Name

Title

Page
NumberPaul Callister & James Newell

The Gender ‘Education Transition’: Whatit might mean for the labour market

1 - 15

Colleen Souness & Philip S.
Morrison

The Effect of Settlement Type on the
LabourForce Participation of New Zealand
Women

16 - 35

Nicola North, Frances Hughes,
Erling Rasmussen, Mary
Finlayson, Toni Ashton, Taima
Campbell, Sharon Tomkins

Use of temporary nurse mechanisms by
New Zealand’s District Health Boards

36 - 50

Ian McAndrew

Employers, Unions and Workplace
Partnership in New Zealand

51 - 65

Jason Timmins

Minimum wage workers in New Zealand:
Who are they?

66 - 76

Leda Blackwood, Goldie
Feinberg-Danieli & George
Lafferty

Unions and Union Membership in New
Zealand: Annual Review for 2005

77 - 87

Jamie Latornell

Uncovering the Origins of New
Zealand’s Employment Relations Act
2000: A Research Framework

88 - 100

Vivienne Hunt

Book Review: “Developments in the Call
Centre Industry – Analysis, Changes andChallenges” J. Burgess and J. Connell(2006)
Chronicle June 2006 to September 2006

101 - 104

Erling Rasmussen & Colin
Ross

105 - 114NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

THE GENDER ‘EDUCATION TRANSITION’: WHAT IT
MIGHT MEAN FOR THE LABOUR MARKETPAUL CALLISTER1 and JAMES NEWELL2
Abstract
While overall tertiary education participation has been rising, some groups are lagging.
Men, and particularly Maori and Pacific men, are increasingly under represented in manyeducation institutions, especially at higher levels of education. For example, in 1994 in
the under 30 age group and when foreign students are excluded there were 13% more
women than men enrolled in degree courses. By 2004 this had risen to 36%. For Maori
undertaking degrees, the difference had risen from 21% to 79% in 2004, while for Pacificstudents the figures have gone from 27% to 52%. The cohorts that are part of this tertiary‘education transition’ are now a key part of the population that are forming couples ordeciding to live on their own, establishing their careers and deciding whether to havechildren. Some of the possible implications of this ‘education transition’ for the labour
market are explored.
Introduction
In the 1990s, New Zealand experienced a gender transition in tertiary educational
enrolment within New Zealand educational providers. For the first time in our history
women began participating in tertiary education at a significantly higher rate than men(Callister et al 2006, Newell and Perry 2006). However, this transition is not unique to
New Zealand with similar trends occurring, at differing rates, in most industrialised
countries (Buchmann and DiPrete 2006a&b).
This paper begins by setting out the magnitude of the changes in education for womenand men within New Zealand. First, there is brief outline of overall long-term trends intertiary education participation. The paper then focuses on changes in both enrolments
and completions since the mid 1990s, but with the main period studied 1999 through to
2004.3 The initial data used in this paper are drawn from a new dataset based on students
created by the Ministry of Education. In an earlier paper on this issue, as well as in thesecond part of this paper, a different source of enrolment data is used (Callister et al

1Paul Callister is at the Institute of Policy Studies, Victoria University, Wellington
James Newell is at the Monitoring and Evaluation Research Associates Ltd
This paper was first presented at the Paper presented at the 12th Labour, Employment and Work conference,
Wellington: Victoria University, November 15 & 16
3
This was the latest available data when this paper was being prepared.
2

1

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’2006).4 These are enrolment data that can result in some double counting where people
are enrolled at more than one institution.
The paper then considers how these changes might have an impact, either directly or
indirectly, on the labour market. We do so by focussing primarily on two professional
qualifications: school teaching and the broad area of health related qualifications, but
especially doctors.
Census data helps set the scene. Summarising census trends from 1981 to 2001, Newell
and Perry (2006) show that the proportion of women over 15 with a tertiary degree
qualification increased from 2.5% in 1981 to 12.4% compared with an increase from
5.1% to 12.4% for men. Within this overall picture they show a major shift between 1991
and 1996 from male to female led educational attainment amongst younger age groups in
the transition from school to work. Between 1981 and 1986 6.2% of males aged 20 to 24
and 5.4% of male residents had gained a degree. Between 1991 and 1996 9.9% of males
aged 20 to 24 and 12.4% of females gained a degree qualification. By the 1996 to 2001
period, the margins between male and female attainment levels diverged further with
11% of males and 16.6% of females gaining a degree qualification. The divergenceshows up clearly when a cohort approach is taken (see Appendix). The census data areconsistent with Ministry of Education administrative data for the 1996 to 2001 which thatshow that 25,700 degree completions by females and 16,000 by males aged 20 to 24
years of age. The margin between male and female non-degree post-secondary
qualification attainment is smaller with 15.8% of females versus 15.1% of males aged 20
to 24 gaining a non-degree post-secondary qualifications between 1996 and 2001
compared with 29.5% of men and 24.4% of women between 1986 and 2001. Newell andPerry show that the margins between male and female educational attainment are larger
for residents of Maori and Pacific ethnicity than others.
While this paper focuses on trends in educational enrolment and completions in New
Zealand, overall levels of educational qualifications, and the numbers of qualified men
versus women, in each country is also strongly influenced by both inward and outward
migration. New Zealand stands out internationally in terms of the proportion of the
population that were born overseas as well as the proportion of New Zealanders living
overseas (Dumont and Lemaître, 2004). Newell and Perry (2006) make preliminary
estimates for New Zealand resident net outflow rates between 1996 and 2001 of 10-20%
over a wide range of New Zealand a non-degree post-secondary qualification and a net
loss of those with a degree qualification of the order of 15-20% concentrated amongst
those aged 20 to 29 years.
Given that the most skilled and educated tend to be the most mobile internationally,
ideally the balance of well-educated New Zealanders leaving, well-educated migrants
arriving in New Zealand (the so-called ‘brain drain’), and foreign students remaining in
New Zealand after they have completed their studies, should be considered when
determining what New Zealand’s future labour force might look like. While this is an
ideal, the complexities of determining overall educational trends, particularly when4

In fact, the data quoted in the abstract are from this earlier dataset.
2

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

gender is also considered, are beyond the scope of this paper. Instead, only trends within
New Zealand tertiary education institutions are considered.
While an important dimension to the gender changes, ethnicity is not directly consideredin this paper. Finally, apart from briefly considering how the gender of teachers might
affect the outcomes for students, the paper does not attempt to analyse why the genderbased changes in educational participation have taken place. Both these areas await
research in a New Zealand context.
Historic education trends
Figure 1 shows the number of women and men taking part in tertiary education in eachyear from 1879 through to 1999. It indicates a dramatic increase in enrolments post
World War II, with particularly strong growth since the 1980s.
Figure 1
Long term trends in tertiary enrolments, 1879
to 1999, Two measures
300,000
NZOYB

250,000
200,000

Thorns /Sedgwick

150,000
100,000
50,000
1996

1983

1970

1957

1944

1931

1918

1905

1892

1879

0

Source: http://www.stats.govt.nz/tables/ltds/ltds-social-indicators.htm

Ministry of Education data indicate that the growth continued since 1999. If foreign
students are included then the number of students enrolled increased from 308,139 in
1999 to reach 505,408 in 2004.
US research shows that in the late 1890s through to the turn of that century there weretimes where there were slightly more women than men enrolled in tertiary education(Goldin and Katz, 2006).5 The authors note that the peak of male dominance in tertiary
educational enrolments in the US was post WW2 in the 1960s and 1970s. While similar
5

However, in this period more men than women graduated.
3

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

data have not been produced in New Zealand, case studies indicate a comparable pattern
in New Zealand. For example, in terms of enrolments at Victoria University, Barrowman(1999) shows that in 1920 women made up 42% of enrolments but this had declined toaround 25% in the 1950s and 1960s.
Focussing on a much shorter time period, using Census data Newell and Perry (2006)
demonstrate that from 1981 to 2001 the proportion of New Zealand residents aged 15
years or older with no educational qualification halved from 55% to 28%. While part ofthis decrease in the number of New Zealanders without educational qualifications is due
to increases in the number of people with school qualifications, reflecting the patternshown in Figure 1, much of the growth in qualifications has been through an increasing
number of New Zealanders gaining tertiary qualifications.
What types of education are we considering?
All formal educational courses offered within polytechnics, wananga, universities,
colleges of education, universities and private providers are captured in the Ministry of
Education tertiary data. There has been much focus on the gender imbalance in Modern
Apprenticeships, which is strongly in favour of men. Some people undertaking
apprenticeships may not undertake any formal study within a tertiary education provider.
But most people undertaking some form of industry-based training will undertake aformal course and therefore will be counted in the official data. To give some idea of therelative size of Modern Apprenticeships, overall industry based training and the total
education sector, Figure 2 shows the gender balance in industry training and in wider
education in 2004. It indicates that Modern Apprenticeships, while important, are a verysmall part of the education sector.
Figure 2
Enrolments by sex in tertiary education, 2004 and 2005
data
300,000
250,000
200,000
Female150,000

Male

100,000
50,0000Modernapprenticeships(MA)

Industry training(including MA)

Total tertiary(Including mostIndustry Trainingsome MA)

4NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Recent educational trends
Not all enrolments end as qualifications, and in fact Ministry of Education data indicatethat women are more likely than men to complete their tertiary studies. For instance of
those enrolled in 2000, women had a qualification completion rate after five years of 43%
against men at 35%. There are also some ethnic differences in completion rates withlower rates for Maori and Pacific students. Nevertheless, enrolment data provide an initialguide to how educational trends are emerging.
Table 1 shows end of year data for enrolments from 1999 to 2004 and exclude foreign
students. The gender transition had already taken place in the mid 1990s and women as apercentage of all students’ in this time period moves in a narrow band between a low of
56% and a high of 58%.
Table 1: Students enrolled in tertiary education from 1999 to 2004, all age groups
but excluding foreign students
1999
Female
Male
Total
Women as %165,305
130,899
296,204

2000
177,321138,041
315,362

2001
196,286
149,446
345,732

2002
223,869
162,401
386,2702003
243,247
184,384
427,631

2004
258,587
196,366
454,953

56

56

57

58

57

57

Source: Ministry of Education (2006)

The differences between women and men also show up when age standardised
participation rates are calculated. For example in 2004 the participation rate for womenwas 16.2% while for men it was 12.4%.
In recent years, one of the growth areas in tertiary education has been amongst older
students. Part of this represents a ‘catch-up’ by those who had no formal tertiary
qualifications, a component represents people re-training within a similar level ofqualifications, while another group are those who already had a tertiary qualification
gaining further advanced qualifications, perhaps an honours degree or some otherpostgraduate study. In recent years in the older age groups, while male enrolments haveincreased strongly, female enrolments have greatly outnumbered males. To some degree
this is not surprising given that historically women were less likely to participate in
tertiary education when they were young. In addition, many women have taken time outof paid work while raising children and upgrade skills before returning to the workforce.
This is indicated by data that shows in 2004 that 74% of those who were enrolled in
tertiary education, and had not been in the workforce prior to this enrolment, were
women.

5

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Table 2 show enrolments by sex and age in the period 1999 to 2004.6 Only in the under18 age group were there more men than women in each year but total student numbers
under 18 are relatively low compared with other age groups.7
Table 2: Male and female tertiary student enrolments by age, 1999-2004
under 18 Female
Male

18-24

FemaleMale

25-39

FemaleMale

40+

Female
Male

1999
6,621

2000
8,318

2001
8,734

2002
7,993

2003
8,100

7,676

8,270

9,283

8,077

9,305

2004
9,067
10,43
6

65,16
3
59,83
0

66,18
1
60,22
4

70,67
7
62,76
4

74,47
2
63,98
0

77,28
6
66,67
9

80,16
2
68,93
8

58,32
1
43,05
8

62,77
5
45,80
6

70,32
4
49,85
2

81,12
6
55,40
1

85,28
3
59,58
0

91,36
4
63,63
8

35,14
9
20,31
3

40,00
4
23,19
8

46,54
4
27,54
4

60,27
6
34,94
2

68,49
9
44,68
2

77,99
4
53,35
4

Table 3 shows female students as a percentage of total enrolments in each broad age
group. As already noted, only in the under 18 age groups were there more men than
women enrolled. In the 18-24 and 25-39 age groups there was a small rise in the
proportion of women students, but amongst those aged 40 or older a slight decline
between 1999 and 2004.
Table 3: Female tertiary student enrolments as a percentage of total enrolments, byage 1999-2004
1999 2000 2001 2002 2003 2004
under 18 46 50 48 50 47 46
18-24
52 52 53 54 54 54
25-39
58 58 59 59 59 59
40+
63 63 63 63 61 59
Total
56 56 57 58 57 57
Table 4 shifts the focus to completions and, as already discussed, indicates femalecompletions are higher than those for men. In recent years the women have formed
between 59% and 62% of those completing tertiary qualifications.

6 Note this that all subsequent tables exclude foreign students.
7
In part this is likely to reflect overall sex ratios with there being more men than women in this younger
age group.
6

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Table 4: Male and female tertiary student qualification completions and femalecompletions as a percentage of total completions, 2004
Female
Male
Total
%

1999
33,886
22,40656,29260

2000
41,36827,41468,78260

2001
45,731
31,26977,00059

2002
55,39734,90490,301
61

2003
2004
59,146 76,682
36,997 51,451
96,143 128,133
62
60

Table 5 shows that in 2004 there was only one area of study where there were more
completions by males, that is at the doctorate level in the 25-39 age group. The highest
difference was completions by women aged over 40 who had undertaken study at abachelors level (75% of graduates in this age group in 2004 were women).
Table 5: Female tertiary student qualification completions as a percentage of total
completions, by age 2004 (areas where there were more men are in bold italics)*
Level 1-3
Level 4 Level 5-6 Level 7
Certificate Certificate Diploma Bachelors

18-24
25-39

57
61

67
65

55
62

61
63

Level 8
Honours/
PostgradCert/Dip

Level 9Masters

Level 10
Doctorate

Total

61
63

55
53

48

59
61

55
51

61
60

40+
57
62
71
75
72
64
Total
58
64
62
64
65
57
* the under 18 age group is not shown as the completions in this age group are so low.

Earlier research indicates that when field of study is examined there remain areas that are
still male dominated (such as engineering, computing and most, but not all, of Modern
Apprenticeships), while there are other areas that have for a long time been female
dominated (for example nursing or childcare) (Callister et al. 2006). In the remainder ofthis paper we primarily focus on two areas of study when considering possible labour
market implications of the gender transition in tertiary education. These are teacher
training for the compulsory education sector and the gender balance in enrolments inhealth training. These data are drawn from the Ministry of Education enrolment databaserather than the student dataset as such data are not available at this level on the publicly
available website for the latter database. Except where noted, they show enrolments for
those under 30 years of age and exclude foreign students.
Table 6 shows enrolments in 2004 for those training to teach in the compulsory education
sector. As is well known, almost all early childhood teachers are women (Farguhar et al,7

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’2006). However, as children move through the education system they increase theirchances of having a male teacher.

Table 6: Women as a % of enrolments in teacher training, 2004 (all ages andincluding foreign students)% of enrolments
Early childhood
99
Primary teaching
83
Secondary teaching
60
General76
Bilingual primary
80
Immersion primary
75
Turning to health, Table 7 shows women as a percentage of enrolments health related
training at four levels of qualification for those domestic students under the age of 30. For
postgraduate students it needs to be noted that a significant number of students are notshown as many students studying at this level are older. The categories of education
where men form more than half of enrolments are marked in italics.
Table 7: Women as a % of enrolments in certificate courses, domestic students
under the age of 30, 2004

Dental Therapy/Assistant
Health Care Assistants
Natural Healing/HealthPharmacy Assistant
Other Nursing Programmes
Occupational Therapy
Physiotherapy
Introductory HealthPublic & Environmental
Medical Technology
Para-medical
General Health Programmes

Female as% ofenrolments
100
100
98
95
91
89
82
82
71
67
54
40

Table 8: Women as a % of enrolments in diploma courses, domestic students under
the age of 30, 2004
Midwifery
Pharmacy/ Pharmacology
Dental Therapy/AssistantPhysiotherapy

Female as %of enrolments
100
99
96
83

8

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’
Natural Healing/HealthNursing
Other Nursing Programmes
Para-medical

83
80
56
39

9

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Table 9: Women as a % of enrolments in bachelor degree courses, domestic students
under the age of 30, 2004
MidwiferyNursingNatural Healing/HealthOccupational Therapy
Other Nursing ProgrammesRadiography
Medical Technology
General Health Programmes
Pharmacy/ Pharmacology
Physiotherapy
Optometry
Public & Environmental
Medicine & Surgery
Dentistry
Dental Therapy

Female as %of enrolments
100
94
93
91
90
86
75
71
69
68
63
62
57
50
37

Table 10: Women as a % of enrolments in postgraduate courses, domestic students
under the age of 30, 2004

Occupational Therapy
Nursing
Other Nursing
Physiotherapy
Radiography
Audiology
Optometry
Public & Environmental
General Health
Medicine & Surgery (post service)
Sports Medicine
Introductory Health
Medicine & Surgery (pre service)
Pharmacy/ Pharmacology
Medical Technology
DentistryFemale as% ofenrolments
100
96
94
91
91
83
78
77
77
72
71
70
67
67
63
55

10

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Some implications of the changes
Overall, the gains in education enrolment and attainment by both women and men are
positive. If New Zealand is to be a high-income society competing on quality andinnovation rather than quantity and price it is essential that we have a high level of the
population completing some form of tertiary education early in their lives and perhaps
undertaking further training or retraining as they move through their lifecycle. It is also
positive to see women moving into many of the fields of study that have traditionallybeen dominated by men. This has many positive features. As an example, women who
wish to consult with a female doctor now have more choice. But inevitably a change ofthe size of the gender transition that has taken place in tertiary education in New Zealand
will have other impacts on society, including the labour market.
In commenting on a similar transition that has taken place in the US, Buchmann and
DiPrete (2006) set out a number of areas where the changes could have an impact. These
include:••Wage gaps, labour force participation, and other labour market outcomes, andTrends in educational assortative mating, which then impact on labour market.

In terms of assortative mating, in the US Mare and Schwartz (2006) argue that who
marries who has implications for the formation of families, the extent of labour market
and income inequality among families and individuals and intergenerational inequality.
Their research shows that over the past 40 years in the US, primarily due to the increasein educational attainment of women, the similarity of husbands’ and wives’ educational
attainments has increased markedly. In turn, Costa and Kahn (2000) show that in the US
college educated couples are increasingly located in large metropolitan areas. These areas
were home to 32 percent of all college-educated couples in 1940, 39 percent in 1970, and50 percent in 1990. They suggest a primary reason for this is the growth of dual careerhouseholds and that these households face co-location problems. In a US context theynote that smaller cities may therefore experience reduced inflows of human capital
relative to the past and thus become poorer. Most of New Zealand’s cities, in a global
context, are small. In addition such trends will tend to draw people away from living inrural areas. This includes the male GPs who in the past may have been married to aschoolteacher or nurse who could also work in rural areas or small towns. Now thepotential male or female GP may have a partner who is a specialist doctor, lawyer orother professional who needs to work in a large urban area.
But even considering individuals outside a family context changes in education are
forcing change in labour markets, especially in small towns and rural areas. Based on
historical evidence, in New Zealand, as in other industrialised countries, well-educatedwomen have, on average, patterns of attachment to the workplace that are different tomen. This applies to participation rates and hours worked (Callister 2005, McPherson2005)), as well as willingness to work in more remote areas (Janes et al. 2004). Overall
time use surveys show that women are also slightly less likely to be working in evenings,
at night and or at the weekends (Callister and Dixon 2001). This has been due primarily

11

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

to different roles assumed by men and women in childrearing but also factors such asconcerns about safety when working in remote areas.
These patterns can be considered in relation to more women training to be doctors. First,
if female doctors keep following the broad patterns of working hours described above,
then this will result in New Zealand requiring more trained doctors to fill any given levelof need. Due to possible changes in norms, it may also mean that overall doctors,
including male colleagues, will be less willing to work long hours than in the past,
perhaps one reason for the strikes in 2005 about working hours for trainee doctors. But
also of significance to an economy that still depends strongly on rural production and theviability of small towns, it may be increasingly difficult to recruit doctors into small
towns and rural areas. Both New Zealand and Australian research indicates, for a varietyof reasons, female doctors are less willing to work in rural areas (Janes et al. 2004, Health
Workforce Queensland & Australian Rural and Remote Workforce Agencies Group
2006, Tolhurst 2003). Overcoming this problem will be a challenge.
The changes in the gender mix of the health workforce will also mean that family friendly
policies need to be increasingly considered in all areas of the health workforce, not justtraditionally female areas such as nursing.
Turning to education, one question is whether the gender imbalance in the training ofteachers flows through to an imbalance in employment and then ultimately has some
affect on the education outcomes of the next generation? Table 11 shows that the
majority of teachers are female (around 71%), as are more than half of senior managers inschools. While the majority of principals are male, the proportion of female principals has
increased from 34% in 1999 to 41% in 2004.
Table 11: Trends in gender composition of teaching workforce
Male Principal
Female Principal
Male Management
Female Management
Male Teachers
Female Teachers
Total Male
Total Female% of principals% of managers% of total teachers

1999
1,663
859
4,103
5,749
7,276
24,654
13,042
31,262

2000
1,650
899
4,054
5,603
7,427
25,457
13,131
31,959

2001
1,632
952
4,099
6,139
7,508
25,586
13,23932,677

2002
1,561
967
3,911
6,053
7,713
26,003
13,18533,023

2003
1,518
1,008
3,975
6,291
8,040
26,835
13,53334,134

2004
1,465
1,028
3,953
6,399
8,464
27,245
13,882
34,672

34
58
71

35
58
71

37
60
71

38
61
71

40
61
72

41
62
71

Source: http://educationcounts.edcentre.govt.nz/statistics/downloads/teaching-staff-march04.xls

Does it matter if the majority of teachers are female? In New Zealand, when this question
has been discussed one response is that it is the quality of teaching that matters not thegender of the teacher. Determining whether gender matters in teaching outcomes is a very
difficult research question. But recent research by Dee (2006a&b) in the US suggests thatoutcomes for boys could be improved if there were more male teachers. Using
12

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

longitudinal data Dee found that assignment to a same-gender teacher significantly
improves the achievement of both girls and boys, the teacher perceptions of student
performance and student engagement with the teacher's subject. As an example, Dee’s
data suggests that having a female science teacher increases the likelihood that a girlviews science as useful for her future. He notes that because most US middle-school
teachers in the majority academic subjects are female, his results suggest that the gender
dynamics between teachers and students strengthen boys' large underperformance inreading while helping overcome the more modest underperformance of girls in maths andscience.
As shown, in New Zealand the majority of teachers in primary school are female. In
addition of particular relevance to those Maori children attending immersion or bilingual
units, the majority of teachers training to teach in these areas are also female. While otherresearch suggests a wide range of factors will be influencing outcomes for boys and girls,
if Dee is correct, then the gender composition of the teaching labour market could behaving some long-term impact on the overall workings of the labour market.
Conclusion
Like most other industrialised countries, in recent decades New Zealand experienced agender transition in tertiary educational enrolment. With many researchers and policy
makers still focusing on those areas that are male dominated, such as Modern
Apprenticeships, there has been a lack of recognition of the dramatic changes that havetaken place in most other areas of study. Two main areas are considered in this paper,
teaching and health workers. We argue while there are many positive implications in therise of human capital of women, there are also some potential outcomes that will provide
new challenges within the labour market. In particular, we suggest that the health sector,
already facing difficulties in attaching and retaining staff, will also have to make someadjustments, especially in rural areas, if it is to retract and retain the women who areincreasingly form the majority of new entrants in many skilled occupational groups.
Further research
There are a number of areas where further research would be useful. The first, andperhaps one of the most difficult, is determining why this gender transition has takenplace. As part of this research, there is a need to consider why particular areas of tertiary
education remain so strongly male dominated and why some remain strongly female
dominated. Currently research tends to focus on barriers to women in those areas thatremain male dominated. Already, a number of hypotheses are being put forward as towhy the transition has taken place including: that the schooling system has become
feminised, both in terms of curriculum and teaching staff, which assists a greater
proportion of girls to move onto tertiary education; that more boys are being raised bymothers without good male role models present in the family; that male behavioural,
psychological or developmental characteristics are slowing increases in male educational
attainment; that new courses being developed by tertiary education providers tend to be in‘female dominated’ subjects; that women have seen better gains than men in earnings andother material benefits from their participation in higher education; through to the idea
13

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

that women are genetically ‘brighter’ than men but have historically been held back by
discrimination within the family, within schools and in the wider society (Buchmann and
DiPrete 2006, DiPrete and Buchmann 2006).
Second, while not focussed on in this paper, ethnic dimensions of this gender transition
are especially important. If Maori and Pacific people are to dramatically increase their
participation in education and bring them up to the same rates as Europeans, then lifting
male participation rates is particularly important. Understanding why men from thesecommunities are, on average, under performing relative to women in educational settings,
is important.
Finally, more research is needed on the long-term implications of these changes in areas
such as the closing of pay gaps, couple formation, fertility decisions, decisions about paid
and unpaid work within couples, and both internal and external migration decisions. In
particular, more research is needed as to family friendly policies that may be needed if
the investment in women’s education, by both the women themselves and by the
taxpayer, is to be optimally utilised while at same time allowing women, and men, tohave both careers and be parents.
References
Barrowman, R. (1999) Victoria University of Wellington 1899 –1999: A history,
Wellington: Victoria University.
Buchmann, C. and DiPrete, T (2006) The growing female advantage in college
completion: The role of family background and academic achievement, American
Sociological Review, 71:515 –541.
Callister, P. (2005) Overworked families? Changes in the paid working hours of families
with young children, 1986 to 2001, Social Policy Journal of New Zealand, 24: 160-184.
Callister P. and Dixon, S. (2001) New Zealanders’ working time and home work patterns:
Evidence from the Time Use Survey, Occasional Paper 2001/5, Wellington: LabourMarket Policy Group, http://www.lmpg.govt.nz/publication-view.asp?ID=36
Callister, P., Newell, J., Perry, M. and Scott, D. (2006) The gendered tertiary educationtransition: When did it take place and what are some of the possible policy implications,
IPS Policy Quarterly, 2(3): 4-13.
Costa, D. L. and Kahn, M. E. (2000) Power couples: Changes in the locational choice ofthe college educated, 1940-1990, Quarterly Journal of Economics, 115(4): 1287-1315
Dee, T. S. (2006a) Teachers and the gender gaps in student achievement, NBER Working
Paper No. 11660, revised March 2006.

14

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Dee, T. S. (2006b) The Why Chromosome: How a teacher’s gender affects boys andgirls, Education Next, 4, http://www.hoover.org/publications/ednext/3853842.html
DiPrete, T. and Buchmann, C. (2006) Gender-specific trends in the value of educationand the emerging gender gap in college completion, Demography, 43 (1): 1-24.
Dumont, J. & Lemaître, G. (2004) Counting immigrants and expatriates in OECD
countries: A new perspective, Social, Employment and Migration working papers, Paris,
OECD.
Farquhar, S., Cablk. L., Buckingham, A., Butler, D. and Ballantyne, R. (2006) Men atwork: Sexism in early childhood education, Childforum, Porirua.
Health Workforce Queensland & Australian Rural and Remote Workforce Agencies
Group (2006) Doing the Sums: Will there be a future health workforce for rural andremote Australia?: A concise overview of past and present rural and remote General
Practice workforce trends. Brisbane: HWQ and ARRWAG.
Goldin, C. and Katz, L. F. (2006) The homecoming of American college women: Thereversal of the college gender gap, Journal of Economic Perspectives check
Janes, R., Elley, R., and Dowell, A. (2004) New Zealand Rural General Practitioners
1999 Survey—Part 2: gender issues, Journal of the New Zealand Medical Association,
117(1191), http://www.nzma.org.nz/journal/117-1191/814/
Mare, R. D and Schwartz, C. R. (2006) Income inequality and educational assortative
mating in the United States: Accounting for trends from 1940 to 2003, Paper presented at
the Annual Population Association of America meeting, Los Angeles, March 30-April 1.
McPherson, M. (2005) Demographic change and labour force participation: Implication
for workplace and social policy, New Zealand Population Review, 31(2): 91-115.
Newell, J. and Perry, M. (2006) Trends in the contribution of tertiary education to theaccumulation of educational capital in New Zealand: 1981 to 2001, Report prepared for
the Ministry of Education, Wellington: Monitoring and Evaluation Research Associates
Ltd.
Tolhurst, H., Talbot, J., Baker, L., Bell, P., Murray, G., Sutton, A., Dean, S., Treloar, C.,
and Harris, G. (2003) Rural General Practitioner Apprehension About Work Related
Violence in Australia, Australian Journal of Rural Health, 11(5): 237-241.

