Contents Page: NZJER, 2009, 34(1)
Name

Title

Jane Bryson & Paul O’Neil NZJER Special Issue: Human
Capability. Editorial

Simon Deakin

The ‘Capability’ Concept and the
Evolution of European Social Policy

Page
Number
1-6

7-26

Gordon Anderson

The Capability Approach and theLegal Regulation of Employment:
A Comment on DeakinPaul Barker, Lis Cowey
and Simon McLoughlin

The Human Capability Framework
Ten Years On

Stefan Kesting &Candice
HarrisProviding a Theoretical Foundation
for Work-Life Balance – Sen’s
Capability Approach

47-61

A Workplace View of Drivers andBarriers to Developing Human
Jane Bryson & Paul O’Neil Capability

62-76

John Schischka

Erling Rasmussen & Colin
Ross

Lessons learned from the long term
application of a monitoring andevaluation process based on thecapability approach
Chronicle: June–September, 2008

27-33

34-46

77-93

94-102

New Zealand Journal of Employment Relations 34(1): 1-6

NZJER Special Issue: Human Capability
JANE BRYSON∗ and PAUL O’NEIL

Editorial
The genesis of this special issue lies in the conclusion of the editors’ FoRST funded
research ‘Developing human capability: employment institutions, organisations andindividuals’, and in the tenth anniversary of the ‘human capability framework’
developed by the Department of Labour in 1999 to assist policy thinking on the labour
market. Hence, this issue comprises six articles which utilise in different ways theconcept of human capability and its development.
Dictionary definitions typically refer to capability as either ‘ability and power’ or as‘underdeveloped or unused faculty’. In relation to people, there is a sense in thisdefinition of capability referring to human potentialities rather than actual humanactions. In this sense, the concept of human capability and its development lends itself
to a number of areas within the domain of employment relations, particularly withregard to workplace skills and skills development, an area which has been the focus ofmuch recent effort from the macro- to the micro- level in developed states such as
New Zealand.
At one level, therefore, human capability is perhaps indistinguishable from the notionof human capital, whereby human qualities, either innate or learned, have thepotential to be employed in production in much the way that physical capital is.
Human capability from this perspective becomes reduced to the utility people have in
production. Similarly, capability development becomes reduced to the acquisition ofskills and other human qualities that are of relevance and use to the workplace. Given
the dominance of human capital theory in the disciplines informing employment
relations, it is perhaps reasonable to ask what usefulness a new term – humancapability – has for something that already has been ‘named’ and informs discourseand practice. The articles in this issue hope to address this question by encouraging
the reader to think of human capital in more holistic terms by centring attention on the‘human’ part in human capital. In doing so, emphasis is placed on people as social
beings brought into existence for social reasons rather than for their use in production.
It also acknowledges that individuals differ in their innate and learned qualities andmotivations, including those that are useful to production.
Also, in this expanded view, sites of production become recognised as sites of social
production as well as of commodity production and thus subject to societal tensions
and contradictions as to what constitutes development. Similarly, a broad view of sitesof production recognises that human capital and its development goes beyond
bringing about economic development but also brings about social development. Most∗

Jane Bryson & and Paul O’Neil, Industrial Relations Centre, Victoria Management School, Victoria
University of Wellington, Jane.Bryson@vuw.ac.n1

New Zealand Journal of Employment Relations 34(1): 1-6of the articles in this issue take this more expansive interpretation of human capital,
and, principally drawing on the various works of A. K. Sen (the Nobel Laureate inEconomics in 1998) and use the term human capability to capture this wider view.
Sen’s work originated within the context of development economics. He critiqued
dominant development thinking and practice which prioritised economic development
based on a ‘western model’ and measured by increases in GDP per capita, noting its
failure to raise the human condition for the masses in what constituted ‘underdeveloped’ nations. In Poverty and Promise, for example, Sen demonstrated that it
was a lack of entitlements (‘command over commodities’) rather than insufficient
food availability through development that resulted in death and suffering on a wide
scale. His analysis of the famine in Bangladesh in the early 1970s illustrated thatpeople started dying when food availability was at record levels. People died, notbecause of a lack of food but because many lost their jobs when the floods hit andconsequently their entitlement to food. At issue was not a lack of economic
development in terms of productive capacity but an issue of distribution (Sen, 1981).
Whilst a focus upon entitlements in development thinking moved towards putting
people’s well-being at the centre of analysis, Sen began to use the term ‘capabilities’
to break from the strong relationship entitlements have with command overcommodities. To Sen, capabilities represent a “person’s real opportunities to do and tobe” (Pressman and Summerfield, 2002: 430), or simply the ‘freedom to achievevarious lifestyles’ (Sen, 1985, 1993, 1999). This use expands on the human capital
approach which focuses on a person’s given skills and abilities.
Sen distinguishes between ‘capabilities’ and ‘functionings’ in his work. Functionings
address the actual outcomes or achievements of what a person does or is. Capabilities,
in contrast, represent those sets of functionings that a person could choose oralternatively, the availability of opportunities. From a policy or strategic perspective,
capabilities are more important because they can more easily address the availabilityof opportunities such as the real capability of obtaining an education, being able to be
mobile or having dignity and respect and in a liberal positive sense, open the space foragency in choosing to act for oneself to bring about change and to consider others inthose decisions. In contrast, while some functionings are determined by social
constraints, many are also related to preferences and inherent talents and thus, arebeyond the influence of policy-makers.
Sen’s approach to human capability is now migrating beyond informing progress indevelopment thinking and practice in developing nations, to use as a philosophy andan analytic framework to address contemporary economic and social issues indeveloped nations. In Western Europe in particular, human capability has recently
come to prominence in the debate over European Union (EU) social and economic
policy as a result of its use in the Supiot report on the transformation of work andemployment relations (Salais, 1999; Supiot, 1999). Here, the argument presented isfor EU social and employment policies and institutions to be reconstructed to provide
for “active security to cope with work transformation and economic uncertainty”(Salais and Villeneuve, 2005: 6) as a complement to the economic transformation
strategy towards ‘knowledge-based’ economies as agreed to at the Lisbon summit in2000. Thus, by recognising that economic transformation implies further moves awayfrom standard employment relationships, social protections also need to shift away2New Zealand Journal of Employment Relations 34(1): 1-6from traditional forms of protection against economic risk towards proactive security
for individuals in the labour market (Barnard, Deakin & Hobbs . 2001).
Similarly, the articles in this issue attempt to extend Sen’s capability approach to
examination of social and employment issues in a developed nation, such as New
Zealand. Policy-makers and other agents in New Zealand have grasped, in recent
times, the need for transition towards more knowledge-based economic activity as ameans for sustainable development. There are, however, ongoing arguments and alack of consensus as to the appropriate institutional arrangements, both in andsurrounding the workplace, to support this transition. An aim of this issue is toprovide a fresh perspective on this debate in New Zealand.
One aspect of the debate over appropriate institutional arrangements for economictransformation in New Zealand concerns the continuing dominance of neo-liberal
thought, which prioritises institutions that promote freedom of contract and minimal
interference by the state in redistributing resources. In this view, collective bargaining
and social rights embedded in the welfare state upset the spontaneous order of themarket and act as a fetter on economic development. The article by Deakin, whilst
placed in an English and EU context, challenges this conception on its own grounds
by utilising the capability approach to argue for the market-creating function of therules of social law. Deakin develops this argument from a historical perspective bytracing the development of the welfare state and contemporary employment policies
from early ideas associated with the duty to work as captured in the English poorlaws. Whilst he acknowledges that some developments in EU statute and case law
help support the idea of social rights promoting labour market participation, otherinstitutional arrangements, such as the EU open method of coordination of social
security are held by Deakin to limit the spread and learning from institutionalinnovations that occur in some member states (i.e. the Nordic states).
The article by Anderson provides a commentary from a New Zealand perspective on
the article by Deakin. Anderson focuses on the relevance to New Zealand of Deakin’s
argument that a capability approach provides a framework to shape labour and social
policy to maintain social security in the face of labour market insecurity. Anderson
argues that the current ability and prospects for labour law in New Zealand tomaintain social security is somewhat light compared to the EU. Anderson points outthat unlike continental Europe, there is a strong ideological belief among New
Zealand’s legal community that common law is ‘real law’ and that statutory law
interferes with ‘fundamental common law rights’. This preference for common law
limits capability approach thinking to labour law where for instance, the common law
has never recognised that an employee might have ‘protectable rights in the continuityof their employment’. Nevertheless, despite this, the modern contract of employment
in New Zealand has to be seen as an integrated structure of common law and statute inwhich a range of protections exist from the minimum wage to protection against
unjustified dismissal.
Such protections are somewhat different from what Deakin and Supiot have in mind
in a reformed Welfare State, reflecting measures to protect individuals against
economic insecurity rather than maintaining economic security in the face of risks.
Nevertheless, New Zealand retains a relatively strong social welfare system, elementsof which, such as the combination of social insurance and universal superannuation,

