
the Industrial Relations Centre, for his assistance with data entry, analysis and presentation.
**

Laundry and Allied Workers) merged into another (NDU). In addition, 13 unions did not submit
surveys to the DOL for March 2008; these unions remain ‘active’ in our database for 2007 and theirmembership numbers have been rolled over from our 2006 survey. The total number of unions
included in our data is 141 of the 159 unions officially registered with the DOL at 1 March 2009

Trade union membership and density
Table 1 summarises the historical trend in trade union membership and union density in New Zealandfrom the enactment of the ECA in 1991. Under the ECA, there was no requirement, let alone official
process, of union registration in New Zealand. In addition, some employee organisations included intallies of union membership in that period were effectively established by employers under the ECA.
In light of this, and because unions under the ERA must be constituted and operate ‘at arm’s lengthfrom any employer’, one would expect members of employer-dominated organisations not to havebeen counted in union membership tallies for the past decade. For these reasons, though, union
membership totals given in Table 1 for the 1990s are not directly comparable to those for later years.
Table 1: Trade Unions, Membership and Union Density 1991-2008
Year

Dec 1991
Dec 1992
Dec 1993
Dec 1994
Dec 1995
Dec 1996
Dec 1997
Dec 1998
Dec 1999
Dec 2000
Dec 2001
Dec 2002
Dec 2003
Dec 2004
Dec 2005
Dec 2006
Mar 2008¹
Dec 2008

Union
membership

Number ofunions(1)514325428160409112375906362200338967327800306687302405318519329919334783341631354058377348382538373327384777

(2)
66
58
67
82
82
83
80
83
82
134
165
174
181
170
175
166
147
141

Potential union membership
Total employed Wage andlabour force² salary earners²(3)1509400
1514200
1545400
1612000
1686600
1741200
1750600
1739300
1766400
1800000
1846100
1906500
1955900
2024100
2084800
2134700
2173000
2188200(4)1199000
1190500
1215300
1269600
1331700
1375100
1401700
1387000
1395600
1425200
1482200
1540100
1579700
1637900
1702100
1759700
1792000
1811200(1) / (3)Union Density%(1) / (4) %

(5)
34.1
28.3
26.5
23.3
21.5
19.5
18.7
17.6
17.1
17.7
17.9
17.6
17.5
17.5
18.1
17.9
17.2
17.6

(6)
42.9
36.0
33.7
29.6
27.2
24.7
23.4
22.1
21.7
22.3
22.3
21.7
21.6
21.6
22.2
21.7
20.8
21.2

HLFS-Persons
Employed byby Employment
Status(Annual-Dec)-Table
Ref: HLF005AA; Industrial
Source:
HLFS-Persons
Employed
bySexSex
by Employment
Status (Annual-Dec)-Table
Ref. HLF005AA; Industrial
Source:Relations Centre Survey 2008.
Relations Centre
Survey, 2008
Notes:¹The 2007 figures are from the DOL Union Membership Return Data;

HLFS-Persons Employed by Sex by Employment Status(Annual-March)-Table Ref: HLF002AA.

Note: 1. The 2007 figures are from the DOL Union Membership Return Data; HLFS-Persons Employed by Sex by²Figures in column 3, 4, 5, & 6 are different from those reported in previous years due to the
Employment Status (Annual-March)-Table Ref. HLF002AA
population rebase by Statistics New Zealand to take account of the latest census results.
2. Figures in column 3, 4, 5 & 6 are different from those reported in previous years due to the population rebase by
Statistics New Zealand to take account of the latest census results.

Union membership counts offer an indication of the absolute power of unions and their power relative
to business and government. Nonetheless, as a measure of relative rather than absolute size, union
density rates are better suited to making comparisons between sectors than are absolute membershipfigures. Union density expresses trade union membership as the proportion of potential union
members who belong to a union. What constitutes potential union membership, however, is notalways entirely clear. For instance, if union membership is measured against the total employed labour
force, then only employed union members should be included in the numerator of the union density
fraction. Yet, some unions count self-employed individuals, those that have retired, and others not
currently in the labour force amongst their membership.

In New Zealand, the relevant workforce would seem to encompass all wage and salary earners, eventhough the self-employed, unpaid family members, and other groups of workers, who are very
unlikely to be union members, are included among wage and salary earners. In spite of this, we
provide union density figures based on both the total number of wage and salary earners and the total
employed labour force in this report.
As can been seen in Table 1, both total union membership and overall union density in New Zealanddecreased markedly, commencing in May 1991, with enactment of the ECA. During the era of the
ERA, although never coming close to achieving its pre-ECA level, union membership has, for themost part, continued to increase each year over that preceding it. Union density, on the other hand, hasremained relatively constant around 21 or 22 percent of wage and salary earners and between 17 and18 percent of the total employed labour force since October 2000, when the ERA was enacted.
As shown in the third column of Table 1, the number of trade unions in New Zealand has alsochanged over the last 20 years, as single enterprise unions have come and gone, long-standing unions
have merged, and new unions have come into existence. At the end of 2008, there was a total
membership of around 385,000 across 141 unions in New Zealand. Nearly half (43 percent) ofregistered unions at that time had fewer than 100 members; the median number of members per union
was 145. The ten largest unions accounted for more than three quarters (77 percent) of total union
membership.
The number of wage and salary earners in the country’s economy increased by 2.9 percent, from1,759,700 in 2006 to 1,811,300 in 2008. The number of union members in New Zealand increased inthat time from 382,538 to 384,777, a mere 0.6 percent. Union density dropped slightly over that
period but continued to hold at just over 21 percent of wage and salary earners. In the nine years
between December 1999 and December 2008, union membership increased by 27 percent, which has
lagged behind a 30 percent increase in the number of wage and salary earners. Hence, union density
has experienced a slight drop under the ERA. Overall New Zealand union density at Dec 2008 was
lower than its lowest levels during the period of the ECA.

Union membership and wage and salary employment by industry
This section of the paper provides a summary of wage and salary earners and union members
according to the Australia New Zealand Standard Industry Classification (ANZIC) during the year to
December 2008 in an effort to highlight areas of relative union strength and weakness. As shown in
Table 2, union membership remains concentrated in particular sectors, and there continues to be wide
variation in union membership according to industry. Despite a small decline in these areas, union
density remains high in the public sector and parts of the private sector in which unions havetraditionally been strong, in particular manufacturing, and transport and storage. Moreover, despite
minor year-to-year shifts, there has not been sufficient change or enduring growth over the past 10
years in any area to suggest established patterns of union membership are changing significantly.
The largest increases in union membership in the two years to December 2008 were in mining (55.5%)
and related services industry groups, government administration and defence (38.6%). Both of thesegroups experienced big increases in union membership despite a decrease in the number of wage andsalary earners in each sector. The energy and utility services, construction and building services, andfinance, insurance and business services, likewise, each experienced between 20 and 25 percent
growth in union membership, in all of these industry groups, well beyond the growth in the number ofwage and salary earners.
All other industry groupings currently register fewer than 20,000 members, with several sectors
having fewer than 5,000 members. For example, only 19,500 members of the total retail, wholesale,
restaurants and hotels labour force of 424,400 (the largest private sector grouping) are unionised.