15

NZJER 31(3): 1-15, 2006, Callister & Newell ‘The Gender ‘Education Transition’: What it mightmean for the labour market’

Appendix
Census cohort analysis: The proportion of men and women from recent cohorts whoheld a degree
Percent of NZ born male and female
residents with a degree aged 15-34, basedon 1981 to 2001 census data
1951-56
1956-61
1961-66
1966-71
1971-76
Male 30-34

Male 25-29

Male 20-24

Male 15-19

Female 30-34

Female 25-29

Female 20-24

1976-81
Female 15-19

16
14
12
10
% 8
6
4
2
0

16

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

THE EFFECT OF SETTLEMENT TYPE ON THE LABOURFORCE PARTICIPATION OF NEW ZEALAND WOMENCOLLEEN SOUNESS1 AND PHILIP S. MORRISON2
Abstract
A key priority of the present government is to improve women’s participation in the workforce.
That education, age and reproduction decisions all play an important role in female labour force
participation is well documented. What is less well understood is the role played by the geographic
context in which these decisions are made – the relationship between participation and place. Basedon analysis of the 1996 census data of over one million New Zealand women of working age, theaim of this paper is to explore the way in which different types of settlement are associated withdifferent levels of female participation in the labour force. Our findings reveal that place ofresidence does affect the propensity of women to engage in wage labour – over and above thestandard human capital and demographic determinants. A unique feature of this study is the explicit
consideration of the relationship between partnership, participation and place. We find that not only
does the presence of a (male) partner have a strong and statistically significant influence on female
participation but that its effect is also very sensitive to settlement type. Particularly interesting isthe different effect partners have on female participation within small versus large urban settings.
Introduction
Probably the single most significant change to post-war labour markets has been the dramaticincrease in the labour force participation of women. One of its most perplexing characteristics,
however, is its marked and persistent variation within countries and within regions. The
improvement of women’s labour force participation has emerged as a key priority for government; 1
it was given special prominence by the OECD in the 2005 OECD survey of New Zealand (Jaumotte
2003; OECD 2005) and has been reflected in economic and social policy, such as the Working for
Families package, paid parental leave, improvements to annual holiday entitlements, and earlychildhood education and care, as well as pay equity (Affairs 2004). Despite this attention we
observe that the Workshop on Labour Force Participation and Economic Growth hosted by The
Treasury, Ministry of Social Development, Ministry of Women’s Affairs, and the Department ofLabour, gave only passing attention to the geography of participation (The Treasury 2005).
The purpose of this paper is to investigate the way in which settlement type in general andproximity to metropolitan labour markets in particular is associated with the labour force
participation of women as well as the way in which these particular geographies are associated withthe divisions of labour within households.

1

Colleen Souness is with the Centre for Social Research and Evaluation, Ministry of Social Development, Wellington
Prof Philip Morrison is in the School of Geography, Environment and Earth Sciences, Victoria University of
Wellington
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NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

The paper begins with a summary of the literature on the relationship between place andparticipation. We then introduce the data, the regression model and define each of the variables.
The variation in female participation rates over categories of settlement is then described in terms ofboth the likelihood and the degree of participation. We then consider the effect of controlling forthe composition of the population specifically the influence of age, fertility, education and thepresence of a partner. This is followed by a consideration of the way partnership affects
participation and the interactions of participation and place. Under Future Research we raise theissue of causality and how longitudinal data might help us better understand the above relationships.
The Influence of Place on Women’s Labour Force Participation
In addition to documenting the effect of dependent children, education and age, the international
literature has shown that female labour force participation is also sensitive to the characteristics of
local labour markets (Gordon 1970; Penhale 1980; Molho 1983; Stolzenberg and Waite 1984;
Lillidahl and Singell 1985; Morrison 1989; Ward and Dale 1992; Odland 1998; Morrison 1999).
Stolzenberg & Waite’s (1984) for example, observe how local areas have substantive andstatistically significant effects in weakening or strengthening the relationship between a mother’s
likelihood of labour force participation and number of children.
Participation rates can vary both within and across regions for two reasons; either the demographic
composition of the female population differs from one place to another (Molho 1983), or places ofresidence differ in the employment opportunities and constraints - in the ability of women toaccommodate both child rearing and paid work for example (Odland and Ellis 2001). Other factors
include labour market characteristics, such as higher wage earning potentials (Bowen and Finegan
1969; Oaxaca 1973; Gallaway, Vedder et al. 1991; Isserman and Rephann 1993), urban structure(Simpson 1982), and economic growth (Penhale 1980; Ward and Dale 1992; Johnstone and Pool
1996; McCall 1998).
Problems of mobility can also constrain opportunities for women to enter or extend their hours of
paid work. The inability of some women to move residence in order to maximise their work
opportunities contributes to differences of participation observed from place to place, particularly
among women with low levels of education and wage earning capacity as noted by McCall (1998).
Other place-specific differences in opportunities and constraints include the availability and cost ofchildcare, tertiary (re)training and the presence of social networks.
The New Zealand literature on locational constraints on women’s employment began by focusing
on comparisons between and within urban regions (Hyman 1979). In line with international
evidence, inter-urban comparisons of participation by women with children show employment isgreatest in areas with high overall labour force participation rates and strong economic growth(Penhale (1980). In a later study of regional labour markets, Morrison (1999) showed that thisvariation is most significant among the least-educated and least-experienced working populations
for whom mobility is most constrained, a finding also supported in the international literature(Odland and Ellis 2001).
The literature also supports the theoretical expectation that women’s labour force participation rises
with population density (Hyman 1979; Penhale 1980; Poot and Siegers 1992; Ward and Dale 1992;
Isserman and Rephann 1993; Morrison 1999). The reasons include the existence of greater
opportunities for full-time work, the concentration of tertiary sector employment in urban areas as17

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

well as the combined employment needs of career couples which require denser local labour
markets.
Early UK based evidence linked high female inactivity with rurality and, to a lesser extent,
industrial structure (Gordon (1970). Lillidahl and Singell (1985) also note a dramatic decline in
women’s labour force participation at the edge of cities and question how much of this nonparticipation is a result of family income and demographic differences, and how much the decline isa product of inadequate job opportunities.
Finally, while most studies take into account either the effect of marriage, male partner’s income, or
male partner’s labour force position on women’s participation, no studies could be found that
explicitly consider the different effect partnership might have on participation in different
settlement contexts.
Our review of the literature led to four hypotheses. Firstly, that women’s labour force participation
would continue to vary within countries even after controlling for the demographic, fertility andeducational attributes. Secondly, that one of the principle geographic explanations is proximity to
the job opportunities which large local labour markets offer. A third argues that fertility,
participation and location decisions are interrelated and made jointly, albeit with different lead andlag structures. To these we add a fourth hypothesis, that focuses on the importance of partners,
namely that the nature of the local labour market affects the joint decisions couples make over theirrespective engagement in paid work.
Data, Model and Variables
In the explorations to follow we draw on census data representing over one million New Zealandwomen of working age, 20-65 years. Our analysis is based on special cross-tabulations preparedfrom the 1996 census chosen initially because of the questions asked in that census about fertility.
The decision to enter the labour force is modelled as a binary choice, initially as participation per
se and then conditionally, that is, the probability of working fulltime given that some paid
employment is undertaken. Weighted least squares logit regression is used to estimate theparameters. As geographers we first begin by estimating the fixed effect of settlement type andonly then introduce four sets of control variables: age group of female, age group of the youngest
dependent child, highest qualification of female, presence of male partner, and where appropriate,
the labour force status of male partner.
The participation model may be written as:(1)

Psd = α + β1 Dsd + β2 Ssd + εsd

where Psd is the probability that the ith group of woman, in settlement type S, with attributes D, will
have engaged in paid work in the week prior to the 1996 census. D and S are vectors of relevantcharacteristics and β1 and β 2 are vectors of associated parameters. The conditional model applies
the same equation to women who are already employed in order to estimate the probability of fulltime work. A third model considers Puisd, the probability of female unemployment, as a function of
the same set of variables.
For estimation purposes the logit function is defined as the log of the odds ratio, so Psd is rewritten
as
18

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women(2)log ( Psd / 1 - Psd )The large sample expectation of εisd is zero and its variance is(3)

σsd2 = 1/ (Nsd . Psd (1 - Psd ))where N sd represents the population for group sd.
The fact that we are estimating parameters from cross tabulated data means that the estimates referto groups of women, not individual women as would be the case if we were using records on
individuals. The groups are weighted according to the proportion of the population they represent so
the weights are proportional to Nsd . Psd (1 - Psd ). Parameter estimates from weighted least squares
logit models have been shown to be very close to those that would be obtained from individuals
with the same range of attributes (see for example Li 1975) which makes using cross-tabulations aquick, low cost alternative to the more expensive unit records.2 We turn now to the data set andvariables in Table 1.
The set of five independent variables required for women with partners implies an 8 x 7 x 6 x 5 x 5= 8400 cell cross-tabulation. The table for women without partners is much smaller at 1680 cells (8x 7 x 6 x 5). We concatenated (joined) the two data sets to form a single multiway table of 10,080
cells. About half of these cells were empty and removing these left us with 5,477 cells.3 The
process of ‘folding’ turns these n cells into n rows with each cell address uniquely identified by the
0 or 1 in the columns denoting categories of each variable.
Table 1. Variables used in modeling female labour force participation 1996
Dependent Variable Components
Labour Force Status of Female
Employed Fulltime (30 hrs or more per week)
Employed Part-Time (less than 30 hrs per week)
Unemployed and Actively Seeking Work
Not in Labour Force
Not Applicable

FT
PT
U
NLF
NA

Independent Variables
Area of Usual Residence
Main Urban Community
Satellite Urban Community
Independent Urban Community
Rural Highly Urban Influence
Rural Moderate Urban Influence
Predominantly Rural
Highly Rural/Remote
Not Included

MUA
SUC
IUC
RHUI
RMUI
RLUI
HRR
UD

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NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

Age Group of Female
15-19 Years
20-24 Years
25-29 Years
30-34 Years
35-39 Years
40-44 Years
45-65 Years

A1519
A2024
A2529
A3034
A3539
A4044
A4565

Highest Qualification of Female
No Qualification
School Qualification
Vocational Qualification
Post School Qualification Not Elsewhere Incl.1
Degree or Higher
Not Specified

NQ
SQF
VQF
PSQN
DHF
NS

Youngest Dependent Child
Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children
No Dependent Children
Presence of a (Male) Partner

DCLT5
DC613
DC1417
DCADULTS
NDC
WPLabour Force Status of Male Partner
Employed Full-Time
Employed Part-Time

FTMP
PTMP

Measuring Labour Force Participation
The five categories listed under dependent variable components in Table 1 were used to construct
the three participation rates used in this paper. The conventional rate refers to the undertaking of
paid work of an hour or more per week, E, plus those actively looking for work, U, divided by all
those of working age, T, (20-65 in our case).4 In this paper we exclude those looking for work (theunemployed, U) from the numerator so our participation rate becomes simply E/T.5
Our conditional measure, the full time work rate, is the number of women working 30 hours ormore per week (Ef) divided by the total number of women (20-65) employed (E), that is, Ef/E. The
third measure we explore is the unemployment rate itself, U/T.
Settlement types
The main reason we use the Census of Population and Dwellings is the access it provides togeographic detail on the residence of households. Almost all studies which recognise the role ofplace in participation specify actual locations, usually regions, but sometimes urban areas or cities
within them.6 In a departure from this practice we replace what is often an arbitrary statistical
20

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

division of a country into geographic units by a classification of places based on both theiridentification as urban or rural and their proximity to the country’s largest, metropolitan labour
markets.7 The rationale here is that it is the geographic relationships embodied in the settlement
system which are important in understanding labour participation rather than location per se.8
Statistics New Zealand’s recent (re)classification of rural and urban recognises that a rural or small
urban centre’s proximity to a main city has significant influence on the labour market opportunities
of its residents. For example, a female resident in a small remote West Coast town and a female
resident of a small town close to Wellington each face a quite different labour demand scheduleeven though the towns themselves may be of the same size. Access to facilities, services, or
employment opportunities differ substantially in these two cases however and can be expected tohave consequences for the division of labour between work and family and hence on participation.
Under a dichotomous classification of rural or urban both towns would appear in the same category
however, the new classification allows the analysis to be based not only on an explicit ‘urban’ and‘rural’ dimension but also by degree of access to the major urban labour markets.9
Demographic and Education Variables
The seven age groups listed in Table 1 use fairly conventional divisions but in order to avoid thecompeting effects of schooling we confine our analysis to those women in the working age years
20-65. The ‘fertility’ measures in Table 1 are based on the ages of the youngest dependent child,under 5 years of age, between 6 and 13, 14-17 and the presence of (dependent) adult children. The
five education categories are based on the highest qualification attained.10
The primary variable we use to refer to partners is the presence of a (male) partner. The remaining
available variables in Table 1 refer to the labour force status of the partner, i.e. whether they are
employed, and if so, fulltime or part time.
Obtaining least squares estimates for categorical variables requires the specification of a basecategory in each case. The base used throughout is the group of women, 25-29 years old living in
Main Urban Areas without qualifications, without partners and without dependent children.
Participation Rates by Settlement TypeAn initial look at participation in 1996 shows that women’s engagement does vary by settlement
type, but not in the expected direction (Table 2). About two thirds of women living in urban areas
are in the labour force, but their participation rates are actually lower than those women living inrural areas.11 This is more specifically the case for women who live in Satellite (SUC) andIndependent Urban Centres (IUC) and they are noticeably less likely to be engaged in paid work. In
stark contrast with the international literature, in New Zealand it is not women in the more densely
populated labour markets who participate most, but those women living in rural areas; their mean
participation rate is 71 percent compared to 68 percent among urban women.12
The influence of ‘rural’ residence in truth depends critically on their proximity to urban centre
employment opportunities. Women living in rural areas that lie just outside the main urban areas,
those with a high urban influence, are noticeably more likely to be engaged in paid labour thanthose actually living in urban areas. This difference diminishes as access to the main urban markets
improves but appears to rise again in the more remote rural areas, although the latter three
categories in Table 2 do not reach the conventional margin of statistical significance. They are
21

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

intuitively plausible nevertheless with the costs of commuting to jobs reducing the net returns tourban employment so that reliance on rural and small town employment opportunities rise with theirremoteness.

Table 2: The labour force participation rates of female population by type of settlement. New
Zealand females of working age 20-65, 1996.
S e ttle m e n t T y p e

U rb a n

R u ra l

M a in u r b a n a r e a
S a t e llit e U r b a n C o m m u n it y
I n d e p e n d e n t U r b a n C o m m u n it y
T o ta l
R u r a l H ig h U r b a n I n flu e n c e
R u r a l M o d e r a t e U r b a n I n flu e n c e
R u r a l L o w U r b a n I n flu e n c e
H ig h ly R u r a l/ R e m o t e
T o ta l

L a b o u r F o rc e
P a r tic ip a tio n R a te
M e a n0 .6 9 5
0 .6 3 3
0 .4 6 8
0 .6 8 0
0 .7 3 9
0 .7 1 5
0 .7 1 2
0 .7 2 1
0 .7 1 0

S .D .
0 .2 0 2
0 .2 3 9
0 .2 3 2
0 .2 0 0
0 .2 2 1
0 .2 2 7
0 .2 3 0
0 .2 3 7
0 .2 3 0

Fulltime Employment
The labour force participation rates we have been using so far (E/T) simply indicate if the woman
worked for pay (or in a family business) for an hour or more in the week prior to the census. As
such this variable gives no indication of the actual number of hours worked.13 In order to capturesome of the variation of employed women over the hours of work distribution we introduce theconditional fulltime employment rate, (Eft/E) the mean of which is 64%. Rates for each of theseven settlement types are shown in Table 3. 14
Table 3. Conditional fulltime labour force participation rates by settlement type; women 2065, 1996
Settlement Type
Urban

Rural

Conditional Rate (Eft/E)
Main Urban Area
Satellite Urban Community
Independent Urban Community
Rural High Urban Influence
Rural Moderate Urban Influence
Rural Low Urban Influence
Highly Rural/Remote

0.661
0.592
0.578
0.618
0.599
0.587
0.579

The chance of an employed woman obtaining fulltime work beyond the main urban areas wasnoticeably lower than those residing within them. The chances of fulltime work rises the closer awoman resides to the largest labour markets. Such a pattern is exactly what one would expect fromavailable theory and underscores the importance of measuring participation in terms of the amountof paid work. The exception to this neat pattern however are the results for Independent andSatellite Urban areas for women living in these areas show rates which are more similar to rural
areas outside the commuting range of main urban areas.
Unemployment
22

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

In terms of settlement type female unemployment rates behave inversely to the participation rate:they are lowest in urban settlements and rise with distance to the main urban settlements. In thissense the spatial mirrors the temporal, (see Figure 3 of the Stroombergen paper in this volume foran example). Again, breaking the neat picture is the Satellite and Independent Urban Communities,
both of which show relatively higher unemployment rates, Table 4.
In summary, we have established that women’s chances of employment continue to varysystematically by settlement type but each settlement type has a different relative influence depend
on whether one is considering participation per se, engagement in fulltime work or searching forwork (unemployment).
In general, the results are consistent with available theory. However the data used so far does notcontrol for composition effects – the fact that settlements are occupied by women whose
demographics and educational attributes alone raise or lower their likelihood of participating andworking full time. A more specific test for settlement effects on participation needs therefore tocontrol for the different mixes of women living therein.
Table 4: Mean unemployment rates by settlement type of women 20-65, 1996
Settlement Type
Urban

Rural

Main Urban Area
Satellite Urban Community
Independent Urban Community
Rural High Urban Influence
Rural Moderate Urban Influence
Rural Low Urban Influence
Highly Rural/Remote

Unconditional
Unemployment Rate (U/T)
0.049
0.051
0.054
0.031
0.039
0.039
0.034

Settlement Effects after Controlling for Composition Effects
The effect of including the vector of demographic variables (D) into the same equation as
settlement effects confirms the overwhelming negative impact that dependent children, particularly
those under six, have on whether a woman works at all, as well as the likelihood that she will work
full time and confirms that participation also falls substantially if the youngest child is under six.
When the youngest child is 6-13 years old the negative impact on participation is slightly weaker
but still statistically significant. The likelihood of a mother gaining employment increases aschildren become older (see Table 5).
Our results also confirm the positive relationship between education and participation; the higher
the level of education the more likely a woman will enter paid work. Underlying each of these
attributes is the pervasive effect of age in accounting for variation in women’s labour force
participation; women in the youngest and oldest age groups are least likely to be in paid work.
Entering control variables has an effect on the role of settlement type. For example composition
effects diminish the likelihood of participation in Independent Urban Communities and Satellite
Urban Communities to the point where they cease to be statistically different from those of theMain Urban Areas. This suggests that it was the composition of the female population rather thanthe labour demand schedule characteristic of such locations which was responsible for much of theirlower participation observed in Table 2. 15
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NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

In summary, Main Urban Areas attract those women with higher propensity to participate in paid
work and once we control for their attributes we still find women more likely to engage in at least
some paid work (or in a family business) in rural areas; in fact the different mix of women living inremote areas was actually suppressing the magnitude of this settlement effect on participation. Oneof the possible reasons may lie in the very definition of participation itself for it only requires thatthe respondent works an hour or more a week.
Table 5: Labour force participation (E/T) by settlement type controlling for demographic andeducational attributes. Odds ratio, weighted least squares logit estimates. New Zealandfemales of working age 20-65, 1996.
Logit
Dependent Children 1-5 Years
Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children

Odds Ratio
0.228
0.228
0.457
0.876
1.312

t
-34.34-34.34-19.87-3.10
6.74

Post School Qualification Not Elsewhere
Incl.135-39 Years
40-44 Years
45-65 Years

1.701

10.11

1.023
1.109
0.478

0.45
1.90
-16.00Presence of a (Male) Partner

1.932

23.82

Satellite Urban Community
0.884
-1.65
Independent Urban Community
0.929
-1.91
Rural Highly Urban Influence
1.255
2.64
Rural Moderate Urban Influence
1.173
2.28
Predominantly Rural
1.190
3.14
Highly Rural/Remote
1.296
2.77
Not Included
0.842
-0.16
Number of obs = 3569, F (21, 3547) = 146.84, Prob > 0.0000, R-Squared = 0.4651, Adj RSquared = 0.4619, Root MSE = 0.7278

Participating in full-time work
Each of the variables which were important in accounting for participation per se become
exaggerated when we consider the likelihood employed women will work fulltime - in both theireffect on the odds of employment and in terms of their statistical significance; Table 6. The
opportunities for women to work fulltime are clearly strongest in main urban areas (all the placeodds ratios are significantly less than 1.0) and this result brings the New Zealand result back in linewith the international evidence.
Table 6: Conditional full time labour force participation (Eft/E) by demographic attributes andsettlement type. Odds ratio, weighted least squares logit estimates. New Zealand females of working
age 20-65, 1996.
Logit

Odds Ratiot24

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children

0.189
0.275
0.536
0.853

-59.22-56.45-27.22-6.83

Post School Qualification Not Elsewhere
Incl.1
School Qualification
Vocational Qualification
Degree or Higher

1.087

2.56

1.062
1.194
1.496

3.198
8.67
14.40

20-24 Years
30-34 Years
35-39 Years
40-44 Years
45-65 Years

0.651
0.743
0.644
0.661
0.428

-12.76-9.46-14.04-12.75-29.33Presence of a (Male) Partner

0.838

-9.61

Satellite Urban Community
0.818
-4.37
Independent Urban Community
0.803
-9.53
Rural Highly Urban Influence
0.878
-2.90
Rural Moderate Urban Influence
0.865
-3.90
Predominantly Rural
0.873
-4.66
Highly Rural/Remote
0.837
-3.74
Number of obs = 3023, F (20, 3002) = 350.37, Prob > 0.0000, R-Squared = 0.7001, Adj RSquared = 0.6981, Root MSE = 0.39351

Interaction Effects
Although there are marked differences in fertility across the country the influence of dependent
children of different ages has a remarkably similar effect across all seven settlement types. There isnot, in other words, a strong interaction effect between settlement and fertility when it comes toaccounting for participation. The odds on participation (relative to women without dependents)
increases as the youngest dependent child ages regardless of settlement type. The strength of therelationships however (the t statistics) are most pronounced in the main urban areas.
The influence of education levels on participation is also highly consistent across the settlementswith participation rising at roughly the same magnitude with successive increases in the highest
qualification. Interestingly, the relative effect of having a degree on participation is most marked,
not in the cities but in the more remote rural areas. Moreover, when it comes to fulltime work, therelative strength of both vocational and degree qualifications on the probability of engaging in
fulltime work rises noticeably in the Satellite and Independent Urban Centres. Both underscore thegreater premium attached to education outside the main urban areas – a point we return to below.
The relative influence of age on participation is also similar across the settlements, but participation
rates of older women are more likely to fall (relative to our age base) in rural areas compared to themain centres. Age also has a different influence on the participation in full time work across thethree urban settlement types. Younger women (20-24) in independent and satellite urban areas are

25

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

far more likely to be engaged in fulltime work than their counterparts in the major centres where alarger proportion are engaged in tertiary education.
The Effect of Partnership on Participation16
One of the striking features of the results presented so far is the highly significant influence which(male) partners appear to play in labour force participation outcomes of women, as Table 5 and 6
show.17 There is a high correlation between partners in their propensity to work or not to work, aswell as a complementarity with the hours of work undertaken.18
Considerable attention is now being paid internationally to the implication of these relationships forhousehold location decisions, that is to the geography of career couples (Frank 1978; Green 1995;
Green 1997; Costa and Kahn 2000) as well as associated questions of family, migration andemployment (Lichter 1982; Bird and Bird 1985; Snaith 1990; Shields and Shields 1993; Cooke andBailey 1996; Bailey, Blakes et al. 2004). These studies are part of a much broader literature that isaddressing the complex geography of households (Buzar, Ogden et al. 2005). In this paper we
focus on the way settlement type affects the distribution of paid work across adults within thehousehold.
The paper by Callister and Newell in this volume refers to the way in which the growing demand
for simultaneous employment of both partners (especially those with high levels of education)
render it increasingly likely that they will have to locate in the most dense and largest labour
markets if both partners are to secure employment that matches their career aspirations (Callisterand Newell 2007). If this argument is substantiated empirically then it has implications forcompetitiveness of different settlement types, for relocation policies and even for environmental
policy - because career couples tend to commute longer distances (Green 1995).
There are six questions about the relationship between partnering, work and settlement type that areof interest here. Each addresses the extent to which a partnered woman’s propensity to work is
influenced by her partners employment status, controlling for demographics including fertility andeducation as above. The reasons for this are manifold. The partnership variable is also likely to bepicking up attributes of women which are not captured in the standard set of human capitalvariables already in the model but that are nevertheless positively correlated with matching on boththe partner and job markets. This results is consistent with both the theoretical (e.g. Becker) and theempirical assortative mating literature which shows that men and women do not partner randomly
but are likely to have similar characteristics in terms of education and employment status (Del
Boca, Locatelli et al. 2000; Henz and Sundstrom 2001; Baxter 2005).19
Our first question addresses the employment effect of simply having a partner, regardless ofwhether the partner is employed or not. Table 5 showed that the marginal effect of having a partner
substantially increases the likelihood a woman will engage in paid work; partnered females arealmost twice as likely to be working (odds ratio = 1.93).

26

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

Table 7: The impact of being partnered with someone who is employed on the odds of apartnered woman being employed, 1996.
Logit

Odds Ratiot

Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children

0.225
0.492
0.923
1.197

-45.56-23.31-2.47
5.22

Post School Qualification Not Elsewhere
Incl.1
School Qualification
Vocational Qualification
Degree or Higher

1.510

10.15

1.590
2.278
2.313

20.61
30.84
22.19

20-24 Years
30-34 Years
35-39 Years
40-44 Years
45-65 Years

1.005
0.958
1.062
1.203
0.596

0.11
-1.20
1.61
4.45
-13.97

Presence of an employed partner
5.559
77.27
Number of obs = 2643, F (14, 2628) = 680.80, Prob > 0.0000, R-Squared = 0.7839, Adj RSquared = 0.7827, Root MSE = 0.46756

27

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

Our second question is whether being partnered with someone who is employed further raises thelikelihood that the women herself will be employed. The answer is a clear yes, the odds of her
working increase fivefold; an employed partner has a much greater influence on a woman’s
participation than partnership alone, Table 7.20
Our third question is whether the amount of work engaged in by an employed male partner
influences his partner’s propensity to participate. And here again the answer is a clear yes. Adding
a variable representing partner’s engagement in fulltime work to the model in Table 7 raises theodds of a woman working over and above the fact that her partner is employed.
A fourth related question is whether, having a partner who is unemployed has any effect on apartnered woman’s likelihood of working. The answer is no; her odds of being employed remainunchanged, suggesting that unemployment is a temporary phenomenon for most partners.
Our fifth question asks whether a partner can also have a negative effect on a women’s likelihood ofparticipation. The answer is a definite yes. A male partner’s location outside the labour force
significantly decreases the chances his partner will be in paid employment. It is possible in suchcases that both partners may be students or retired although note how both the age range and thefact that all these regressions reported here have a full set of controls probably precludes suchcomposition effects.
Our sixth question has to do with the relationship between the amount of work a woman is engaged
in and her partnership status. Our interest here lies in testing the so-called backward sloping supply
curve effect on female participation, the argument being that if the partner is working and earning
sufficiently, the woman is more likely to withdraw some or all or her labour from the market.21 The
empirical issue is the point at which male engagement with the market tends to reduce female
labour supply. The career couple hypothesis would suggest otherwise with the two participations
reinforcing rather than countering each other.22
Table 8: The negative influence of partnership on the propensity of employed women to selectfulltime work, New Zealand, 1996.
Logit

Odds Ratiot

Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children

0.190
0.275
0.539
0.865

-57.82-55.29-26.41-6.14

Post School Qualification Not Elsewhere
Incl.1
School Qualification
Vocational Qualification
Degree or Higher

1.100

2.87

1.069
1.203
1.545

3.47
8.87
15.32

20-24 Years
30-34 Years
35-39 Years
40-44 Years
45-65 Years

0.658
0.739
0.639
0.660
0.426

-12.22-9.41-13.98-12.65-28.91

Presence of a (Male) Partner

0.825-10.2628

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

Number of obs = 3023, F (14, 3008) =471.19, Prob > 0.0000, R-Squared = 0.6868, Adj RSquared = 0.6854, Root MSE = 0.40172

29

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

We explore two possible effects – the first being the influence which simply having a partner(employed or not) has on the likelihood that an employed women will work fulltime (Eft/E).
Interestingly the effect was strongly negative; working women were less likely to work fulltime ifthey have partners (even with the full set of controls in place). Table 8 shows the diminished odds
on the partnership variable.
If instead we just consider the effect of those partners who are in employment on the chances an
employed woman will work fulltime the effect is actually positive – the odds increase and thesignificance level is higher. Thus, while partnership per se negatively affects the likelihood an
employed woman works fulltime , this is not the case when partners are themselves employed.
The Interaction of Partnering, Employment and Settlement TypeA central question for this paper is whether or not the employment implications of partnering are
affected by the geographic context? For example, does partnership have the same influence on
women’s employment in the main cities as it does in the smaller towns and in the countryside?
We will focus primarily on urban size by considering the differences between main urban areas andsmaller towns (Satellites and Independent Urban Centres). This way we largely avoid theconfounding differences which farm work can introduce into these comparisons. We also
approached this question by running our models just for urban areas and then testing for small town
interaction effects on the partnership variable. Using this approach we test whether living inSatellite and Independent centres means that the presence of working partners has a different effecton female participation than in the Main Urban Areas. The answer is no. While the interaction
effect is positive it is not significant.
Among partnered women we then ask whether women were more likely to work if their partner
worked fulltime and whether this relationship holds any differently in Satellite and Independent
Urban Centres communities. Again the answer is no; the new coefficient is positive but notsignificant.
We then asked whether the effect of adding a partner on the odds that a women otherwise employed
will work fulltime differs according to the type of urban centre. The answer is yes; the presence of apartner has a much greater effect in reducing the propensity of employed women to work fulltime inSatellite and Independent Urban Centres than in Main Urban Areas. The marginal contribution ofmen’s additional work in small towns is to decrease the likelihood that women will work fulltime
whereas in large urban markets it is to raise it.
These last highly significant interaction effects suggest a difference in motivation for fulltime work
among women in large and small cities. In the larger urban centres there are more career
opportunities for women. In smaller centres a female with a partner may take on fulltime work outof necessity, so that when men secure fulltime work, women reduce their hours of work. This same
result may also reflect substitution effects in Satellite and Independent urban areas - men taking
most of the few fulltime jobs in such areas.
There is the possibility of course that it is not geography but the different socio-economic positionof women in small and large urban areas that is operating to generate the above results. The
propensity of women in Satellite and Independent settlements to withdraw their labour when theirpartners get fulltime work may simply reflect the lower socio-economic of women in small urban
centres. In contemporary large labour markets, particularly among educated couples, men and
30