3

New Zealand Journal of Employment Relations 34(1): 1-6
do provide a relatively strong degree of economic security for those unable to work
because of accident or age. Anderson, thus, does not see much short-term influence ofthe capability approach on employment and social welfare law, but has prospects forit as a theoretical support for progressive reform of such structures.
The article by Barker, Cowey and McLoughlin considers how the human capability
concept has been used by policy practitioners in New Zealand – principally in the
Department of Labour (DoL). In contrast to Sen, the concept was developed in late1999 and used early in the new millennium by the DoL was as a ‘conceptual
framework for understanding the dynamics and forces at work within the labour
market’. In this human capability framework, the labour market is viewed ascomprising three core elements: capacity (people’s skills, knowledge and attitudes),opportunities (places where people can utilise their capacity to generate income andother rewards) and matching (the process of matching capacity with opportunities).
As the authors note, naming this framework as ‘human capability’ is really areworking of the mainstream economics understanding of how labour markets work,
thus it is old wine in a new bottle. Nevertheless, as the authors discuss, such areworking had significant utility as a guide for policy-makers, who were adjusting to
the more social democratic regime of a Labour-led government and out of more thanten years of extreme neo-liberal-informed governance and associated reforms. The
framework, thus, provided the concepts and language to re-insert society into labour
market issues and to help frame the political emphasis on employment issues at thetime ‘from a social welfare mentality to one of social development’. Additionally, theframework assisted the DoL in the competition with other Government agencies for
influence with ministers. Within the DoL, the framework proved useful in thedevelopment of key policy initiatives such as the Government’s Employment Strategy
in 2000 and its subsequent Inter-agency Skills Action Plan.
Barker et al. note that the framework largely fell into disuse after 2004. Whilst
conceptually, the framework serves to identify the interdependence between ‘supply’and ‘demand’ sides of the labour market, politicians and policy-makers find it easier
to intervene on the supply side and are reluctant to intervene in the demand-side. Prior
to 2004, supply-side policy initiatives, such as those mentioned above fitted with thepolicy emphasis on increasing labour market participation. After 2004, the policyemphasis began to shift towards increasing New Zealand’s low productivity relative
to other OECD nations. The authors acknowledge that whilst still a valuable tool for
labour market policy thinking, the framework needs to be supplemented ‘by greater
depth in understanding [of] the underlying dynamics within the framework’.
From a policy perspective our own article, Bryson and O’Neil potentially provides auseful follow-on from Barker et al. We report on a recent FoRST-funded research
project which utilised Sen’s notion of human capability to examine how New Zealandinstitutions, organisations and individuals associated with workplaces both drive andconstrain the development of human capability. The study has a largely micro-focus
within organisations.
Surveying the literatures on learning organisations, human resource development,
human resource management, workplace learning and adult education, the authors
find two separate strands on human capability. The dominant strand is one in which

4New Zealand Journal of Employment Relations 34(1): 1-6
an implicitly instrumental view of human capability as serving the achievement oforganisational goals is taken. The dominance of this strand is, in no small part, due tothe popular uptake of human capital theory and resource-based views of the firm,
which provide an appealing logic for organisations to behave in a short-term, selfinterested manner. A contrasting critical strand points to the limits of human capitalthinking on HRM practices towards organisational learning – its commodification oflearning, ignoring of power relations, inability to deal with the general problem ofunderutilisation of investment in learning, and its failure to recognise the factors inworkplaces that are supportive of learning. In the light of the narrow conceptions of
the role of workers, managers and organisations in human capability development, wewere drawn to the work of Sen’s capability approach as an alternative starting point toprovide a more integrated way of considering organisational ends, individual needs
and societal outcomes. More particularly, this lens helped to ask: what are the social
arrangements that lead to the ability of people in workplaces to so or be something
they value and have reason to value.
Based on extensive field research, we developed a framework identifying drivers andbarriers to the development of human capability in New Zealand organisations. We
believe that such a framework has relevance for policy-makers attempting to construct
policy interventions that go within private production in order to facilitate increase inproductivity as well as for managers and others within firms attempting to do thesame. For instance, as with the EU initiatives discussed in the Deakin article, theframework expands the scope for policy measures which enable individuals tomanage uncertainty in the face of organisational restructuring – as opposed to merely
providing income security such as the unemployment benefit. Similarly, withinorganisations, the organisational practices that make a difference to human capability
are not dissimilar to forms of good human resource management practice that
underpin high performance in organisations.
The multi-dimensional nature of capabilities and functionings in Sen’s approach,whilst adding complexity, lends the approach to applications evaluating the outcomesof policy and strategic initiatives. Two papers in this issue illustrate the utility of
Sen’s approach for evaluation purposes. In the first of these papers, Kesting andHarris utilise Sen’s thinking on capability as freedom to lead one type of life or
another with a feminist approach to the gendered notion of care to critically examine
whether actual work-life balance initiatives fit with what is implied in the term – ‘awider range of life opportunities and a process to attain and guarantee [them]’. Twocases illustrate this approach. They find this approach offers a framework fordeveloping a more open and less biased evaluation of work-life balance social policy
and workforce initiatives.
Schischka, in his paper, evaluates the usefulness of Sen’s capability approach toempower communities and to guide development appraisal mechanisms. The context
of this paper is a development setting of pre-school education in Vanuatu in which
Volunteer Services Abroad (VSA) is a development partner. Schischka argues that, insuch settings, evaluation is dominated by mainstream economics thinking whose
reductionist approach ‘miss[es] much and misleads’ the extent to which different aid
programmes have been able to contribute to social progress and improved standardsof living. He develops and reports on a capability approach inspired appraisal

5New Zealand Journal of Employment Relations 34(1): 1-6
methodology which seeks to capture more of the realities of the participants indevelopment programmes.
Collectively, the articles in this special issue provide an illustration of theapplicability of the capability approach to an alternative analysis of the human lot inwork and society. They also remind us of the ongoing challenges for researchers,
policy makers and organisational actors (from managers to workers and trade union
organisers) to remain innovative, humane and holistic in our employment relations
thinking.

References
Barnard, C., Deakin, S., and Hobbs, R. (2001). Capabilities and rights: An emerging
agenda for social policy?. Industrial Relations Journal 32(5) pp 464-479.
Pressman, S. and Summerfield, G. (2002). Sen and Capabilities. Review of Political
Economy. 14(4): 429 – 434
Salais, R. (1999). Liberté du travail et capacities: une perspective pour la construction
européenne? (Freedom of Work and Capabilities : A European Framework
Perspective). Droit Social. 5 : 467-471
Salais, R. and Villeneuve, R. (2005). (eds). Europe and the Politics of Capabilities.
Cambridge: Cambridge University Press
Sen, A.K. (1985). Well-being, agency and freedom: the Dewey lectures, 1984.
Journal of Philosophy. 82(4): 169 – 221
Sen, A.K (1993) Capability and well being. In M. Nussbaum and A K. Sen (Eds).
pp.30-53. Oxford: Oxford University Press)
Sen, A.K. (1999). Development as Freedom. Oxford: Oxford University Press
Supiot, A. (1999). (ed) Au-delà de l’emploi. Transformations du travail et devenir dudroit du travail en Europe (Beyond Employment. Transformation of work and work
reform in Europe), Paris: Flammarion

6

New Zealand Journal of Employment Relations 34(1): 7-26

The ‘Capability’ Concept and the Evolution of European Social
PolicySIMON DEAKIN∗
Abstract
Amartya Sen’s capability approach has the potential to counter neoliberal critiques ofsocial welfare systems by overcoming the false opposition between security andflexibility. In particular, it can be used to promote the idea of social rights as thefoundation of active participation by individuals in the labour market. This idea is starting
to be reflected in the case law of the European Court of Justice concerning free movementof persons but its use in the European employment strategy is so far more limited, thanks
to the continuing influence of neoliberal ‘activation policies’.

Introduction
The concept of ‘capability’, developed by Amartya Sen in a series of economic andphilosophical texts (see 1985, 1999), could play a major role in the reshaping of theEuropean Union’s social and employment policies. The prominence of the capability
concept in contemporary European debates owes much to the use made of it in the reporton the Transformation of Work and the Future of Labour Law in Europe which was
prepared for the European Commission by a group led by Alain Supiot (1999). The
Supiot Report argued that a capability-based approach would help to overcome theopposition between ‘security’ and ‘flexibility’ which had been established in neoliberal
critiques of labour law and the welfare state, and provide a basis for ‘real freedom of
choice’ in relation to labour market participation. This analysis was further developed in apaper published in Droit Social by the economist Robert Salais (1999), one of themembers of the Supiot group. A research programme was subsequently initiated,designed among other things to explore the potential role of a new ‘politics of capabilities’
within the wider project of European integration (see: http://www.idhe.enscachan.fr/Eurocap/index.html.).
The present paper aims to contribute to that programme of research by exploring some of
the legal aspects of the capability concept. There is no precise juridical equivalent toSen’s notion of ‘capability’. However, certain legal concepts undoubtedly bear a certain
resemblance to it. This is particularly true of notions of contractual capacity which arerecognized in both common law and civilian systems of private law. The task of exploring
the links between ‘capability’ and legal ‘capacity’ has begun. My aim here is to focus ona different strand of legal thought, namely the set of ideas associated with the duty to work∗

Professor of Law, University of Cambridge, United Kingdom, s.deakin@cbr.cam.ac.uk

This paper was first published in 2005 as Working Paper No. 303 by the ESRC Centre for BusinessResearch, University of Cambridge, and formed part of the CBR Research Programme on Corporate
Governance. It is reprinted with permission of the author.