Finally, unions representing workers in finance, insurance and business services appear to havestemmed the tide of membership decline we have reported in previous years, nearly 1 percent growthin the two year to December 2008.
Table 2: Distribution of union members and wage and salary earners across industry sectors

Industry Grouping
Agriculture, fishing, forestry etc
Mining and related services
Manufacturing
Energy and utility services
Construction & building services
Retail, wholesale, restaurants, hotels
Transport, storage and communication
Finance, Insurance and business services
Personal and other services
Public and community services
Govt admin and defence
Education
Health and community services
No Industry ¹
TOTAL

Union
MembershipDec 2006
3015
1436
75588
3346
5555
18335
42538
10934
18278
203513
33049
81070
89394
NA
382538

Union
MembershipDec 2008
3295
2233
66939
4195
6779
19485
37674
13253
8079
218575
45821
84886
87868
4270
384777

Change in membership2006-2009
(No.)
(%)
280
797
-8649
849
1224
1150
-4864
2319
-10199
15062
12772
3816
-1526
NA
2239

9.3%
55.5%
-11.4%
25.4%
22.0%
6.3%
-11.4%
21.2%-55.8%
7.4%
38.6%
4.7%
-1.7%
NA
0.6%

Wage andSalaryEarners
2008 (000)
81.7
5.2
249.2
11.6
122.1
424.4
107.6
239.1
127.2
443.1
82.9
168.8
191.4
NA
1811.2

Change in wage
and salaryearners 20062008 (%)
-0.7
-22.4
2.4
38.1
-7.5
3.5
3.3
0.9
10.3
4.2
-6.9
9.5
5.1
NA
2.7

Source: Household Labour Force Survey; Industrial Relations Centre Survey 2008

Source:Household Labour Force Survey: Industrial Relations Centre Survey, 2008
Note: ¹Union Members not allocated to particular industries
Note: 1. Union Members not allocated to particular industries.

At the other end of the spectrum, unions in the energy and utility services industry experienced
substantial membership growth (25.4%) since the end of 2006, but that increase fell well short of thetotal growth in salary and wage earners in the sector (38.1%) in that timeframe. This has resulted in a
4 percent reduction in union density (see Table 3) in that sector. Manufacturing and the transport,
storage and communication industry groups also experienced falls in union membership (11.4%) in
the two years to the end of 2008. The largest drop in union membership, though, was in the personaland other services industry; union membership in that industry fell by more than half (55.8%) in 2007
and 2008.
In spite of the growth in union membership under the ERA, union density has remained relatively
stable, typically in the range of 17 to 18 percent of the total employed labour force and between 20 to
22 percent of wage and salary earners, in that time. Overall union density has not increased, due inlarge measure to a concomitant and commensurate increase in both the total number of people
employed and the number of wage and salary earners in New Zealand since 2000.
In our review for 2005, we reported on the largest single increase in union membership since the IRC
surveys began, 6.6 percent (23,290 members). Whereas in 2005 union membership outstripped growthin wage and salary earners, in the two years to December 2008, union membership again fell behind
the growth in wage and salary earners, leading to a small decline (0.5%) in union density to 21.2
percent, from 21.9 percent. Overall union density has remained within the narrow range of 21 to 22
percent since 1998, indicating a remarkable level of stability. The data presented in the fourth column
in Table 2, however, illustrate that each industry’s contribution to the change (loss or gain) in total
union membership also varied widely between December 2006 and December 2008.
What is clear from the data in Table 2 is that union membership is increasingly concentrated in publicand community services jobs, with some 57 percent of all union members working in those sectors. In
2004, just over half of all union members in New Zealand were employed in public and community
services. Four years later, 45 percent of all union members in New Zealand worked in either theeducation or health sector, with government services and defence accounting for an additional 12
percent of the unionised workforce. The next two highest concentrations of union membership inDecember 2008 were in manufacturing (18 percent in 2008, down from 20 percent in 2004) and thetransport, storage and communication sector (10 percent, down 1 percentage point from 2004). Allother industry groups together made up only 15 percent of total union membership at the end of 2008.

Figure 1 highlights the distribution of wage and salary earnings across industry groups as at December
2008. The largest share and, hence largest number, of New Zealand wage and salary earners were
found in public and community services (25%; 443,100 employees); retail, wholesale, restaurants, andhotels (23%; 424,400 employees); manufacturing (14%; 249,200 employees); and finance, insurance
and business services sectors (13%; 239,100 employees). The largest increases in the number of wage
and salary earners in the two years to December 2008, as shown in the last column of Table 2, were inenergy and utility services (38.1%) and personal and other services (10.3%).
Personal and otherservices
7%

Other Industries
12%

Public and community
services
25%

Manufacturing
14%

Finance, Insurance
and businessservices
13%

Retail, w holesale,
restaurants, hotels
23%

Transport, storage
and communication
6%

Figure 1: Distribution of wage and salary earners across industry sectors
Source: Statistics New Zealand HLFS 2008.

As depicted in Figure 2, although there also continues to be wide variation across industry sectors inunion membership which does not closely reflect the distribution of wage and salary earners shown in
Figure 1. To that end, union membership was overwhelmingly concentrated in public and community
services (218,600 members), followed by manufacturing (66,900 members) and transport, storage andcommunication sectors (37,700 members). Together, the two industry groups, having experienced thelargest increases in wage and salary employment since the end of 2006 – public and community
services and energy and utility services and personal and other services, presently account for nearly
one-third of total New Zealand union membership. With some 57 percent of all union members,
public and community services remain the contemporary union heartland, having passed the
traditional union stronghold of manufacturing long ago, under the ECA.
Personal and
Other
other services Industries
2%
5%
Manufacturing
18%

Public andcommunity
services
57%

Retail,wholesale,
restaurants,
hotels5%
Transport,
storage andcommunication
Finance, 10%
Insurance andbusiness
services
3%

Figure 2: Distribution of union members across industry sectors
Source: Industrial Relations Centre Survey 2008.