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

women’s paid work is less likely to be substitutable within the household. Among this stratum
work is more likely to be undertaken for its own sake and enjoyment rather than simply a means ofincome generation to be substituted by another adult whenever possible.
We tested this socio-economic hypothesis by rerunning our previous test for two different educationlevels, those above and below School Qualifications (but we had to remove the main education
terms when stratifying the sample due to collinearity). We found however that the small town
interaction effect still held regardless of whether we applied the model separately to women with amaximum of school qualifications or to those with higher qualifications. In both cases there was asignificant small –town-working-partner negative interaction effect on the odds of employed
women working fulltime, even among the better educated women.
Table 9. The influence of small town residency and the partner’s fulltime work on the propensity ofwomen to work fulltime on women with a maximum of school qualifications only. Urban areas only.
Logit

Odds Ratiot

Dependent Children 1-5 Years
Dependent Children 6-13 Years
Dependent Children 14-17 Years
Adult Children

0.183
0.268
0.542
0.864

-28.61-27.12-12.96-2.96

20-24 Years
30-34 Years
35-39 Years
40-44 Years
45-65 Years

1.021
0.696
0.599
0.594
0.364

0.24
-5.55
-7.76
-7.66
-15.93Presence of an employed partner
1.203
4.00
Presence of an empl’d partner x
0.807
-5.48
Small town residence
Number of obs = 565, F (11, 553) = 121.72, Prob > 0.0000, R-Squared = 0.7077, Adj R-Squared= 0.7019, Root MSE = 0.34786

Table 9 shows that within urban areas as a whole the effect of having a partner in fulltime workraises the likelihood that employed women will engage in fulltime work but lowers her likelihoodof employment, especially if these women live in smaller settlements.
In the larger, denser urban labour markets the more likely it is that fulltime work will be undertaken
by both adults in partnered households. Women living in larger cities are less likely to reduce theirlabour supply when partners hold fulltime jobs than their counterparts living in small, scatteredurban markets. However, the fact that this is also the case for women with lower levels of educationsuggests that price effects in larger centres may necessitate both partners working. Withurbanization the partnering markets and labour markets reinforce each other to collect productive
talent in a few concentrated places.23 Our results are therefore consistent with and support theevolving ‘career couple’ thesis being advanced by Costa and Kahn (2000).
Conclusions
What this cross sectional study of the New Zealand census data suggests is not only that thecountry’s settlement geography has to be factored more explicitly into models of female labour
31

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women

force participation but that there are alternative ways of bringing in that geography. Our paper isunusual in its use of settlement type as an influence but this is justified by the way in which it has
illuminated both the role of employment density, the proximity to the major urban labour markets
and exposed the sensitivity of increased hours of participation to location, as well as the differential
way partnership affects participation across the country.
We have also shown that while the key demographic influences on female participation rates
continue to hold throughout the settlement system their relative strength and statistical significancecan vary systematically from one settlement type to another. We have noted this particularly in thecase of young women where the amount of work they undertake depending on where they work.
Finally, we have spent some time exploring a relatively neglected relationship, that is, between
partnering and participation in paid work. The range of issues is considerable but one result is quite
clear - women and their partners do not make employment decisions in a spaceless world. Their
choice of location, work and partnership, together with fertility decisions, are all highlyinterconnected. It is the nature of that interconnection and its implications for urban settlement that
constitutes the on-going research challenge.
There are, however, well known limitations to drawing inferences from cross sectional data,
especially when it comes to understanding highly dynamic behaviour such as labour participation.
While there are clues in the above results to the possible influence of timing in both the labour andpartnership markets, any attempt to draw causal inferences about these interrelated processes isgoing to require access to appropriate longitudinal data.
As several papers delivered at this twelfth conference have shown, New Zealand researchers willsoon be in a strong position to join their overseas colleagues in exploiting rich longitudinal data
sets. By modeling migration and labour market entry, fertility and education decisions as related,sequential decisions in which timing plays an important role, geographers and other social scientists
will be better able advance their understanding of the role that place plays in market engagement.
Such advances will also allow other disciplines to include space in their models with a much greater
degree of confidence as to its likely role in mediating the labour engagement process.
Finally, using the conventional breakpoints of 0 and 1 hours of work and over and below 30 hours
is still required if cross tabulations are the only form in which data are readily available. But thisdichotomization hardly begins to exploit the much richer information we actually have available
from the census on hours worked. While the number of cross tabulations permissible by Statistics
New Zealand has restricted full use of hours worked in this study, access to unit record data infuture should allow a much better understanding of the role of partnership on the hours worked by
women as well as the geography of female participation itself. The 2006 census offers many newopportunities in this respect.
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Notes
1

The recent OECD 2005 Economic Survey highlighted that while New Zealand’s overall female participation iscomparatively high by international standards, it has one of the lowest rates of employment among mothers withchildren under the age of six years in the OECD OECD (2005). Economic survey of New Zealand 2005: raising female
labour force participation, OECD..
2
Although not widely used there are distinct advantages in exploring relationships in a multivariate way using suchcross tabulations, apart from the fact that they are a fraction of the price and can be run very quickly by SNZ. Both timeand dollar costs are considerably lower than obtaining access to unit records through the SNZ data analysis lab. Cross
tabulations in ‘folded’ form to which weighted least squares can be applied are therefore ideal for graduate student
work. Other examples in which a ‘synthetic’ individual level sample of workers were used to obtain estimates of
disaggregated groups from cross-tabulated data Morrison, P. S., K. L. Papps, et al. (2006). "Wages, employment,labour turnover and the accessibility of local labour markets." Labour Economics 13: 639-663.. For an example using
four successive census years to make up a panel data set see Morrison, P. S. (2005). Changing patterns of homeownership in New Zealand, 1991 to 2001. Wellington, Report to DTZ for Centre for Housing Research (CHRANZ): 163.. Other examples of the use of high-dimensional cross tabulations on New Zealand data include Harris, R. (1992).
"Ethnicity, gender and labour supply in New Zealand 1986." New Zealand Economic Papers 26(2): 199-218..
3
This table includes all those cells with at least one observation, one women present (randomly rounded to 3). We
experimented with this threshold and found that setting the minimum cell size to 6, 9, 12 or even 15 made little
difference to the overall conclusions we draw from these analyses and have therefore returned to the original number ofcells, 5476.
34

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women
4

A fairly full discussion of the hours of work distribution of both men and women was published as Appendix 5.1 inMorrison Morrison, P. S. (1989). Labour adjustment in metropolitan regions. Wellington, Institute of Policy Studies
and VUW Press.. This still serves as a useful qualification to the dichotomous measures used here. Paid work
definitions undoubtedly understate the participation of women in productive work in general, not just housework but
any caring of children or adults outside the household in which reciprocity rather than monetary payment takes place.
A much more nuanced picture of the extent of ‘work’ undertaken by both men and women could be obtained from theTime Use Survey. For this study we are limited by the largely international conventions that govern the questionnaire
structure of the census of population and dwellings.
5
Our definition also excludes the Not Applicable response in the Census question. Unemployment rates are consideredseparately.
6
The rationale for including regions or location identifiers in general is often quite limited or unidimensional. Take forexample the single rationale applied in a recent Treasury paper: “It is expected that the fixed cost of working is different
for people in or outside our larger cities and in or out of more remote areas, in particular for people with children who
may need childcare services” Kalb, G. and R. Scutella (2003). New Zealand labour supply from 1991-2001: ananalysis based on a discrete choice structural utility model. New Zealand Treasury Working Paper 03/23. Wellington,
The Treasury.. This may well be true, but there are many other components to the regional context that can affectparticipation rates. The fact that (in New Zealand particularly) ‘the region’ is a poor proxy for access to metropolitan
labour markets is one of the reasons for the use of Settlement Types in our paper.
7
Note that Statistics New Zealand uses the 2001 census to undertake this classification and, by using the 1996 census,
we are implicitly assuming its appropriateness for conditions five years earlier. For details of the classification see
Statistics New Zealand Statistics_New_Zealand (2005). New Zealand: an urban/rural profile. Wellington.. The
resulting map may be found in http://www.stats.govt.nz/urban-rural-profiles/default.htm
8
We acknowledge the valuable conversations we have had with Robert Didham, Statistics New Zealand, on thistypology and acknowledge the instrumental role he had in bringing the (re) classification to our attention.
9
The other approach is to use local labour markets. These are locationally specific and are defined on the basis of
inward and outward commuting patterns Papps, K. L. and J. O. Newell (2002). Identifying functional labour market
areas in New Zealand: a reconnaissance study using travel-to-work data. Bonn, Institute for Study of Labour..
10
Experimentation with the ‘not specified’ showed its inclusion in the base had little effect on the estimates presented
below.
11
Of the approximately one million women of working age represented in the data, 86 percent live in urban settlements.
12
We tested for the statistical significance of these differences by running the settlement location variables in equation
1 only. Each settlement type was identified as a dummy (0,1) variable and compared against the Main Urban Areas,
Table 3. The lower Satellite and Independent urban communities participation rates are statistically significant as are thehigher rates for the rural areas with high urban influence.
13
The distribution of hours worked by women is a far more complex issue than is normally acknowledged and thedimensions of the question are probably best explored in depth through the Time Use Survey Callister, P. and S.
Dixon (2006). New Zealanders' working time and home work patterns: evidence from the Time Use Survey. Occasional
Paper 2001/5,. Wellington Department of Labour, Labour Market Policy Group ; also see Callister, P. (2005). Thechanging distribution of paid and unpaid work in New Zealand. W. o. L. F. P. a. E. G.-A. Wellington. Wellington
Institute of Policy Studies, Victoria University of Wellington: 33, Callister, P. (2005). "Overworked families? Changes
in paid working hours of families with young children, 1986 to 2001." Social Policy Journal of New Zealand 24: 160284..
14
The odds ratio coefficients are the log of the odds ratio coefficients exponentiated, ie. eβ.
15Composition and context are related of course; those seeking fulltime employment would be much more likely tolocate in main urban areas so certain compositions are correlated with certain contexts. Correspondingly, those womenseeking a life style that does not necessarily include employment such as the retired may seek locations more consistent
with that lifestyle.
16
The seminal paper here is Becker Becker, G. S. (1973). "A theory of marriage: part 1." The Journal of Political
Economy 81(4): 813-846.. It is worth noting our preferred use of the term ‘partner’ rather than ‘marital status’, andhow this mirrors exactly Becker’s own intent in what he nevertheless calls, ‘A theory of marriage’. “Marriage,” heexplains, “simply means that two persons M and F share the same household (p 815) and “differs from the legal
definition [to] include persons in “consensual” and casual unions and excludes legally married persons who areseparated” Becker, G. S. (1973). "A theory of marriage: part 1." The Journal of Political Economy 81(4): 813-846..
The point to make here of course is that the majority of empirical studies which only use marital status in theirequations are quite inconsistent with this theoretical position even when they refer to Becker. The result is an
unacknowledged degree of measurement error on the partnership variable for increasingly, married women are a
declining and quite unrepresentative subset of all partnered women. We have avoided this confusion by not only
employing the more current term ‘partner’ both conceptually but in the way we asked Statistics New Zealand toconstruct the partnership variable.

35

NZJER 31(3):16-35, 2006, Souness & Morrison The Effect of Settlement Type on the Labour Force Participationof NZ Women17

Our analysis is confined to male partners. It would be of interest to extend this to an assessment of the labour impact
of female partners although there will be a problem of small numbers.
18
This association is now well documented in the international literature Pencavel, J. (1998). "Assortative mating byschooling and the work behaviour of wives and husbands." The American Economic Review 88(2): 326-329..
Nevertheless Pencavel makes the point that rarely has the research on the market work decisions of husbands and wives
and their marital choices been brought together. See also Liu and Zhang Liu, P.-W. and J. Zhang (1999). "Assortative
mating versus the cross-productivity effect." Applied Economics Letters 6(8): 523-525.. However also see early workby sociologists on dual career families Rapoport, R. and R. Rapoport (1976). Dual-career families re-examined.
London, Martin Robinson..
19
A related connection is between the marriage market and poverty Cancian, M., S. Danziger, et al. (1993). Working
wives and family income inequality among married couples. Uneven tides, rsing ineuqlaity in America. S. H. Danziger
and P. Gottschalk. New York, Russell Sage Foundation: 195-222..
20
The conventional way of specifying the additional attributes of partners would be to add an employed partner term in
the equation which has the working partner variable included. However the vast majority of partners are employed andincluding both in the same equation forces the rejection of the working partner variable in this case.
21
This could be for both labour and non-market reasons; see Pencavel, J. (1998). "Assortative mating by schoolingand the work behaviour of wives and husbands." The American Economic Review 88(2): 326-329.
22
Becker’s distinction between the labour of partners being complementary or substituting is relevant here, op cit.
23
For a sociological take on this issue driven by a concern over the relationship between propinquity and homogamy
see the early paper by Ramsoy Ramsoy, N. R. (1966). "Assortative mating and the structure of cities." American
Sociological Review 31(6): 773-786.

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

USE OF TEMPORARY NURSE MECHANISMS BY NEWZEALAND’S DISTRICT HEALTH BOARDS
Nicola North1, Frances Hughes2, Erling Rasmussen3, Mary Finlayson4, Toni
Ashton5, Taima Campbell6, Sharon Tomkins7
Abstract
Nursing shortages is a concern globally, and in this context has emerged a research
focus on reasons and costs of turnover and retention. A national study on the costs ofnursing turnover in New Zealand public hospitals was conducted between 2004-2006,
with12 month’s data collected per randomly selected unit. Annual turnover rates were
found to be high at average 39.16%, with a range of between 13.83% and 73.17%.
Budgeted nurse staffing per unit in is expected to be sufficient to deliver nursing workfor the patient population (occupancy, acuity and complexity) and provide for leave(annual, sick, study, family, bereavement etc). In the context of the study, it was
assumed that temporary cover mechanisms were mainly to cover vacancies andoccasional unplanned contingencies such as influenza affecting staff, and higher thannormal demands for nursing work. The cost of temporary cover would therefore be acost of turnover. An unexpected finding of the study was that temporary covermechanisms were widely used, including when actual staff numbers were equal to or
exceeded budget, and no consistent relationship with vacancies was evident. It was
concluded that management of the nursing resource was driven by cost, not strategic,
considerations. Published research on use of temporary cover and the effect of suchpractices on turnover of nurses provided a perspective to critique the finding.
Introduction
The single largest health professional workforce in hospitals, both numerically and as
a proportion of the total wage bill, is its nursing services. The nature of nursing workand demand on nursing services complicates efficient budgeting and deployment,
because nursing work is characterized by its non-deferrable nature and unpredictable
volumes arising from fluctuations in acuity and demand. Budgeting for nursing fulltime equivalent numbers (FTEs) must take into account employment contracts
provisions (eg annual, sick and bereavement leave, hours of work per shift and perweek). In New Zealand public hospitals nursing working conditions are covered by
the NZNO-DHB MECA agreement.
This paper reports on an aspect of data that was collected from a national sample ofnursing units in New Zealand public hospitals participating in the Cost of Nursing
1

Nicola North, School of Nursing, The University of Auckland,
Frances Hughes, University of Technology Sydney
3
Erling Rasmussen, Department of Management and Employment, The University of Auckland
4
Mary Finlayson, School of Nursing, The University of Auckland
5 Toni Ashton, School of Population Health, The University of Auckland
6
Taima Campbell, Auckland District Health Board
7
Sharon Tomkins, School of Nursing, The University of Auckland
2

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Turnover study (North et al. 2005). Unexpected findings of the study were thewidespread lower levels of actual permanent RN staff (reported as FTE) thanbudgeted, and the high use of temporary cover mechanisms. Use of temporary coveroccurred not only to cover vacancies, as anticipated, but also occurred when RN FTE
staffing was equal to or exceeded budgeted levels. The finding raised questions about
the adequacy of RN staffing levels to deliver nursing services and led to a conclusionthat management of the nursing resource is driven by considerations of cost, notstrategic considerations.
Regarding the statutory context there are two primary considerations. First, District
Health Boards in New Zealand have statutory obligations to provide the best healthcare and support services to New Zealanders in a fiscally prudent manner (Public
Health & Disability Act 2000). This implies that DHB owned facilities including
hospitals should provide services that are competent, safe, and of high quality.
Second, as employers DHBs are also responsible for employee health and safety andfor making sure the work done by employees is safe and healthy (Health and Safety in
Employment Act 1992 & 2002).
Previous Research
The use of temporary cover mechanisms in nursing to cover vacancies, shortages,
leave, higher patient volumes and acuity is attracting researcher attention. An a prioriconsideration, however, concerns the adequacy of nurse staffing and nursing
workforce management in the first place. A five-country study in the late 1990s thatsurveyed over 43,000 nurses showed high levels of job dissatisfaction (between 32.941% in 4 of the 5 countries), scores in the high burnout range for 29.1-43.2% in those
4 countries, and corresponding high rates of intent to leave, up to about 46%. Only
about a third of respondents in each country agreed that levels of RN staffing were
sufficient to provide high quality care and to get the job done. Correspondingly highlevels, up to 83.2%, reported an increase in patient load (Aiken et al. 2001). Further
analysis of the USA sample demonstrated that, after adjusting for patient and hospitalcharacteristics, each additional patient assigned to a nurse increased by 7% the risk ofdeath within 30 days of admission and failure to rescue; risk to the nurse of burnout
increased by 23% and job dissatisfaction by 15% (Aiken et al. 2002).
These concerns have also been found in New Zealand; where research indicates that30-40% of nurses consistently intend to leave their job within 12 months (CobdenGrainge & Walker 2002; Finlayson & Gower 2002). Persistently high job stress anddissatisfaction are not surprisingly reflected in RN recruitment and retentiondifficulties, reported by the Department of Labour(DoL) (2005). A survey of
employers, who had recently advertised vacancies in 2004, showed that there were
few suitable applicants per vacancy (1.1 applications per vacancy), and only 63% ofvacancies were filled within 8-10 weeks of advertising, meaning that existing staff
and temporary nurses would be covering unfilled positions. Moreover, those
advertised vacancies were for existing, not newly created, positions, suggesting thatturnover is high. Lending support to nurses’ complaints of being overworked, the DoLreported that employment of RNs grew by only 0.8% per annum in the decade 19912001, low compared to employment growth of doctors (2.8%) and other healthprofessionals (2.1%).

37

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Accompanying increased nurse workload and attendant outcomes for patients(increased mortality) and nurses (job dissatisfaction, burnout and intent to leave) has
been a reported escalation in the use of and dependence on temporary covermechanisms internationally. Research has found that temporary cover mechanisms
are employed to manage chronic shortages of nurses, retention and recruitment
difficulties, staff absences, a hiatus of 2-3 months between a leaving nurse’s position
being refilled, and variations in patient volume and acuity (Berney et al 2005; Buchan& Thomas, 1995; Cardona & Bernreuter 1996; Manias et al 2003).
Also significant is that these developments have taken place in a context of increasing
casualisation of the work force generally. This workforce casualisation has also
affected nursing, reflecting what are seen as prohibitive costs of a 100% staffing
model (Peerson et al 2002). I has also resulted in a trend toward “dejobbing”, that is afundamental shift from seeing one’s self as occupying a position to contracting one’s
skills to meet work needs (Strasen & Brock 1998). However, research has shown that
temporary cover mechanisms are no panacea. Seen as an easy way of reducing costs
and increasing flexibility, criticisms of temporary cover mechanisms commonly
employed include (Berney et al 2005; Buchan & Thomas, 1995; Manias et al 2003;
Mayer & Siegel 1996; Peerson et al 2002):• reduced continuity of care
• variable quality of temporary staff and concerns over continuing education• reduced quality of care and increased risk of liability• increased management time to arrange cover;• reduced morale of permanent staff• fatigue and burnout of permanent staff working overtime and assisting
temporary nurses• irregular and unknown exposure to continuing education.
On the other hand, research has also pointed to advantages which include the greater
flexibility of managing staffing to manage fluctuations in demand and associatedreduced costs, ability to manage chronic vacancies and short term absences, improved
flexibility and other benefits for the agency nurses themselves (Buchan & Thomas,
1995; Manias et al 2003; Peerson et al 2002).
Ways of providing temporary cover vary and reflect three main mechanisms. One
mechanism concerns the use of overtime, a practice related to fatigue and the stress ofoverwork. Using hospital operating cost data, a USA study showed that overtime use
increased by between 35-40% during 1995-2000. While nurses worked an average
weekly overtime of 4.5% of total hours, this included some nurses who worked up to
16.6% weekly overtime (Berney, Needleman & Kover 2005). A second mechanism
employed is the use of an in-house nursing resource variously referred to as a nursebank or bureau, float team or resource team. This was found to be widespread in asurvey of Scottish hospitals to improve flexibility and save on staff benefits (Buchan& Thomas 1995). Savings on staff benefits are contestable in the light of a landmark
UK employment tribunal decision awarding benefits on the basis of similar work forthe organisation, irrespective of temporary or permanent status (Anonymous 2006). A
third commonly used mechanism is the use of nurses employed not by the hospital but
by an external agency. A 2002 survey in Melbourne (Peerson et al 2002; Manias et al2003) uncovered high utilisation of agencies along with concerns over the difficulties
38

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

in matching the qualifications and experience of the agency nurse to the needs of thecontracting nursing service. Agency nurse use was higher where units were busy,
where patient demand was fluctuating, in specialty areas with recruitment andretention problems, and where there were no permanent night staff (all staff rotated),but use was lower where staffing was stable. In spite of concerns over use of agency
nurses, health organisations were nevertheless dependent on them to manage
vacancies, shortages, absences and variable patient volumes and acuity.
Few authors have addressed the issue of solutions. An exception is an evaluated trialof a policy decision to “over hire”, that is to employ excess numbers of nurses, in thatcase new graduates, to reduce the number of vacancies resulting from the hiatus
between a nurse’s resignation and replacement (Cardona & Bernreuter 1996). The
study identified several benefits of over-hiring:
•
•
•
•
•

historical costs of temporary staff and overtime were much higher than wages
for the over-hires
likelihood of closing beds was reduced
liability risks were reduced
staff morale and loyalty was increased
stability of the nursing workforce and strategic workforce management wereenhanced.

In the UK, a recently published document sets out a series of best practices for
managing temporary nursing staff, urging a strategic approach to use of temporary
nurses in place of an ad hoc dependence to manage shortages and recruitment andretention difficulties (National Audit Office 2006). A strategic approach requires dataon work arrangements and staff usage: on usage patterns and trends, costs, reasons foruse and relation to variables such as patient volume and acuity, seasons and days,
turnover and vacancies. Also required are that the setting of and filling nurse
establishments are realistic, including clear policies and decision guidelines to govern
the use of temporary staff.
What, then, is the situation in New Zealand? Are nursing workforces managed
strategically, as reflected in budgeted staffing levels, actual levels employed, reasonsfor and levels of use of temporary cover mechanisms? These are issues explored byanalysing data collected for the Cost of Nursing Turnover study.
Methods
The data used for this paper were collected as part of the New Zealand Cost of
Nursing Turnover Study, conducted between 2004-2006 to determine the actual costsof nursing turnover, and the impacts on patient and nurse outcomes (North et al.
2005). The study used a protocol developed in Britain, was pilot tested by six
countries including New Zealand (see Hayes et al 2006; O’Brien-Pallas et al 2006;
North & Hughes, 2006). In New Zealand after receiving ethical approval, 22
randomly selected general medical and surgical units participated in the study but
three did not complete data collection and have been excluded from the analysis (acompletion rate of 86.4%). Information regarding nurse staffing models and practices(and other information) was collected from each unit at the start of the study. Data on
temporary cover mechanisms, assumed in the protocol to be used primarily to cover

39

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

vacancies, were collected systematically and longitudinally over a period of 12months per ward. All unit managers participated in a series of follow-up telephoneinterviews when they commented on and offered explanations on some of the results
for their unit.
Results
In presenting the results, the article starts by describing the context of nursing work interms of occupancy rates and nurse staffing practices. Then data on RN budgeted andactual FTE are presented Turnover rates are reported and a correlation between FTE
deficit and turnover demonstrated. Finally, temporary staffing practices, as a means tobridge the gap between demand and supply of nursing services, are reported. Unit
managers’ comments and explanations of the way nursing levels are set andtemporary cover mechanisms used go some way to understanding staffing practices
but do not satisfactorily explain the motivation for those practices.
Resourced beds and occupancy
Table 1 shows the number of resourced beds (average 25.57) and occupancy rates(average 91.8%). In many of the units, there were additional unfunded beds, and thesebeds were also used as required to meet demand. Occupancy that exceeded 100%
showed that a given bed was occupied by more than one patient in a 24 hour period.
Average registered nursing care hours per patient per 24 hours were 4.99 hours. In
some units, the figure was precise when appropriate software was used, while in otherunits, the figure was calculated based on average nurse and patient numbers.
Staffing of units and nurse staffing practices
Nursing budgets covered the following staff: unit manager (usually termed charge
nurse); advanced clinical roles (clinical nurse specialists and educators); staff nurses
covering four levels; unregulated roles (health care assistants, nurse assistants,
enrolled nurses).
Table 1: Resourced beds, occupancy rates and daily hours of care
Average
Ave RN hours per patient per
Resourced beds
occupancy
24 hours
Mean 25.57

Mean 91.8%

Mean: 4.99

Range 19.08 -47.33

Range 73%-109.1%

Range 3.07-9.8

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

As can be seen from Table 2, units were managed by charge nurses at 1 FTE per unit,
with the support of a small number of advanced nurses-clinical nurse specialists andclinical nurse educators. Normally, these advanced roles did not carry a patient load.
To deliver direct patient care services, units were staffed by a mix of RNs working as
staff nurses, with the assistance of unregulated roles (health care assistants, nurse
assistants). In addition nursing staff were supported in delivering patient care withhousekeeping support and allied health services, neither of which came from thenursing budget.
In 1 ward, nurses worked 2x12 hour shifts while in all other wards, nurses wererostered on 3x8 hour shifts. Typically, in day shifts, there were 6 RNs + 1
unregistered health care assistant or enrolled nurse, and on night shifts, there were 2-3
RNs and 1 unregistered health care assistant.
Table 2: Nursing Staff of units in FTE per unit
Clinical nurse
specialist

Unit manager
All units
1FTE

6/20 units
0.5-4 FTEClinical nurse
educator
12/20 units
0.3-1 FTE

Staff nurses
All units14.3 - 45.63

Unregulated
All units
0.5-14 FTE

Budgeted and actual RN FTEWhen budgeting for the FTEs of RN staff nurses, the following factors need to beconsidered:

Predictable factors
affecting required RN
numberso Annual Leaveo Bed numberso Nurses per shift+

Unpredictable (low level)factors affecting required
RN numberso Sick Leaveo Study leaveo Family Leave+

Unpredictable (highlevel) factors
affecting required
RN numberso Occupancy rateso Acuity

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Table 3 shows data on full time equivalents (FTE) of Registered Nurses (staff nurses).
The mean budgeted FTE was 25.87 and mean actual RN FTE was 24.05 (median
25.48), with a range of 14.61-38.52. The difference between budgeted and actual FTE
was on average -1.88 (median -1.74), with a range per ward per month from -7.2 to+2.26.
Table 3: The average budgeted and actual FTE
Budgeted FTE

Actual FTE

Difference between budgeted& actual FTE

Mean

25.87

24.05

-1.88

Range

14.3-45.63

14.61-38.52-7.2 - +2.26

The relationship between budgeted and actual RN FTE became a focus of discussion
in follow-up interviews where researchers presented and analysed provisional resultswith unit managers and nurse leaders. Budgeted RN levels were set annually bymanagement staff, and unit managers confirmed that the levels were expected toinclude annual leave and provide for sick and other unanticipated leave requirements.
Few unit managers were involved in setting the budgeted RN level beyond being
briefly consulted. Some did not know how the budget was arrived at and many feltthat historical budgeted levels were no longer adequate to meet usual volumes and thegenerally high acuity levels that many unit managers stressed had increased alongwith a shorter length of stay.
In spite of their views that budgeted FTEs were inadequate, it is also important tostress the negative difference between budgeted and actual RN FTE (an average of 1.88 FTE, with a range to -7.2 FTE). Unit managers were asked why actual RNs
tended to be lower than budgeted. In many cases, this was because RNs had left andthere were delays in filling the vacancy, reflecting both the time it takes to fill avacancy and difficulties in finding a replacement (see also DoL 2005). However, afew DHBs or wards preferred not to staff the ward to the budgeted level for various
other reasons. This practice gave them greater flexibility to staff according to variable
demand; to help manage costs within the budget; to minimise the risk of RNs being
redeployed on a shift by shift basis (a practice nurses disliked); and that RN budget
savings allowed unit managers to purchase other services such as unregulated staff tosupport nurses.
Interestingly, there were also a few units where actual FTEs exceeded the budget.
Those unit managers claimed that their primary concern was to provide a safe
working environment both for patients and staff and this over-rode budget concerns.
They also believed the budgeted FTE was inadequate and by consistently exceeding
the budget delivered a message to managers responsible for setting the budget.
As discussed below, this paper focuses on situations when actual RN levels were
inadequate and where temporary cover mechanisms were used to cover the shortages.

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Turnover Rates
The turnover rate of the sample of units over one year was calculated per ward basedon the following information:
1. FTE: average budgeted FTE levels per ward were 25.87.
2. FTE Leavers: the total number of RNs who left the primary place of employment
in the 12 month study period was 192.6 FTE.
3. Wards: the total number of wards was 19.
The average national turnover rate after 12 months of data collection for all 19 wards
was 39.16% with a range of 13.83% to 73.17%. The turnover rate is artificially raisedby the required 6 month rotations of new graduate RNs. If the total number of leavers
is reduced by deducting new graduate second rotation figures (24), the average
turnover rate falls to around 34.38% (see Table 4).
Table 4: Turnover rates %
Mean

Max.

Min.