7

New Zealand Journal of Employment Relations 34(1): 7-26

in labour and social security law. The content of the duty to work has shifted over time
according to different notions of the capacity or ability of individuals to make themselves
available for employment. These in turn have been shaped by particular conceptions of
the employment relationship and of the family. To see how this process has occurred is togain some insight into how the capability concept might operate if, as its proponents
intend, it comes to serve as a new conceptual cornerstone for social law.
To this end, the next section explores Sen’s definition of ‘capability’ and the use made of
the notion in the Supiot report. The paper then looks at the historical development of legal
analogues of capability in the English poor law and law of social insurance. The paper
then returns the debate to a European level by considering some ways in which thecapability concept is being (or could be) operationalised within the current employment
and social policy of the EU.

Sen’s notion of capability and its adaptation in the Supiot report
Sen’s account of capabilities describes individual well being in terms of a person’s ability
to achieve a given set of functionings. In this context,…the ‘concept of “functionings”… reflects the various things a person may
value doing or being. The valued functionings may vary from elementary
ones, such as being adequately nourished and being free from avoidabledisease, to very complex activities or personal states, such as being able totake part in the life of the community and having self-respect… A“capability” [is] a kind of freedom: the substantive freedom to achievealternative functioning combinations, (Sen, 1985: 75),
An individual’s feasible set of utilization functions is constrained by the limits upon theirown resources. This is not simply a question of choice. Non-choice factors affectfunctioning; for example, an individual’s metabolic rate which is a consequence of their
physical state. The state of an individual’s knowledge may also be a non-choice factor,
although this can be improved by education. Here the element of choice may lie
elsewhere, at the collective or societal level, that is to say, with policy makers, government
officials, and judges. Apart from the resources available to an individual, their capability
to make use of a commodity may depend upon access to a legal system which recognizes
and guarantees protection of contract and property rights, but also upon access to healthcare, education and other resources which equip them to enter into relations of exchangewith others. Thus an individual’s capability is to some degree a consequence of theirentitlements, that is, their ability to possess, control and extract benefits from a particular
economic commodity or resource.
Thus pivotal within Sen’s ‘capability approach’ is the idea of conversion factors. These
are the characteristics of an individual’s person, their society and their environment which
together determine their capability to achieve a given range of functionings. Personal
characteristics, in this sense could include an individual’s metabolism, or their biologicalsex, and environmental characteristics could refer to climate, physical surroundings, or
technological infrastructure. But in addition, institutional or societal characteristics would
include social norms, legal rules and public policies. These can act to entrench inequality
8

New Zealand Journal of Employment Relations 34(1): 7-26

of capability, as is the case with social norms which result in institutionalised racial
discrimination or gender stereotyping, or, conversely, to offset inequality through legal
interventions of various kinds, including anti-discrimination law.
Sen has not sought to develop a juridical theory which might give some institutional shape
to the capability concept, beyond insisting that his ‘capability approach’ does not prescribe
any particular set of outcomes for a given society or group of societies. The high level ofgenerality and theoretical abstraction of the capability approach lends itself to adaptations
which may be far from Sen’s initial formulation; the Supiot report is perhaps best thoughtof in this way. In the Supiot report, the capability concept appears in the context of a
discussion of the meaning of labour flexibility (1999: 267-291). The report notes that‘flexibility’ is frequently associated with greater variability in the application of social
protection and labour standards, and thereby appears to be opposed to ‘security’.
However, this view, it is argued, overlooks the degree to which the capabilities of anindividual depend on them having access to the means they need to realize their life goals.
These include guarantees of a certain minimum standard of living and the resources
needed to maintain an ‘active security’ in the face of economic and social risks, such as
those arising from technological change and uncertainty in labour and product markets.
Thus ‘real freedom of action’ for entrepreneurs, in the form of protection of property
rights and recognition of managerial prerogative, has its equivalent in guarantees for thedevelopment of human resources for workers. However, these, the report suggests, would
not necessarily take the same form as the ‘passive protections’ traditionally provided, intwentieth century welfare states, against unemployment and other interruptions toearnings. Protection against social risks is not the same as mechanisms aimed to maintainsecurity in the face of’ risks:
We can understand the fundamental difference between protection, on the
one hand, and security in the face of risks, on the other, by seeing that thelatter includes but goes beyond the former. The capacity to work flexibly is
conditional upon being able to deal with the consequences of risks.
Protective regulations, because of the essentially negative way in which
they are formulated, go against this kind of learning process. Security inthe face of risk, on the other hand, is about providing the individual withthe means to anticipate, at any given moment, long-term needs… Thus
guarantees of minimum living standards (for example, that each person
should have an effective right to housing, and not just to a minimum
income), far from being undermined by the need for flexibility, should be
reinforced by virtue of this need, and, if anything, more clearly andconcretely defined as a result, (Supiot, 1999: 278).
Phrased in this way, the capability concept can be understood as an answer, of sorts, to theneoliberal critique of labour and social security law. That holds, among other things, that
regulation which interferes with freedom of contract upsets the process of mutual learningand adjustment which is implicit in market relations. As Hayek put it, private law is theprecondition of the market order in the sense that without it, individuals are not free to use
their own information and knowledge for their own purposes. Private law is certainly aproduct of governmental action: ‘in most circumstances the organisation which we callgovernment becomes indispensable to assure that those rules are obeyed’ (1973: 47).
However, legal coercion to enforce contract and property rights is justified ‘where this is9New Zealand Journal of Employment Relations 34(1): 7-26

necessary to secure the private domain of the individual against interference by others’(1973: 57). By contrast, public or regulatory law, which Hayek regarded as consisting ofspecific commands and directions aimed at the substantive redistribution of resources,
introduces an illegitimate form of interference by the state. Where this occurs, the‘spontaneous order’ of the market is upset, and a certain part of the advantages toindividuals and society alike of a market order, in terms of a higher degree of specialization
and a more extensive division of labour, are lost.
The capability approach offers a response, based on the market-creating function of therules of social law. In order to participate effectively in a market order, individuals require
more than formal access to the institutions of property and contract. They need to beprovided with the economic means to realize their potential: these include social guarantees
of housing, education and training, as well as legal institutions which prescribe
institutionalized discrimination. Mechanisms of this kind, by extending labour market
participation on the part of otherwise excluded or disadvantaged groups, may enhance theaggregate value of production.1
If the capability approach attempts to answer, at a certain theoretical level, some aspects of
the neoliberal critique, it also moves beyond the conceptualization of social rights in the
post-1945 welfare state. T.H. Marshall, perhaps the most articulate exponent of thistradition, saw social rights as operating in tension with market relations. Civil andpolitical rights had ‘harmonized with the individualistic phase of capitalism’ in thenineteenth century (1949, 1992: 26). By contrast, social rights, which Marshall defined as
ranging ‘from the right to a modicum of economic welfare and security to the right toshare to the full in the social heritage and to live the life of a civilised being according to
the standards prevailing in society’ (1992: 8), created entitlements which were ‘notproportionate to the market value of the claimant’. Marshall, it is true, made something ofan exception in this respect for collective bargaining, which he thought was ‘a normal
peaceful market operation’ which also gave expression to ‘the right of the citizen to aminimum standard of civilized living’ (1992: 42). But for the most part, social rights werein ‘basic conflict’ with the market.
The capability approach, by contrast, sees one of the principal purposes of social
legislation and social rights as encouraging the participation of individuals in the labour
market. It is only by putting in place effective mechanisms for dealing with the effects
upon individuals of economic uncertainty that the legitimacy and effectiveness of themarket order can be maintained. This is not necessarily a call for the individualization oflabour law; the ‘conversion factors’ by which individual capabilities are enhanced arelikely to be collective in nature (Supiot, 1999: 268). But in the passage from ‘passive
protection’ to ‘active security’ (ibid, 1999: 269), it is likely that many features of existing
welfare state and labour law systems would not survive unscathed.
The capability approach to labour and social security law appears particularly novel when
set against the post-1945 paradigm of protection based around ‘stable employment for an
adult male able to provide, by these means, for the needs of a nuclear family’ (Supiot,
1999: 267). That model makes certain assumptions about employment and family
relations which no longer command general assent, and perhaps never did. However, the‘standard employment contract’ was itself a reaction to a quite different view of theconditions under which individuals should make themselves available for waged work.
10New Zealand Journal of Employment Relations 34(1): 7-26