Table 3 summarises how union density has changed according to industry grouping since December
2006. The number of wage and salary earners in mining and related services has fallen since 2006.
This decline in potential union members contributed to the significant increase in union density in this
sector in the two years to December 2008 shown in Table 3. The other industry group to experience a
substantial increase in union density over the previous two years is government administration anddefence, in which 37 percent of wage and salary earners in this industry were union members in 2006
and, by December 2008, this figure had risen by almost 20 percentage points to 55 percent. Union
density in the manufacturing sector has fallen by nearly 5 percentage points to just under 27 percent;this figure has fluctuated, though, between 27 and 31 percent over the last few years and is, therefore,
not indicative of a declining trend. A trend of declining union density is evident, however, in theenergy and utility services, where it peaked at 52 percent in 2004, only to decline over the next 2 years.
Nevertheless, this trend does appear to have levelled off over the past 2 years.
Table 3: Change in union membership across industry groupings
Industry Group
Agriculture, fishing, forestry etc
Mining and related services
Manufacturing
Energy and utility services
Construction & building services
Retail, wholesale, restaurants, hotels
Transport, storage communication
Finance, insurance & business services
Personal and other services
Public and community services
Govt administration & defence
Education
Health & community services
Source: Industrial Relations Centre Survey 2008

Approx. density
2006 (%)
3.7
21.4
31.3
39.8
4.2
4.5
40.8
4.6
15.9
47.8
37.1
52.6
49.1

Approx. density
2008 (%)
4.0
42.9
26.9
36.2
5.6
4.6
35.0
5.5
6.4
49.3
55.3
50.3
45.9

Source: Industrial Relations Centre Survey, 2008

In our union membership surveys, we ask our union respondents how many of their members work in
the private and public sectors, respectively. This year, as we did in 2006, we have included the
additional ‘not-for-profit’ category (4,783 union members). It should be noted, however, that union
members identified as being in the not for profit sector in 2008 were likely identified as being in theprivate sector in the past. Not surprisingly, then, as union respondents had previously included thesemembers in one of these two sectors, this inclusion has had a corresponding impact on the figures forprivate and public sectors.

The public/private sector divide
Table 4 shows that the small (0.5%) increase in aggregate union membership across all sectors of New
Zealand’s labour market between December 2006 and December 2008 (shown in Table 1) occurred asa result of a 1.6 percent increase in union membership in the public sector. On the other hand, union
membership in the private sector fell by nearly 4.6 percent over that period. To the extent to which
membership numbers, i.e., not the members themselves, have shifted from the private to the not-forprofit sector, the actual decrease in union membership in the private sector in the two years to
December 2008 was closer to 1 percent. As can be seen in Table 4, the public sector retains the
majority of all union members, with a much higher density (see Table 5).

Table 4: Public, private union membership
SectorPrivate Sector
Public Sector
Not for profit¹

Dec-061803601973954783

Dec-08172431
200711
11635

Change 06-08
-7929
3316
NA

Change 06-08
%
-4.6
1.6
NA

Source: Industrial
Relations
CentreCentre
Survey Survey,
2008
Source:Industrial
Relations2008¹Theremajor aredifferences
the reportingof thefor profit ofunion
1. areTheremajor indifferences
inand
theanalysis
reportingandnotanalysis
themembershipnot for profit union membership which makes
which makecomparisonsdifficult. The
willwillbe usedas aasbase
for future
surveysurvey comparison.
comparison
difficult.
The2008
2008figures
figures
be useda basefor futurecomparisons.

The relative strength of New Zealand public sector unionisation and the weakness of its private sector
unionisation are best seen in comparison with other Anglo-Saxon nations, shown in Table 5. In otherindustrially developed countries, the exception being the United States, regularly published union
membership data emanate from union reports – either in compliance with a statutory requirement andsupplied by unions or provided on a voluntary basis to government statistical agencies, which thencompile and publish the data. In fact, prior to 1980, the US Bureau of Labor Statistics (BLS) reported
data obtained directly from unions in response to a biennial questionnaire.
Table 5: Public/private sector union density – international comparisons
Country
New Zealand¹
Australia²
UK³
USA4
Canada5

Union density
21
19
25
12
29

Public sector
62
42
57
37
71

Private sector
12
14
16
8
16

Public/Private Ratio
5.2
3.0
3.7
4.6
4.4

Sources:
Sources:¹Statistics
NZ, QES Dec
Relations
CentreRelations
Survey 2008;
1. Statistics
NZ,2008;
QES,Industrial
Dec 2008b
Industrial
Centre Survey, 2008b.
2. Australian
Bureau ofTable
Statistic,
Table 63100Ts0001,
in April 2009.
²Australian
Bureau of Statistics,
63100TS0001,
published Aprilpublished2009³Department
of Business
Regulatory
Reform,TRADEReform,
UNION MEMBERSHIP
2008, MEMBERSHIP
April 2009.
3. Department
ofEnterpriseBusinessandEnterpriseandRegulatory
TRADE UNION
2008, April 20094
(Barratt,
2009). of Labour, Bureau of Labour Statistics New, January 28, 2009
United States
Department
5
4. United
Departmentof Labor(Bureauof Labor
Statistics
Canada,States
Perspectives
on Laborand Income,August2008. Statistics, January 28, 2009).
5. Statistics Canada, (Perspectives on Labour and Income, August 2008).

As is true of the data we report, union membership data gathered in other countries, regardless of theirsource, are subject to reporting errors. With specific regard to membership counts provided byindividual unions, though, many unions have difficulty keeping accurate and up-to-date records oftheir membership. Members who have left the union for one reason or another may not be deleted
from the records for some time as employers are not required, unless by agreement with the union, toinform the union of those members who leave the organisation’s employ. This also points to the very
real possibility that, if some or all of those members join another union, they may be counted in eachfor a period of time.
Another factor to consider in this regard is that self-reported membership numbers may reflect
institutional or even political biases and may yield unreliable results. To that end, unions may
overstate or understate their membership figures to influence policy-makers. In addition, different
unions may apply different norms regarding who is considered a member and some may be slow to
remove those who have left the union or simply ceased paying their subscriptions. To this end, they
may also include people who no longer consider themselves union members. Therefore, membership
reports by unions in all countries are subject to inaccuracies. Yet, notwithstanding these potential
sources of bias, comparisons in other national and international contexts with data on union
membership derived from other sources suggests that, while some overstatement in self-reported
union membership by trade unions is common, for the most part, it is inconsequential (ILO, 1997)
With these caveats in mind, the data reported on Table 5 appear to indicate that the public/private
sector union membership ratio continues to be higher in New Zealand than in other Anglo-Saxon
countries. A slightly higher proportion of New Zealand’s labour force is unionised than is the case inAustralia, but New Zealand union density lags behind that in both the UK and Canada – the only
country listed in Table 5 with a higher public sector union density than New Zealand. Union density
in New Zealand’s private sector, though, is low relative to most other English-speaking countries, theone key exception to this being the US. A regeneration of private sector membership, in particular,
remains a major challenge for New Zealand unions.