39.16

73.17

13.83

Total FTE
leavers
192.6

Total FTE
joiners
268

Mean excl.
NG 2nd34.38

A total of 192.6 FTE in 19 units left during the 12 months of data collection. Notingthat the mean budgeted RN FTE per ward was 25.87, the national average for one
ward in one year was 10.14 leavers, with a range from 3.5 to 21.6, representing anannual turnover of nearly 40% of its RN staff. During the same period, a total of 268
RNs joined the participating wards, giving an average of 13.4 new RNs per year per
ward. Unit managers were asked whether the turnover in their ward in the 12 month
data collection period was unusual. In many cases, the rate reflected normal patterns.
Others remarked that the turnover rate in the study period was unusually high andoffered explanations: organisational change or restructuring had occurred around thetime of the study; occupancy and acuity had been particularly high; and theenvironment stressful.
Relationship between turnover and FTE deficits
The relationship between turnover and FTE deficits was investigated using
Spearman’s rank order correlation. There was a medium, negative correlation between
the two variables [r= -.474, n=19, p<.040], with high levels of turnover associatedwith lower levels of staffing. That is, as actual FTE decreases below the budgeted
FTE, turnover increases. Fig. 2 shows a scatter gram demonstrating the relationshipbetween higher turnover with lower actual FTE against budgeted FTE.

43NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Fig.2: Scatter gram showing the negative relationship between turnover and thedifference between budgeted and actual FTE
80.00

70.00

Turnover Rate %

60.00

50.00

40.00

30.00

20.00

10.00
-8.00

-6.00

-4.00

-2.00

0.00

2.00

Difference b/w budget & actual FTE

Use of temporary cover mechanisms
When permanent rostered RN staff nurses were insufficient to meet demand for
nursing services, temporary cover was used. All units used temporary cover, though
the mechanisms and the purpose varied. Figure 3 shows the variety of mechanisms
employed.
Fig.3: Temporary cover mechanisms used
Mechanisms to cover shortages in RN
numberso RN Overtimeo Redeployment from other wards
o Float/Resource nursing teamo Temporary RNs (in-house-bureau; externalagency)o Unregulated Staff (nurse assistants)o Maximising pressure on nurses (increase
productivity)o Close bedso Reduced services

Overtime by permanent staff was commonly used, frequently involving permanent
part-time staff nurses and also full-time nurses. Redeployment on a shift by shift basis
from other units under less pressure was also widely used. The “float” or “resource”
team refers to a pool of permanent employees who, like permanent staff nurses
allocated to wards, are guaranteed work to a specified number of weekly hours;
however, the nurses work wherever the greater need is. Bureau (in-house) or agency

44

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards(external) nurses also work wherever they are sent, but there is no guaranteed amountof work, nor are those nurses obliged to agree to work where and when requested. All
hospitals had their internal bureau (other terms used are ‘nurse bank’ or ‘nurse pool’)and in metropolitan areas there were external agencies that hospitals could call on. RN
substitution or extension by using unregulated staff from a bureau or pool (assistants,
patient “watchers”) was widely used, sometimes when an RN could not be found,
other times when particular patients required the constant presence of an observer, but
not necessarily by an RN. When no temporary RN could be found sometimes
available nurses simply worked harder, and/or carried out the essential tasks (e.g.
medications) while neglecting those tasks that did not risk patient safety (e.g. notadministering hot drinks). As a final resort, when RN coverage was deemed too low
to assure safety and quality of care, nurse managers had the authority to close beds
temporarily or reduce services.
Unit managers differed in their use of and preference for different mechanisms. For
example some unit managers avoided redeploying their staff as morale was negatively
affected by being moved around at short notice. Others did not like using agency orbureau nurses and would rather use overtime. Some resisted nurse substitution for
professional reasons. When unit managers were asked to describe how they managed
a RN shortage on a given shift, they mentioned a wide range of approaches based on
the above mechanisms but differing on their priorities, preferences and organizational
policies.
Costs of temporary cover mechanisms
Different mechanisms carry different dollar costs. For example, it is more expensive
to use external agency RNs than the hospital’s own employees; increased productivity– that is, doing the same work with fewer staff - and redeployment do not show up on
the balance sheet as a cost. In addition, a common practice is for shifting RNs
between wards: RNs working in wards that on a given shift are not busy can be
moved temporarily to another ward that on a given shift is short of staff. This latter
practice is seldom included in the calculation, but nevertheless carries a potential costin its effect on staff health and job satisfaction. Closing beds and reducing services are
not reflected in unit manager cost centre figures, although the costs related to loss ofrevenue, public confidence and expensive fixed assets lying idle is high.
On this background, the dollar costs associated with temporary cover mechanisms
were calculated to include:••••

actual amount spent on temporary nurses;
overtime;
cost of time spent to arrange cover; andcost of time related to permanent staff introducing temporary staff to unit and inassisting or explaining things.

The detailed calculations associated with the various temporary cover mechanisms arepresented in the following sections and then costs associated with the provision of
temporary cover are summarized in Table 5.

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NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Temporary nursing staff - an average of $173,201 was spent on temporary cover per
ward per year (median $161,197), with a range of $31,743 -$374,152. These costs
were calculated based on actual amounts spent providing temporary staffing,including internal float or resource teams, internal bureau//pool, and external agency.
Overtime - an average of $11,028 was spent on overtime per ward per year (median$2,904), with a range of $0.00 - $93,893. Duration ranged from an hour or two to fullshifts, with instances of double shifts being worked.
Administrative and management time to arrange temporary cover – an average of$11,813 per ward per year (median $12,227), with a range of $3878 - $22,461. The
cost was calculated on amount of time spent on a daily basis by unit and other nurse
managers, internal nursing bureau personnel and administrators multiplied by theirhourly rates. Administrative practices varied considerably across DHBs: large DHBs
had dedicated offices or personnel purely for the arrangement of temporary nursing
staffing and smaller DHBs one to two persons dedicated to that task; other DHBs
relied on the unit manager concerned to arrange the cover.
Cost of time for permanent staff to assist/ advise temporary staff – an average of$4,369 per ward per year, with a range of $0.00 - $15,201. The cost was calculated
based on real-time recording of permanent RN staff time and level over the 12 month
period. Costs associated with the provision of temporary cover are summarised on
Table 5.
Table 5: Average costs per unit per year associated with temporary cover
Mean

Range

Temporary Nursing Staff$173,201$31,743- $374,152

Overtime$11,028$0.00-$93,893$11,813$3,878-$22,461$4,369$196,482.2$0.00-$15,201$35,621-$505,707

Time arranging temporary
staff
Time assisting temporary staff
TOTALSOn exploring the high amounts spent on temporary staffing with participating unit
managers, many raised concerns that temporary staffing mechanisms are not only tocover vacancies and therefore should not be a turnover cost. In many DHBs,
temporary cover was primarily used for other purposes including: sick leave, otherleave such as bereavement leave and study leave, and higher than normal acuity andworkload. Temporary cover was used for leave though budgeted RN levels in wards
were deemed sufficient to cover workload and leave. However, there wasconsiderable variation reported; some claimed only a small level or none was used tocover vacancies with most used to cover sick leave and the like; others said that
temporary cover mechanisms were only or mostly used for vacancies and shortages.
Further complicating factors were different practices in staffing wards. Some
deliberately employed fewer RNs than budgeted for, for such reasons as allowing for
greater flexibility to cover fluctuating demand and to manage units within budget.
Others endeavoured to employ RNs up to the budgeted level or to exceed the46

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

budgeted level when the budget was deemed inadequate for delivering safe care.
Another reported practice was to use the nursing budget flexibly, for example to buy
additional health care assistant time. While acknowledging that owing to differing
practices and policies temporary cover is used to manage RN staffing, not only tocover vacancies and shortages, it also appeared that in some cases the budgeted levelof RNs was insufficient to meet the demand. Based on data and unit manager
explanations, use of temporary cover could be ascribed to one of three scenarios:i.

Scenario 1: budgeted = actual RNs.
Temporary cover is used for increased acuity, increased volume, increased
staff sickness.

ii.

Scenario 2: vacancies result in actual<budgeted.
Temporary cover is used for increased acuity, increased volume, increased
sickness, and vacancies.

iii.

Scenario 3: actual staffing is deliberately <budgeted:Temporary cover is used to manage fluctuations as above and to create salarysavings.

In Scenario 1, temporary cover is not a cost of turnover; however questions remain
about how realistic budgeted staff levels are. In Scenario 2, temporary mechanisms
clearly are a direct cost of turnover, but salary savings related to unfilled vacancies
need to be deducted from costs. Costs of temporary cover are also a turnover cost in
Scenario 3 irrespective of the rationale for the practice.
Discussion
In the participating units, although occupancy rates were high and according to unit
managers acuity was also high, there was a mean negative RN staffing against
budgeted levels. Furthermore, unit managers widely felt that budgeted RN FTEs wereinsufficient to deliver safe levels of nursing services for the patient population. New
Zealand and international research (Aiken et al, 2001, 2002; Finlayson & Gower
2002) has indicated that nursing is an overworked occupation and this researchreflects that there is a high risk of burnout and stress among nurses. It is not
surprising, therefore, that employers reported difficulty in filling RN vacancies (DoL,2005). The Department of Labour has attributed this recruitment difficulty to low
numbers of applicants, high turnover, emigration of nursing skills and highoccupational detachment (with nurses choosing not to work in nursing).
It was found that temporary cover mechanisms were widely used to cover thenegative gap between budgeted and actual RN FTEs combined with high turnoverrates. This was an important finding which was further explored with unit managers.
A primary concern of unit managers was related to professional issues: concerns wereexpressed about safe levels of staffing, quality patient care, and pastoral concern for
their nurses. However, unit managers were in the invidious position where multiple,
often competing, demands intercepted: they were required to manage the unit withinbudget, to support organisational strategy, to manage quality of care, and they were
responsible for health and safety of staff and for professional development of nurses.

47

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

Despite these responsibilities, generally unit managers did not strategically or
operationally participate in the setting of RN FTEs required to meet demand, nor were
they able to fill vacancies quickly and efficiently, leading to their reliance on
temporary cover mechanisms.
Mechanisms of temporary cover and costs reflect those reported in literature reviewed(Berney et al 2005; Buchan & Thomas 1995; Manias et al 2001; Peerson et al 2002).
These authors also identified drawbacks of temporary cover mechanisms. Working at
the point of delivery of nursing services, unit managers were well aware of the
drawbacks, but they were seldom in a position to reduce their reliance on temporary
cover. Those drawbacks included the demand on manager time and resources, thedemand on permanent staff working overtime and assisting external nurses, and thelimitations of temporary nurses regarding skills, familiarity with the workplace andproductivity. Given these concerns, annual average expenditure at these levels on
temporary cover mechanisms is worthy of serious and critical attention with a view todetermining how best to use the nursing budget.
The results demonstrate that at an organisational level setting the nursing FTE budget,
staffing to the budgeted level and use of temporary cover are largely driven byconsiderations of costs, not strategic and professional considerations. A wider
question, however, regards the costs to which a dollar figure cannot be easily
ascribed. These costs reflect the high levels of burnout and job dissatisfaction found instudies cited above, low morale, the difficulties reported by employers in recruiting
nurses along with high occupational detachment and emigration by nurses (DoL2005) and high turnover found in the present study. Instability of nursing workforces
and increased patient load, both found in the present study, have been demonstrated tobe directly related to higher patient mortality (Aiken et al 2002).
In the light of international experiences, the future supply of a competent nursing
workforce cannot be assumed. In Australia, the UK and the USA, where reliance on
temporary cover mechanisms – particularly nurses external to the organisation - ismuch longer and more widespread than in New Zealand, temporary cover has
emerged as a focus of research into the use, impacts on both temporary and permanent
nurses, and implications for patient care quality. There are specific recommendations
arising from such studies (National Audit Office 2006; Manias et al 2001; Peerson etal 2002; Cardona & Bernreuter 1996; Buchan & Thompson 1995; Berney et al 2005)
that could usefully inform policy development in New Zealand hospitals. In particulara critical examination of the present nurse staffing levels, the use of temporary covermechanisms and the development of guidelines governing their use are warranted in
the light of findings of the present study.
Conclusions and recommendations
This study provides evidence to guide policy and practice decision making regarding
the nursing workforce. In a context of high turnover, reducing supply, an ageing
workforce approaching retirement and increased demand for nursing services, anobvious human resource strategy is to focus on retention. However, a working
environment that maximises productivity of nurses through flexible use of the nursing
resource and budget, extends nurse capacity with the use of unregulated workers, and48

NZJER 31(3), 36-50, 2006 North, et al, ‘Use Of Temporary Nurse Mechanisms By NZ’s District
Health Boards

relies on temporary cover mechanisms is antithetical to retention. A priority is toestablish human resource management systems to determine, monitor, and review
appropriate nurse establishments and to manage the use of temporary cover. The
impact of current and future patterns of use of temporary cover on key indicators andoutcomes needs to be monitored to guard against patient outcomes and the health andsafety of nurses being secondary considerations to those of cost.
Acknowledging that use of temporary cover was not the primary focus of the present
study, the findings highlight the need for further research. It is important toinvestigate unit managers’ claims that budgeted RN levels are inadequate to do thejob. A more focused investigation on the costs and consequences for patients, nurses
and health systems, at their broadest, of staffing practices and strategy, related to
productivity, flexibility, temporary replacement and nurse substitution, is indicated.
And research into nurse retention is required, particularly in the context of an ageing
population that is increasing demand for nursing services.
References
Aiken L, Clarke S, Sloane D, Sochalski J, Busse R, Clarke H, Giovanetti P, Hunt J,
Rafferty A-M, Shamian J. (2001) Nurses’ reports on hospital care in five countries.
Health Affairs 20, 3., 43-53.
Aiken L, Clarke S, Sloane D, Sochalski J, Silber J. (2002) Hospital nurse staffing andpatient mortality, nurse burnout, and job satisfaction. Journal of the American
Medical Association 288, 16, 1987-1993.
Anonymous (2006) Nursing Standard, 20, 46., 11.
Berney B, Needleman J, Kovner C. Factors influencing the use of registered nurse
overtime in hospitals, 1995-2000. Journal of Nursing Scholarship, 37, 2., 165–172.
Buchan J & Thomas S. (1995) Managing temporary nursing staff: nurse banks in
Scotland. Health Manpower Management, 21, 1., 23-27.
Cardona S & Bernreuter M. (1996) Graduate Nurse Overhires: A Cost Analysis.
Journal of Nursing Administration, 26, 3., 10-15.
Cobden-Grainge F & J Walker (2002) New Zealand Nurses’ Career Plans. Nursing
Education and Research Foundation, Christchurch.
Department of Labour (2005) Registered Nurse: occupational skill shortage
assessment. Wellington: author.
Finlayson M & Gower S (2002) Hospital restructuring: identifying the impact onpatients and nurses. Praxis 18, 1., 27-35.
Hayes, L.J, O'Brien-Pallas, L., Duffield, C., Shamian, S., Buchan, J., Hughes, F.,
Spence Laschinger, H. K., North, N., Stone, P. W. (2006) Nurse Turnover: a literature
review. International Journal of Nursing Studies, 43, 2., 237-26.
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Health Boards

Manias E, Aitken R, Peerson A, Parker J, Wong K. (2003).Agency nursing work inacute care settings: perceptions of hospital nursing managers and agency nurse
providers. Journal of Clinical Nursing, 12, 4., 457–466.
Meyer S & Siegel M (1996). How Much is Enough? Agency Nurse Orientation
Journal of Nursing Staff Development, 12, 1., 41-42.
National Audit Office (2006) Good Practice in Managing the Use of Temporary
Nursing Staff. UK: Department of Health.
North N & Hughes F. (2006) Methodological challenges to researching nursing
turnover in New Zealand: a progress report of a national study. Asia Pacific Journalof Health Management 1, 1., 45-51.
North, N., Rasmussen, E., Hughes, F., Finlayson, M., Ashton, T., Campbell, T. andTomkins, S. (2005). Turnover amongst Nurses in New Zealand’s District Health
Boards: A National Survey of Nursing Turnover and Turnover Costs. New Zealand
Journal of Employment Relations, 30, 1., 49-62.
O’Brien-Pallas, L. Griffin, P, Shamian, J, Buchan, J, Duffield, C, Hughes, F,
Laschinger, H, North, N, Stone, P, Hayes, L. The impact of nursing turnover onpatient, nurse and system outcomes: a pilot study and focus for a multi-centre study.
Policy, Politics and Nursing Practice; forthcoming July 2006.
Peerson A, Aitken R, Manias E, Parker J, Wong K. (2002). Agency nursing in
Melbourne, Australia: a telephone survey of hospital and agency managers. Journal ofAdvanced Nursing 40, 5., 504–512.
Strasen L, Brock R. (1998) Preparing for the 'Dejobbed' World of Work. Journal of
Nursing Administration, 28, 7/8., 3-5, 9.

50

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’EMPLOYERS, UNIONS AND WORKPLACEPARTNERSHIP IN NEW ZEALAND
Ian McAndrew1

Abstract
In 2005 the Partnership Resource Centre of the Department of Labour commissioned
a comprehensive review or ‘stocktake’ of union-management workplace partnership
practices and behaviours in New Zealand. The study found that the penetration ofpartnership practices has been sporadic and/or experimental, set in an environmentthat is oftentimes abrasive to the concept. Nonetheless, in many workplaces wherecollective bargaining has existed for a significant period, both unions andmanagement are adopting some key features of a partnership approach. The study
concluded that prospects for further penetration of partnership behaviours inunionized firms are positive as the attitudes of many officials on both sides are
relatively open to the approach and to the practices it encompasses. This paper offers
empirical insights into the attitudes and behaviours of New Zealand employers andunion officials in single-employer collective bargaining relationships regarding eachother, collective bargaining, other consultative measures, and collaborative versus
competitive approaches to their relationships with one another.
Introduction
This paper is the product of a significant research project sponsored by thePartnership Resource Centre (PRC) in the New Zealand Department of Labour(DOL). The PRC sought to describe the current state of workplace partnership in New
Zealand employment relations by documenting and analysing contemporary
employer-union relationships in action (Ballard & McAndrew 2006).
The core ideas behind partnership include: a collaborative approach to bargaining;wide union and employee consultation practices; a focus on extracting “mutual gains”
from negotiations; a preference for consensus over conflict; and, mutual investment inprotecting relationships. Partnership, nonetheless, respects the existence of a diversityof interests in the workplace, recognizes the potential for legitimate conflict there, but
promotes restraint and protection of the relationship in the management of conflict.
The study involved a comprehensive review of all relevant New Zealand literatureand documented case studies. With that background, a theoretical model identifying
the antecedent behaviours involved in workplace partnership was developed and fromthat a structured questionnaire and survey process was completed. This paper
summarises the results of the study, with a focus on the survey outcomes.

1

Ian McAndrew, Senior Lecturer, Department of Management, University of Otago, Dunedin

51

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

The Development of Workplace Partnership Theory & Practice
The term “workplace partnership” incorporates a range of cooperative practices fromsocietal to workplace levels. Today’s interest in partnership arguably derives fromseveral quite diverse concepts and practices. One is the unitarist framework embodied
in the employer-initiated, union-excluding “employee involvement” or “employee
participation” schemes popularised in Britain and the United States, among othercountries, in the 1980s (Marchington & Wilkinson 2000; Wilkinson 2001). Today,
they are often supported by a strongly unitarist, managerial rhetoric and asophisticated suite of high commitment human resources management practices
designed to “win minds and hearts” to organizational goals (Guest & Peccei 2001).
In more direct lineage to modern union-management partnerships are several pluralist
strands, including one that flows from the post-World War II Western tradition ofcollective bargaining studied by Bakke and other institutional labour market scholars
in the 1940s, ‘50s, ‘60s and ‘70s, particularly in the United States and Britain (Bakke
1946; Flanders 1974; Clegg 1979; Brannen 1983). This tradition is what has beenreferred to as:… a minimal pluralist-voluntarist sense of partnership as a stable, collaborative
relationship between capital and labour, as represented by an independent union,
providing for low social conflict and significant worker influence on businessdecision-making through strong collective bargaining (Ackers & Payne 1998:
533).
This is essentially voluntary, collective bargaining-based cooperation between
management and union, with an acknowledgement of some differences of interest
between employer and employee, and an acknowledged role for the union as
representative of workers, albeit with a de-emphasis on the sort of sustained, overt
industrial conflict that often characterized collective bargaining in earlier times and agreater emphasis on seeking consensus through integrative bargaining.
The second relevant pluralist concept is that of “industrial democracy” as embodiedin, for example, European Works Councils. The third is partnership in the state
corporatist sense, again with roots in Northern Europe and Scandinavia.
While New Zealand has toyed with these latter two concepts, it is really the“voluntarist pluralist” concept of state-enabled, but not mandated, collective
bargaining, perhaps with subsidiary consultation mechanisms, and incorporating an
independent union voice for employees that would likely offer the most fruitful
foundation for workplace partnership in this country. This is essentially the “mutual
gains” approach advocated by Kochan and Osterman (1994).
Workplace Relations in New Zealand – The Relevant Short History
For 90 years until the mid-1980s, the New Zealand labour market operated under acompulsory conciliation and contingent arbitration model for the setting of wages andconditions. Though there were some exceptions, this centralised and low-involvement

52

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’model offered little opportunity for the development of collaborative workplace
relationships between unions and managements.
The Labour Relations Act 1987 (LRA) was intended to provide stimulus to further
break down the award-based structures that had been stripped of arbitration backing in
1984, and to experimentation with industry- or enterprise-based, collective bargaining(Harbridge, 1988; Harbridge & McCaw, 1989; McAndrew, 1989). By 1989 thegovernment set up a Committee of Enquiry into Industrial Democracy, giving further
articulation and impetus to the notion that unions should be accepted as constructive
partners with business in negotiations at industry and enterprise level (McAndrew,
1989: 137).
The structure and nature of employment relations, however, was soon to change
dramatically under the Employment Contracts Act 1991 (ECA). Employers now had arelatively free hand and made most of the running, and many employees who had
previously been covered by union-negotiated awards were moved onto individual
employment contracts. The scope of union representation and influence waned
considerably. However, workplace reform did occur in pockets of New Zealandindustry during this period, mostly in industries exposed to changing global
economics, and it included some examples of union-management co-operation.
With its underpinnings being the promotion of collective bargaining and theobligation of good faith dealing, the Employment Relations Act 2000 (ERA) clearlyprovides more fertile ground for the growth of union-management partnership than
did the legislation that preceded it. The Public Service Association (PSA) Partnershipfor Quality (PfQ) strategy, implemented in May 2000, was the first explicit andcomprehensive attempt by a union in New Zealand to go down a workplacepartnership route as a matter of union policy. The PfQ provided a significant impetus
for workplace partnership to enter the political and economic agenda, and was astrong catalyst for the government to invest in the Partnership Resource Centre.
There have been occasional high-profile partnership initiatives in the private sector inrecent years, perhaps most notably that involving the EPMU and the Dairy Workers
Union at Fonterra. But these have come into public view only infrequently, and little
was really known about the extent to which partnership-style behaviours and attitudes
were prevalent in unionized private-sector workplaces in New Zealand until thepresent study was commissioned by the PRC.
Methodology
A theoretical model was developed to extrapolate the behaviours which represent
workplace partnership in action, allowing the development of appropriate research
instruments to measure the extent and type of partnership behaviours that are
occurring in New Zealand at this time. The research model is shown graphically in
Figure 1.

53

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’Figure 1: Theoretical Model of Workplace Partnership

A survey was designed based on the theoretical model. The target population was all
employers who, at July 2005, had single-employer collective employment agreements
registered with the DOL, and representatives of the trade unions who were party tothose agreements. The DOL provided the research team with access to the database
containing details of registered collective agreements and parties to those agreements,
and also to an existing mail-out database. The database was checked and updated to
optimize accuracy and likely returns.
An “online” survey tool was used in the development and conduct of the survey. Two
draft surveys were developed; employers and union representatives undertook
different but complementary surveys. All potential respondents (employer and union
representatives) were sent a letter outlining the purpose of the survey and instructions
for accessing the online survey site. The survey population consisted of 904
employers, and 189 union representatives from 52 unions. For the employer survey,
201 responses were received, for a response rate of 22.3 percent. For the union
survey, 70 responses were received, for a response rate of 37 percent. A limited list oftargeted interview participants was selected from respondents who provided theirdetails to be contacted for follow-up. Twenty employers and five union officials wereselected for follow-up interviews, and these were conducted in November 2005.
Survey Results
The employer and union representatives who responded to the targeted survey
represented a broad profile of New Zealand industry by sector, size and location.
Employers with collective agreements on the whole tend to have larger than average
workforces and, accordingly, two-thirds of respondent employers had workforces ofmore than 100 employees. The results which follow are focused on and ordered as:

54

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’•

The level of awareness of the concept and practice of workplace partnership;•

The extent that employers and unions are willing to partner with each other andthe barriers to partnering; and•The extent of workplace partnership practice and where and when it happens.

Awareness of Workplace PartnershipTo gauge awareness of the concept of union-management workplace partnership,
employers were asked whether they had had any experience, in terms of formal
processes, with a range of what are generally seen as collaborative practices – “mutual
gains bargaining or workplace partnership with a union representing theorganization’s employees”, and “workplace reform or consultative approaches tochange management”.
Just 12 percent of respondent employers indicated that their organizations had had any
experience with mutual gains bargaining or workplace partnership with unions in aformal sense. One quarter indicated that their organizations had experienced
workplace reform or consultation over change management.
At a more perceptual level, 70 percent of the respondent employers believed that theemployees of their organizations were in partnership with management, while 30
percent did not. Just half as many, 35 percent, believed that the union was inpartnership with the management and employees of their organizations.
By contrast with the employers in the sample, a majority of union respondents, 58
percent, said that they had had experience with mutual gains bargaining or workplacepartnership systems. About the same number, 61 percent, said that they had had
experience with workplace reform processes or consultative approaches to change
management.
It might be an accurate summary to say that a majority of union respondents and aminority – albeit a significant minority – of employer respondents have somefamiliarity with workplace partnership or the notion of union-management
cooperation in the workplace more broadly.

Willingness to Partner and Barriers to Partnering

The second dimension of workplace partnership examined is the willingness of unionand management parties to engage in partnership and, on the other side of that coin,
the barriers to partnering that are likely to be encountered. Eighty-one percent ofrespondent union officials said that their union saw its role as being a strategic partnerin the management of organizations in which members were employed. Of these, one
half said that their union strongly endorsed that view, while the rest reported that
official union policy was somewhat supportive. Fifty-two percent of union officials
agreed “totally” with the statement “unions should be prepared to act in partnership

55

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’with an employer where the employer is willing to do the same”. Another 34 percent
agreed “to some extent”, while 15 percent disagreed entirely with that statement. In
other words, 85 percent of respondent union officials were prepared, at least to someextent, to engage with employers in workplace partnerships, on a reciprocal basis.
Union officials’ personal approaches to employers and collective bargaining are set
out in Table 1.
Table 1: Union Officials’ Personal Approaches & Beliefs‘Thinking about your personal views as a union/ association
representative, please describe the extent to which you agree ordisagree with each of the following statements.’
A union’s role is to maximize the direct benefits flowing to its
members
Unions should use their bargaining power in an overt manner
when required to get what their members want from reluctant
employers
Unions should take a longer term view and be prepared tocompromise even when they have more bargaining power than theemployer
Unions and employers have more common interests thanconflicting interests
Industrial action is best avoided unless absolutely necessary
Unions should resist employer attempts at ‘changes’ which may
disrupt the working lives of members
It is OK for union leaders to have a close social relationship withmanagement
Most employers want to do the right thing by their employees
Most employers want to do the right thing by the union
A union should compromise its interests a little rather thandamage its relationship with an employer
Having a union involved enhances an employers efficiency andproductivity

To a large
extent%87

To someextent%11

Not at all
%

40

56

5

29

56

15

35

53

11

85
35

11
58

3
6

8

54

38

5
2
6

84
55
43

11
44
51

75

22

3

2

The picture that emerges from the data is of a group of union respondents
overwhelmingly supportive of a partnership approach to union-management
relationships, believing that that approach benefits both employees and the employer.
Reciprocation by the employer is important to them, and they see the inclinations of
the chief executive as pivotal in the development or not of workplace partnership.
Employers’ disrespecting the role of the union, by bypassing officials and attempting
to deal directly with employees, is a turnoff for these union officials. However, theirsupport for partnership is pretty resilient despite sometimes encountering employer
conduct and attitudes not conducive to partnership.
Certainly the picture is of a group of union officials who believe that the union has
something to contribute to employing organizations, who believe that members would
benefit from a collaborative relationship between employer and union, and who are
ready to play their part if employers are willing to play their’s.
Employers were asked why they deal with unions representing their employees. In
multiple union situations, employers were asked to respond with reference to the56

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’union that represented the largest number of their employees. Their responses are set
out in Table 2. While a significant minority of employers acknowledge that union
involvement may be beneficial to the organization, this is not a driving motivation todeal with a union for most employers. When asked to choose “the single mostinfluential reason” for dealing with the union, just 11 percent of employers nominated“because it is beneficial to the organization”.
One necessary ingredient for successful partnership, but not a sufficient one on its
own, is acceptance of a diversity of interests in the workplace and the legitimacy of an
independent voice for employees. In this respect, it is noteworthy that 83 percent of
employers said that they dealt with a union because that was what their employees
wanted, and 43 percent nominated this as the primary reason for dealing with theunion.
Precisely 40 percent of respondent employers supported workplace partnership as
likely to help New Zealand business, while 60 percent did not, and the responses
show some interesting patterns by demographics, employer attitudes, and theirreported experiences in dealing with unions.
There were no marked patterns to employers’ expressed support for unionmanagement partnerships as being beneficial for business by nature of the employer’s
business or industry classification, although respondents representing state agency
employers were marginally more likely to endorse partnership. Perhaps surprisingly,
there were no patterns associated with the nature or scope of competition in markets
for employers’ products or services, or by self-reported indicators of market or costpressures.
Employers in Canterbury were most likely (70 percent) to believe that the promotionof workplace partnership would benefit New Zealand businesses, with those in
Auckland least likely (28 percent) of employers in major centres. Whereas union
officials’ support for partnership was directly correlated with their attitudes andbeliefs, to some extent withstanding negative experiences with employers, employers’
support or not for partnership was more directly and solely tied to their experienceswith unions.
To a considerable extent, employers’ attitudes to workplace partnership are reflectedin their approaches to collective bargaining, and that is unsurprising given the central
role of collective bargaining in union-management relations under the Employment
Relations Act.
It is instructive to note relationships between some bargaining practices that would
normally be associated with a “good faith” or “interest based” approach and awillingness to endorse workplace partnership as being beneficial for business.
For example, employers who said that they always preferred to “brainstorm” with theunion over a range of options before taking positions on how particular issues should
be settled or dealt with were far more likely to endorse the benefits of partnership (80percent endorsement) than those who only sometimes (38 percent endorsement) or
never did so (28 percent endorsement).