The prehistory of the capability concept: notions of ability to work in the
English poor law and social insurance
The English ‘poor law’ was the precursor not just of the welfare state but of modern
employment policy. In the sixteenth and seventeenth centuries, the ‘poor’ were not simply
those with a low income, but all who were dependent on wages from employment as theirprincipal means of subsistence: ‘those who labour to live, and such as are old and decrepit,
unable to work, poor widows, and fatherless children, and tenants driven to poverty; not by
riot, expense and carelessness, but by mischance’ (Dalton, 1746: 164). The poor law was, in
one sense, a survivor of feudalism; as T.H. Marshall put it, ‘as the pattern of the old orderdissolved under the blows of a competitive economy… the Poor Law was left high and dry as
an isolated survival from which the idea of social rights was gradually drained away’ (1949,
1992: 14). However, there was another sense in which the poor law was a response to theemergence of a labour market. The enactment of legislation dealing with wage rates, poor
relief and labour mobility (or, as it was put, ‘vagrancy’) from the fourteenth century onwards
is evidence how far traditional feudal ties based on obligatory service (villeinage or serfdom)
had already declined by that point.
Under the poor law, relief was delivered locally, through parishes (small administrative units
covering only a few square miles), but organized nationally, in the sense that within theframework set by the Elizabethan legislation, every parish was required to set a local tax tobe paid by householders (a ‘poor rate’), to suppress indiscriminate giving, and to organize inits place a regular system of welfare support (Poor Relief Act 1601 (43 Elizabeth I c. 2), s. 1).
Legislation called for the unemployed to be set to work, but the cost of implementing thisprovision was found to be excessive, and only a minority of parishes constructed workhouses
for the purpose; for the most part, those suffering destitution for lack of work received cash
doles (‘outdoor relief’) in the same way as the sick and the aged. Local poor law officers
were required to provide relief to all those with a settlement in the parish in question. Thus
relief became, in a customary sense, if not necessarily in the modern legal sense of ajusticiable entitlement, the ‘peculiar privilege’ of the rural poor (Snell, 1985: 73).
One of the principal means of acquiring a settlement, from the late seventeenth century, wasthrough a yearly hiring, which was the normal form of employment for young, unmarried
workers in agriculture. The young thereby had an incentive to leave their home parish tosearch for employment elsewhere, acquiring a settlement in return for annual service as they
moved from one employer to another, thereby ensuring that they would not be subject toremoval to their parish of origin. In this way, the poor law, along with the emerging notionof the contract of service, encouraged and supported labour mobility (Slack, 1990).
The second half of the eighteenth century saw falling real wages in agriculture at the sametime as access to the land was restricted by enclosure (Slack, 1990: 66). The social upheaval
which accompanied the depopulation of rural areas was matched by a similarly far-reachingprocess of transformation in the poor law and labour legislation. The response of thosecharged with the administration of the poor law to falling real incomes in agriculture in the1790s was the institution of a practice of wage supplementation, known as the Speenhamland
system after the rural district in which it was first adopted. It began as an ad hoc addition ofpoor relief to wages, designed to bring incomes up to subsistence level. At the same time,
attempts to deal with the problem through the implementation of a minimum wage (throughthe revival of the wage fixing powers of the Elizabethan Statute of Artificers) were rejected11New Zealand Journal of Employment Relations 34(1): 7-26
both locally and in the national parliament.2 The combined effect was to relieve employers of
the obligation to pay the customary level of wages; during the same period, yearly hirings
were becoming increasingly uncommon (Hobsbawm and Rude, 1973; Snell, 1985), andchanges to the law of settlement made it more difficult for wage earners and their dependants
to acquire the right to relief (Deakin, 2001). As employment grew less stable and access torelief by the traditional route of the settlement by hiring, under which the employer absorbed
the costs of short-term interruptions to earnings, became increasingly restricted, expenditure
on poor relief grew to the point where a national debate was launched on the feasibility ofmaintaining the poor law system. This continued, at intervals, over several decades in theearly nineteenth century, during which time the administration of poor relief became steadily
more restrictive and punitive. This process culminated in the 1834 Poor Law Report3 and thePoor Law (Amendment) Act4 of the same year.
The new poor law which was put in place after 1834 was founded on the principle of ‘lesseligibility’, meaning that relief should not provide a standard of living superior to thatenjoyed by the least-well off ‘independent’ household. The assumption was that once the‘distortion’ of wage supplementation was removed, wages would rise to the point where thesubsistence needs could be met. On this basis, the unwillingness of individuals to accept
wages set by the market could only be evidence of poor ‘character’, which it was the role ofthe law to address by disciplinary means. Thus a wilful refusal to accept an offer of
employment at the going rate of wages became a criminal offence punishable byimprisonment.5 At this point, in the absence of a minimum wage and before the developmentof collective bargaining, the relevant wage was whatever an employer was willing to offer,and not the customary rate for that trade. In addition, the simple fact of destitution as a resultof unemployment or sickness would normally lead to the confinement in the workhouse of
the wage earner and other family members.6 Beginning in the 1840s, a series of regulatoryorders spelled out the implications of this policy for the administration of poor relief: outdoor
relief was to be limited as far as possible to the aged and infirm, denied to the adult ‘able
bodied’, and under no circumstances combined with wages; if it were to be paid,
exceptionally, to those who were able to work, it had to be combined with a ‘labour test’
designed to deter the work shy; and in order to ensure that conditions inside the workhouse
were, as far as possible, below those of the worst-off household outside, a consciously
degrading and punitive regime for workhouse inmates was put in place.7
In this context, being able to work was defined as having the physical capacity to labour, andthe labour test functioned to distinguish the work-shy from those genuinely incapable ofworking. But of course, physical ability to work was only one aspect of being ‘able bodied’.
A further, implicit assumption was that the claimant for relief had no means of their own; thatthey were propertyless. Capability, then, was a function of the duty to work which was
imposed on those with no means of subsistence but their own capacity to labour. The
independently wealthy were not subject to the duty to work.
Bentham recognized, and implicitly endorsed, the dual standard at work here. The old poor
law, he complained, had ceased to draw an appropriate distinction between ‘natural’ poverty,
which the law could not hope to relieve, and the ‘evil’ of indigence. By enabling ‘thecondition of persons maintained without property by the labour of others [to be] renderedmore eligible than that of persons maintained by their own labour’ the old poor law removed
the incentive to work upon which the market depended for its effectiveness: ‘individuals
destitute of property would be continually withdrawing themselves from the class of persons
12New Zealand Journal of Employment Relations 34(1): 7-26

maintained by their own labour, to the class of persons maintained by the labour of others;
and the sort of idleness, which at present is more or less confined to persons of independent
fortune, would thus extend itself sooner or later to every individual… till at last there would
be nobody left to labour at all for anybody’ (emphasis added) (Poynter, 1969: 125-126). It
was because the numbers of the propertyless greatly outweighed those of the idle (or‘independent’) rich that the law had to coerce the former into employment, while leaving thelatter to enjoy their ‘fortune’ undisturbed.
Just as the new poor law was a response to the perceived failings of Speenhamland, so thewelfare state of the twentieth century was constructed by way of reaction against what wereseen as the shortcomings of the system put in place after 1834. By the end of the nineteenth
century, there was a growing consensus that the new poor law had failed in its own terms.
Wages had risen following the restriction of outdoor relief, but not to the extent which had
been anticipated. Destitution was an ever-present phenomenon in Britain’s major urban areasand in many rural districts. When numbers of the unemployed increased, as they did inparticular during the long recession which lasted from the 1870s to the 1890s, the response of
the poor law administrators was to tighten the disciplinary operation of the system; outdoor
relief was made more selective, the labour test more severe, and workhouse conditions mademore demeaning. Thus throughout the 1880s and 1890s, a number of urban poor law unions
were constructing special ‘test workhouses’ with the aim of subjecting the adult able-bodied
to a particularly stringent regime of discipline (Webb, 1909).
The sheer expense of this effort was one factor which helped to turn the tide of opinion; also
important was the work of the ‘social science’ movement which set out to measure the extent
of destitution outside the poor law system. ‘Independent’ households could not subsist on thewages offered for low-paid work, and were reliant in practice on ad-hoc charitable giving; thecasualisation of urban occupations undermined efforts to establish a living wage and imposed
unnecessary search costs on employers and workers alike.8
A key text in laying bare the deficiencies of the new poor law was the Minority Report of thePoor Law Commission of 1909, which was drafted by Sidney and Beatrice Webb. For the
Webbs, the new poor law was constructed on a false premise, namely that destitution wasalways and everywhere the result of personal irresponsibility. This, in turn, was the resultin turn of the undue attention placed in 1834 on ‘one plague spot – the demoralization ofcharacter and waste of wealth produced in the agricultural districts by an hypertrophied
Poor Law’ (Webb, 1909: 4). The Webbs did not believe that the ‘personal character’ of
those in poverty was completely irrelevant; it was ‘…of vital importance to the method oftreatment to be adopted with regard to the individuals in distress’. However, it was not ‘ofsignificance with regard to the existence of or the amount of Unemployment’ (Webb,
1909: 233).
As Beveridge had put it, unemployment was ‘a problem of industry’, that is, a feature of
economic organization, rather than the result of personal irresponsibility. His research on
casualisation9 was called in aid to show that ‘chronic over supply of casual labour inrelation to the local demand was produced and continued, irrespective of any excess of
population or depression of trade, by the method by which employers engaged their casual
workers’ (emphasis in original). This ‘inevitably creates and perpetuates what have beencalled “stagnant pools” of labour in which there is nearly always some reserve of labour
left, however great may be the employer’s demand’ (Webb, 1909: 200). It was continued
13