Trade union numbers, distribution of membership by size, gender and affiliation
Table 6 shows the number of identifiable trade unions, categorised by size, at the commencement andconclusion of the ECA period (1991 and 1999, respectively), and under the ERA as at December 2006
and December 2008. The clearest effects of regulatory regimes on the industrial relations landscape in
New Zealand are in relation to the number of trade unions. Union amalgamations followed the Labour
Relations Act (LRA) 1987 requirement that unions have a minimum membership of 1000. This
produced a dramatic drop in trade union numbers from 259 in 1985 to 104 in 1990. The abolition ofregistration provisions under the ECA made identification of unions difficult, but estimates suggest
there was a further decline in numbers during this period. Reversing this decline, the ERA’s
requirement that only registered unions can participate in collective bargaining, and the setting of alow membership threshold for registration at 15 members, has seen the number of registered unions
more than double. Refer to Table 1 for the number of trade unions for all years from 1991 onwards.
Although the ERA has seen a growth in the number of unions, most new unions are small, enterpriseor workplace based and do not see themselves as unions in the traditional sense. Many exist solely forthe purposes of negotiating a collective agreement, and they tend to have extremely limited resources.
Moreover, their entry has done little to change the distribution of union membership. As depicted inTable 6, small unions (those with fewer than 1000 members) still only account for 4 percent of overall
membership, and large unions (those with more than 10,000 members) account for more than threequarters of all membership in New Zealand. It is also these large, well established, and better
resourced unions that account for most of the membership growth under the ERA.
Table 6: Membership by union size 1991 – 2008, selected years
MembershipDec 1991

Dec 1999

Dec 2006

range#
Members%#
Members%#
Members
Under 1000
4
2750
1
48
12703
4
129
20358
1000 - 4999
39
87119
17
22
43709
14
22
53199
5000 - 9999
9
76489
15
3
19669
7
5
38375
10000+
14
34796768
922632475
8270606
Totals66514325100
82302405100
166382538
Av. Size
7793
3688
2437
Source: Industrial
Relations
CentreSurveys
1991, 1999,
and2006
2008.and 2008.
Source:Industrial
RelationCentreSurveys
1991,2006
1999,

Dec 2008
%
5
14
10
71
100

#
105
23
3
10
141

Members
17112
52044
20149
295472384777
2729

%
4
14
5
77
100

As we have reported in the past, there is an increasing concentration of union membership into larger
unions. We noted earlier in this document that 77 percent of union members are now in unions ofmore than 10,000 members and Table 6 shows that there has also been an increase in the number ofunions in this level (8 in 2006 to 10 in 2008). There has been a large decrease in the number of unionswith under 1000 members since December 2006 and it is this group that is contributing to the overall
reduction in the number of unions registered in New Zealand.
The gender composition of New Zealand’s union membership has changed considerably since the eraof predominantly male, full-time employment. The data in Table 7 shows this trend for the years 2004,
2006 and 2008. As has been the case for most of the Employment Relations Act era, women comprised
the majority (55.3%) of union members in 2008, although they constituted only 46.5 percent of thecountry’s labour force (Statistics New Zealand, 2008a). The proportion of union members who arefemale has steadily increased over the previous 4 years. Factors contributing to this change include thehigh representation of women in public and community services and the decline in traditionallyunionised areas of male employment, such as manufacturing and mining.

Table 7: Female union membership 2004-2008
Year
2004
2006
2008

%Female
52.0
54.9
55.3

Source: Industrial
Relations
CentreCentre
Surveys 2004, 2006 and 2008
Source: Industrial
Relations
Surveys 2004, 2006 and 2008.

The number of CTU affiliated unions dwindled throughout the 1990s, from 43 in 1991 to 19 in 1999;
the proportion of union members covered by CTU affiliates also declined, from 86.5 percent to 78
percent. In the wake of the ECA, the New Zealand union movement fell into some disarray, which saw
the emergence of a second central trade union organisation in May 1993. The Trade Union Federation(TUF), however, never threatened the New Zealand Council of Trade Unions’ (CTU) position as theprimary national body for trade union organisations. At its peak membership, in 1995, its affiliates
represented only 7 percent of reported total union membership, while the CTU’s affiliates accounted
for 79 percent of union members in New Zealand at that time.
In fact, the impact of the ECA and, in particular, the ability of employers to establish their own ‘inhouse’/unions under that Act is likely to have had a far greater effect on the share of the unionised
workforce covered by CTU affiliates during the 1990s. To that end, following the 1999 election of aLabour-led government and the introduction of the ERA, the TUF was disestablished and the unions
which remained affiliated rejoined the CTU.
As can be seen in Table 8, the number of unions affiliated to the CTU has risen under the ERA to 37(of the 159 registered unions in New Zealand) in 2008 while the proportion of union members
belonging to CTU affiliates has increased to 89.4 percent. However, with 333,395 members, CTU
affiliates have close to 90 percent of total union membership and represent 18 of the 20 largest unions
in New Zealand. This proportion has been more or less consistent throughout the period of the ERA.
Table 8: NZCTU affiliation 1991 – 2008Year

NZCTU Affiliate
unionsMembers

Percentage of total
m'ship in CTU
affiliates

1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

43
33
33
27
25
22
20
19
19
26
32
34
36
38
37
39
38
37

445116339261321119296959284383278463253578238262235744273570289732293466297440310451333395340281330130343017

86.5
79.2
75.8
78.9
78.5
82.2
77.4
77.7
78
85.9
87.8
87.7
87.1
87.7
88.4
88.9
88.7
89.4

Source:IndustrialRelations
Relations
CentreSurveys
Source: Industrial
CentreSurveys
1991-1991-2008
2008.