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NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

Employers who said that they always “worked to find areas of mutual interest to theorganization and the union and to jointly develop proposals in those areas” were more
likely to endorse the benefits of partnership (71 percent endorsement) than those who
said that they only sometimes (27 percent endorsement) or never (13 percent
endorsement) did so.
Table 2: Why Employers Deal With Unions‘Could you please indicate whether you mostly agree or mostly disagree with eachof the following statements about why your organization has a relationship withthis union.’
Because it can’t easily be avoided
Because our employees want it
Because ‘it has always been that way’
Because it is beneficial to the organization
Because the law requires it

Mostlyagree%

Mostlydisagree
%

77
83
63
41
65

23
17
38
59
35

On the other side of the coin, employers who said that they always “tried to protect
the organization’s interests by limiting the union’s input to just wages and basic
employment conditions, not management issues” were less likely to endorse thebenefits of partnership (27 percent endorsement) than those who said that they
adopted that approach only sometimes or not at all (50 percent endorsement).
A commitment to relationships is a key ingredient in successful partnerships. So it
comes as no surprise that employers who said that they were willing to agree to somecollective bargaining proposals that they did not particularly like in order to build abetter relationship with the union were much more likely to endorse the benefits ofpartnership (49 percent endorsement) than those who said that they were never willingto do that (3 percent endorsement).
Employers were asked to react to a series of statements designed to gauge theirattitudes to unions and collective bargaining. Some of these, principally dealing with
employers’ preferences regarding unions, and the statistics on the percentages of
respondent employers who agreed and disagreed with each statement, are set out inTable 3.
There were some interesting and statistically significant correlations between attitudes
to union involvement and endorsement of workplace partnership as being beneficial
to business. For example, employers who said that they consult with the union before
making significant decisions – what many would consider a fundamental of
workplace partnership – were much more likely to endorse the benefits of partnership(51 percent endorsement) than those who don’t (14 percent endorsement). Employers
who agreed that they would to a small extent compromise their interests rather thandamage their relationship with the union were more than twice as likely to endorse thebenefits of workplace partnership (56 percent endorsement) than those who said thatthey would not compromise (25 percent endorsement).

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NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

Employers who agreed that the union creates a better workplace environment for
employees were more likely to endorse partnership (67 percent endorsement) thanthose who did not agree with that statement (29 percent endorsement). Those who
were prepared to go beyond that to say that having union involvement enhances theoperation of the business were far more likely to endorse the benefits of workplacepartnership (79 percent endorsement) than those who did not agree with that statement(28 percent endorsement).
Table 3: Employer Attitudes to Union Involvement‘Please describe the attitudes or policies of those in your organization mainly responsiblefor dealing with the union.’

Agree
%

Disagree%

We would like to see the union more fully involved in the organization
The union is a legitimate representative of employees, but not part of our teamThe union is a source of conflict and division in the organization
The union officials will do the right thing by our organization
We would prefer to deal less with the union and more directly with employees
We have an effective relationship with the union and are keen to keep it the way it is
Our relationship with the union is tense and unproductive
We consult with the union before making decisions that significantly impact theorganization and the way we operate

11
77
38
37
76
78
16
72

89
23
62
63
24
22
84
28

We would rather compromise our interests a little than damage our relationship with the
union

50

50

We would trust the union to keep commercial information about our organization
confidential

59

41

The union is a problem we could do without
Having union involvement enhances the operation of our business
The union creates a better workplace environment for employees
Employees will not achieve anything through the union that management would not havegiven them anyway

32
23
30
50

68
77
70
50

The union improves the organization’s competitive position

9

91

Again, it is clear that employers who have the inclination to be relatively open in theirdealings with unions, who are prepared to take the risks associated with openness andtrust, and to pay the costs associated with protecting and building the relationship, aremore often appreciative of the value of partnership than those who don’t have thoseinclinations and experience. It is also clear that employers’ approach to partnership isa largely pragmatic one, not an ideological thing. The employers who most endorse
the value of partnership are those who say, from their experience, that it not only
benefits their employees, but that it benefits the organization as well.
The study extensively recorded the self-reported attitudes and behaviours of
employers. But union officials were also asked about employers’ attitudes andbehaviours that they had encountered, and that impact on the chances of establishingcollaborative relationships. These results are presented in Table 4.
To summarize the theme of Table 4, about three-quarters of union officials said thatthey either consistently or sometimes encountered a range of attitudes amongst

59

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’employers that would not ordinarily be thought of as being conducive to establishingcollaborative relationships.
Most union officials had, from their perspectives, to deal – occasionally or often –with employers who were not open to collaboration, who did not believe that unions
had anything to contribute, who did not welcome union input into decision-making,
who regarded them as outsiders to the management-employee relationship, and whoessentially attempted to side-step the union and diminish its role.
These are not insignificant attitudinal barriers confronting a union seeking to establish
a partnership relationship with an employer. And it is well to recall that a significant
minority (40 percent) of union respondents said that they sometimes encounteredresistance to their efforts to forge partnership arrangements with employers from theirown members and delegates as well.
Without diminishing the barriers to partnership, the statistics can also be interpreted
more hopefully. It is noteworthy that a substantial minority of union officials reported
that they were generally not encountering these negative attitudes as a problem inestablishing effective relationships with employers.
Where is Workplace Partnership Happening?

Generally speaking, demographics do not emerge as a reliable predictor of thepractice of workplace partnership. There were some suggestive patterns but nostatistically significant variations by the nature of the employing organization, by
industry classification, or by workforce size. Partnerships were more likely to bereported by employers with just one or a few worksites than by employers with manysites, and employers in New Zealand’s two major cities were the least likely to reportbeing in partnership with a union, although again these relationships were not at a
statistically significant level.
Table 4: Union Officials’ Perceptions of Employers’ Attitudes to Unions‘Please describe the extent to which you haveencountered the following problems in trying to establish
effective relationships with employers.’

A consistentproblem%

Sometimes
a problem%

Employers attempt to deal directly with employees evenwhen the union has an established role
Employers are not open to collaborative approaches
Employers assert a right to run their business however
they choose to without ‘union interference’
Short-term economic imperatives are the single mostimportant factor to employers
Employers do not genuinely want employees or the union
to have a real say in the running of the organization
Employers undermine the union’s attempts at‘partnership’by
establishingdirectemployeeparticipation schemes that exclude the union

16

53

Generally
not a
problem
%
31

11
23

60
44

29
34

29

53

18

36

51

14

15

42

42

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NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

Employers are not really interested in any value that
active union involvement could add to the business
Employers insist on treating the union and union officials
as ‘outsiders’ rather than as an integral part of theorganization

23
35

53
39

23
26

Figure 2: Partnership by years dealing with the union

All in all, while there were some interesting patterns to the demographics, there isnothing in the data to suggest that partnership is assured of flourishing in one
particular location or industry or market or plant configuration, but doomed to fail inothers. The link between reported partnership and demographic variables is simply
not that strong. It seems reasonable to conclude that there is potential for workplacepartnership pretty much anywhere that union and management commit to it.
Employers were also asked how long they had been a party to collective agreementswith the union (or, again, the union representing the largest number of theiremployees where the employer dealt with more than one union). The percentages of
employers reporting partnership relationships with unions according to length of timedealing with the union are illustrated in Figure 2.
There is obviously no consistent relationship between felt partnership and length oftime working together in the sense that it cannot be said from the data that the longer
the period a union and management work together the more likely they are to develop
a partnership relationship. However, what is clear from Figure 2 is that a sense ofpartnership is not prevalent amongst employers in new bargaining relationships with
unions. What is apparent on the face of the graph is that partnership takes some time
to build. Indeed, 80 percent of employers who said that the unions with which they
dealt were in partnership with management and the employees had been parties tocollective agreements with those unions for six years or more. And indeed all but one
employer describing the union-management relationship as a partnership had dealt
with the unions for three years or more.

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NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

To summarize, an employer dealing with a single union representing a highpercentage of the employer’s employees, with the opportunity to develop over time atrusting relationship with a credible union official would seem to reflect some of the
key ingredients in the recipe for a successful workplace partnership.
Towards a Model of Workplace Partnership in New Zealand
The deliberate focus of this study was employers with single-employer collective
agreements. Employers with multi-employer documents, largely in the public sector,
were not included.
Among employers with single employer collectives, the findings suggest that the most
likely situation in which to find workplace partnership-type engagement in New
Zealand at this time is an employer dealing with one principle union for a single
employer collective agreement covering employees throughout the organisation.
There are otherwise no very clear patterns by industry or area of the country.
There are few examples of “pure” workplace partnerships evident in this research. In
the sub-samples of employers and union officials who report either being in
partnership or being inclined towards partnership, actual bargaining and otherworkplace relations practices tend to be a mixture of some behaviours and attitudes
that would be associated with a partnership approach and other behaviours andattitudes that would normally be associated with, perhaps, a more traditional,
competitive approach to union-management relations.
It can be inferred from the research that most workplace partnership in New Zealand,
at least in the private sector, is “self-taught” or experimental, is not strategically basedon a cohesive concept or “theory” of partnership, and is “incomplete” in the sense
noted above – parties mix partnership behaviours with more traditional ways of
relating to one another. Beyond bargaining and beyond other statutory associations
and forums (health and safety committees, for example) no consistent pattern of cooperative relationships or forums emerged, although there were a small number ofnotable exceptions.
Workplace partnership in New Zealand where it does occur, even in limited form,
appears to take time to develop. It also appears to involve some natural ordering of
circumstances involving (a) a mature collective bargaining relationship; (b)reasonable relationships between individual representatives of the employer and theunion; and, (c) a catalyst initiative from one side or a circumstance requiring broader
co-operation or joint discussion outside of bargaining and the usual day-to-day
interactions.
One in every three employers surveyed is interested in partnership-type approacheswith unions, albeit that the evidence suggests that what they currently envisage issomething less than an all-embracing partnership. Many union officials suspect that
employers often want partnership “only on their terms”. It is clear from the researchthat employers’ views of workplace partnership are very pragmatic and experiencebased. Employers who have had good experiences when trying to be more open with62

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’a union tend to be interested in partnership; those who have not, or who have had abad experience, are less interested or are opposed.
The majority of employers surveyed have what might most accurately be described asa “limited” view of unions. Most respect the right of employees to have representation
and accept the role of the union in representing employees. However, relatively few
are prepared to go so far as to acknowledge the union as “part of our team.” As aresult, a lot of union officials report facing a range of attitudes and behaviours from
employers that only encourage traditional “position taking” in response.
The experiences and inclinations of on-the-ground union officials are mixed. Less
than a quarter think that collaboration with employers is ideologically wrong and abetrayal of the membership. A second group is still dealing with bad experiences in
the relatively recent past and these union officials are cautious with many employers
with whom they deal, but nonetheless generally open to partnership under the rightcircumstances. A minority are fully embracing workplace partnership concepts intheory and in practice.
On the whole, however, the data suggest that a significant majority of the union
officials surveyed are supportive of partnership approaches on a reciprocal basis (thatis, where employers are open to the same) and believe that partnership would benefit
their members, the employer, and the New Zealand economy.
Since the shakeout in the early 1990s, the coverage of “real” collective bargaining
between unions and employers has remained fairly stable, with only modest growth,
despite a decade of hostile legislation and half a decade of quite supportive
legislation. That seems unlikely to change substantially as long as legislation allows
for, but does not mandate collective bargaining. Accordingly, the realistic ambit for
expansion of partnership is the population of existing collective bargaining
relationships.
That does not mean that the nature of legislation has no bearing on the matter. The
research does support the notion that “good faith” behaviours in collective bargaining,
if observed by both parties, are more likely to lead to further open relationships
between the parties. What the legislation may actually do these days is not so muchdetermine the spread or shrinkage of collective bargaining, but set the “tone” for thecollective bargaining that does exist. In this sense, the ERA goes to the nature ofcollective bargaining and provides a platform for promoting degrees of workplacepartnership over more traditional, competitive styles of interaction.
Finally, if effective collective bargaining is accepted as a key pathway to broader
workplace partnership, then government via the DOL has a key role to play. To theextent that the focus in the past has been on interventions in collective bargaining
when things go wrong (as they sometimes do) and providing effective dispute
resolution, then perhaps the role in the future should go further. The extension would
be to promoting improved understanding amongst the industrial parties in New
Zealand of ‘mutual gains’ (or similar) bargaining practices and of broader workplacepartnership practices. Perhaps interventions should not end when immediate outcomesare reached in a collective bargaining dispute. Instead this could be followed withlonger term assistance to get the parties behaving in a manner whereby the next time63

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’bargaining occurs another dispute is avoided. This change in focus is alreadyemerging in the proactive mandate that the DOL has accepted, for example as the roleand guiding philosophy of the Mediation Service, and in the establishment of the
PRC.
Conclusions
Among other things, this research has indicated that there is occurring a gradualtransition in the way in which some New Zealand employers and unions areinteracting with one another, and that this happens most obviously as collective
bargaining relationships mature. From employers’ perspectives, it appears to beoccurring largely pragmatically, while most union officials are more inclined tobelieve that partnership behaviours and attitudes benefit workers, employers andproductivity.
The study opens up a number of avenues for further research, some of which isalready in train. The author and colleagues at Otago University are already exploring
more closely the links between partnership attitudes and behaviours and employers’
employment relations ideologies. Collaborative work with colleagues at Massey
University exploring employers’ attitudes to collective bargaining is also relevant.
However, other research opportunities abound.
With exceptions, it is fair to conclude that most movement towards the adoption ofpartnership behaviours and attitudes has occurred in New Zealand over the past 15
years, with some acceleration since 2000. Longitudinal replication of this research
tracking changing attitudes and behaviours makes some sense.
Union-management partnership is not something valued for its own sakes. It is seen
by proponents to enhance employment relationships and the workplace experience, as
well as to benefit employer, industry and national productivity and competitiveness.
While the present research has tested these outcomes at the level of participant
perspectives, hard evidence on partnership outcomes in New Zealand is essentiallylimited to case studies sponsored and published by the PRC. There is room for much
more.
Conventional wisdom holds that partnership behaviours and attitudes are most likely
to be found in single-employer, single-union collective bargaining relationships. The
scope of this research was defined by that supposition, although as a matter of settlingpriorities rather than ruling out partnership at other levels of engagement. As multiemployer and multi-union bargaining and documents have assumed greater
importance on the industrial landscape, research into bargaining behaviours andattitudes, and outcomes, at those levels is now also required.
References
Ackers, P. & J. Payne (1998) British trade unions and social partnership: rhetoric,
reality and strategy. The International Journal of Human Resource Management 9,(3): 529-550.

64

NZJER 31(3): 51-65, 2006, McAndrew, ‘Employers, Unions & Workplace Partnerships in NZ’

Bakke, E.W. (1946) Mutual survival: The goal of unions and management. New
York: Harper & Brothers.
Ballard, M. & Ian McAndrew (2006) Illustrated Report & Stocktake on Workplace
Partnership in New Zealand. Wellington: Partnership Resource Centre, New ZealandDepartment of Labour.
Brannen, P. (1983) Authority and participation in industry. London: Batsford.
Clegg, H.A. (1979) The Changing System of Industrial Relations in Great Britain.
Oxford: Blackwell.
Flanders, A. (1974) Management and Unions: The Theory and Reform of Industrial
Relations. London: Faber.
Guest, D.E. & R. Peccei (2001) Partnership at work: mutuality and the balance ofadvantage. British Journal of Industrial Relations. 39, (2): 207 – 236.
Harbridge, R. (1988) Whatever happened to second tier settlements? A survey ofsettlements under the Labour Relations Act 1987. New Zealand Journal of Industrial
Relations 13, (2): 143-156.
Harbridge, R. & S. McCaw (1992) Award, agreement or nothing? A review of the
impact of s.132(a) of the Labour Relations Act on collective bargaining. New Zealand
Journal of Industrial Relations 17, (2): 175-183.
Kochan, T.A. & P. Osterman (1994) The mutual gains enterprise: Forging a winning
partnership among labour, management, and government. Boston: Harvard Business
School Press.
Marchington, M. & A. Wilkinson (2000) Direct Participation. In Bach & Keith Sisson(eds) Personnel Management: a comprehensive guide to theory and practice. Oxford:
Blackwell.
McAndrew, Ian (1989) Bargaining structure and bargaining scope in New Zealand:
The climate of employer opinion. New Zealand Journal of Industrial Relations 14,(2): 133-148.
Wilkinson, A. (2001) Empowerment. In Poole, Michael & Malcolm Warner (eds)
International Encyclopaedia of Business and Management Handbook of Human
Resource Management. London: ITB Press.

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NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

Minimum wage workers in New Zealand: Who are they?
JASON TIMMINS1
Abstract
The New Zealand minimum wage rate has recently experienced a sustained period of growth thatlooks set to continue under the current Labour-led government. Since 2002 the adult minimum
wage rate has increased by 28% from $8 an hour to the current rate of $10.25. This rise in theminimum wage has outstripped average wages, which increased by 15% over the same period. This
paper uses the New Zealand Household Labour Force Survey and its Income Supplement to
identify minimum wage workers and describe their demographic and job characteristics. In
particular, the paper examines changes in the characteristics of minimum wage workers between
2002 and 2005. Minimum wage workers, over this period, are relatively young (over a half are aged
16-25 years), predominantly female, working part-time and are likely to be employed in a Services
and Sales related occupation and in the Retail and Hospitality industries. Between 2002 and 2005
there was a three-fold increase in the share of wage and salary workers identified as minimum wage
workers. Minimum wage workers in 2005 were slightly older and more likely to be female,compared with 2002. In particular, the share of married females among minimum wage workers
doubled and there was an increase in the share of minimum wage workers in the Health andCommunity Services industry sector.
Introduction
The New Zealand minimum wage rate has recently experienced a sustained period of growth thatlooks set to continue under the current Labour-led government. Since 2002 the adult minimum
wage rate has increased by 28% (17% in real terms) from $8 an hour to the current 2006 rate of$10.25. In her address to the New Zealand Council of Trade Unions (NZCTU) on 18 October
2005, the Prime Minister indicated that “the aspiration over the next four adjustments is to see it
move close to $12 an hour for the adult rate”. What is of particularly interest is that since 2002 theminimum wage has outstripped average wages, which increased by 15%2.
There has been a substantial amount of debate around the effect of raising the minimum wage on
labour market outcomes, in particular employment3. New Zealand studies by Maloney (1995),
Chapple (1997) and Maloney and Pacheco (1999) provide mixed evidence that the minimum wage
has an adverse impact on employment for specific (vulnerable) groups. Hyslop and Stillman (2004)
examined the effect of an unusually large increase (40%-60%) in the minimum wage for young
workers aged 16-19 on their employment prospects and labour market outcomes. The study foundno immediate effect on the employment rate of 16-19 year olds, but weak evidence of a negative
effect on employment two years out from the minimum wage change. Hyslop and Stillman (2004)
did find a negative and significant impact on study rates and a positive and significant effect on
unemployment rates, benefit receipt and inactivity. Estimating the direction and magnitude of theminimum wage effect is difficult, particularly within New Zealand given currently available data
sources (e.g. a short time-series of wage data and relatively small annual changes in the minimumwage). Quasi-experimental approaches that make use of an unusually large change in the minimum
1

Jason Timmins, Work Directions, Department of Labour, Wellington

66

NZJER 31(3): 66-75, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

wage rate, as used by Hyslop and Stillman (2004), can produce robust results, but are a rare event in
New Zealand. Hyslop and Stillman (2004) note that the direction of minimum wage research has
moved from the assumption that a rise in the minimum wage is always associated with negative
employment effects to investigating under what circumstances do negative employment effects
occur.
Given that a change in the minimum wage may potentially affect labour market outcomes the
purpose of this paper is to identify who is likely to be impacted. In particular, following the recent
and relatively large increases in the New Zealand minimum wage, whether there has been a change
in the types of workers affected by minimum wage changes.
New Zealand’s Minimum Wage Legislation
The New Zealand Minimum Wage legislation4 decrees that the minimum wage rate must be
reviewed each year by 31st December. Any changes in the minimum are typically implemented in
the following March. The New Zealand minimum wage was brought into law in 1983 and set abinding wage floor for all workers aged 20 years or older. In March 1994 a youth minimum wage
was introduced for 16-19 year olds and was set at 60% of the adult minimum. On 14th December
2000 it was announced that the eligibility age for the adult minimum wage would be lowered from
20 to 18 years of age and that the youth minimum wage would be increased from 60% to 80% of
the adult minimum. The change in the eligibility age for the adult minimum wage was made on 5th
March 2001 together with a 10 percentage point increase in the youth minimum wage from 60% to
70% of the adult minimum. On 18th March 2002 the youth minimum wage was increased by afurther 10 percentage points from 70% to 80% of the adult minimum.
Data Description
The data used in the analysis in this paper comes from the New Zealand Household Labour Force
Survey and its Income Supplement (HLFS-IS). Since 1997, the Income Supplement (also known as
the New Zealand Income Survey, NZIS) has been included as an annual supplement to the Junequarter HLFS, to collect information on income from a variety of sources. The HLFS sample frame
uses an eight-quarter panel, and samples approximately 15,000 households and 30,000 individuals
aged 15 and over each quarter. The HLFS-IS collects information on wages and salaries earned in areference period (typically the week prior to the survey). In addition to collecting information on
wages and salaries the HLFS-IS also collects information on the number of hours worked in eachwage and salary job (up to a maximum of three jobs) during the reference period related to thereported earnings. Statistics New Zealand (SNZ) convert the information collected on wages andsalaries and hours worked to a weekly measure of earnings and hours worked and an hourly wage
rate, which are presented as such in the HLFS-IS data extract.
The minimum wage legislation covers all those employed for wages or salaries aged over 16 yearsof age. For this study we focus on individuals aged 16-64 years, employed in wage and salary jobs
(excludes the self-employed). This paper focuses on the years 2002-2005, which covers a period of
relatively large and year-on-year increases in the minimum wage. Between 2002-2005, on average,
73.9% of the working age population were in employment, of which nearly 80% are only employedin wage and salary jobs. The differences in the population characteristics of the employed andwage and salary working age population are not particularly large.
To analyse the characteristics of minimum wage workers, it is first necessary to identify workers
that are affected by a change in the minimum wage. Interviews for the HLFS-IS are carried out
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NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

during the months of April, May and June. The majority of changes to the minimum wage rate are
made during the month of March, therefore, all the wage and salary information collected by the
HLFS-IS should reflect the recent change in the minimum wage rate. We define minimum wage
workers as those being paid between the current minimum wage and next year’s minimum wage.
For example, using the 2005 HLFS-IS minimum wage workers are those earning between the 2005
minimum wage of $9.50 for adults and $7.60 for youth workers (aged 16 and 17 years) and just lessthan next year’s (2006) minimum wage of $10.25 for adults and $8.20 for youth workers. Thisapproach excludes workers earning below the current minimum wage. This is done for two reasons.
First, the New Zealand Minimum Wage Review, conducted each December by the Department ofLabour, uses the same definition for identifying minimum wage workers. Second, this approachenables below minimum wage workers to analysed separately.5 An important problem is that thisapproach assumes that the hourly wage rates collected by the HLFS-IS are correct. One of the
problems with using an hourly wage measure is the amount of noise introduced if the hourly wage
is derived using reported gross earnings and hours of work. Measurement error occurs when thenumber of hours reported does not correctly match the reported earnings. In the 2005 HLFS-IS
over two-thirds (65.5%) of respondents had their hourly wage rate derived.
It is likely that the level of measurement error associated with an hourly wage rate that is reported
directly by a respondent is lower compared with an hourly wage rate derived using reported grossearnings and usual weekly hours of work. Therefore, it is possible that individuals could be falsely
identified as minimum wage workers because their hourly wage has not been measured correctly in
the HLFS-IS. However, it would not be sensible in this case to only include individuals that reportan hourly wage rate. First, only one-third of the wage and salary sample in the HLFS-IS report anhourly wage rate. Second, it is unlikely that these workers are representative of the population of
wage and salary workers because they may reflect jobs that are paid by the hour. There are distinct
differences between the characteristics of derived hourly wage workers and reported hourly wage
workers. Over the period 2002-2005 derived hourly wage workers are, on average, older, lesslikely to be female, more likely to be Pakeha and more likely to have a post-school qualification.
The job characteristics are also quite different. Derived hourly wage workers are more likely towork full-time and less likely to work in a Services and Sales related occupation and in the Retailand Hospitality industry sectors. Derived hourly wage workers are paid, on average, $21.18,
compared with $14.20 for workers that report an hourly wage. The remaining analyses will include
both derived and reported hourly workers.6
Analysis of Minimum Wage Workers
This section examines the impact of minimum wage changes over the period 2002-2005 bydescribing the population and job characteristics of individuals identified as minimum wage
workers. Minimum wage workers are those paid an hourly wage between the current minimum
wage and next year’s minimum wage.
Minimum wage impacts
Table 1 calculates the number of workers, between 2002 and 2005, that were likely to be affectedby a change in the minimum wage. The number of minimum wage workers tripled from 32,700 in
2002 to 96,200 in 2005. This means that at the time of the 2005 HLFS-IS survey it is estimated that
96,200 wage and salary workers were being paid between the 2005 minimum wage of $9.50 andjust less than the next year’s (2006) minimum of $10.25. In comparison the wage and salary
workforce increased by only 9.2%, whereas, the share of workers affected by a minimum wagechange grew from 2.3% to 6.1%, an increase of nearly 200%. The share of workers that reported
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NZJER 31(3): 66-75, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

below minimum wages also increased by nearly 50% from 40,200 to 59,700 and made up 3.8% of
the wage and salary workforce in 2005. The annual increases in the minimum wage between 200203 and 2005-06 were 6.3%, 5.9%, 5.6% and 7.9% respectively. Therefore, it is not necessarily
surprising that there were more minimum wage workers identified in 2005, compared with in 2002,
because the 2005-06 minimum wage increase was larger than the increase in 2002-03. To test theeffect of different sized minimum wage increases between 2002 and 2005 we use the percentage
increase in the minimum wage over the period 2002-03 to identify minimum wage workers in 2003,
2004 and 2005. The share of minimum wage workers in 2002, 2003, 2004 and 2005 using the 200203 minimum wage increase is 2.3%, 3.1%, 3.7% and 5.7% respectively. This suggests that thedensity of workers earning just above the minimum wage has increased between 2002 and 2005. Inother words a 1% increase in the minimum wage rate in 2005 will affect a larger share of the wage
and salary workforce compared with in 2002.
Table 1. Estimated impacts of minimum wage changes
Year

All
workers

MW workers

Below MWworkers

2002
2003
2004
2005

1,439,000
1,470,200
1,525,100
1,571,600

32,700 (2.3%)
26,000 (1.8%)
39,000 (2.6%)
96,200 (6.1%)

40,200 (2.8%)
56,600 (3.8%)
45,900 (3.0%)
59,700 (3.8%)

9.2%

194.2%

48.3%

Change 02/05

Source: Statistics New Zealand, HLFS-IS

Characteristics of Minimum Wage Workers
Figure 1 compares the demographic and job characteristics for all workers with minimum wage
workers. The light grey bar represents all workers and the dark grey bar represents minimum wage
workers. The whisker plot on each bar is the confidence interval at the 95% level. Minimum wage
workers have an average age of 30 years, compared with 38 years for all workers. In particular,
there is a relatively high incidence of minimum wage workers aged under 25 years. For all workers
just under 20% are aged 16-24 years, compared with just under half (53.6%) of minimum wage
workers. Nearly two-thirds of minimum wage workers (63.1%) are female, compared with justunder half of all workers (49.0%). Minimum wage workers are less likely to be married (36.1%)
compared with all workers (63.6%). However, of the minimum wage workers that are married,nearly three quarters are female, compared with just under half of all married workers. The share of
all workers that relate to the Pakeha ethnic group (76.6%) is slightly higher compared with theshare of minimum wage workers (65.2%). There is weak evidence to suggest that there is a slightly
higher incidence of Maori and Pacific Islanders among the minimum wage group, however, thesedifferences are not statistically significant from zero at the 5% level. Study rates are much higher
among minimum wage workers, with 33.7% of workers studying towards a qualification, comparedwith 14.9% of all workers.

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NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

Figure 1 Demographic and job characteristics, pooled 2002-2005
90%
80%
70%
60%
50%
40%
30%
20%

All workers

P
ar
ttim
e

D
eg
re
e

P
ak
eh
a

fe
m
al
e
&
M
ar
rie
d

M
ar
rie
d

F
em
al
e

A
ge
d

un
de
r

25

0%

S
tu
dy
in
g*

10%

Minimum wage workers

Source: Statistics New Zealand, HLFS-IS
Notes: * The study question has been pooled across the 2004 and 2005 HLFS-IS surveys because the question was
introduced for respondents in the labour force in 2004. Whisker plots are 95% confidence intervals.