New Zealand Journal of Employment Relations 34(1): 7-26

exposure to the effects of under-employment which precipitated decline into thepermanently unemployed, a body which, leaving aside ‘the rare figure of the ruined
baronet or clergyman’ consisted of ‘those Unemployables who represent the wastage fromthe manual, wage earning class’ (1909: 200).
To this, the Webbs added an important rider: the effects of casualisation were exacerbatedby the poor law itself. The outdoor labour test, by providing intermittent work for theunemployed, ‘facilitates and encourages the worst kind of Under-employment, namely,
the unorganized, intermittent jobs of the casual labourer’. Likewise, the workhouse test
for the able-bodied, by ‘establishing a worse state of things for its inmates than is provided
by the least eligible employment outside’, not only engendered ‘deliberate cruelty anddegradation, thereby manufacturing and hardening the very class it seeks to exterminate’;
it also ‘protects and, so to speak, standardizes the worst conditions of commercial
employment’ (1909: 67). Thus the ‘fatal ambiguity’ (1909: 72) of ‘less eligibility’ wasthat standards inside and outside the workhouse, since they were mutually reinforcing,would drive each other down, until ‘the premises, the sleeping accommodation, the foodand the amount of work exacted, taken together, constitute a treatment more penal andmore brutalizing than that of any gaol in England’ (1909: 79).
The solutions advanced by the Minority Report reflected its diagnosis of the problem.
Their principal aim was to remove the ‘able-bodied’ from the reach of the poor law. The
key mechanisms for achieving this end were labour exchanges which, in addition to
reducing search costs, would break the power which employers had to maintain ‘pools oflabour’ in reserve, waiting for work:
What a National Labour Exchange could remedy would be the habit ofeach employer of keeping around him his own reserve of labour. By
substituting one common reservoir, at any rate for the unspecialised
labourers, we could drain the Stagnant Pools of Labour which this habit
produces and perpetuates, (1909: 261).
The Minority Report also addressed the issue of unemployment compensation as analternative to poor law relief. It argued in favour of a hybrid public-private system, underwhich government would have the power to subsidise the private insurance schemes
already run, at that point, by certain trade unions. In the event, Part II of the National
Insurance Act 1911 went further by instituting a fully state-administered system.
However, the form of unemployment compensation which initially emerged was similar tothat discussed by the Minority Report, namely a system of compulsory insurance ‘applied
only to particular sections of workers or to certain specified industries, under carefully
considered conditions’ (1909: 291). This was gradually extended during the inter-war
period to cover the vast majority of the workforce; a key feature of the system, and asignificant departure from the poor law, was that workers were entitled for the most part torefuse work at wages below those which they had received in their previous employment,
or which were out of line with standards set by collective agreements between employers’
associations and trade unions in the relevant district.
In this respect, social insurance dovetailed with state support for labour standards. The
case for general legislative standards in the labour market was put by the Webbs in Industrial
Democracy, the first edition of which appeared in 1896. Their ‘National Minimum’ of living
14

New Zealand Journal of Employment Relations 34(1): 7-26

and working conditions would ‘extend the conception of the Common Rule from the trade towhole community’. Low-paying and casualised trades were ‘parasitic’ as by paying wages
below subsistence they received a subsidy from the rest of the community; thus ‘theenforcement of a common minimum standard throughout the trade not only stops thedegradation, but in every way conduces to efficiency’. In this respect, the deficiencies of theselective model of regulation contained in nineteenth century factory legislation were clearlyrecognised:…this policy of prescribing minimum conditions, below which no employer
is allowed to drive even his most necessitous operatives, has yet been only
imperfectly carried out. Factory legislation applies, usually, only to sanitaryconditions and, as regards particular classes, to the hours of labour. Even
within this limited sphere it is everywhere unsystematic and lop-sided. When
any European statesman makes up his mind to grapple seriously with the
problem of the ‘sweated trades’ he will have to expand the Factory Acts of his
country into a systematic and comprehensive Labour Code, prescribing theminimum conditions under which the community can afford to allow industry
to be carried on; and including not merely definite precautions of sanitationand safety, and maximum hours of toil, but also a minimum of weekly
earnings, (Webb, 1896, 1920: 767).
A third component in the re-regulation of the labour market was provided by full
employment policy. In Beveridge’s view, an effective social insurance scheme could notwork unless ‘employment is maintained, and mass unemployment prevented’ (Beveridge,
1944, 1967: 17). The responsibility for providing the conditions for full employment lay
with the state: ‘[i]t must be function of the State to defend the citizens against massunemployment, as definitely as it is now the function of the State to defend the citizens
against attack from abroad and against robbery and violence at home’ (1967: 29). Full
employment, in turn, had a specific sense. It did not just refer to the absence of
unemployment, but to the availability of employment of a particular kind: ‘at fair wages,of such a kind, and so located that the unemployed men can reasonably be expected totake them; it means, by consequence, that the normal lag between losing one job andfinding another will be very short’ (1967: 18). Beveridge’s combined scheme for social
security and full employment therefore sought to complete the work of the Minority
Report of 1909 in reversing the effect of the poor law. As he put it: “…the labour market
should always be a seller’s market rather than a buyer’s market’ (1967: 18).
The welfare state of the mid twentieth century therefore gave rise to a specific conceptionof social rights: a model of social citizenship based on employment. The duty to work
was not completely neutralized. On the contrary, access to economic security dependedon labour market participation. However, this was conditional upon the capacity of thestate, through a combination of regulation and macroeconomic management, to guarantee
access to stable and well remunerated employment, and to provide for collective provision
against the principal hazards for wage earners in a market economy, in particularunemployment, illness and old age. Encoded in the complex mass of detail of national
insurance legislation was a commitment to social integration and solidarity acrossdifferent occupational groups: ‘[w]orkers of every grade in every town and village in the
country are now banded together in mutual State-aided insurance… They are harnessed
together to carry the industrial population through every vicissitude’ (Cohen, 1938: 10).
15

New Zealand Journal of Employment Relations 34(1): 7-26

There were qualifications to this idea, the most important of which was the differential
treatment of male and female workers. Beveridge’s social insurance scheme treatedmarried women as dependent on a male breadwinner, and allowed them to opt out of most
aspects of the scheme; in return they were able to claim the long-term benefits ofretirement and widows’ pension on the basis of their husbands’ contributions. As a resultof decisions taken in the 1940s, a high proportion of married women either stayed outside
the national insurance scheme altogether or opted to pay a lower rate, up to the late 1970s(Williams, 1982).
The roots of the differential treatment of men and women in social insurance systems areto be found in contemporary assumptions about the family and the employment
relationship. This is most clearly seen in the extensive discussion by the Webbs, in the1909 Minority Report, of the question, ‘are women able-bodied?’
The new category of ‘unemployment’ differed from the concept of ‘able-bodiedness’ inthe way it carefully defined the status of the applicant for relief by reference to theemployment which had been lost and to which the applicant was expected to return: as the
Minority Report recognised in referring to the intentions of the Unemployed Workmen
Act 1905, the ‘bona fide Unemployed’ were ‘the men and women who, having been in fullwork at full wages, find themselves without employment through no fault of their own’(emphasis added) (Webb, 1909: 1). This category, in the view of the authors of theReport, necessarily excluded women whose domestic responsibilities prevented them frombecoming ‘regular and efficient recruits of the industrial army’ (1909: 209). Thus in
response to the questions ‘are women able-bodied?’, posed at the beginning of the Report,and ‘are women unemployed?’, posed at the end, the same answer was supplied: only ifthey were ‘unencumbered independent wage earners, both supporting themselves entirely
from their own earnings and having no one but themselves to support’.10
The logical conclusion was the male breadwinner wage:…we have chosen so to organise our industry that it is to the man that is
paid the income necessary for the support of the family, on the assumptionthat the work of the woman is to care for the home and the children. The
result is that mothers of young children, if they seek industrial employment,
do so under the double disadvantage that the woman’s wage is fixed tomaintain herself alone, and that even this can be earned only by giving up
to work the time that is needed by the care of the children. When thebread-winner is withdrawn by death or desertion, or is, from illness or
Unemployment, unable to earn the family maintenance, the bargain which
the community made with the woman on her marriage – that themaintenance of the home should come through the man – is broken. It
seems to us clear that, if only for the sake of the interest which thecommunity has in the children, there should be adequate provision madefrom public funds for the maintenance of the home, conditional on themother’s abstaining from industrial work, and devoting herself to the careof the children, (Webb, 1909: 211).

16

New Zealand Journal of Employment Relations 34(1): 7-26

In this way, the welfare state was constructed on a notion of ability to work which
presupposed a particular family structure.

Contemporary European social and employment policy from acapability perspective
In the post-war welfare state, the duty to work was qualified by state guarantees of full
employment and by access to a breadwinner wage, underpinned by collective bargaining.
The decline of the breadwinner wage, which has accelerated since the 1970s, is a complex
phenomenon (Creighton, 1999). On the one hand, increasing female participation in paid
employment, coupled with the growing importance of sex discrimination and equal pay
legislation, has eroded the assumption that well-paid, secure and stable jobs should bereserved for male earners. On the other, the notion of a breadwinner wage is of declining
relevance for the increasing proportion of households with children which contain a single
parent, normally the mother (up from 7% of all such households in 1971 to 21% by
199411). Both trends are particularly visible in the UK, but also illustrate the range offorces involved.
Thus overall participation rates for married women have increased markedly, from 10% in
1931 (this low figure influenced Beveridge to believe that married women should be a
special class of contributors to national insurance) to 22% in 1951, 42% in 1971 and 53%
in 1971. However, this growth has increasingly taken the form of part-time work: in 1971
this accounted for one third of all female employment, but by 2001 had reached almost
half of the total.12 An unduly large proportion of female part-timers are employed on very
low weekly wages, in part because of an artificial fiscal subsidy which until recently
applied to employment below the level of national insurance contributions.13
In general, and notwithstanding attempts to legislate for equality of treatment,14 part-timework still confers relatively lower incomes and proportionately fewer employment-related
benefits than is the case with full-time work. There has been a narrowing of the gender
pay gap and average job tenure rates for women have been lengthening at the same time as
those of men have been falling. Equal pay legislation, beginning in the 1970s, contributed
significantly to the substantial reduction in wage inequality between men and women, andthe longer job tenure of women was the result in part of the passage of maternity
protection legislation, mandating a period of maternity leave and providing for the right toreturn to employment. However, these gains are largely concentrated on the situation of
full-time working women; in the 1990s, while the gender pay gap was falling in overallterms, it remained constant for part-time work. Thus notwithstanding the elimination of
discrimination against part-time workers in relation to terms and conditions of
employment and access to occupational pension schemes, part-time work remains poorly
paid in relation to full-time employment (Robinson, 2003).
Conversely, the rise in single-parent households, while undermining the idea that it isnecessarily a male earner’s duty to provide for the other family members, has beenaccompanied by a growing polarization of income and opportunities: while dual-earnerhouseholds have been growing in number, an increasing proportion of households arewithout employment altogether. In 2002, of those households with married or cohabiting
17