Discussion
Despite retention of many changes ushered in with the ECA 1991 that could potentially undermine
unions’ organising effectiveness, such as voluntary unionism, enterprise-based bargaining, andextension of personal grievance procedures to non-union workers, it did not seem unreasonable toexpect that the ERA would have a positive effect on unionisation. For one, by restricting collective
bargaining to registered unions, the ERA returned to unions the exclusive right to negotiate collective
agreements, a right they had enjoyed for nearly 100 years prior to enactment of the ECA. In addition,
the ERA offered unions access to workplaces, including those without union members, and it provided
for employment relations education leave, effectively supporting union delegates in their role.
It would appear, at least on the face of it, that membership in New Zealand trade unions has, in fact,grown incrementally, albeit slightly, since the late 1990s. This picture of relatively stable growth,
however, belies considerable variation among industry sectors as well as in the fortunes of New
Zealand’s trade unions in different sectors. For instance, two unions with strong representation in thehealth and community services sector have experienced significant growth in membership numbers
since December 2006, yet union density in the health sector as a whole declined in that period. A
similar picture emerges in the education sector. With the addition of 3300 more members by the endof 2008, one of the largest unions experienced the highest absolute growth in union membership of
any union in New Zealand over the previous two years. In spite of this, the rate of growth of wage andsalary workers – the denominator in our union density fraction – outstripped growth in union
membership across the broader education sector.
Overall, increases in membership numbers in some sectors have been offset by commensurate losses
in other sectors, in particular, in the traditional union strongholds of manufacturing and transport,
storage and communications. In addition, while union membership numbers have increased, they havebarely kept pace with the increasing number of workers entering the labour force over the past decade.
Hence, union density has remained relatively constant across the country’s labour market under the
Employment Relations Act (ERA) 2000. This is somewhat surprising in light of the predictedfavourable effect of that legislation on union organising efforts.
In sum, overall union density has, for the most part, remained within the narrow range of 21 to 22
percent for the past decade, indicating a remarkable, and somewhat unexpected, level of stability. New
Zealand unions experienced a small increase in union membership (0.5%) between 2006 and 2008,
but that growth was more than offset the much larger (2.9%) increase in the number of potential union
members, all wage and salary earners in New Zealand. Union membership also remains concentrated
in particular sectors. To that end, there is a considerably greater degree of unionisation in the public
sector and amongst a few particular industries (manufacturing, and transport and storage) in theprivate sector. These are areas of traditional union strength and existed as such prior to the ERA.
Although annually there are minor changes, there has not been sufficient change or enduring growth
to suggest established patterns of union membership growth or decline are changing significantly.

References
Australian Bureau of Statistics. 1 in 5 are Trade Union Member: ABS. Retrieved fromhttp://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/6310.0Media%20Release1Aug%202008?
opendocument&tabname=Summary&prodno=6310.0&issue=Aug%202008&num=&view=
Barratt,C.
(2009).
Trade
Union
http://stats.bis.gov.uk/UKSA/tu/tum2008.pdf

Membership

2008.

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Bureau of Labor Statistics. (2009). Union Members
http://www.bls.gov/news.release/archives/union2_01282009.pdf

in

2008.

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Department of Labour. (2009a). Union Membershipwww.ers.dol.govt.nz/union/registration.html

Registration.

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from

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DepartmentofLabour.
(2009b).
AnnualReporthttp://www.dol.govt.nz/publications/general/ar0910/ar-0910_28.asp

2009/10.

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from

Department of Labour. (2009c). Union Membership Return Report 2009. Retrieved fromhttp://www.ers.dol.govt.nz/union/pdfs/union-membership-2009.pdf
International Labour Organization (ILO). (1997). World Labour Report 1997-98: Industrial Relations,
Democracy and Social Stability. Retrieved from http://www.ilo.org/global/publications/ilobookstore/order-online/books/WCMS_PUBL_9221103315_EN/lang--en/index.htm
Statistic Canada. (2008, August). Unionization. Perspectives on Labour and Income. Retrieved fromhttp://www.statcan.gc.ca/pub/75-001-x/pdf/topics-sujets/5100160-eng.pdf
Statistics New Zealand. (2008a). Household Labour Force Survey Population Rebase: December
2008.
Retrievedfrom
http://www.stats.govt.nz/browse_for_stats/work_income_and_spending/employment_and_unemploy
ment/householdlabourforcesurvey_hotpdec08qtrrebase.aspx
Statistics New Zealand. (2008b) Quarterly Employment Survey: March 2008. Retrieved fromhttp://www.stats.govt.nz/browse_for_stats/work_income_and_spending/employment_and_unemploy
ment/quarterly-employment-survey-info-releases/previous-releases.aspx
Statistics New Zealand. (2009) Household Labour Force Survey: March quarter. Retrieved fromhttp://www.stats.govt.nz/browse_for_stats/work_income_and_spending/employment_and_unemploy
ment/HouseholdLabourForceSurvey_HOTPMar09qtr.aspx

New Zealand Journal of Employment Relations, 35(3): 96-103

Chronicle: June 2010 – September 2010
June 2010
The Dominion Post reported on the plight of around 200 meat workers at the AFFCO works in Wairoa.
June did not start well for these meat workers as they were laid off following a stand-off with theiremployer following employer threats that they needed to work faster and agree to not being paid overtime.
The workers were told that they would be out of work for up to five months. The meat workers union
representing the workers lodged a claim in the Employment Relations Authority alleging that theultimatum given to the workers was a breach of their employment agreement.
The normal round of the „weird and unusual‟ personal grievance cases appeared in the media in June. Boththe Sunday News and the Sunday Star Times reported on David Page who worked for a Japanese-owned
language school and was awarded $170,000 by the Employment Relations Authority after he was subject
to the “Japanese way” of management. This included his boss ranting, berating and humiliating people.
The Dominion Post also reported on the ambulance paramedic who was dismissed for posting derogatory
comments on Facebook after an altercation with a fellow officer. Although this was an early example ofthis phenomenon the article highlighted that the Employers and Manufacturers‟ Association had alreadyreleased a report showing that employers should not fear disciplining staff for online indiscretions. The
Council of Trade Unions (CTU) responded with the comment that employers needed to differentiate
between their workers grumbling to friends and running a defamatory website. Finally, the NZ Herald
reported on the woman who unleashed a “torrent of drunken abuse” at her employer but was found to havebeen unjustifiably dismissed. The language sprinkled liberally with the F word was used at an officebarbecue but the employee concerned could not remember the altercation the next day. The resultant
disciplinary meeting and dismissal was found to be unfair because not all the statements from other
employees, who witnessed the outburst, had been put to her.
The NZ Herald and the Dominion Post both reported on the payout awarded to a former employee of
Ogilvy New Zealand Limited. The senior advertising executive was asked to relinquish her title inexchange for a directorship on the Board. Before she could make up her mind she found that hercolleagues had been informed of her replacement and that it had also been announced in the media. The
aggressive nature of the employer was criticised by the Employment Relations Authority who said theactions of the Managing Director as “discourteous, disruptive and uncooperative”. The executive wasawarded $350,000, plus $27,000 costs and $15,000 for distress.
The use of social networking media by public servants was highlighted in an investigative article in the
Dominion Post. The article estimated that public servants spend at least 8,482 hours a year on Twitter. The
figure was extrapolated from a one month snapshot which was obtained by the newspaper under the
Official Information Act. It was not known how much Twitter browsing was for legitimate work, including
maintaining the official Twitter accounts operated by five government agencies. One of the study quoted
estimated Facebook reduced work output by 1.5%.
Interestingly, the article mentioned that some companies were blocking “time sucking” sites while othersaw social networking as a good way of tuning in to public opinion, without commissioning expensive
surveys or focus groups. For example Westpac Bank was formulating a “how to” social media policy andwas encouraging staff to use the technology to network.
In fact, there appears to be some confusion amongst employers regarding the risks and benefits of staff
using social media such as Twitter and Facebook. Some private companies such as Westpac and Telecom
encourage staff to use social media as a means of gathering feedback on the company. A spokesperson for
the Department of Conservation Department said that Twitter could be a useful tool for public servants toconnect with their counterparts overseas and discover new trends. A later article in the Dominion Post