Not surprisingly, there is a clear difference in the education levels of minimum wage workers,
compared with all workers. Among all workers 16.6% have a degree level qualification, comparedwith 5.1% of minimum wage workers. There is a higher incidence of part-time (less than 30 hours
a week) work among minimum wage workers with 60.0% of minimum wage workers employed
part-time, whereas among all workers nearly three-quarters are employed in full-time jobs (74.5%).
Figure 2 presents the share of all workers and minimum wage workers across different occupationgroups. Over half (51.9%) of minimum wage workers are employed in a Services and Sales related
occupation, compared with 17.7% of all workers. Minimum wage workers are also over-represented
in the Agriculture and Fishers (6.9%) and the Elementary and Unknown (13.6%) occupationgroups, compared with all workers (4.4% and 7.2% respectively). Unsurprisingly, minimum wage
workers are under-represented within relatively high skilled occupations, in particular,
Administration and Management and Professional related occupations.
Figure 2 Occupation group shares, pooled 2002-2005
60%
50%
40%
30%
20%

All workers

P
la
nt
/M
ac
hi
ne

T
ra
de

A
gr
i/F
is
he
rs

S
er
vi
ce
/S
al
es

C
le
rk
s

T
ec
h/
A
ss
.P
ro
f

P
ro
fe
ss
io
na
l

A
dm
in
/M
an
ag
er

0%

E
le
m
en
ta
ry
/U
nk
no
w

10%

Minimum wage workers

70

NZJER 31(3): 66-75, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’
Source: Statistics New Zealand, HLFS-IS
Notes: Individuals have been classified using the 1 digit NZSCO99 occupation classification system. Whisker plots
are 95% confidence intervals.

Figure 3 presents the share of all workers and minimum wage workers across different industries.
The Retail and Hospitality industries contain over half of all minimum wage workers (33.3% and18.6% respectively), compared with 22.3% of all wage and salary workers. Minimum wage workers
have a slightly higher concentration in the Agriculture, Forestry, Fishery and Mining industry(6.7%), compared with all workers (4.7%).
Table 2 compares the demographic and job characteristics of all workers with minimum wage
workers, separately for workers aged 16-24 years and those aged 25-64 years. For both groups ofworkers, aged 16-24 years and 25-64 years, just under half are female. However, among the older
group of minimum wage workers nearly three quarters (72.6%) are female, compared with just overhalf (54.9%) of minimum wage workers aged 16-24 years. For both minimum wage age groups theshare of workers that identify with the Pakeha ethnic group is lower, compared with all workers.
For the Pacific ethnic group there is a distinct difference in the shares among minimum wage andall workers for the older age group. The share of older workers that are in the Pacific ethnic groupis 5.1%, but among older minimum wage workers the share of Pacific workers is almost double at
10.4%. There is almost no significant difference in the shares of Maori and Pacific between theyoung all workers and minimum wage group.
Figure 3 Industry sector shares, pooled 2002-2005
40%
35%
30%
25%
20%
15%
10%
5%

All workers

E
du
H
ca
ea
tio
lth
n
/C
om
m
un
P
er
ity
so
C
na
ul
l/O
tu
ra
th
l/R
er
/N
ec
.In
c/
M
is
si
ng

U
R
til
et
iti
ai
es
l
/T
H
ra
o
ns
sp
./S
ita
lit
to
y
ra
ge
/C
o
Fi
m
na
m
nc
e/
In
su
ra
P
nc
ro
pe
e
rty
/B
us
in
es
G
s
ov
nt
/D
ef
en
se

W
ho
le
sa
le

A
gr
i/F
or
es
t/F
is
h/
M
in
in
g
M
an
uf
ac
tu
rin
g
C
on
st
ru
ct
io
n

0%

Minimum wage workers

Source: Statistics New Zealand, HLFS-IS
Notes: Individuals have been classified using the 1 digit ANZSIC96 industry classification system. The
Personal/Other/N.Inc/Missing industry group contains individuals employed in the following 1 digit industries:
Personal Services, Other services, Not included and Missing. Some 1 digit industries have been combined to protect
confidentiality. Whisker plots are 95% confidence intervals.

71

NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

Table 2 Demographic and job characteristics of minimum wage workers, pooled 2002-2005
16-24
All workers MW
Female47.1%
Pakeha
73.3%
Maori
12.0%
Pacific
5.9%
Studying1
39.9%
Part-time
39.2%
PT & female
23.4%
MJH
3.3%
Hourly wage
12.7

25-64
54.9%*
67.8%
12.3%
5.5%
58.7%*
64.9%*
38.8%*
2.3%
8.9*

All workers
49.5%
77.3%
9.9%
5.1%
9.1%
22.3%
18.8%
2.5%
20.1

MW
72.6%*
62.0%*
11.8%
10.4%*
8.8%
54.4%*
46.6%*
5.7%*
9.5*

Source: Statistics New Zealand, HLFS-IS
Notes: 1. The study question has been pooled across the 2004 and 2005 HLFS-IS surveys because the question was
introduced for respondents in the labour force in 2004. * indicates that the difference between the minimum wage
population percentage and the all workers population percentage is significantly greater than zero at the 95% level.

Nearly 60% of young minimum wage workers combine work with studying for a formal
qualification, which is higher than the respective share among all young workers (39.9%). There isalmost no difference between the study rates of older minimum wage workers, compared with all
workers aged 25-64 years. Part-time work is more prevalent among younger workers, with around
two thirds (64.9%) of young minimum wage workers in a part-time job. Although older workers
are more likely to be in full-time employment, nearly 90% of part-time minimum wage jobs areheld by females. Older minimum wage workers are more likely to have more than one job (5.7%),
compared with younger minimum wage workers (2.3%) and older minimum wage workers report aslightly higher hourly wage.
Figure 4 Industry sector shares for minimum wage workers, pooled 2002-2005
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%

16-24

C
ul
tu
ra
l/R
U
til
ec
iti
es
P
er
/C
so
om
na
m
l/O
/G
th
ov
er
t
/N
.In
c/
M
is
si
ng

E
du
ca
H
tio
ea
n
lth
/C
om
m
un
ity

H
os
pi
ta
P
lit
ro
y
pe
rty
/B
us
in
es
s

R
et
ai
l

W
ho
le
sa
le

C
on
st
ru
ct
io
n

A
gr
i/F
or
es
t/F
is
h/
M
in
in
g
M
an
uf
ac
tu
rin
g

0%

25-64

Source: Statistics New Zealand, HLFS-IS
Notes: Whisker plots are 95% confidence intervals. Individuals have been classified using the 1 digit ANZSIC96
72

NZJER 31(3): 66-75, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’classification system. The Utilities/Comm//Govt industry group contains individuals employed in the following 1 digit
industries: Utilities, Transport, Storage and Communications, Finance and Insurance, and Government and Defence.
The Personal/Other/N.Inc/Missing industry group contains individuals employed in the following 1 digit industries:
Personal Services, Other services, Not included and Missing. Some 1 digit industries have been combined to protect
confidentiality.

Figure 4 presents the industry sector shares for minimum wage workers over the period 2002-2005,
separately for 16-25 year olds (light grey bar) and 25-64 year olds (dark grey bar). Younger
minimum wage workers are concentrated in the Retail and Hospitality industries, which account foraround two thirds (65.2%) of minimum wage workers aged 16-25 years. Older minimum wage
workers, aged 25-64 years, are concentrated in a larger range of industries, compared with younger
minimum wage workers. Older minimum wage workers are less concentrated in the Retail and
Hospitality industry sectors (36.3%) and are more concentrated in the Agriculture, Education and
Health and Community services industries, compared with younger minimum wage workers.
Changes in the Characteristics of Minimum Wage Workers
Since 2002 the New Zealand minimum wage has experienced a period of sustained growth.
Between April 2002 and April 2006 the adult minimum wage increased from $8.00 per hour to$10.25 per hour. The minimum wage has also outpaced average wages. Over the same period theshare of wage and salary workers affected by changes in the minimum wage has also increased
from 2.3% in 2002 to 6.1% in 2005 (Table 1).
Figure 5 compares the population group shares for minimum wage workers between 2002 and2005. For each population group, listed on the horizontal axis, the first (light grey) bar plots the2002 population group percentages and the second (dark grey) bar plots the corresponding
percentages in 2005. The largest and statistically significant changes are related to age, marital
status and gender. The average age of a minimum wage worker increased by 18.6%, from 26 to 31
years. The incidence of females among minimum wage workers increased by 25.1% from aroundhalf (52.6%) to nearly two-thirds (65.8%). The share of minimum wage workers that are married
increased by 42.4% from 28.1% to 40.0%, however the share of minimum wage workers that are
married and female doubled from 14.3% to 29.6%. There was a large increase (57.2%) in the shareof minimum wage workers that were also mothers (parent and female), however this increase is notstatistically significant from zero.
The increase in the average age of minimum wage workers, between 2002 and 2005, appears tohave been driven by a decline in the share of young workers aged 16-24 years, from 62.9% to48.5%, and a corresponding increase in the share of workers aged 25-64 years. In comparison there
was almost no change in the age structure for all workers. The percentage change in the occupationand industry mix of minimum wage workers and all wage and salary workers is less clear. The only
statistically significant difference, among occupations, for minimum wage workers was a 50%
decline in the share of minimum wage workers in Agricultural and Fishery related occupations.
There was also a decrease in the share of all workers in Agricultural and Fishery related
occupations of 17%. Although the share of young workers among minimum wage workers
declined between 2002 and 2005, there was little change in the share of minimum wage workers
employed in the Retail and Hospitality sectors. The largest percentage change was in the share ofworkers in the Health and Community sector, which increased by nearly 200% from 3.4% to 9.9%.
There is some evidence to suggest that the share of minimum wage workers employed in the73

NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

Agricultural and Manufacturing industry also declined, however, these changes are not statisticallysignificant.

Figure 5 Changes in demographic and job characteristics of minimum wage workers between
2002 and 2005
80%
70%
60%
50%
40%
30%
20%
10%
0%
Aged under 25

FemaleMarried
2002

Married & female Parent & female

Health &Community

2005

Source: Statistics New Zealand, HLFS-IS
Notes: Whisker plots are 95% confidence intervals.

Summary
The purpose of this study was to better understand the types of workers affected by minimum wagechanges in New Zealand by describing their demographic and job characteristics. In particular,
following a relatively large increase in the minimum wage over the period 2002-2005, the aim was
to investigate whether the characteristics of minimum wage workers have changed.
A typical minimum wage worker over the period 2002-2005 is relatively young (over half are aged
16-24 years), female, working part-time and employed in a Services and Sales related occupationand in the Retail and Hospitality industries. There were distinct differences between minimum wage
workers aged 16-24 years and 25-64 years. Younger minimum wage workers were less likely to befemale, more likely to be engaged in studying for a formal qualification, working part-time andemployed in the Retail and Hospitality industries. Whereas, older minimum wage workers are
more likely to be female, of Pacific ethnicity and working full-time. Compared with younger
minimum wage workers, older minimum wage workers are spread across a wider range ofindustries, in particular they are more concentrated in the Health and Community industry sector.
Between 2002 and 2005 there was a three-fold increase in the share of wage and salary workers
identified as minimum wage workers. The small sample sizes made it difficult to identify
statistically significant changes in the demographic and job characteristics of minimum wage
74

NZJER 31(3): 66-75, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

workers between 2002 and 2005. What is clear is that minimum wage workers in 2005 were slightly
older and more likely to be female, compared with 2002. In particular, the share of married females
among minimum wage workers doubled. There was a decline in the share of minimum wage works
in an Agriculture and Fishery related occupation and an increase in the share of minimum wage
workers in the Health and Community services industry. Although the number of workers affectedby minimum wage changes between 2002 and 2005 has increased the observed changes in thecharacteristics of minimum wage workers, over this period, appear to support a disproportional
increase in the share of older minimum wage workers, aged 25 years and over.
There is, however, a need for further research and in particular a need to understand why thecharacteristics of minimum wage workers are changing. One hypothesis is that the composition ofminimum wage workers has changed. On the other hand it is possible that the relatively large
recent increases in the minimum wage are affecting a new set of workers (paid just above previous
minimum wage changes) that have not been directly impacted by minimum wage changes in thepast. This second hypothesis may occur because the minimum wage change between 2005 and2006 was larger (7.9%), compared with the increase in the minimum between 2002 and 2003
(6.3%). Alternatively, the minimum wage increases between the years 2002-2005 may have had acompressing effect on the wage distribution resulting in a new set of workers (with different
characteristics) further up the wage distribution being affected by minimum wage changes.
Acknowledgements
The author wishes to thank Dean Hyslop, Sarah Crichton, Sylvia Dixon and participants at theNovember 2006 meeting of the Department of Labour Research and Evaluation Group for theircomments. Access to the data used in this study was provided by Statistics New Zealand underconditions designed to give effect to the security and confidentiality provisions of the Statistics Act
1975. The views expressed in this paper do not necessarily represent those of the Department ofLabour and any remaining errors are my responsibility.
Notes
1. Department of Labour, PO Box 3705, Wellington, New Zealand. jason.timmins@dol.govt.nz.
2. The ratio of the minimum wage to the average wage (measured using the New Zealand Quarterly
Employment Survey) was 42.7% in 2002 and 47.2% in 2005.
3. For example, see the Card versus Neumark debate in the US.
4. For a detailed description of New Zealand’s minimum wage legislation and the recent reforms of the
youth minimum wage see Hyslop and Stillman (2004).
5. For a detailed description of below minimum wage workers in New Zealand see Timmins (2006).
6. Over the period 2002-2005 around one third (39.0%) of minimum wage workers had a derived hourly
wage. The demographic and job characteristics of minimum wage workers that report an hourly wage,
compared with those with a derived hourly wage, are very similar. See Timmins (2006) for a detailed
description of the characteristics of workers that report an hourly wage in the HLFS-IS, compared withthose with a derived hourly wage.
References
Chapple, S. (1997)`Do minimum wages have an adverse impact on employment? Evidence from New
Zealand’. Labour Market Bulletin 1997(2): 25-50.
Hyslop, D. and S. Stillman (2004). `Youth minimum wage reform and the labour market’. New Zealand
Treasury, Wellington.

75

NZJER 31(3): 66-76, 2006, Timmins ‘Minimum wage workers in New Zealand: Who are they?’

Maloney, T. (1995). `Does the adult minimum wage affect employment and unemployment in New Zealand.’
New Zealand Economic Papers 29(1): 1-19.
Maloney, T. and G. Pacheco (1999). `Does the minimum wage reduce the employment prospects ofunqualified New Zealand women.’ Labour Market Bulletin 1: 51-69.
Timmins, J. (2006). `A description of minimum wage workers in New Zealand, 2002-2005’. Department ofLabour, Wellington.

76

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

UNIONS AND UNION MEMBERSHIP IN NEW ZEALAND:ANNUAL REVIEW FOR 2005
LEDA BLACKWOOD, GOLDIE FEINBERG-DANIELI AND GEORGELAFFERTY1

Introduction
This paper reports the results of Victoria University’s Industrial Relations Centre’s annual survey oftrade union membership in New Zealand for 2005. The survey has been conducted since 1991,
when the Employment Contracts Act 1991 (ECA) ended the practice of union registration and thecollection of official data. There has been a return to the collection of official data, available fromthe Department of Labour (DOL) for 2002 onwards. This year we report changes in union
membership, composition, and density from December 2004 to December 2005, taking an historicalperspective to compare the industrial relations periods framed by the ECA and the Employment
Relations Act 2000 (ERA).

Key findings
For the year to December 2005, union membership increased by 6.6 percent (a net increase of
23,290 members). This builds on five years of growth with an overall 25 percent increase since1999. Strong recruitment coupled with reduced labour force growth (2.6% for wage and salaryearners) over the year, has produced a 0.8 percent increase in union density. At 21.9 percent, union
density is now at its highest level since 1998. Most of the union membership growth was achievedby CTU-affiliated unions in the areas of health and community services, education, manufacturing,and transport, storage and communications. Retail, wholesale, restaurants, and hotels again recorded
the largest drop in members (-1,046).

Methodology
Our survey included those unions registered as at 31 December, 2005, as per the Department ofLabour website of registered unions (see www.ers.dol.govt.nz/union/registration.html and DOL
Annual Report 2005). In late January 2006, each of the registered unions was sent a survey
requesting membership numbers as at 31 December 2005. Ninety six unions responded. For thosethat did not, details were obtained either through telephone contact, or based on the DOL Annual
Report 2005. In the time between last year’s survey and the return of this year’s survey, five unions
deregistered and nine new unions registered, bringing the total number of unions to 175 (seeAppendix for explanation of union registration under ERA).

1

Leda Blackwood, Goldie Feinberg-Danieli and George Lafferty are Senior Research Fellow; Research Fellow; andDirector respectively, at the Industrial Relations Centre, Victoria University of Wellington. This study is part of a larger
project which receives funding from the Foundation for Research, Science and Technology (Contract no. Vic X0301).
The authors are grateful to all the union officials who contributed to this research; and to Priya Maheshwari, Adam
Malanchak, James Upton, and Jennifer Halli for their assistance with data entry and publication.
77

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

Trade Union Membership and Density
Table 1 shows trade union membership and density since 1991. Union density is defined as the
proportion of potential union members who belong to a union.2 One commonly used measure ofunion density is based on the total employed labour force. We present this figure here, but note thatit includes people who are not usually potential union members (for example, employers, selfemployed and unpaid family members). A more accurate measure of union density is also presented– this figure is based on wage and salary earners only.
Table 1: Trade Unions, Membership and Union Density 1991-2005
Potential union
membership
Total
Wage and
employedsalarylabour force
earners

Union
membership

Number ofunions

(1)

(2)

(3)

Dec 1991

51432566

Dec 1992

428160Dec 1993

Union density(1) / (3)%(1) / (4)
%

(4)

(5)

(6)

1518800

1196100

33.9

43.0

58

1539500

1203900

27.8

35.6

40911267

1586600

1241300

25.8

33.0

Dec 1994

37590682

1664900

1314100

22.6

28.6

Dec 1995

36220082

1730700

1357500

20.9

26.7

Dec 1996

33896783

1768200

1409300

19.2

24.1

Dec 1997

32780080

1773200

1424000

18.5

23.0

Dec 1998

30668783

1760900

1399100

17.4

21.9

Dec 1999

30240582

1810300

1435900

16.7

21.1

Dec 2000

318519134

1848100

1477300

17.2

21.6

Dec 2001

329919165

1891900

1524900

17.4

21.6

Dec 2002

334783

174

1935600

1566400

17.3

21.4

Dec 2003

341631

181

1986100

1598700

17.2

21.4

Dec 2004

3540581702073800

1676200

17.1

21.1

Dec 2005

377348175

2105600

1719500

17.9

21.9

Year

Source: Statistics New Zealand, Household Labour Force Survey, Table 3, Table 4.3, Unpublished, 2005.
Industrial Relations Centre Survey
Note: Figures in columns 3, 4, 5 & 6 are different to those reported in years prior to 2004, due to a population rebase
by Statistics NZ in June 2004, see HLFS population rebase: June 2004 quarter, July 2004)

In 2005, total union membership increased by 6.6 percent (23,290 members). This is the largest
increase in a single year that we have reported. Since the nadir of 302,405 in 1999, there has been an
overall 25 percent increase in union membership.
Growth in union membership considerably outstripped growth in the labour force generally (1.5%)
and in the wage and salary earners component (2.6%). As a consequence, there was an increase inunion density of 0.8 and 0.8 percent respectively. This takes union density to the highest it has been
since 1998.
2

The measure of potential union members used to calculate union density varies from country to country and there is noagreed ‘correct’ method. Consistency in reporting so that results can be compared year on year is, though, a priority.
78

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

Figure 1: Distribution of wage and salary earners across industry sectors.

Personal & other

Finance & businessserv ices13%

7%
Agriculture
Retail & restaurants

4%Construction

24%

6%
Other industries
1%

Transport, storage &communication

Public & community
serv ices

Manufacturing

24%

15%

6%

Figure 2: Distribution of union members across industry sectors.

Personal & otherserv ices5%

Finance & business

Retail & restaurants

4%

4%Transport, storage &Other industries

communication

4%

11%

Manufacturing
21%
Public & community
serv ices
52%

79

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

80

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

Union membership and employment by industry
In this section we look at the distribution of wage and salary earners (see Figure 1) and of union
members (see Figure 2), across industries (classified according to the Australia New ZealandStandard Industry Classification). This provides a more nuanced picture of patterns of union
representation in the New Zealand context.
In December 2005, the largest concentrations of New Zealand wage and salary earners were in
public and community services (24%); retail, wholesale, restaurants, and hotels (24%);
manufacturing (15%); and finance, insurance and business services sectors (13%: see Figure 1).
Union membership was overwhelming concentrated in public and community services (52%),
followed by manufacturing (21%) and transport, storage and communication sectors (11%: see
Figure 2). These industries are not major growth areas of the labour force (Statistics New Zealand,
unpublished tables). In contrast, the large retail, wholesale, restaurants, and hotels industry which
employs 24 percent of all wage and salary earners and is a growth area had only four percent of total
union membership.
Change in union membership and employment by industry
Table 2 examines gains and losses in membership by industry and Table 3 compares these withchanges in wage and salary earner employment.
Table 2: Union membership change by industry 2004 – 2005
Industry group

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
TOTAL
Membership private sector
Membership public sector

Change 2004-2005
Dec-04
3417
1668
71504
4628
5729
15861
38692
13402
19974
179183
35048
76909
67225
354058163927190131

Dec-05
3382
1543
78187
3644
5208
14815
42379
13355
17904
196931
33266
78577
85088
377348175415
201933

Number
-35
-125
*6683
-984
-521
-1046
3687
-47
**-2070
17748
-1782
1668
17863
23290
11488
11802

(%)
-1
-7
9
-21
-9
-7
10
0
-10
10
-5
2
27
6.6
7
6.2

New
members
breakdown
(%)
0
-1
29
-4
-2
-4
16
0
-9
76
-8
7
77
100
49
51

Source: Industrial Relations Centre Survey, 2005
* A proportion of this increase is due to under-reporting of membership in previous years.
** Most of this loss is due to a reclassification of some employees into community services.

Membership gains in 2005 were restricted to four industries where high profile union campaigns
had been a feature of the year. The largest gains were in public and community services, particularly
health and to a lesser extent, education. Manufacturing and transport, storage and communications
accounted for the overall membership growth in the private sector. As the industry with the largest
81

NZJER 31(3): 77-87, 2006, Blackwood, et al. ‘Unions & Union Membership In NZ: Annual Review for 2005

proportion of private sector union members, the growth in manufacturing is promising. Particularly
in light of the decline in this industry’s workforce due to the loss of jobs overseas and high attrition
rates through retirement.
In the large retail, wholesale, restaurants, and hotel industries, overall losses in union membership
continue—although they are considerably less than last year’s 11 percent drop. This is an important,
yet difficult industry in which to recruit (and retain) members due to high levels of part-time andcasual work, and high turnover – particularly in times of strong economic growth.
Despite an overall slowing, there were a number of industries where labour force growth wasconsiderable: personal and other services; construction and building services; finance, insurance andbusiness services, and mining and related services. Of note, across these industries, union
membership either remained steady or declined with a concomitant reduction in density.
Table 3: Union membership change and labour force change 2004 - 2005

(000)
76.4

Change inlabour force
2004-2005
%
1

-7

6.3

5

78187

9

250.0

-4

Energy and utility services

3644

-21

7.9

-11

Construction & building services

5208

-9

110.2

11

Retail, wholesale, restaurants, hotels

14815

-7

405.2

3

Transport, storage and communication

42379

10

103.7

-2

Finance, Insurance and business services

13355

0

228.1

8

Personal and other services

17904

-10

116.3

11

Public and community services

196931
33266
78577
85088

10
-5
2
27

407.9
82.0
155.1
170.8

-1
5
-2
-2

Agriculture, fishing, forestry etc

3382

Change inmembership2004-2005%-1

Mining and related services

1543

Manufacturing

Industry group•

Govt admin and defence•

Education•

Health and community

Union
membershipDec 2005

Labour force
Dec 2005

TOTAL
3773486.6
1719.5
2.6
Source: Industrial Relations Centre Survey, 2005; Statistics New Zealand, Household Labour Force Survey – Wage &salary earners component. Unpublished, 2005.

Public / private divide
In addition to industry breakdown, our survey asks unions to estimate how many of their members
work in the private sector and the public sector. 2005 saw more balanced growth between theprivate and public sectors than in previous years. The private sector accounted for 49 percent ofmembership growth compared with only 30 percent in 2004. Still, 53.5 percent of all union
members are employed in the public sector; only slightly down from the previous year’s figure of
53.7 percent.
The concentration of union membership in the public sector, which accounts for less than half of all
wage and salary earners in New Zealand, is reflected in a public/private divide in union density
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figures. We have used the Quarterly Employment Survey (QES) to estimate total employment by
public and private sector. Table 4 shows that the public/private divide in New Zealand is somewhat
greater than in our main international comparators.
Table 4: Union Density – public and private sectors in selected countries (2005)
Country
New ZealandAustralia
UK
USA

Union density Public sector Private sector
22
70
14
23
47
17
26
59
17
13
37
8

Source: Statistics New Zealand, QES March 2005; Australian Bureau of Statistics 2005; UK Dept of Trade and Industry 2005; US
Dept of Labor 2005; Industrial Relations Survey, 2005

Changes in union density
Table 5 shows the density figures by industry for 2004 and 2005. Density has been calculated byusing the wage and salary earners only component of the Household Labour Force survey, thus
eliminating the self-employed and employers from the calculations. All industries within public andcommunity services continue to be strongly unionised; there has been a significant increase indensity in health and community services. Across the private sector, energy and utility services,transport, storage and communications, manufacturing, and mining are the most strongly unionised
industries. Unions are struggling to maintain a presence in important areas of the labour market;
particularly retail, wholesale, restaurants and hotels.
Table 5: Density by industry 2004, 2005
Approx. density
Approx. density
Industry group2004 (%)
2005 (%)
Agriculture, fishing, forestry etc
4.5
4.4
27.8
24.5
Mining and related services
27.6
31.3
Manufacturing
52.0
46.1
Energy and utility services
5.8
4.7
Construction & building services
Retail, wholesale, restaurants, hotels
4.0
3.7
36.7
40.9
Transport, storage communication
Finance, insurance & business services
6.3
5.9
Personal and other services
19.0
15.4
43.6
48.3
Public and community services
44.9
40.6
•
Govt administration & defence
48.5
50.7
•
Education
38.5
49.8
•
Health & community services
Source: Statistics New Zealand, Household Labour Force Survey – Wage and salary earners component, Unpublished,2005.

Sex and ethnicity
Although women comprise only 46 percent of the New Zealand labour force (Household Labour
Force Survey, Dec 2005 Table 3, Statistics New Zealand 2005), they constitute 54 percent of union
membership. This strong participation rate reflects women’s high representation in public andcommunity services.
This year only 21 unions advised that they collected statistics on ethnicity. These unions covered
222,609 employees or 59 percent of total union members. Consistent with previous years, Table 683

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shows a slightly higher representation of Maori and Pacific Islander peoples than theirrepresentation in the labour force would lead us to expect, and the converse for Pakeha. Inspectionof survey returns suggests that some unions may be placing employees for whom they do not haveethnicity information in the ‘Other’ category. Accordingly, the survey sample percentages reported
in this table need to be interpreted with caution.
Table 6: Ethnicity by sample and labour force 2005 – where details are provided
Survey sample
Total labour force∗(%)(%)
NZ European / Pakeha:
58.2
76
Maori:
11.5
10
Pacific Peoples:
7.6
5
Asian:
2.7
N/A
Other:
20.0
10
Total
100
100
∗ Statistics New Zealand, Household Labour Force Survey, December Quarter 2005, table 5. No breakdown given for
Asian working population
Ethnic group

Trade Union Numbers, Distribution of Membership by Size, and Affiliation
Table 7 shows the number of identifiable trade unions, categorised by size, at the commencement
and conclusion of the ECA period (1991 and 1999 respectively), and five years into the ERA period(2005). Refer to Table 1 for the number of trade unions for all years from 1991 onwards.
Table 7: Membership by union size 1991 – 2005, selected years
M’shiprange
Under 1000

No.
4

May 1991
Members
2954

%
1

No.
48

Dec 1999
Members
12703

4

No.
140

Dec 2005
Members
19436%
51000 – 4999

48

99096

16

22

43709

14

23

56801

15

5000 – 9999

8

64268

11

3

19669

7

4

30050

8

10000+

20

43680072

922632475

827106172

TotalsAv. Size

80

603118100

82302405100

1753773481007539
Source: Industrial Relations Centre Survey

3688

%

2156

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
1987 requirement that unions have a minimum membership of 1000. This produced a dramatic dropin trade union numbers from 259 in 1985 to 104 in 1990. The abolition of registration provisions
under the ECA (1991) made identification of unions difficult, but estimates suggest there was afurther decline in numbers during this period. Reversing this decline, the ERA’s (2000) requirementthat only registered unions can participate in collective bargaining, and its setting of a low
membership threshold for registration at 15 members, has seen the number of registered unions
more than double (see Table 1).