New Zealand Journal of Employment Relations 34(1): 7-26

couples between the ages of 25 and 49, around one third had two full-time earners and afurther third had a full-time male earner and a part-time female earner. Less than 20% had
a sole male breadwinner, around 4% had a sole female breadwinner, and around 6% of
this age group had neither partner in work. At the same time, the division of householdtasks between men and women remains unequal. This is so across all households,
including those with two full-time earners and even those with sole female breadwinners,
but it is particularly marked for households with part-time female earners and for thosesolely dependent on a male breadwinner (Harkness, 2003).
The overall effect is that ‘the erosion of the [male breadwinner family wage] has been
only partial and has been accompanied by a number of interrelated problems, including
increasing polarization between households, greater poverty, an uneven distribution ofopportunities between households and difficulties in combining paid work with childcare’(Creighton, 1999: 519). The principle of family subsistence no longer guarantees accessto a living wage; instead, low pay is topped up with fiscal subsidies (tax credits), avoiding
the ‘burden’ of regulation of employment.15 In turn, the absence of a living wage is nolonger, as it was at various points in the evolution of social insurance system, a good
ground for refusing an offer of employment.16 The withdrawal of benefits from theunemployed, now termed ‘jobseekers’, who refuse work on the grounds of its unsuitability
or low level of remuneration is a policy which successive governments, Conservative andLabour, have followed during the 1990s.17 Nor are lone parents completely exempt fromthe duty to work; although they cannot be deprived of benefit for refusing to take up paid
work, they are obliged to attend periodic interviews with an employment adviser, on painof losing part of their social security entitlements.18
This is the background, at least in the UK, against which the capability debate is currently
being played out: a neoliberal-inspired activation policy, which is in many respects thepolar opposite of the policy of full employment which it has replaced. Full employment,
in its classic, Beveridgian sense, implied a set of measures to control and stabilize thelabour supply. The policy of ‘a high employment rate’, by contrast, aims to increase
numbers in employment even if this is carried out at the cost of creating categories of low
paid and ‘flexible’ work which do not provide access to a living wage. Deregulation ofterms and conditions of employment goes hand in hand with the restriction of theconditions under which social security benefits are made available. For the time being,
contemporary policy is closer to the old, pre-1834 poor law, in the use being made of tax
credits and other forms of wage subsidisation which echo Speenhamland, than it is to thelate Victorian institutionalisation of the workhouse and labour yard. Yet it was precisely
the same combination of rising expenditure and the use of poor relief to subsidise low
wages which prompted the 1834 reforms, the last vestiges of which were swept away as
recently as the 1940s.19
The UK is, from one point of view, something of a special case within the European
Union. Other systems, in particular the Nordic countries, appear to have been more
successful in replacing the male breadwinner model with alternatives based on an
equitable household division of labour, regulation of working time aimed at achieving amore effective balance between working time and family time, and the use of active
labour market policy measures to support transitions into paid employment (Supiot, 1999).
However, while this model exists within certain Member States, it is striking that, to date,the European Union has done little to propagate it.
18

New Zealand Journal of Employment Relations 34(1): 7-26

This is the consequence, first of all, of the restricted scope for harmonization of social
security law at European level. In lieu of harmonization, the Treaty of Rome provided forthe limited alternative of the coordination of social security systems. In the traditional
meaning of this term (prior to its use as part of the ‘open method of coordination’ or
OMC), coordination referred to measures designed to ensure that in moving between
different social insurance regimes, migrant workers were not unduly penalized bycomparison those whose employment remained within a single Member State.20 Far fromseeking to set a common standard for social security across different national regimes, it
presupposed difference between them. Notwithstanding the far-reaching changes madesince the 1950s in other areas of competence, social security remains an area in which theorgans of the Community have very little capacity to act, as opposed to reacting to theeffects of national diversity.
The inability of the European Union to take the initiative in this area also results from theapproach which has been adopted to the implementation of the employment strategy. A
full assessment of the use of the OMC in the context of employment is beyond the scopeof the present paper. However, notwithstanding the attention justifiably devoted to the
OMC as a novel technique of regulatory learning, it is looking less likely over time that it
can serve as a viable means for implementing a progressive policy agenda, in particular
one of the kind set out by the Supiot report. This is because the employment strategy
bears the traces of its origin in the early and mid-1990s, at a series of European summits
which set out the goals of counter-inflation policy and macroeconomic stability whichaccompanied the adoption of the single currency (Deakin and Reed, 2000). This accounts
for the emphasis within the employment strategy upon the promotion of labour flexibility
and the reduction of social security expenditure, themes which have led the Commission
to give negative evaluations of the employment record of the Nordic systems whileleaving the UK’s neoliberal approach relatively free of criticism (Raveau, 2004). The‘learning process’ encouraged by the employment strategy is, at least for the time being,skewed towards neoliberal policy objectives; as such it is a potential force for the kind of
deregulatory competition between European welfare states which has been long debatedbut, until now, has been limited in its impact.21
Against this rather unpromising background, what are the prospects for the capability
approach as the foundation of a new conceptual framework in labour and social security
law? The ‘prehistory’ of the concept of capability suggests the need for care here. For
most of the period of the poor law, notions of ‘able-bodiedness’ were derived from theexistence of a duty to work which the law imposed on the propertyless. Social insurance
carved out a limited series of exceptions to this principle, based on a model of thebreadwinner wage which now lacks legitimacy. Is it possible to see in the concept ofcapability a basis for reversing the logic of the poor law and reinventing the welfare state,
so that the duty to work is only imposed under circumstances where the state has provided
the conditions under which individuals are equipped for effective labour market
participation? Simply to state this proposition in such terms is to see how far removed
today’s mainstream debate is from any such conception of capability.
The capability approach may nevertheless be helpful in providing a particular way of
thinking about social rights with respect to market processes. The purpose of the capability
approach is not to provide a blueprint for social reform; as Sen has put it, ‘[i]t is not clearthat there is any royal road to evaluation of economic or social policies’ (1999: 84). This
19

New Zealand Journal of Employment Relations 34(1): 7-26

insistence that there is no universally-applicable, prescriptive list of functionings andcapabilities means that attention is focused instead on social choice procedures by which
the content of capability sets can be collectively determined in particular contexts.
In the context of social welfare, the capability approach suggests a particular way of thinking
about social rights: either as claims to resources, such as social security payments, or as rights
to take part in forms of procedural or institutionalised interactions, such as those arising outof collective bargaining. When social rights take the form of claims on resources, they are
the equivalent of commodities which individuals can convert into potential or actual
functionings. When they take the form of proceduralised rights, they come close to what Sen
calls ‘social conversion factors’, that is, social or institutional settings which shape the set of
possibilities open to individuals in terms of achieving their goals. Social rights shape theinstitutional environment in such a way as to enable all (or more) individuals to convert
endowments in the form of human and physical assets into positive outcomes.
Juridical support for the idea is beginning to appear in the interstices of European Union
social welfare law. One illustration of this is the parity accorded to social and economic
rights in the Charter of Fundamental Rights of the European Union, adopted in 2000
(Hervey and Kenner, 2003). Whatever the limitations of particular provisions of theCharter (and there is evidence that they diluted in the drafting process), the equivalenceaccorded to the rights contained in the ‘Equality’ and ‘Solidarity’ chapters on the one
hand, and those dealing with economic and political rights on the other, marks animportant departure from the practice of subordinating social rights to economic
considerations, which is to be found, for example, in the relationship between theEuropean Convention on Human Rights and Freedoms and the European Social Charter,
and arguably in the Treaty of Rome and its various successors. The significance of thismove is reflected in the determined (but so far unsuccessful) effort made to restore thetraditional priority of market considerations in the 2003 draft of the European Constitution(Bercusson, 2004).
A second source of institutional support for the capability approach may be found in thedeveloping case law of the European Court of Justice on the concept of solidarity. As
Catherine Barnard explains, this idea is underpinned by…the notion that the ties which exist between the individuals of a relevantgroup justify decision-makers taking steps – both negative and positive – toensure that the individual is integrated into the community where they havethe chance to participate and contribute fully. The negative steps include
removing obstacles to integration and participation; positive steps include
active programmes to encourage participation of those otherwise excluded.
If this reading is correct then the use of solidarity as a guiding principle canhelp liberate decision-makers and decision-takers from the straitjacket offormal equal treatment, (Barnard, Deakin and Morris, 2004).
The claim that participation in a market presupposes active measures of integration, andnot simply the removal of formal obstacles, is very much in the vein of recent writing on
capability theory. The appearance of this idea in the context of the case law of persons22
indicates its potential, but also its limits. It goes beyond the requirements of formal
equality in insisting on the need for state action to remove the conditions which inhibit
20

New Zealand Journal of Employment Relations 34(1): 7-26

effective market participation. At the same time, it is only within a relatively narrow andestablished legal framework that the idea, to date, has much purchase. The Court’s
approach is suggestive of the kind of reasoning which might be put to good effect, if thelegislative structure of European social law were to be developed further.