New Zealand Journal of Employment Relations, 35(3): 96-103
claimed that in 2006 public servants workers spent at least 35,000 hours a year on the Trademe auction
website.
Regular legal commentator in the Dominion Post Susan Hornsby-Gulek, a partner at law firm Kensington
Swan, commented on the dilemma facing employers when employees strike. Although strikes havebecome less common there are still „strategic strike actions‟ such as working to rule or taking breaks at thesame time. While she acknowledged employees‟ right to strike, the employer‟s argument was that types ofstrategic strike action “now has become the norm”. The Hornsby-Gulek article argued that a decision in
the Supreme Court in May 2010 redressed that imbalance by giving employers greater power to require
non-striking employees to perform the work of striking employees. The Supreme Court decision related toa six-week strike by Air Nelson‟s line maintenance engineers in May 2007. Air Nelson brought incontractors to cover for the striking employees, sparking a legal battle that spanned three years which
ended with the Supreme Court decision.
Prominent employment lawyer Peter Cullen wrote on the issue of „incompatibility‟ and the right of an
employer to dismiss a staff member who does not get on with other staff members. Mr Cullen stated thatdismissal for incompatibility is unusual. For a dismissal on these grounds to be justified, theincompatibility must be largely the fault of the employee and that the worker is reluctant to attempt toresolve the situation, such as undertaking counselling or changing behaviour. Conversely, where theemployer does little to resolve the problem then the onus falls on the employer. If serious incompatibility
remains in the workplace despite the identified employee being assisted and even warned of the dangers to
his or her employment, then the employer may be entitled to dismiss.

July 2010
The announcement that the Government intended to review the Employment Relations Act created a wave
of media reports during July. A number of newspapers predicted that the proposed changes were to beannounced during a speech by the Prime Minister at the annual National Party conference. The proposed
reforms would probably not be a surprise as many of them were signalled in a discussion document issued
in March 2010 by the Department of Labour.
Predictably, the proposed reform that created the most controversy was the extension of the 90 day trial
period from firms employing 20 or fewer staff to all employers. Both supporters and detractors voiced
their views on this significant change to the personal grievance entitlement. A NZ Herald article said that
unions claimed the proposals were „outrageous and an attack on workers rights‟. The unions also promised
to fight the changes and Labour Leader Phil Goff threatened to „scrap the 90-day scheme altogether if
Labour regained power.‟ The article quoted the Prime Minister as saying that the results of the 90-day
trial scheme launched in April 2009 had been stunning and that it had ensured “that a lot more New
Zealanders had the opportunity to engage in work” and the “[e]mployers have been willing to take therisk”.
To further raise the ire of unions, it was also rumoured that union access to the workplace would be
restricted to situations “with the employer‟s consent which cannot be unreasonably held”. In a Southland
Times article, CTU President Helen Kelly was outraged by the plan to restrict union access to theworkplace. Ms Kelly said that, although it was part of National‟s election manifesto, the Prime Minister
had promised to consult with unions before moving to implement the policy.
As the date of the formal announcement at the annual National Party conference got closer, the debate still
raged. The Dominion Post wrote that John Key was likely to face a fiery reception at the conference as“unions kick off a campaign against employment changes”. The article suggested that extending the 90
day trial period could be “the most divisive change since National took office”. In the article, the CTU

New Zealand Journal of Employment Relations, 35(3): 96-103
estimated that around 700,000 people started a new job every year which meant that there would be at least
300,000 people who would be in their first 90 days of employment at any one time.
Employer groups hit back at the unions claiming that they were over-reacting. David Lowe, Employment
Services Manager of the Employers and Manufacturers Association (Northern), was quoted as saying thatthe claim that the provision would be used to exploit workers was scaremongering and did not fit with thereality of employers looking for workers. A Dominion Post article quoted figures from a survey of
employers with fewer than 20 staff. Of the 414 employers covered by the survey, 72% used the 90-day
provision. Of those, 48 employers – 16% of those using the 90-day provision – had used the provision todismiss workers. In line with this, employment lawyer Ross Crotty from Lowndes Associates said that, if
the probation period was extended, it would expose a huge number of low-paid and young staff members.
His view was that small employers did not have the resources to train people and tended to take the “easyway out.”
The Herald on Sunday took a more pro-government line in its article where it quoted Prime Minister John
Key saying that Labour leader Phil Goff was keen to use the issue to “lubricate his party‟s rusty links withLabour”. The article also argued that the Employers and Manufacturers Association had figures whichshowed that three out of four employers who used the scheme had kept almost 90% of the workers they
initially employed. Further, the article argued that anything that encouraged an employer to take a punt on
a new worker who shows promise but lacks credentials was worth trying.
As predicted, the announcement of the reforms was made at the annual National Party conference.
Although the 90 day trial period grabbed, as expected, most of the media attention, other implications of
the proposed changes started to be highlighted. Among these was the measure to deal with the so-called„mental health day‟. The Dominion Post reported that under the package that proposed changes to theHolidays Act 2003 would allow employers “who suspect a worker of pulling sickies” to require proof after
only one day of sickness. Under the proposal, the employer would have to pay for the cost of a doctor‟svisit. Additionally, the proposals include the ability of allowing workers to cash up one week‟s annual
leave. Once again, CTU President Helen Kelly said that it would erode the hard-fought for entitlement offour weeks‟ annual leave and that “[w]orkers short of money will be tempted to cash in such leave when
what they really need is a decent pay rise.”
The articles in the newspapers were followed up by numerous opinion pieces from each of the protagonists
in the debate. Helen Kelly of the CTU argued in a Dominion Post opinion piece that the problem was not
the trial period but the removal of all appeal rights along with it. She added that the changes “legislate for
unfair dismissal” and proceed to list some real examples where unfair application of the existing law had
occurred. However, Phil O‟Reilly of Business NZ argued that the proposed changes were “reasonably
sensible, middle-of- the-road adjustments that will increase productivity and opportunity”. He added that
this was not a return to the Employment Contracts Act. O‟Reilly‟s view was that the extension of the trial
periods was sensible and brought NZ employment law into line with other countries. He also stated that
requiring the agreement of the employer to union access was “a better demonstration of good faith than thepresent rules”.
The practicality of employees being able to get a medical certificate was highlighted in another Dominion
Post article. In the article, GPs warned that the proposal would be problematic as most GP clinics wereunable to offer same day appointments. Medical Association GP council chairman Mark Peterson said
forcing workers to get certificates for a single sick day was likely to see doctors being asked to provide
retrospective diagnoses.
As the month dragged on, the opinion pieces became more and more vociferous. Writing in the NZ
Herald, Garth George almost celebrated the re-emergence of the unions to fight the changes and,surprisingly, he then proceeded to praise the Employment Contracts Act as one of “the most significant
and far-reaching pieces of legislation ever to be passed by the New Zealand Parliament”. George argued