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Although the ERA has seen 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
for the 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.
Small unions (those with fewer than 1000 members) still only account for five percent of overall
membership, and large unions (those with more than 10,000 members) account for 72 percent of all
membership. It is these large, well established, and better resourced unions that account for most of
the membership growth.
Peak body affiliations
Of the 175 registered unions in our survey, only 37 are CTU affiliates (see Table 8). However, with
333,395 members, CTU affiliates have 88 percent of total union membership and represent 18 of the
20 largest unions in New Zealand. This proportion has been consistent throughout the period of the
ERA. Moreover, in the year to December 2005, CTU affiliated unions accounted for 99 percent of
the increase in union membership with a net gain of 22,944 members.
Table 8: NZCTU affiliation 1991 – 2005
Year

NZCTU Affiliate unions

Members

1991

43445116Percentage of total m’ship
in CTU affiliates
86.5

1992

33

339261

79.2

1993

33

321119

78.5

1994

27

296959

78.9

1995

25

284383

78.5

1996

22

278463

82.2

1997

20

253578

77.4

1998

19

238262

77.7

1999

19

235744

78.0

2000

26

273570

85.9

2001

32

289732

87.8

2002

34

293466

87.7

2003

36

297440

87.1

2004

38

310451

87.7

333,395

88.4

37
2005
Source: Industrial Relations Centre Survey

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Discussion
In 2005 we saw the largest increase in union membership in a single year since the Industrial
Relations Centre commenced reporting these figures in 1991. Moreover, for the first time in five
years, an increase in union density is also reported taking density figures to the highest they havebeen since 1998. In part, this success can be attributed to the predicted slowing in labour market
growth. Previous years have seen unions struggle to recruit and retain members in an environmentof high labour turnover and where large numbers of new jobs created have been casual and shortterm. What marked 2005 most, however, were the highly visible union campaigns—particularly inthe health and community, and the manufacturing industries. The success of campaigns such as the
EPMU’s call for ‘5 in 05’and ‘Fix Our Planes at Home’; and the NZNO and PSA campaigns
amongst health and community service workers, is measured not only in record increases in wages
for the year, but in the greater confidence in the union movement more generally.
The election of a Labour-led government in September 2005 provides the union movement with asmall window of opportunity in which it can consolidate its gains and seek improvements to thelegislative and institutional frameworks governing the employment relationship. MMP in New
Zealand makes the radical anti-union reforms that are currently underway in Australia an unlikely
prospect for a future National-led government. Nevertheless, complacency on the part of the New
Zealand union movement is clearly not an option. In particular, the problem of free-riding, where
non-union members benefit from union-negotiated pay and conditions, remains. So too, difficulties
in gaining employer buy-in to Multi-Employer Collective Agreements which can provide forindustry-wide standards. And the piecemeal and often short-term nature of bargaining that limits
what can be negotiated is an impediment to addressing emerging areas of concern for workers.
An important achievement for the union movement in 2005 was the more balanced growth between
the public and private sectors. However, for the private sector, this growth was mainly in
manufacturing; an industry that continues to decline as jobs move off-shore and it’s ageing
workforce approaches retirement. A challenge for the union movement remains in developing
innovative strategies for recruiting in traditionally non-unionised industries within the private sector.
Industries such as retail, hotels, and restaurants are particularly important, not only for the size of
their workforce but their position as an entry-point into work for many young New Zealanders. Suchindustries are notoriously difficult areas for unions to organise due to the casualised nature of muchof the work and the size of many establishments. On an optimistic note, although a loss in overall
union membership was reported for retail, hotels, and restaurants, these figures mask the success of
UNITE and the SFWU in targeting mostly young workers in the fast food and casino industries.
Current campaigns such as the NDU’s ‘Shelf Respect’ and the SFWU’s ‘Clean Start’ campaigns
show a continued willingness on the part of unions to tackle areas of work that are difficult toorganise and where often the lowest paid are employed.

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References:
Australian Bureau of Statistics (2006) catalogue 6310.0 Employee Earnings, Benefits and Trade
Union Membership, Aug 2005. Canberra: ABS.
Department of Labor (2006) Union Members Survey, Department of Labor: Washington D.C: Deptof Labor.
Department of Trade and Industry (2006) Trade Union Membership 2005, London: DTI.
Department of Labour (2006) Unpublished data, DOL.
ERS Website www.ers.dol.govt.nz/union/registration.html
Statistics New Zealand (2002, 2003, 2004, 2005) Household Labour Force Survey, unpublishedreports.
Statistics New Zealand (2005) Quarterly Employment Survey, March 2005.

Appendix
The Employment Relations Act and Trade Union Registration
The objects of the Act with respect to the recognition and operation of unions are:••••

To recognise the role of unions in promoting their members’ collective interests
To provide for the registration of unions that are accountable to their members
To confer on registered unions the right to represent their members in collective bargaining
To provide representatives of registered unions with reasonable access to workplaces forpurposes related to employment and union business.

In pursuit of these objectives, the ERA establishes a union registration system, and grants registeredunions bargaining rights together with rights of access to workplaces (specified in sections 19-25).
To gain registration, a union must have more than 15 members, and provide a statutory declarationthat it complies with the requirements of s14 of the Act regarding rules, incorporation andindependence from employers. The Act requires the statutory declaration to stipulate that the unionis ‘independent of, and is constituted and operates at arm’s length from any employer’ (s14(1)d).
The Registrar of Unions may rely on the statutory declaration to establish entitlement to registration.
Only registered unions may negotiate collective agreements, and collective agreements apply only
to union members whose work falls within the agreement’s coverage clause, and to new workers
whose work falls within the agreement’s coverage clause for the first 30 days of their employment.

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Research Framework’

UNCOVERING THE ORIGINS OF NEW ZEALAND’SEMPLOYMENT RELATIONS ACT 2000: A RESEARCH
FRAMEWORKJAMIE LATORNELL1

Abstract
It has been argued that the Employment Relations Act (ERA) builds on experiences under the
ECA as well as embracing the values of the country’s earlier conciliation-arbitration system. A
review of New Zealand’s history of employment relations legislation reveals that the relational
approach of the ERA does indeed maintain a variety of principles embedded within New Zealandemployment relations by the ECA. Additionally, the ERA also attempts to re-establish earlier
principles rejected by the ECA. However, beyond re-establishing older principles andcontinuing more recent ones, the ERA also introduces four new concepts into the employment
relations system in New Zealand. This paper provides a proposed research framework to fully
understand the origins of these key principles underlying the ERA as well as to understand why
these concepts were incorporated into the ERA. The paper concludes with a preliminary
document analysis of Labour Party policy documents and speeches by key Labour Party
members.
Introduction
On 2 October 2000, the New Zealand legislature passed into law the Employment Relations Act(the ERA), one of the first major pieces of legislation passed by the Labour Party led coalition
government elected the previous year. During the election, a major aspect of the Labour’smanifesto was the replacement of the Employment Contracts Act 1991 (the ECA). Prior to theelection, the Labour Party’s spokesperson on labour relations signalled that the replacement of
the ECA was intended to provide New Zealand with employment legislation which would belong-lived. “Our hope is to provide legislation that is sufficiently well balanced, fair and devoidof ideology that it will attract wide enough support to stand the test of time” (Hodgson 1999:
175). More recently, Margaret Wilson, the Minister of Labour at the time of the ERA’s passage
into law made the following observation.

1

Academic Director (Management & Economics) in the Manukau Business School at the Manukau Institute ofTechnology, Auckland, New Zealand
The author would like to thank Dr Nigel Haworth and Dr Erling Rasmussen for their feedback on early drafts of thispaper as well as colleagues in the Manukau Business School who attended a departmental research seminarpresented by the author on this topic and provided valuable feedback and debate.
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NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

The Employment Relations Act 2000 marked a break with the employment relations
regulatory framework of the 1990s enacted in the Employment Contracts Act 1991. It
also signalled the advent of a new approach to the employment relationship that built on
the experiences of the 1990s as well as the values of the system of conciliation andarbitration. The contractual adversarial stance to employment relations was replaced by anegotiated cooperative approach that was founded on the equitable notion of good faith(Wilson 2004: 9).
The objectives of the ERA are in stark contrast to those of its predecessor, the ECA. The ERA
seeks to “build productive employment relationships through the promotion of good faith in all
aspects of the employment environment and the employment relationship” (Employment
Relations Act 2000: s.3). The ECA, on the other hand, sought to “promote an efficient labour
market” (Employment Contracts Act 1991: long title). Even so, the structure of the ERA is moreconsistent with the ECA than with pre-ECA legislation. In this sense, the ERA does build on theexperiences of the 1990s under the ECA. However, in its desire to promote collective bargaining,
the ERA shares a commonality with earlier legislative approaches in New Zealand.
Nevertheless, a number of the principles underlying the ERA are new to employment relations in
New Zealand, namely:
1. encouragement of building productive employment relationships;
2. promotion of good faith behaviours;
3. extension of the duty of good faith to all aspects of the employment relationship andemployment environment; and4. recognition of implied mutual obligations of trust and confidence within employment
relationships.
It is unclear where these new concepts originated, why they were incorporated into thelegislation, or even if they do indeed represent a link to the values of the conciliation-arbitration
system or the experiences of the 1990s as argued by Wilson (2004). Nevertheless, theintroduction of these new principles within the ERA makes possible the argument that therelational approach is a radical innovation in employment relations legislation rather than an
evolutionary change. It is not the intent of this paper to debate the extent to which theseconcepts are revolutionary or evolutionary change, but rather to provide a preliminary review of
documentary evidence regarding the origins of these concepts as well as to discuss a frameworkfor further research to investigate and more clearly establish their origins.
This paper is structured as follows: first, a brief discussion of the four legislative approaches tothe regulation of employment relations in New Zealand which have been used between 1894 andthe present-day. This leads to an explanation of the significance of the relational approach, themost recent of the four legislative approaches. This explanation considers the key principles
underlying the approach relative to the key principles established by earlier legislation thereby
allowing an identification of the continuities and discontinuities of key principles between andamong the approaches. The paper then turns to the research questions and research framework
resulting from the primary issues raised by the earlier sections of the paper. The paper concludes

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Research Framework’

with a discussion of the results of the preliminary document analysis to identify the possible
origins of the new concepts introduced by the ERA.

Approaches to employment relations legislation
New Zealand’s history of employment relations legislation extends back to the late 19th century.
During this time, the legislative regulation of employment relations has been characterised byfour major approaches: the conciliation-arbitration approach; the ‘modified’ conciliationarbitration approach; the contractual approach; and, most recently, the relational approach.
The conciliation-arbitration approach was first established in 1894 through the enactment of theIndustrial Conciliation and Arbitration Act (the ICAA). The structures and features of thisapproach remained largely unchanged for 70 to 80 years until the emergence of the ‘modified’conciliation-arbitration approach. Exactly when the conciliation-arbitration approach was
replaced with a ‘modified’ approach is open to some interpretation. For instance, Geare (1993)
suggested the modified approach began as late as 1987 with the introduction of the Labour
Relations Act, while Hince (1993) argues that the modification of the conciliation-arbitration
approach was a more evolutionary process beginning in the 1970s with the introduction of theIndustrial Relations Act 1973 (IRA). Other authors place the emergence of a modified approacheven earlier. Woods (1975) stresses that while the 1961 shift from ‘compulsory unionism’ tounqualified preference’ may seem of little significance, in reality it was a dramatic change. At
the very least, this shift foreshadowed the need to move to a modified approach. For the
purposes of this paper however, the modified approach will be considered to have largely beenenabled through a series of Acts during the 1970s and 80s: the Industrial Relations Act 1973 (theIRA), the Industrial Relations Amendment Act 1984 (the IRAA), and the Labour Relations Act
1987 (the LRA). In the third, contractual approach, the legislative regulation of employment
relations was significantly altered by the provisions of the Employment Contracts Act 1991. In
2000, the legislative regulation of employment relations was again changed with the enactmentof the Employment Relations Act 2000. The ERA heralded the arrival of the relational
approach.

Significance of the relational approach
It has been argued that the relational approach embodied within the provisions of the ERA is thelatest in a series of “frequent, radical changes in employment relations during the last two
decades” (Rasmussen 2004: 1). The Labour government stressed that further legislative change
was needed since the labour market reforms of the 1980s and 1990s had failed to facilitate labour
market adjustment (Clark 2003). Furthermore, the Labour government argues that through the
ERA it is attempting to create a new approach to employment relations which not only builds onthe experiences of the contractual approach but also draws on the values of the conciliationarbitration approach (Wilson 2004).

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NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

A full review of the literature pertaining to New Zealand’s history of employment relations
legislation in order to identify the drivers, features and outcomes of each legislative approach isbeyond the scope of this paper2. Instead this section will summarise the key principles
underlying the relational approach as well as highlighting the continuities and discontinuities ofthese key principles between and among the legislative approaches prior to the relational
approach.
The relational approach is attempting to re-establish two principles underpinning employment
relations systems recognised by the conciliation-arbitration approach. First, the philosophy ofcollectivism has traditionally been a fundamental aspect of employment relations in New
Zealand since the introduction of the conciliation-arbitration approach in 1894 (Hince 1993).
This principle was rejected by the contractual approach as the dominant mode for the regulationof employment relationships in New Zealand. In this regard, Geare (1993) suggests that inaddition to the stated objectives of the ECA, the contractual system was also intended to weaken
unions and increase the power of employers. Likewise, Morrison (2003) argues that trade unions
were viewed as one of the more important rigidities or inflexibilities that needed to be addressedin the New Zealand labour market. As a consequence, the contractual approach establishedindividualism as an underlying philosophy of the employment relations system in New Zealand.
In contrast, the relational approach attempts to re-establish the key principle of collectivism
through the promotion of collective bargaining as an integral part of employment relations.
The relational approach also attempts to re-balance efficiency and equity concerns as the twin
objectives of an employment relations system (Meltz 1989). These twin objectives were
supported by the legislation of both the conciliation-arbitration approach and the modified
conciliation-arbitration approach. Through the preamble of the ECA, the contractual approach
explicitly focused on efficiency as the primary goal of the employment relations system. Walshand Ryan (1993: 28) observe that the contractual approach’s “neo-classical emphasis on labour
market efficiency led to a fundamental repudiation of state regulation of the processes ofbargaining and representation”. In this regard, the ECA is a repudiation of the assumed need tobalance efficiency and equity within the employment relations system (Latornell 2005). The
relational approach re-balances these twin goals, as seen through the introduction of provisions
for good faith behaviours.
The relational approach also continues the tradition - established by the conciliation-arbitration
system - of specialist employment institutions to assist in the resolution of employment relations
disputes. While the nature and structures of the specialist employment institutions have varied
across the four approaches, acceptance of the need to maintain such institutions has been
consistent. In fact, the need for specialist employment institutions is the single principle
underpinning New Zealand employment relations which has survived unabated through all four
approaches.
2

There is much literature surrounding the historical development of employment relations legislation in New
Zealand. In addition to the references in this paper, the author recommends the following as being of particular
relevance to the matters covered by this paper: Bray & Walsh 1998; Brook, 1990; Brosnan, Smith, & Walsh 1990;
Dannin 1997; Deeks & Boxall 1989; Deeks, Parker, & Ryan 1994; Deeks & Rasmussen 2002; Harbridge &Crawford 1997; Walsh 1984 & 1993.
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Research Framework’

The relational approach also maintains and continues a variety of principles established more
recently during either the modified conciliation-arbitration approach or the contractual approach.
The relational approach continues a single legislative structure for the regulation of bothcollective and individual employment relationships as established by the contractual approach.
Until 1991, only collective employment relationships had been regulated through statute;individual employment relationships had been primarily regulated through the common law.
The approach also maintained decentralised structures of wage fixing initiated during themodified conciliation-arbitration approach and subsequently greatly expanded by the contractual
approach. The principles of voluntarism regarding union membership and freedom of
association were established by the contractual approach. The relational approach maintains
these principles within the employment relations system in New Zealand.
Finally,
encouragement of self reliance among the direct parties to an employment relationship wereintroduced during the modified conciliation-arbitration approach and subsequently significantly
extended by the contractual approach. This principle is maintained by the relational approach,although somewhat moderated through the states provision of information and mediation
services to assist in the resolution of employment relations disputes.
Beyond re-establishing older principles and continuing and maintaining more recent ones, therelational approach also introduces new principles to employment relations legislation in New
Zealand. These principles are:
1. building productive employment relationships;
2. the promotion of good faith behaviours;
3. the extension of the good faith concept to “all aspects of the employment environmentand of the employment relationship” (Employment Relations Act 2000: s.3(a)); and4. recognition of the implied mutual obligations of trust and confidence between the parties
to an employment relationship.
The origins of the new principles, embedded within the relational approach, are worthy ofquestion. The patterns of continuity and discontinuity of principles between and among the four
approaches to the legislative regulation of employment relations in New Zealand also raise aseries of questions regarding the nature of the relational approach. These research questions will
be presented in the next section.

Research questions
The foregoing brief analysis of the principles underlying the relational approach and theircontinuity and discontinuity with the principles originating in earlier approaches raises a series ofquestions worthy of further consideration.
1. Where have the new principles underlying the relational approach originated? Why havethey been included in the legislation?
2. Given the inclusion of these new key principles:92

NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

a. is the relational approach an evolution of the modified conciliation-arbitration
approach (in the same way that the modified approach was an evolution on theoriginal conciliation-arbitration approach)?
i. If so, does the contractual approach represent an anomaly in legislative
approaches to the regulation of employment relations in New Zealand?
b. to what extent does the relational approach represent a break from the modified
conciliation-arbitration approach (and the original conciliation-arbitration
approach)?
i. If so, is the relational approach an evolution of the contractual approach?
ii. If so, to what extent are the consistencies between the relational approachand the contractual approach continuities or are they contingent
similarities?

Research framework
In order to uncover the origins of the new principles introduced by the relational approach and tounderstand the relationship between the key principles of relational approach and earlier
approaches, in-depth research is necessary. In addition to a review of relevant literature to
identify the drivers, key features, underlying principles and outcomes of New Zealand history oflegislative approaches to the regulation of employment relations, the framework for this research
will include the following aspects.
1. A document analysis to identify the origins of new principles underlying the ERA. This
document analysis will include:a. policy documents as well as speeches and other documents authored by key
members of the New Zealand Labour Party; and,b. Cabinet and Select Committee papers as well as parliamentary debates from 1999
and 2000 which address the development of the Employment Relations Act 2000.
2. In-depth, semi-structured interviews with key players involved in the development of the
ERA, namely politicians and officials from the New Zealand Labour Party and its
coalition partners, as well as government officials involved in drafting the ERA.
Interviews will also be sought with officials from central lobby groups, such as the New
Zealand Council of Trade Unions (NZCTU), the New Zealand Employers Federation(now Business New Zealand) and the New Zealand Business Roundtable (NZBR). All
three of these groups sought to influence the drafting and passage of the ERA.

Origins of new principles introduced by the relational approach
It has already been noted that the relational approach introduces and establishes four new
principles underpinning the legislative regulation of employment relations in New Zealand,
namely: (1) building productive employment relationships; (2) promotion of good faithbehaviours; (3) extension of the good faith concept to all aspects of the employment
environment; and (4) recognition of the implied mutual obligations of trust and confidence. In
order to identify the origins of these concepts, a preliminary analysis has been conducted of93

NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

publicly available Labour Party policy documents as well as speeches and other documents
authored by key players within the Labour Party from the period 1990 through 1999. This
period is of particular interest as it was during this time that the Labour Party was in opposition.
Prior to 1990, Labour Party policy was clear; the Labour Party had formed the government andits policies relating to employment relations were manifest in the legislation of the modified
conciliation-arbitration approach. However, the Labour Party lost the 1990 general election andwas in opposition through three general elections until 1999. Such an analysis will assist in
determining the nature of the shifts in Labour Party policy during their time in opposition. The
following sub-sections discuss the potential origins of each of these four new principles as wellas advancing questions to be investigated through the interview phase of future research.

Productive employment relationships
The objective of building productive employment relationships is fundamental to the ERA, but
the phrase itself is not defined with the legislation. The preliminary documentary review fails to
uncover the phrase, leading to the potential conclusion that a key philosophy underpinning therelational approach was not part of policy discussions.
So where did the concept of productive employment relationships originate? What was theintent of introducing such a phrase as a key object of the employment relations legislation? Is
this an attempt to incorporate the general concept of ‘fairness’ into the overall objectives of the
ERA? ‘Fairness’ is a concept which features in Labour Party policy documents as early as 1992
(see for example New Zealand Labour Party, 1992a, 1992b, 1992c) and continues through thelater 1990s (Cullen 1993; Maharey 1995; Hodgson 1999). Or, is productive employment
relationships merely a phrase which ‘sounded good’ at the time of the legislation’s drafting?

Good faith behaviours
The promotion of good faith behaviours most likely arose out of two concerns. Firstly, as
discussed in the previous sub-section, the Labour Party’s interest in ensuring fairness within theemployment relations system, and secondly, a desire on the part of the Labour Party for New
Zealand to ratify International Labour Organisation (ILO) Convention 87 on Freedom of
Association and Convention 98 on the Right to Organise and Bargain Collectively. These twoconventions are often considered to be two of the six basic human rights (Haworth & Hughes
1995). Ratification of these conventions has been a key feature of Labour Party policy
documents on employment relations since at least 1993 and was also a driver for the replacementof the contractual approach with the relational approach. Indeed the second of the two key
objects of the ERA is to “promote observance in New Zealand of the principles underlying”(Employment Relations Act 2000: s. 3(b)) these two ILO Conventions. The desire to ratify these
ILO Conventions was also provided as a key reason why the Labour Party could not support a
return to unqualified preference (Clark 1993), instead favouring voluntarism in trade union
membership.
Of particular interest to this paper is the fact that the notion of good faith is typically embedded
within the concept of freedom of association. Novitz (1996: 121) notes that there are two
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NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’commonly used approaches to the concept of freedom of association which are largely in conflictwith each other.
Upon one approach, freedom of association is merely a natural extension of individual
liberty and the continued protection of personal choice is fundamental to its survival.
The opposite view is that, within the context of industrial relations, the function of
freedom of association is to redress the power imbalance typical of the relationships
between employer and employee. Freedom of association therefore requires promotionof collective bargaining.
Novitz (1996: 124) further observes that more recent cases of the ILO Committee on Freedom of
Association suggest a duty to bargain in good faith is an appropriate “compromise between theactive promotion of collective bargaining and the preservation of freedom of choice”.
Preliminary document analysis reveals the concept of good faith took time to appear within
Labour Party policy. ‘Good faith bargaining’ first appears in a 1997 policy document (New
Zealand Labour Party 1997). In a later article written during the run-up to the 1999 generalelection a broader notion of good faith in the employment relationship is advanced (Hodgson
1999). Even then, the concept is a vague one and its intended meaning does not appear withinpolicy documents. While an in-depth analysis of the nature of good faith is beyond the scope of
this paper, it is worthwhile noting that it has been characterised in a number of ways and has
been equated with the notions of honesty, loyalty, cooperation and a duty of reasonableness (fora fuller discussion, see sources such as: Baron 2005; Burton 2001; Carter & Peden 2003;
Davenport & Brown 2002; Finn 2005; Harrison 2001; Lücke, 1987; Wightman 1998). It is also
worthwhile noting that the exact nature of the notion of good faith is also subject to considerable
debate from time to time.
So where and when did the concept of good faith behaviours originate? Was it anchored in thedesire for New Zealand to ratify and observe ILO Conventions? Or was it anchored in broader,but more general notions of incorporating fairness into New Zealand’s employment relations?
Or both?

All aspects of the employment relationshipAs noted in the previous section, a duty to bargain in good faith is inherent to employment
relations concepts such as freedom of association and the promotion of collective bargaining.
However, the relational approach extends the notion of good faith to all aspects of theemployment relationship and the employment environment. This extension goes beyond thatwhich exists in most, if not all, employment relations legislation in developed countries. The
intent to have legislation which governed the “overall management of employment relationships”(Clark 1993: 154) has been a concern of the Labour Party during the 1990s, with the argumentthat legislation should not focus on the “narrower objective of contract negotiation andenforcement” (Clark 1993: 54). It was not until 1999 however, that evidence can be found which
directly links the concept of good faith with the broader notion of the employment relationship.
Even so, the linkage between the two concepts is not developed and in fact, immediately

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NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

following the passage making the linkage, good faith is defined in terms of a duty to bargain ingood faith in collective relationships.
Importantly, the legislation will require that the relationship between workers andemployers are governed by good faith. The Act will set out that good faith bargaining
includes an obligation to meet and consider proposals of another party, to provide
information necessary for the purpose of bargaining, and so on. The duty to act in goodfaith will not imply a duty to settle a collective agreement (Hodgson 1999: 173).
So why did the notion of duty good faith bargaining get extended to all aspects of employment
relationships?

Mutual trust and confidence
Recognition of the implied mutual obligations of trust and confidence in employment is the final
key concept introduced by the relational approach. Like ‘productive employment relationships’,
the preliminary document analysis does not uncover the term ‘mutual trust and confidence’ inLabour Party policy. However, the development of this concept and its inclusion in therelational approach is a process which was largely independent of party politics. The common
law in New Zealand had begun to develop ‘mutual trust and confidence’ as an implied duty
within employment contracts a number of years prior to its explicit adoption as a concept within
the relational approach.
New Zealand Courts, as least since the decision of the Court of Appeal in Auckland Shop
Employees IUOW v Woolworths (NZ) Ltd (1985) ERNZ Sel Cas 136; [1985] 2 NZLR
372 (CA), have developed the concept of ‘trust and confidence’ as a mutual obligation
between parties to an employment contract and applied it as an implied term in thecontract of employment (Brookers Online 2003: ER4.06).
It is worth noting that while this implied duty of mutual trust and confidence was being
developed within the common law, the duty of good faith was not enjoying the same treatment.
Furthermore, in the first version of the ERA, mutual trust and confidence was in a position ofprominence with good faith behaviours in a subordinate position. In the 2004 amendments to the
ERA, the concept of good faith was broadened, explicitly placing the notion of mutual trust andconfidence in subordinate position.
So, was the inclusion of a common law principle in legislation a reflection of the notion of
fairness which appears to run through Labour Party policy? If so, then why was a moredeveloped concept (mutual trust and confidence) placed in subordination to a lesser developedone (good faith) within the legislation? What is the intended nature of the interplay between
these two concepts?

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NZJER 31(3): 88-100, 2006, Latornell ‘Uncovering the Origins of NZ’s Employment Relations Act 2000: A
Research Framework’

Concluding comments
A review of the historical development of the four approaches to the legislative regulation of
employment relations in New Zealand reveals that the most recent relational approach continues
and extends a number of concepts and themes introduced in earlier approaches. Some of theseconcepts, such as the role of collectivism in employment relations have a long history datingback to the conciliation-arbitration approach of the late 19th century. Other concepts, such as
voluntarism, are fairly recent developments in New Zealand, having been introduced during themodified conciliation-arbitration approach of the 1970s and 1980s and significantly developed
during the contractual approach of the 1990s.
However, this review also reveals that the relational approach of the 21st century also introduces
a series of four new concepts which are key underpinnings to the approach, namely, building
productive employment relationships, good faith behaviours, all aspects of the employment
environment and mutual trust and confidence. While some documentary evidence provides clues
to the origins of some of these new concepts, some concepts – for example, ‘productive
employment relationships’ – are not discussed or disclosed in policy documents. If we are to
fully understand the nature and intent of the relational approach and its legislation, we must
understand the origins of these new concepts. To do this further research is necessary. This
paper has proposed a research framework of further document review and in-depth, semistructured interviews designed to improve this understanding.

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100NZJER 31(3): 101- 104, 2006, V. Hunt, Book Review

Book Review by V. Hunt1
Developments in the Call Centre Industry – Analysis, Changes andChallenges by John Burgess and Julia Connell (eds), Routledge,
Oxon, 2006
The last fifteen years have seen a proliferation of call centres throughout the world.
Companies, seeking to compete, have had to provide a new form of customer service
via the telephone. In some sectors this is required on a ‘24/7’ basis. Call centres haveattracted considerable academic interest as they are now a major source of
employment, particularly for women who make up 70% of the workforce in theAustralasia, UK and US call centres. In the main, the research findings have been
negative about the Tayloristic labour process used to provide customer service andquestions have been raised about whether this form of employment is a positive
development in the world of work.
Developments in the Call Centre Industry – Analysis, changes and challenges, makes
an important contribution to the relatively new call centre literature, which has only
evolved since 1990. Therefore, it is understandable that the editors, John Burgess andConnell, signal at the beginning of the book that it is still a ‘work in progress’ anddraw attention to the fact that this industry is rapidly changing and growing and thus
issues will continue to emerge as the industry reaches maturity. In particular, theynote how call centre technology, organisational change to facilitate the adoption ofcall centres and its impact on employment have all led to call centre service work
being restructured, relocated and reorganised.
While this books charts the growth of the call centre industry, more importantly, it
helps to establish the contextual influence on call centre research, an area which has
to date been largely missing from the discourse. The book achieves this by including
research from a number of different countries, and in particular from countries such as
Korea, Greece and Sweden which have not been previously featured in the reported
international research. The authors also include a variety of research approaches andemploy both qualitative and quantitative methods to collect data on call centre work.
Adopting this broad methodological approach has been beneficial in that the results
have thrown up a number of additional and useful insights about call centre work andits development.
The range of research findings is also a key strength of this book for a number ofreasons. First, it demonstrates both positive and negative aspects of call centre
workplaces as well as the different human resource practices found in theseworkplaces. The findings reported in the book mirror the extant literature in thatsimilar studies do not entirely paint a pessimistic picture of all call centreorganisations and indicate that these types of working environments may not always
be a negative experience for workers.