Conclusion
This paper has examined the concept of capability from an historical perspective in order
to try to gain some traction on the issue of its usefulness for contemporary EU social law.
The idea has potential as a way of breaking out of the impasse established by neoliberalpolicies, which increasingly view social rights as a fetter on the growth and integration ofmarkets. Capability theory, in contrast, insists on paying regard to the institutional
preconditions for the effective participation of individuals in market activities. Contrary
to neoliberalism, these are not limited to the provision, by private law, of contractual
capacity or the right to hold property, but extend to collective mechanisms for the sharing
and distribution of social risks arising from the operation of markets. However, theexample of the male breadwinner model offers an example of the urgent need to review
and renew these mechanisms. The EU, which already recognises that social rights have aplace within an integrated market order, is ideally placed to play a central role in thisprocess. It is disappointing, therefore, that the ‘learning process’ associated with theemployment strategy has done more to endanger than to encourage institutionalinnovations of the kind needed to move this debate forward. This should perhaps serve asa reminder that notions of capacity or capability represent contested terrain, in which
many different conceptions of the market order struggle for acceptance.

Notes
1

See generally S. Deakin and F. Wilkinson, ‘“Capabilities”, ordineo spontaneo delmercato e diritti sociali’ (1999) 2 Il diritto del mercato del lavoro 317 (also published in
Englishas
CBR
Working
Paper
No.
174,
September
2000(http://www.cbr.cam.ac.uk/pdf/wp174.pdf); S. Deakin and J. Browne, ‘Social rights andmarket order: adapting the capability approach’ in T. Hervey and J. Kenner (eds.) Economic
and Social Rights under the EU Charter of Fundamental Rights. A Legal Perspective(Oxford: Hart, 2003); J. Browne, S. Deakin and F. Wilkinson, ‘Capabilities, social rights
and European market integration’, in R. Salais and R. Villeneuve (eds.) Europe and thePolitics of Capabilities (Cambridge: Cambridge University Press, 2004); and S. Deakin and
F. Wilkinson, The Law of the Labour Market: Industrialization, Employment and Legal
Evolution (Oxford: Oxford University Press, 2005), ch 5..
2

The classic account of Speenhamland remains J.L. and B. Hammond, The Village
Labourer 1760-1832 (London: Longmans, Green and Co., 1920).
3

Reproduced in S.G. and E.O.A. Checkland (eds) The Poor Law Report of 1834
(Harmondsworth: Penguin, 1973).
4

4 & 5 George IV c. 76.

21

New Zealand Journal of Employment Relations 34(1): 7-26

5

Under the Vagrancy Act 1824 (5 George IV c. 83), it was an offence punishable by one
month’s hard labour to become chargeable to poor relief in the case of ‘every person being
able wholly or in part to maintain himself, or his or her family, by work or other means, andwilfully refusing or neglecting to do so’. In earlier vagrancy legislation, dating from 1744, acrime was committed only where there was ‘a refusal to work for the usual and common
Wages given to other Labourers in the like Work’. In the 1824 Act, the reference to ‘usual
and common wages’ was removed.
6

Workhouses existed in certain parishes prior to 1834, but after that point their use
increased substantially thanks to the restriction of outdoor relief.
7

The principal orders were the Outdoor Relief Prohibitory Order of 21 December 1844,
the Outdoor Relief Regulation Order of 14 December 1852, and General Consolidated Orderof 24 July 1847 (dealing with workhouse conditions). They are reproduced, with
amendments and consolidations, in H.R. Jenner-Fust, Poor Law Orders (London: P.S. King,1907).
8

On the significance of the surveys of urban poverty carried out by Booth and Rowntree,
see the account of Rowntree’s work in A. Briggs, Social Thought and Social Action: A
Study of the Work of Seebohm Rowntree (London, Longmans: 1961); on Beveridge, see J.
Harris, William Beveridge: A Biography (2nd. ed., Oxford: Clarendon Press, 1997).

9

Unemployment: A Problem of Industry (London: Longmans, Green and Co., 1909).

10

Ibid., at p. 208. For further discussion of the Webbs’ analysis of the issue of female‘able-bodiedness’, see A. Picchio del Mercado, Social Reproduction: the Political
Economy of the Labour Market (Cambridge: CUP, 1992), at pp. 86-94.
11

Creighton (1999: 527), citing figures of the Office of National Statistics and official
Census data which also show that during roughly the same period, the divorce rate in the
UK rose from 2.0 per 1,000 members of the married population (in 1960) to 13.6 (in1995), and the number of births outside marriage from 5.4% of all live births (in 1961) to37% (in 1994).
12Overall participation rates are drawn from the official Census of Population (publishedby the Office of Population Censuses and Surveys) and those on part-time work from theLabour Force Survey (published monthly in the Department of Trade and Industry’s
Labour Market Trends).

13

See S. Deakin and F. Wilkinson, ‘Labour law, social security and economic inequality’(1991) 15 Cambridge Journal of Economics 125. Changes made to the law of national
insurance in the late 1990s removed much of the subsidy effect (see Social Security Act
1998, s. 51, and Social Security Benefits and Contributions Act 1992,s. 6A, as inserted by
the Welfare Reform and Pensions Act 1999).
14

Principally in the form of the Protection of Part-Time Workers (Prevention of Less
Favourable Treatment) Regulations, SI 2000/1551, implementing Directive 97/81/EC
Concerning the Framework Agreement on Part-Time Work concluded by ETUC, UNICE
and CEEP, OJ L 14, 20.1.98, p. 9. On the important limitations in the 2000 Regulations,
see A. McColgan, ‘Missing the point? The Part-Time Workers (Prevention of Less
Favourable Treatment) Regulations 2000’ (2000) 29 ILJ 260.
15

The tax credit scheme is governed by the Tax Credit Acts 1999 and 2000. See
generally N. Wikeley, Wikeley, Ogus and Barendt’s Law of Social Security (5th. ed.,22

New Zealand Journal of Employment Relations 34(1): 7-26

London: Butterworths, 2002), ch. 10. Although a statutory minimum wage was put into
place in the late 1990s by virtue of the National Minimum Wage Act 1998, it operates at alow level and is intended to be topped up by tax credits in order to provide a sustainable
income for households.
16

The National Insurance Act 1911, s. 86(3) made disqualification from unemployment
benefit under this heading conditional upon it being shown that the work in question was
outside the claimant’s normal occupation and/or, in certain instances, was remunerated
below the going rates set by collective agreement or custom and practice in the industrial
sector or district in question. Despite some weakening of the test during the 1920s, inremained more or less in place up to the 1980s, when it was diluted in various ways (onwhich, see Deakin and Wilkinson, ‘Labour law, social security and economic inequality’,op. cit.).
17

The Jobseekers Act 1995, passed by a Conservative government, confirmed the trend
begun in the 1980s towards the tightening of benefit conditions and expansion of thegrounds for disqualification from benefit on the basis of non-availability for work (seeprevious note). The Labour administration, elected in 1997, has maintained the same
approach to the definition of benefit entitlements for those out of work.
18

By virtue of the Welfare Reform and Pensions Act 1999, inserting ss. 2A-2C into theSocial Security Administration Act 1992.
19

The last workhouses were converted into hospitals with the creation of the National
Health Service in 1946 and poor relief for the sick and aged was replaced by national
assistance in 1948.
20

For an overview of this highly complex and, within European legal studies, relatively
neglected topic, see Wikeley, Ogus and Barendt’s Law of Social Security, op. cit., ch. 3.
21

On regulatory competition in EU welfare state and labour law policy, see generally K.H. Paque, ‘Does Europe’s common market need a social dimension?’ in J. Addison and W.S.
Siebert (eds.) Labour Markets in Europe: Issues of Harmonisation and Regulation (London:
Dryden, 1997), and S. Deakin, ‘Labour law as market regulation’, in P. Davies, A. LyonCaen, S. Sciarra and S. Simitis (eds.) European Community Labour Law: Principles andPerspectives, Liber Amicorum Lord Wedderburn (Oxford: Clarendon Press, 1996).
22

The most important decisions are those in Case C-184/99 Grzelczyk [2001] ECR I6193 and Case C-413/99 Baumbast [2002] ECR I-000.

References
Barnard, C. (2004). The future of equality law: equality and beyond. In C. Barnard, S.
Deakin and G. Morris (eds.). The Future of Labour Law. Liber Amicorum for Bob Hepple,
Oxford: Hart.
Bercusson, B. (2004). Episodes on the path towards the European social model: the EU
Charter of Fundamental Rights and the European Convention on the Future of Europe. In
C.