New Zealand Journal of Employment Relations, 35(3): 96-103
that the changes were long overdue and expressed his surprise at how long it took to address „“personal
grievance dispute procedures which have become dangerously skewed in favour of employees”. Likewise,
Wellington lawyer Susan Hornsby-Gulek compared union access to the workplace with an uninvited visit
by a mother-in-law and suggested that the change to union access was reasonable.
Meanwhile, the Dominion Post reported that collective agreement talks between the Ministry of Educationand the PPTA had broken down. The PPTA walked away from talks after 13 „fruitless‟ sessions. The
PPTA was seeking a 4% pay increase but the employer was offering a 1.5% pay rise for the first year and
1% the year after. A Ministry spokesperson said the offer was realistic in the current economic climate.
There was only one stoppage in the March quarter which was the lowest figure for seven years, according
to Statistics NZ. This followed an unusually high number of stoppages – 17 stoppages – in the December
2009 quarter.
More claims of exploitation of seasonal fruit pickers in the Bay of Plenty were reported by the Dominion
Post. Workers were claiming they were not being paid their wages and holiday allowances. This followed
the imprisonment of three men, whose company employed 500 seasonal workers nationwide, on charges ofconspiring to keep workers in New Zealand in breach of the Immigration Act.

August 2010
The controversy over the proposed changes to employment legislation announced in July 2010 continued.
A comprehensive article published in both the Press and the Dominion Post foreshadowed that unions
were mobilising for a major campaign but it also asked the question whether the labour movement could
still „pack a punch‟ or had it “lost the power and influence to put up a decent fight”. Union leader Matt
McCarten promised a „name and shame campaign‟ to target fast food businesses that had dismissed
workers under the 90 day clause with „very noisy and unwelcome visitors‟ armed with placards. The
article said that although there was a raft of changes proposed by the Prime Minister most of the focus had
been on the extension to the 90 day trial period to all employees. Professor Erling Rasmussen, Professor ofWork and Employment at Auckland University of Technology, argued that although the reduced numbersof union membership meant that unions were less powerful it did not mean that they had no influence. The
key issue for him was whether the Government can actually „sell‟ the extension to the 90 day trial period to
the NZ public which came down to influencing the hearts and minds of the New Zealand public. CTU
President Helen Kelly said that the failure to come up with any convincing cases before the Prime Ministerannounced the extension of the scheme was affected by that employees were reluctant to come forward.
However, cases were beginning to come through and she was confident that the campaign would be “loudand strong”.
One case before the Employment Court attracted a lot of attention; this was due to its currency as it was
about a worker at a Pharmacy in Stokes Valley in Upper Hutt who was found to have been unjustifiably
dismissed and unjustifiably disadvantaged. The employee was employed under a 90 day trial period when
the new owners of the Pharmacy took over. The Employment Court found that the employers hadbreached their obligations because they had not provided the regular appraisal meetings specified in theemployment agreement and that the employee “had no inkling that her employment was in jeopardy”.
Predictably, the union movement was quick to utilise the case as an example of employers abusing the 90
day trial legislation.
The Press reported that engineers at Orion subsidy Connetics rejected their 1.6% offer as paltry and unfair.
The Engineering, Printing and Manufacturers‟ Union President Andrew Little said that the offer was below
the rate of inflation and was in effect a pay cut. Orion‟s CEO Roger Sutton claimed that Orion had only
made a small profit and was losing money and that the company was trying to find a “balance among
everyone‟s interests”.

New Zealand Journal of Employment Relations, 35(3): 96-103

The threat of industrial action by Junior Doctors featured again in the media following an impasse in theircollective agreement negotiations. A series of stopwork meetings had been called by the Resident Doctors
Union to enable members to discuss their options before negotiations began, according to union
spokesperson Deborah Powell.
Ongoing problems in the Health Sector were highlighted by the Press reporting that ten Canterbury Healthmedical laboratory workers were suspended after eight weeks of strike action. Half of the laboratory staff(totalling about 100 people) had been on rolling strike action since late June and were not performing
certain tasks. Canterbury Health Laboratories‟ General Manager Trevor English said that while staff had
the right to take strike action employers had the right to suspend people. The article also stressed that
medical staff at the Auckland, Counties Manukau and Waitemata District Health Boards had beensuspended. A spokesperson for the District Health Boards said that New Zealand‟s District Health Boards
operated under “extremely tight budgets” and that 75% per cent of all staff had already accepted a pay
offer under the National Terms of Service agreement.
Once again, there were a number of personal grievance cases being reported. These cases appeared to bestraight summaries of the determinations issued by the Employment Relations Authority. The moresensational of the cases included that of a dispatcher, who worked for Wellington Free Ambulance, foundto be unjustifiably dismissed and was awarded the sum of $4,000. The employee had an argument with amale colleague which „turned nasty‟ when it was continued on Facebook. After a complaint of abusive
comments being posted on Facebook over what appeared to be a relatively minor dispute over rest breaks,
the employer dismissed her after finding that she had behaved in a similar manner in the past. While she
received monetary compensation the Authority declined reinstatement because of the “subsequently
discovered misconduct and her serious contribution to the situation”.
In another case, two customs officers, who were dismissed because they allegedly leaked concerns about agay officer at Christchurch International Airport, were reinstated after a ruling by the Employment
Relations Authority. The officers‟ claim for hurt and humiliation was declined but they received an order
for lost salary. The officers allegedly leaked details of their concerns about a gay customs officer who they
alleged was performing more than “his share of strip searches and was making lewd comments about the
body parts of male passengers”. The officers were opposed to a Customs policy that stated that passengers
were not entitled to know the sexual orientation of officers conducting strip searches at airports and portson the grounds of unlawful discrimination if the officers were required to declare their sexuality. The
Department of Customs indicated that it would appeal against the decision.