1

V. Hunt, Department of Management & Employment Relations, The University of Auckland.

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NZJER 31(3): 101- 104, 2006, V. Hunt, Book Review

Second, the range of work discussed in the book highlights the context-driven natureof call centre research. Underpinning this discussion is the essential question (whichto date has not been addressed) – namely: “How do different political and sociocultural regimes impact on the workplace?” By investigating the employment
arrangements used in the call centres of the different countries, the book goes further
than most others in answering this question.
Third, the wide range of studies and approaches reported in the book precludes ananalysis that adopts a singular and narrow theoretical framework, thus providing a
useful contribution to theory. That is, some of the studies draw on Foucault andlabour process theory; but there is no central theme to the analysis of the research or
linking to a single body of theory. The absence of a central theme and core theory are
not necessarily detrimental as call centres are heterogeneous, microcosms ofworkplaces and are more likely to reflect national employment regimes and thepolitical, social and economic environment in which they operate. In other words,
context matters and advocating one over-riding theory to explain all call centre
research would be problematic.
The book opens with a chapter on ‘off-shoring’ by Srivastava and Theodore who
establish a meta perspective of call centre work within the global labour market. They
discuss the key drivers of call centre location and the importance of call centre work
as a source of employment in the knowledge intensive economy. Chapter 3, by Taylor
and Bain, continues the off-shoring discussion by looking at the issues of UK
companies relocating to India. Taylor and Bain have worked in this field for over 10
years and are widely acknowledged as the leading experts on call centre research. It
was with great sadness to learn that Peter Bain has recently died. His research on callcentres and his contributions and insights on the topic will be sorely missed.
Chapters 4 and 5 are based on surveys in call centres in Germany (Weinkopf) andKorea (Lee and Young Kang). Against a background review of studies in Germany
since the end of the 1990’s, Weinkopf analyses data collected in a survey of 650 callcentre employees across 14 call centres. Findings on job quality, design, employee
satisfaction, HRM and IR in this survey confirm a broad variety of features and HRM
practices in use in German call centres. Weinkopf demonstrates that the ‘sweatshop’or `dark satanic mills’ image of call centre work does not prevail and that there is arelatively high level of overall employee satisfaction (84.6 per cent of respondents are
satisfied or very satisfied with their jobs). However, she notes that there is still room
for improvement as call centres appear to be marginally attached to the German
labour market regulations and institutional frameworks. In particular, call centres
which are not part of a larger company as in-house operations, tend not to have anycollective bargaining arrangements in place.
The research on Korea shows that call centre work is a very new form employment
with 60 percent of call centres operating since 2000. Employment relations appears to
be externalised with over a third of call centres being outsourced and those operating
in-house call centres, employ in the main, non-regular employees. The authors explainthat in Korea, call centres use hybrid work organisation where intense real-timemonitoring is used to control staff who, are also given a degree of work discretion.
They note, that unlike the international research in Europe, US and Australia, there102

NZJER 31(3): 101- 104, 2006, V. Hunt, Book Review

has been little social capital development with limited public resources and few
networks created in this sector.
In Chapter 6 Bob Russell discusses the skills required to perform what he calls‘infoservice’ work in Australian call centres and how the problem of matching the
expectations of the job with the characteristics of the job is leading to the highturnover rates in the industry. His findings demonstrate that the work in three out offour of the centre studies is to some degree more sophisticated than the semi-skilledassembly line work normally associated with call centres and yet is still some distanceaway from the type of work and skills required to operate in the ‘knowledge
economy’. His research highlights the huge variations in skill requirements within thecall centre industry and advocates the need to match recruitment of staff with thecomplexity of the work to be done.
In Chapter 7, Susan Durbin accounts for the barriers which prevent women fromdeveloping careers in four call centre case studies located in two UK financial
institutions call centres. She questions whether women are held back because of their“soft” skills and, because call centres are still patriarchal institutions that “keepwomen in their place”. Her findings are mixed, however. In one of the case studies,
female staff progress into senior management roles while in the other case study, they
do not. Call centre work was the only employment most of the female respondents
could find and half of all them had experienced ‘perceived’ or ‘real’ barriers to careerdevelopment. These included; a lack of management training, no role models inmanagement jobs, and male stereotyping of women skills. However, despite their
obvious lack of career development, half the respondents interviewed said they werevery happy with their career progress to date.
The remaining chapters 8 to 11 present both the trade union and employer
perspectives. In Chapter 8, Rainnie and Drummond discuss community involvementin the development of a union in a re-located call centre situated in a green-field,
mono-industrial site in the Latrobe Valley. This account gives the organiser’s
perspective of mobilising a union and provides practical insights about community
involvement in the union forming process. It highlights the importance of informal
and social networking to develop a collective culture and adds to a growing debate oncommunity unionism. The research has wider significance as call centres relocatefrom city to small towns in search of lower costs. Traditional unions can learn fromthe success of social capital development that takes account of the community in thisworkplace organisation.
Chapters 9, 10 and 11 cover managerial practices and work organisation in callcentres, commencing with Houlihan’s ethnographic work. Based on her fullparticipation in a call centre in between 1997 and 1999, Houlihan’s study isimportant, not only because of its method of data collection, but also because it
focuses on the experience of the managers, a perspective frequently missing in the
discourse on call centres. Although the findings are mixed, Houlihan demonstrates
that the same rules and systems apply to managers who may also resist some of thecall centre daily working practices.

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Chapters 10 and 11 illustrate convincingly that political, social and economic
environment are important factors when analysing call centres. In Chapter 10,
Koskina tests the level of Tayloristic practises in Greek call centres. She finds that theculture and social norms of Greece are so entrenched that none of the call centres inher study used the call centre technology to drive the labour process but instead reliedon high levels of trust and autonomy. This provides evidence that national institutions
and culture play an important role in how call centres are organised. In the final
chapter, Lindgren and Sederblad investigate workers’ autonomy in Swedish callcentres. The authors note that the negative aspects of call centre work are offset bycompensation, lots of breaks, amenities, private space and in one case low call quotas.
This book is well organised and deals with a number of employment issues acrossdifferent countries. It provides a range of research studies to provide practical insights
about outsourcing, HR call centre practices, union organisation, skills development
and career opportunities for female call centre staff. Particularly valuable is thedifferent approaches use to analyse the call centre literature. The book will stimulate
new questions and research from call centre practitioners, academics and students
alike.

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NZJER 31(3): 105-114, 2006, Chronicle June 2006 to September 2006

Chronicle June 2006 to September 2006
June 2006
The debate around the Employment Relations (Probationary Employment)
Amendment Bill continued (see May Chronicle). In the Dominion Post, one of theCouncil of Trade Union leaders, Carol Beaumont, wrote that the Bill attacked therights of every employee in New Zealand. Ms Beaumont slated the Bill as
unnecessary, unfair and unproductive. As every New Zealander changed jobs, on
average, about six times in their lifetime, it was estimated that, at any one time,around 300,000 workers would be with be covered by the probationary provisions.
However, the Bill’s promoter Dr Wayne Mapp responded by stating that the “union
movement is still living in the world of class struggle” and that “the reaction fromunion quarters has actually been quite hysterical and over the top”. He concluded thatthe Bill would help new workers and assist those on the margins of the labour force“to get a foot in the door”.
The future of the Bill started to look uncertain when United Future said it would
oppose that people, who changed jobs, would be subject to its provisions. Whileagreeing with the probationary provision applying to new employees, the leader ofUnited Future, Peter Dunne, stated that it would be problematic if the Bill meant thatevery time a worker changed jobs then they would have to endure anotherprobationary period. In response, Dr Mapp acknowledged that he may need to soften
the Bill if it was to pass. He also suggested further changes such as the inclusion ofan employers’ code of conduct and limiting the Bill to smaller workplaces. The
National Secretary of the engineering union (EPMU), Andrew Little, rejected the
proposed code as being toothless and unenforceable.
Besides the Employment Relations Amendment Bill, industrial unrest in the healthsector featured prominently in the media. The strike by junior doctors became a
reality and it received extensive, often negative, coverage in the media. The Press
reported that the dispute was over working hours, with the Resident Doctors’
Association (NZRDA) saying that a 72-hour maximum working week was too long.
The Association also rejected a proposal of a joint committee to negotiate changes tohours and rosters. Several newspapers highlighted that contingency planning saw
consultant doctors, not normally rostered to work at hospitals overnight or weekends,
being offered about $200 an hour as an inducement to cover the shifts usually staffedby junior doctors.
The strike action by junior doctors prompted a string of critical media comments. The
Press stated that the junior doctors’ case seemed weak and while the employer, theDistrict Health Boards, appeared “calm and reasonable, the rhetoric emerging fromthe doctors’ union has been characterised by the kind of stridency that would do credit
to the cloth capped secretary of a miners’ union”. The NZ Herald joined in therhetoric when it suggested that the delays caused to patients were “calculated andcruel” and accused the NZRDA of “needless industrial theatre”. The article also
recalled similar claims of punishing rosters by the Association in 2004, 2003, 2001
and 2000. The Sunday Star Times reported that union leader Deborah Powell’s job
could be on the line in the wake of the industrial action as many regarded it as a costly
failure. The article claimed that a rift between junior doctors and hospital105

NZJER 31(3): 105-114, 2006, Chronicle June 2006 to September 2006

management was widening, while fractures were also appearing between senior andjunior doctors as well as within the ranks of junior doctors.
Further criticism of the junior doctors came in a NZ Herald editorial which
commented somewhat ironically that it hoped that the doctors used their time
profitably and eliminated the sleep deficits which they believed made them sopotentially dangerous to patient welfare. The editorial claimed that the strike was notabout specific changes to working hours, an increase in the rate of pay or allowancesor conditions. Instead it was about the mechanics of how the two parties negotiatedthose issues.
The Nelson Mail also featured critical articles about the junior doctors’ strike. Before
the planned five-day strike by junior doctors went ahead, it reported that Nelson
Hospital would be forced to postpone all but urgent surgery and concentrate on
emergency services. In a later Nelson Mail article, an advocate for New Zealand’s
District Health Boards accused junior doctors of using “cynical” delaying tactics tofrustrate the organisation of emergency cover for the planned strike and added that it
had been difficult to get any cooperation from the union and junior doctors.
After the strike, the NZ Herald reported that signs were looking positive for asettlement. General Secretary of the Resident Doctors’ Association, Deborah Powell,
said the parties were “working on a new way forward”.
Several newspapers reported that the ‘Metals’ multi-employer collective agreement
Both the Press and the Dominion Post reported that the "Metals" collective deal had
been settled at 4.25%. The Metals agreement covered over 2000 workers at about
180 companies and has been regarded as a benchmark for agreements coveringother manufacturing businesses. The Engineering, Printing and Manufacturing
Union had initially claimed 7% which was labelled as 'crazy' by a Canterbury
manufacturers group. While conceding that 4.25% was a more realistic figure somemanufacturers warned that the increase could threaten jobs as it would make themless competitive against Chinese manufacturers.
The Dominion Post reported that the Employment Court had ordered Farmers
Holdings to pay a former executive, Gijs Faber, a bonus of $120,000 for staying withthe company through its sale negotiations. Mr Faber resigned without being informedof the company’s pending sale and he was never paid the bonus. The Court ruled thatwithholding the sale information was a breach of the employer’s good faithobligations under the Employment Relations Act.
Two decisions of the Employment Court regarding wrongful dismissal of employees
featured prominently in the media. In one of the first cases to come before the
Employment Court since amendments to the Employment Relations Act in December
2004, the Court found that Air New Zealand had acted wrongly in dismissing an
employee. Air New Zealand dismissed the employee after investigating complaints
laid against her for poor service and an admission that she pushed a co-worker during
a dispute. The Court said that the amendment to the Act changed how employers
dealt with employees, shifting the focus from what the individual employer thinks isthe best way to handle the situation, to what a “fair and reasonable” employer would
do. The Court found that a fair process might have resulted in a justified dismissal

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but Air New Zealand failed to talk to all the relevant parties involved, thereby failing“properly to weigh all the circumstances under which the alleged misconduct
occurred”.
In a second case, the NZ Herald reported than the Employment Relations Authority
ordered an employer to pay $2,400 to a plasterer who wrote graffiti on a client’s
house. The Authority ruled that the employee did not get an unequivocal warning that
his job was at risk. The employer labelled the decision “ridiculous” and was seeking
legal advice about whether to appeal the decision.
The CEO of the Employers and Manufacturers Association, Phil O’Reilly, argued thatthe two cases highlighted real problems with dismissal law in New Zealand. He
claimed that in each case the dismissal was warranted but the employer had to pay
because the employer did not go through all the proper procedural steps to dismiss theemployees. He supported his stance further by pointing to an Employers andManufacturers Association (Northern) report which had identified a 28% rise ingrievances in the past year, with awards for hurt and humiliation averaging about$5000. Mr O’Reilly called for the Employment Relations Act to be simplified andclarified, including the introduction a probationary period for new employees.
The Dominion Post reported a dramatic increase in personal grievance claims lodged
by staff against Child, Youth and Family Services. Answers to parliamentaryquestions showed that 24 personal grievance claims had been lodged against Child,
Youth and Family Services in the year to August 2002 while in the period between
January 2005 and March 2006, there were 45 claims.
Tens of thousands of people congregated in Australian cities to protest against new
employment relations laws (the so-called “Work Choices” legislation). The NZ
Herald wrote that the laws, which removed many rights and conditions that hadprotected workers for decades, were a defining battleground for the next federal
election (expected to be held in the second half of 2007).
The NBR took issue with a report released by Standards New Zealand. The reportintended to set out best practice for evaluating job positions within an organisationand in the market. The report was intended to eliminate any gender biases that might
privilege male or female dominated occupations or positions. The NBR claimed
somewhat ironically that the report would allow New Zealand to “stake a claim forbeing the most politically correct country on the planet” and that there are fears thegovernment’s internal review of gender pay equity would encroach on the private
sector after the Department of Labour had commissioned Standards New Zealand todevelop the national standard.
July 2006
The debate over the Employment Relations (Probationary Employment) Amendment
Bill continued (see June Chronicle) as the union movement held a number of protests
to voice their opposition to the Bill. The Taranaki Daily News reported that 100
Fonterra cheese workers marched through Eltham while the Dominion Post reported

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that a contingent of 600 protested on Parliament’s lawn. The promoter of the Bill, Dr
Wayne Mapp, was loudly booed when he tried to address the crowd.
The Transport and Industrial Relations Select Committee hearing on the Bill started
near the end of July. The Nelson Mail reported that the CTU president Ross Wilson
told the committee that the Bill was an attack on the fundamental human rights of themost vulnerable employees. The Bill’s promoter, Dr Wayne Mapp, said that the Bill
would allow employers to give a chance of work to young people and others types of
employees without fear of personal grievance cases if they were not up to the job. Dr
Mapp told the Select Committee that his main purpose was to help groups, such as
Maori, immigrants and women returning to the workforce, who found it difficult tobreak into employment. Dr Mapp conceded that the Bill might need to be amended toshorten the 13-week benefit stand-down for employees who did not get a job after 90
days, and include voluntary employer codes of conduct as well as shorter probation
periods for casual workers. The Dominion Post reported on clothing manufacturer
Douglas Voon who had a clear impression of the Bill. Mr Voon said the Bill wouldstop new employees from taking personal grievances in their first 90 days on the job
and would allow small businesses to test staff.
Another contentious piece of legislation was before the Transport and Industrial
Relations Select Committee. The Dominion Post reported on the select committee
hearings into Green MP Sue Bradford's Bill to remove the distinction between youth
and adult minimum wages. Fifteen-year-old schoolgirl Ashleigh Saunders, who works
at a supermarket, was part of a National Distribution Union delegation submitting on
the Bill. National MP Wayne Mapp said that paying all workers the adult rate would
increase prices, especially as there were moves to introduce an adult rate of $12 anhour.
The Dominion Post reported that the New Zealand Fire Service Commission wasgiven leave to appeal against the decision of the Employment Court to grant a day off
to firefighters for each public holiday worked. The Fire Service estimated thedecision could cost millions as it meant that firefighters would also be entitled to backpay to 2004, when the Holidays Act 2003 took effect.
The Timaru Herald reported that a collective agreement was reached with boning
room workers at the Smithfield freezing works. The settlement of the agreement
would mean that a planned $11m upgrade could proceed. Following a two-year
impasse between workers and management, there had been fears that the freezing
works would close with the loss of 500 jobs.
Numerous strikes occurred throughout New Zealand during July. Industrial action
struck Wellington rail commuters as rail track workers from the Rail and Maritime
Union sought a $1.38 increase in their hourly rate of $14.84. The Dominion Posthighlighted the owner’s – Ontrack - claim that wage demands would cost $4.2m.
However, the company offered to meet the union through a mediator.
Air commuters were also affected by industrial action. The Press reported that someflights in and out of Christchurch were cancelled because of continuing industrial
action by Mt Cook Airline pilots. Flights were disrupted because some pilots had

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been sick and other pilots would not cover shifts beyond those that they had alreadybeen rostered on.
The fallout from the junior doctors’ strike continued during July. The Sunday Star
Times and the Dominion Post reported that hospitals were refusing to hand over pay
records to the doctor’s union amid fears strike-breaking doctors might become thetarget of a union witch-hunt. The Resident Doctors' Association was demanding toknow what its 2000 doctors were paid during the period of the strike, igniting a fresh
dispute with health boards. While the RDA said it simply wanted to ensure its doctors
were paid correctly during the strike, sources from several hospitals believed it was an
attempt to discover which doctors broke the strike.
The Southland Times reported that sixty of its staff took industrial action over contract
negotiations. The National Secretary of the Engineering, Printing and Manufacturing
Union (EPMU) Andrew Little said the union members were frustrated that, despite
long negotiations and mediation, the company was refusing to provide the same
conditions as staff at other Fairfax-owned papers in New Zealand.
The Press reported that Canterbury meat processors who supply Progressive
Enterprises supermarkets began a five-day strike. NZ Meat Union Canterbury
spokesperson claimed that the processors were earning 30% to 50% less than industry
standards. The union was seeking a 16-month collective agreement with a 12% pay
rise, which would take workers up to $15.50 an hour in a first step towards pay parity
with others in the industry.
The Press reported that Child, Youth and Family (CYF) denied poor management
was behind an exceptionally high number of personal grievance cases taken by its
staff (see June Chronicle). The union claimed that the complaints were indicative ofpoor management culture and low staff morale. In a reply to an Official Information
Act request, CYF’s Chief Executive Peter Hughes stated that the 43 personal
grievances lodged in 2005 represented only 1% of all staff.
Both the Dominion Post and the Press reported that the dismissal of four Christchurch
based Air New Zealand engineers for accessing inappropriate internet sites was foundto be unjustified. The Employment Relations Authority ordered the airline toreinstate the workers and pay them $76,695 in lost wages and compensation. The
airline announced it was likely to appeal the finding.
The NZ Herald reported that finance company Hanover Group was ordered by the
Employment Relations Authority to pay a former CEO $750,000, plus interest of
more than $50,000. The CEO was originally made redundant but Hanover thenalleged he breached a restraint of business deed when he accepted a CEO position at arival company, one month before his effective resignation date. The payout was
believed to be the biggest the Authority had awarded since it was established in 1999
and possibly the biggest in New Zealand employment law history.
A number of articles appeared in the media relating to the Employment Court
decision in Air New Zealand v Hudson (see June Chronicle). An article in the
Dominion Post claimed that the new test introduced under the Employment Relations
Amendment to the Act was helpful to employees because it created a harsher test for109

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an employer to justify any decision to dismiss. The article went on to say that before
the amendment the test depended on whether there was a fair investigation into theallegations of misconduct and if this requirement was met, then the test was whether
the employer had an honest belief, based on reasonable grounds, that serious
misconduct had occurred. Generally, if there was a fair and thorough investigation
there would be grounds upon which an employer could form that view. The new test
allowed the Employment Court to substitute the objective test of the “reasonable
employer”. The NBR stated that the new test highlighted the need for complete
objectivity by the employer.
August 2006
The Employment Relations (Probationary Employment) Amendment Bill continued
to receive widespread media coverage (see July Chronicle). In an article reporting on
the select committee hearings, the Press commented that, judging by the diverse
views expressed on the Bill, it was sometimes difficult to work out if supporters andopponents were talking about the same piece of legislation. By late August, however,the Dominion Post predicted that the Bill was doomed after the Maori Party indicatedit would withdraw its parliamentary support.
An article in the NZ Herald suggested that, according to the Human Rights
Commission, New Zealand employers could potentially advertise for non-smokers
only, without violating the Human Rights Act. A spokesperson from the Departmentof Labour appeared to support this interpretation when the spokesperson agreed thatsmoking fell outside the Employment Relations Act. Anti-smoking lobby group Ash
stated that while it could understand employers wanting non-smoking employees, it
opposed employers deliberately hiring non-smokers.
The transport and industrial relations select committee presented its report on the
Employment Relations Amendment Bill. The Bill was the second attempt by thegovernment at extending job security to employees in the catering and cleaning
industries. In 2005, the Employment Court found the right to transfer employment
only applied where an organisation was contracting out a part of its work that wascurrently done in-house, not to so-called “second generation” contracting.
The Press reported that Mount Cook Airline and its pilots had agreed to renew talks
in order to break the deadlock in a year-long dispute which had caused hundreds offlight cancellations and disrupted the travel of thousands of passengers (see July
Chronicle). Mt Cook Airlines was successful in its application to the Employment
Relations Authority for facilitated bargaining. The dispute related to twice yearlycourses in Bangkok that pilots were required to complete to maintain their flying
licence. The pilots association had insisted that the pilots flew business class toThailand, while Mount Cook wanted them to fly economy.
Meanwhile, the troubled health sector again featured prevalently in the media. The
Dominion Post reported that senior doctors would return to the negotiating table after
the Association had claimed that an 8% pay rise was needed to ensure that theirsalaries remained competitive. The Executive Director of the Association of Salaried
Medical Specialists Ian Powell pointed to that, in response to workforce shortages,

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salaries offered to Australian senior doctors in New South Wales and Queensland had
increased significantly this year.
The Dominion Post also reported that junior doctors were considering more strikeaction as their union accused District Health Boards of deliberately stalling
negotiations. The General Secretary of the Resident Doctors Association Deborah
Powell said the boards had begun delaying talks in order to force doctors out ofexisting employment conditions. Dr Powell said that information about the boards’ "“tactics” had been sent to members and they were deciding what action to take(including strike action). DHB Spokesperson Nigel Murray said that Dr Powell’scomments were irresponsible and designed to drum up support for another strike.
The spectre of strike action from yet another group of health sector employees wasreported in the Southland Times as radiographers, working in hospitals in six District
Health Boards confirmed dates for a three-day strike. The National Secretary of the
Association of Professional and Executive Employees Deborah Powell said theradiographers wanted parity in wages and conditions with colleagues who settled theircollective agreement last year. A DHB Spokesperson said that employers would liketo have a nationally consistent set of terms and conditions for radiographers but thiswas not achievable in the short term.
The Dominion Post reported that former academic Michael James lost a battle overhis dismissal by Unitec in 2003. Mr James, who was the former head of the design
school, had been dismissed for waiving the course fee of a female student he waspursuing a relationship with. The Employment Relations Authority determined thatthe dismissal was justified.
The Press reported that the Christchurch City Council was ordered to pay $32,500 toan employee for failing to prevent his stress and ill health. The employee, whoworked for the council for over 10 years and was former team manager, took the
council to court (seeking $200,000 in compensation) after he suffered stress in his job.
The Employment Relations Authority found that the council had caused harm by notrecognising the employee’s stress. His immediate manager knew that he was indifficulty but did not inform senior management or human resources staff.
The Dominion Post reported that the woman, who forced the Corrections Department
to change its Maori cultural practices policy, was told she could not get legal
assistance to pursue a Human Rights Commission complaint. This was despite that
the Commission’s legal office admitted: that her rights were likely to have beenbreached, that Corrections had discriminated against women in holding a Maori
farewell ceremony and that resolution of her complaint would “affect a large numberof people”.
Both the Waikato Times and the Independent featured the findings of the Industrial
Centre’s 13th Annual Report on employment agreements, bargaining trends andemployment law. When presenting the report findings in a seminar in Hamilton,
Professor George Lafferty suggested that wages were only starting to catch up withrecent favourable economic conditions after years in the doldrums. The report stated“there have been significant gains for many workers in low-paid industries wherewages had fallen behind in the 1990s. So they appear to be eventually gaining some111

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benefits from an extended period of economic growth, increased profitability, skills
shortages and low unemployment.” In the past couple of years, unions had “built up
their confidence” and collective agreements for nurses and in the metal andmanufacturing industries had helped to set the platform for better pay and conditions
for workers. According to the report, which covered collective employment
agreements for parts of 2005 and 2006, 82 per cent of workers surveyed had wage
increases between 2% and 4.9% in 2006. Over the past 15 years, the average increase
for collective agreements had been a “modest” 2.3% each year. The report advocatedthat more focus was needed on “vulnerable” workers, those on minimum or youth
wages and on developing work-life balance.
The political row over Labour MP Taito Phillip Field had an employment twist when
the NZ Herald reported a Labour Department finding that there was no basis forinquiring into allegations that he breached the Minimum Wage Act with payments
made to Thai workers who painted his houses. The Department stressed that thepainters were in a contracting relationship, not an employment one, and were,
therefore, not covered by the Employment Relations Act. The Department’scomment came after National MP Wayne Mapp lodged an official complaint with thedepartment about Mr Field in July, after the release of the report by Noel Ingram QC
into the Mr Field’s relationship with a group of Thai people he had given immigration
assistance to.
The Dominion Post reported that the former Managing Director of Air New ZealandRalph Norris received a final payout of $1.06 million from the airline after he left in2005 to start a $7.6 million-a-year job as head of the Commonwealth Bank ofAustralia. His payout consisted of an $853,417 bonus for his final year at Air New
Zealand and $208,705 salary for the first two months of the 2006 financial year before
he left.
September 2006
Media reports on employment relations were dominated by two very high profile
strikes. The health sector was again prominent but a long bitter dispute between
Progressive Enterprises and its distribution workers also featured.
The month started with the news that striking distribution workers and their employer- supermarket chain Progressive Enterprises - were ordered back to mediation in a bid
to end a week long strike. The striking workers were demanding wage increases anda national collective agreement for all three distribution centres owned and operated
by Progressive Enterprises. The workers’ union - the National Distribution Union had originally sought an interim injunction to stop the employer from using non union
labour to break the strike. While both parties stated in the media that they looked
forward to resolving the dispute the parties soon became deadlocked when 500
workers were locked out of Progressive Enterprisess Auckland, Christchurch andPalmerston North distribution centres.
There were also media reports that violence had broken out on picket lines. In
Christchurch, picketers harassed a worker trying to enter the distribution centre andshook his car. A Progressive spokeswoman described the Christchurch picket line as112

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“particularly militant’. But the National Distribution Union’s Spokesperson Laila
Harre said it was inevitable “tensions will run high” as workers tried to keep strikebreakers away from the distribution centres.
During the strike’s second week, the Press suggested that the dispute was as muchabout public relations as it was about pay rises and costs of the agreement. The
Press’ Editorial claimed that the National Distribution Union was anxious to paint
Progressive Enterprises as a foreign company indulging in aggressive industrial
tactics imported from its Australian home. The Press also evaluated that the unionappeared to be winning the publicity battle.
The Sunday Star Times featured the impact of the prolonged strike on two of thestriking workers. The young married couple from Mangere said that two weeks withno pay was putting a strain on their finances and that they could no longer meet theirloan and car repayments. The couple said that they never expected the initial two-day
strike would end in a lockout. Still, they had no regrets as they thought they werefighting for a “good cause”.
According to the Press, the National Distribution Union and the Engineering, Printing
and Manufacturing Union were shocked that Progressive Enterprises appeared to wantunion members to give up their right to bargain. Other unions had started to mobilise
support of the striking workers. The article posed the question of whether unions
were finding their “mojo” again after the Employment Contracts Act had emasculated
them in the early 1990s.
Three weeks into the strike, the Dominion Post suggested that the dispute had united
unions in New Zealand and around the world. Donations to the striking workers’
fund were coming from Australia and the United States. It was also reported thatwatersiders in both Australia and New Zealand were considering blocking thecontainers of Progressive Enterprises at the ports. However, Progressive Enterprises
said it was willing to negotiate a reasonable deal with workers under the three existingcollective agreements. As the strike entered its fourth week, the parties settled after
two days of mediation.
Meanwhile, the health sector faced more industrial action when radiographersannounced a three-day strike. Radiation technologists from seven District Health
Boards (DHBs) were seeking a multi-employer collective agreement with the same
pay and conditions as their counterparts in the North Island. As a result, hospitals had
to postpone scheduled operations and could only treat severely ill patients. The Press
highlighted that the radiographers had announced that they would follow the initialstrike with a one-day strike and their union also warned of the possibility of a third
strike. A spokesperson from the DHBs claimed the second notice was “deliberately
and cynically timed” to have the maximum impact on patients.
The strike went ahead as planned leaving hospitals in "emergency mode" according to
the Press as the care of thousands of patients was disrupted. The radiographers had
agreed to work only on people who were in life-threatening situations but the Otago
District Health Board was accused of breaking this understanding, according toreports in the NZ Herald.

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The second strike by radiographers went ahead, although a Spokesperson from the
DHBs argued that the strikes could have been prevented had the radiographers’ union- Apex - been prepared to compromise. The DHBs had agreed to meet the union’s
pay demand but the pay rises would be paid over 2.5 years, instead of 2 years.
By the end of September, the radiographers returned to work with the promise ofrenewed negotiations. Neither side was prepared to discuss the strikes or the talks,with the union promising to “give the rhetoric a rest” as they sought an exit from what
was claimed to be an expensive impasse.
However, the Dominion Post reported that yet another group in the health sector hadannounced intentions to take industrial action. Negotiations between the seniordoctors and the District Health Boards appeared to have reached an impasse (seeAugust Chronicle). The Executive Director of the Association of Salaried Medical
Specialists Ian Powell argued that the union had made significant compromises but
the boards had adopted a hard line. Although there was no plan to strike, this could
not be ruled out. The DHBs had offered the senior doctors an increase of about 7%
over three years, compared with the 29% over four years awarded to senior doctors in
New South Wales.
The Dominion Post reported on a bizarre case at the Employment Relations Authority
which involved a crane operator. The crane operator had confessed to his employer
that he had an alcohol problem. Subsequently, he was dismissed for failing a breath
test when he said he had not been drinking. The Authority determined that he had
been unfairly dismissed. When the employee voluntarily admitted that he had an
alcohol problem a rehabilitation agreement was drawn up which required theemployee to complete a detoxication programme, attend a medical course and agree
to random breath tests. The employee was told that, if a random breath test foundtraces of alcohol, he would be dismissed. These requirements were found to be“punitive and not rehabilitative” as they were in effect a “one strike and you're out”
scenario.
The Dominion Post reported that according to a human resources specialist,
workplace bullying was widespread in New Zealand. The specialist claimed that if
she talked about the problem to a roomful of 100 people, “60 to 70 of them will be
nodding their heads, knowing just what I am talking about”. She also claimed that
there was virtually no place for people to turn to for help. Employers were urged to
get rid of bullies “as fast as possible” as the ongoing effects on individuals andcompanies could be devastating.

Erling Rasmussen & Colin Ross
Auckland University of Technology

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