September 2010
The debate on the controversial 90 day trial period legislation continued. Some of the media reporting
focussed on submissions made before the Transport and Industrial Relations Select Committee.
In an opinion piece in the Dominion Post, CTU President Helen Kelly responded to an earlier article by
CEO of the Business Roundtable Roger Kerr. Kerr had argued that countries such as the US were
examples of where either party to an employment contract were free to terminate at any time. Kelly
criticised Kerr for his promotion of the US as a place with low worker exploitation. She supported thisargument with figures saying that the Federal Minimum Wage had fallen 9.3% in the past ten years andthat the top ten per cent of Americans have 70% per cent of the wealth while the bottom 50% shared just
2.5% of the national wealth.
Dr Judy McGregor, Equal Employment Opportunities Commissioner of the Human Rights Commission,
wrote that “the proposed legislation to extend the 90-day-trial period to all businesses and New Zealandrisks regressing both in terms of its commitment to, and the reality of, equal employment opportunities”.

New Zealand Journal of Employment Relations, 35(3): 96-103
Dr McGregor stated that it was unusual for Parliament to take away rights, particularly the right of accessto a hearing. The denial of this right in something as basic as employment had human rights implications.
The implementation of the new law would disadvantage, in Dr McGregor‟s view, various groups with theyoung, Maori, Pacific and disabled people most at risk. Additionally, the idea that the proposal would reston agreement between the two parties was unrealistic as a new employee desperate for work was in no
position to opt out and had no real choice in the matter. She also argued that the new law would increasecasualisation of the workplace at a time where there was increased concern about the low productivity of
the New Zealand workforce.
In a response, David Lowe, Manager of the Employment Relations Service of the Employers andManufacturers Association, argued that the new legislation would increase workers chances of finding
work. Lowe claimed that if New Zealand wanted business, the public service and voluntary organisations
to be internationally competitive then employers would “need all the confidence they can get, to hirepeople in the first place”. It was his view that the present system discouraged employers from hiring
people because of the constrictions on an employer to redeploy or dismiss staff. He expressed surprisethat Dr McGregor made no mention of the costs of employing people and the fact that it often took morethan 90 days for a new employee to “learn the ropes” which was an incentive for an employer not to start
the process of employment lightly.
Dr Judy McGregor repeated her views in her submission to the Transport and Industrial Relations SelectCommittee. In her submission, she claimed that women were often more at risk under the proposed
legislation as they were often in “precarious work” such as domestic work, care work, retail or service
positions. She said the 90-day trial period should be dumped because it offended against the “fabled senseof a fair go” and was unnecessary given that probationary period provisions already existed in the
Employment Relations Act. However, National Party members of the Select Committee questioned Dr
McGregor on her views with National MP Tau Henare quipping that the Human Rights Commission was“a branch of the Labour Party”.
The Dominion Post published an opinion piece by James Ritchie, Secretary of the Dairy Workers Union,
where Ritchie claimed that the proposals were “so small-minded as to miss the point completely”. Heargued that sustainable economic development through greater productivity was derived from greater
worker engagement in the goals of the enterprise and industry growth. To achieve this engagement would
require an environment of trust, inclusion and ownership. He cited the example of the workplace
programme between Fonterra and the Dairy Workers union over the past decade which had transformed
the workplace into a high performance system similar to what was achieved by Toyota. As a result,
Fonterra had made huge gains in process and logistical efficiency and waste reduction. Ritchie quoted US
research that said that productivity gains were greatest when there was a “unionised workforce withconstructive engagement between union and employer‟.
The Unite Union claimed that some of Vodafone‟s lowest-paid call centre workers in Auckland have gone
three years without a pay rise and it planned to „shame‟ the company. About 50 of Vodafone‟s 405 callcentre staff belonged to the union and the action was a response for Vodafone‟s refusal to increase pay. A
Vodafone spokesperson countered that the company offered a competitive package with call centre staff
starting on between $37,000 and $47,000. They also received benefits including four weeks‟ holiday, freehealth and life insurance, free cellphones with calls paid for, 4% superannuation contributions and a day
off on their birthdays.
In a somewhat unusual move, Senior Doctors and their District Health Board employers decided toapproach the Government with a joint bid for funding in next year‟s Budget to cover contract negotiations.
Both sides agreed to suspend pay negotiations while they worked on the business case to be presented to
the Government in time for the 2011 Budget cycle.

New Zealand Journal of Employment Relations, 35(3): 96-103
Meanwhile Junior Doctors voted to strike if their prolonged pay negotiations were not resolved (seeAugust Chronicle). The Sunday Star Times reported that a ballot last week returned a „strong mandate‟ foraction but a spokesperson said that despite this, doctors were a long way from walking off the job. A
further two days negotiation on the Multi-Employer Collective Agreement (MECA) was set down for theend of September. The article continued that the dispute was set against a backdrop of mounting pressurein the health sector, which faced the challenge of an aging population and an increased demand for healthcare. The District Health Boards were seeking more flexibility in the roster system, which was based on
average expected hours of work which often resulted in doctors being paid for more hours than they
actually work. The Junior Doctors were seeking rostering changes, including a maximum of 10
consecutive days on followed by four off as well as only one in three rostered weekends. One
commentator, Auckland University of Technology‟s Health Faculty Dean Professor Max Abbott, called for
public debate over whether compulsory arbitration should be introduced to prevent industrial action
because of the public safety issues when health professionals went on strike.
Meanwhile, another part of the Health Sector was being subject to strike action when radiographers went
on strike at Auckland City and Starship hospitals for three days. Furthermore, a nationwide strike for 24hours was called for. A senior doctor claimed that the strike action could result in deaths to some patients
which was criticised by the Apex union (representing radiographers) as a very inappropriate thing to say.
In late September, a simmering dispute involving Sir Peter Jackson (director of the Hobbit movie) and theunion representing actors flared into life. Headlines included „Jackson fights „Aussie bully‟ to save
Hobbit‟ (Dominion Post), „Movie Madness‟ (Press) and „Hobbit in Danger from Dark Forces‟ (Bay ofPlenty Times) were published. The dispute centred on a call from the Australia Media, Entertainment andArts Alliance union for a boycott of the Hobbit film after Sir Peter Jackson refused to negotiate with theunion. The stakes were raised when New Line Warner Brothers Pictures said that their “general policy
was to avoid filming in locations with potential for „workforce uncertainty‟.” Consequently, Sir Peter
Jackson threatened to move filming offshore to Eastern Europe. The Government became involved whenthe Attorney-General Chris Finlayson wrote to Sir Peter Jackson‟s Hollywood backers to reassure them
New Zealand employment law ruled out an expensive union-negotiated collective agreement for actors
working on the Hobbit.

Erling Rasmussen & Colin Ross
Auckland University of Technology