23

New Zealand Journal of Employment Relations 34(1): 7-26

Barnard, S. Deakin and G. Morris (eds.) The Future of Labour Law. Liber Amicorum for
Bob Hepple, Oxford, Hart.
Beveridge, W. (1944, 1967). Full Employment in a Free Society, London: Allen and
Unwin.
Briggs, A. (1961). Social Thought and Social Action: A Study of the Work of Seebohm
Rowntree. London: Longmans.
Browne, J., Deakin, S and Wilkinson, F. (2004). Capabilities, social rights and European
market integration. In R. Salais and R. Villeneuve. (eds.) Europe and the Politics ofCapabilities. Cambridge: Cambridge University Press.
Checkland, S.G. and E.O.A. (1973). (eds) The Poor Law Report of 1834. Harmondsworth:Penguin.
Cohen, P. (1938). Unemployment Insurance and Assistance in Britain. London: Harrap
Creighton, C. (1999). The rise and decline of the “male breadwinner family” in Britain.
Cambridge Journal of Economics. 23: 519 – 541
Dalton, M. (1746). The Country Justice: Containing the Practice, Duty and Power of theJustices of the Peace, as well In as Out of Their Sessions. London: Lintot.
Deakin, S. (1996). Labour law as market regulation. In P. Davies, A. Lyon-Caen, S.
Sciarra and S. Simitis (eds.) European Community Labour Law: Principles andPerspectives, Liber Amicorum Lord Wedderburn. Oxford: Clarendon Press.
Deakin, S. (2001). The Contract of Employment: A Study in Legal Evolution. Historical
Studies in Industrial Relations. 11(1): 12 – 17.
Deakin, S. and Browne, J. (2003). Social rights and market order: adapting the capability
approach. In T. Hervey and J. Kenner (eds.) Economic and Social Rights under the EU
Charter of Fundamental Rights. A Legal Perspective. Oxford: Hart
Deakin, S and Reed, H. (2000). The contested meaning of labour market flexibility:
economic theory and the discourse of European integration. In J. Shaw (ed.) The Evolution of
EC Social Policy. Oxford: Hart.
Deakin, S. and Wilkinson, F. (2005). The Law of the Labour Market: Industrialization,
Employment and Legal Evolution. Oxford: Oxford University Press.
Deakin, S and Wilkinson, F. (1999). “Capabilities”, ordineo spontaneo del mercato e diritti
sociali. 2 Il diritto del mercato del lavoro (also published in English as CBR Working Paper
No. 174, September 2000 (http://www.cbr.cam.ac.uk/pdf/wp174.pdf)
Deakin, S and Wilkinson, F. (1991). Labour law, social security and economic inequality.
Cambridge Journal of Economics. 15(2): 125 – 14824

New Zealand Journal of Employment Relations 34(1): 7-26

Hammond, J.L. and Hammond, B. (1920). The Village Labourer 1760-1832. London:
Longmans, Green and Co.
Harkness, S. (2003). The household division of labour: changes in families’ allocation of
paid and unpaid work, 1992-2002. In R. Dickens, P. Gregg and J. Wadsworth (eds.) The
Labour Market under New Labour: the State of Working Britain 2003. London: Palgrave.
Harris, J. (1997). William Beveridge: A Biography. (2nd ed). Oxford: Clarendon Press.
Hayek, F.A. (1973). Rules and Order. London: Routledge
Hervey, T. and Kenner, J. (2003) (eds.) Economic and Social Rights under the EU Charterof Fundamental Rights. Oxford: Hart.
Hobsbawm, E and Rudé, G. (1973). Captain Swing. Harmondsworth: Penguin.
Jenner-Fust, H.R. (1907). Poor Law Orders. London: P.S. King.
Marshall, T.H. (1949, 1992). Citizenship and Social Class. Cambridge: CUP, reprinted
London: Pluto.
McColgan, A. (2000). Missing the point? The Part-Time Workers (Prevention of Less
Favourable Treatment) Regulations 2000. Industrial Law Journal. 29(3): 260 – 267
Paque, K.H. (1997). Does Europe’s common market need a social dimension? In J. Addison
and W.S. Siebert (eds.) Labour Markets in Europe: Issues of Harmonisation and Regulation.
London: Dryden.
Picchio del Mercado, A. (1992) Social Reproduction: the Political Economy of the LabourMarket. Cambridge: CUP.
Poynter, J.R. (1969). Society and Pauperism: English Ideas on Poor Relief 1795-1834.
London: Routledge and Kegan Paul.
Raveau, G. (2004). The European Employment Strategy: From ends to means? In R.
Salais and R. Villeneuve (eds.) Europe and the Politics of Capabilities. Cambridge:
Cambridge University Press.
Robinson, H. (2003). Gender and labour market performance in the recovery. In R.
Dickens, P. Gregg and J. Wadsworth (eds.). The Labour Market under New Labour: theState of Working Britain 2003. London: Palgrave,.
Salais, R. (1999). Libertés du travail et capacités: pour une construction Européenne?
Droit Social. 5: 467 – 471
Sen, A. (1985). Commodities and Capabilities. Deventer: North Holland.
Sen, A. (1999). Development as Freedom. Oxford: OUP.

25

New Zealand Journal of Employment Relations 34(1): 7-26

Slack, P. (1990). The English Poor Law 1531-1782. Basingstoke: Macmillan.
Snell, K.D.M. (1985). Annals of the Labouring Poor: Social Change and Agrarian
England 1660-1900. Cambridge: CUP.
Supiot, A. (1999). (ed.) Au delà de l’emploi: transformations du travail et l’avenir dudroit du travail en Europe,.Paris: Flammarion.
Webb, S and Webb, B. (1909). The Public Organisation of the Labour Market: Being Part
Two of the Minority Report of the Poor Law Commission. London: Longmans, Green andCo.
Webb, S and Webb, B. (1896, 1920) Industrial Democracy. London: Longmans, Greenand Co.
Wikeley, N. (2002). Wikeley, Ogus and Barendt’s Law of Social Security. (5th ed).
London: Butterworths.
Williams, D.W. (1982). Social Security Taxation. London: Sweet and Maxwell.

26

New Zealand Journal of Employment Relations 34(1): 27-33

The Capability Approach and the Legal Regulation of
Employment: A Comment on Deakin
GORDON ANDERSON∗
Introduction
Sen’s capability concept has become increasingly influential and has been applied in a varietyof contexts that have extended its utilisation well beyond the original formulation in thecontext of economic development. It is clearly a versatile concept, capable of a variety ofinterpretations and applications. As the papers in this special issue illustrate, one area where
the capability approach provides a valuable analytical tool is the analysis of human capability
in the workplace, a topic which itself is multi-faceted. Within developed economies, theworkplace and employment are central, either directly or indirectly, to the economic securityof the great bulk of the population who are completely or substantially dependent on the
return from their own labour. It might be expected that, given its underlying premises, thecapability concept would have much to offer to the analysis of labour relations generally aswell as to its separate components, in this case the law.
The paper contributed by Simon Deakin illustrates the capability concept’s potential for
providing a theoretical foundation for rethinking much of our approach, not only toemployment law but also the various systems of law that provide economic and legal security
for workers generally. The paper focuses on issues surrounding the “duty to work” in labourand social security law. The idea of a duty to work is, of course, one that has a long history
and the legal enforcement of that duty has varied over time. In the main, the duty to work has
always had a strongly punitive element although modern systems of social welfare haveameliorated that aspect to some degree. Deakin’s paper, taking into account a number ofacademic developments in Europe, and particularly the work derived from Supiot, discusses
the idea that the foundation of an individual’s active participation in the labour market mustbe found in clear social rights. While Deakin’s paper was written in 2005, the ideas in it havea particular contemporary resonance, given the current economic recession and the resulting
unemployment. It is in periods such as this that the structures of the social welfare systems
providing economic security to workers come more clearly into the political spotlight and theembedded assumptions, such as a duty to work, come under greater scrutiny. The ideas
covered in Deakin’s paper and the work from which it is derived make an important
contribution to the debate on social security and welfare systems and their interface with thelabour market.

The law and capability
Legal rules, as Deakin points out, are an important institutional characteristic of society andcan act either to promote or constrain capabilities. Although Sen has not sought to develop ajuridical theory which might give some institutional shape to the capability concept, others∗

Gordon Anderson is Professor of Law, Faculty of Law, Victoria University of Wellington.

27

New Zealand Journal of Employment Relations 34(1): 27-33
have begun to formulate such a theory. In his article, Deakin refers to the work of Supiot
with whom he has collaborated (Deakin, 2005, p.1). Supiot’s work has been particularly
influential in Europe and has provided the foundation for a major research programme within
the European Union (see Supiot, 2001 and the references in Deakin). Deakin refers to thevisionary intentions of the proponents of the capability concept; the intention that thecapability approach should come to serve as a new conceptual cornerstone for social law(Deakin, 2005, p.16). Whether or not such a radical vision can be realised remains to be
seen. Even if the debate on the capability concept only has the effect of providing a new lensthrough which employment law can be viewed, it may still make a major contribution to thetheoretical debate on the structure and breadth of labour law and to the direction of andmotivation for legal reform. As is suggested in Deakin’s paper, a credible theory that
presents an alternative to the new-right’s neo-liberal orthodoxy is a welcome development.
This paper and the work it refers to begin that task for labour law.
Deakin writes from the particular perspective of the European Union. From a New Zealandperspective, one might suggest that there is room for greater optimism for alternatives within
Europe with its range of diverse legal traditions to draw on and with its developed “social
market” ethos. Such a cultural context may be more responsive than countries dominated by
the Anglo-American free market model and the common law concepts that have long
dominated labour law discourse. However, it is also true that New Zealand has long had astrong social welfare ethos and, as it is the nature of the social welfare system that is at theheart of the capability approach in this context, there may well be room for the emergence ofa capability based dialogue.
In any social or economic system, the law plays a central role. Whether the law acts topromote or constrain capabilities in a particular legal system will be dependent on how otherfactors, particularly economic, social, and political factors, influence the structure of the law
at any particular time. In 1972, in the introductory chapter to Labour and the Law, Professor
Otto Kahn-Freund wrote that “the law is a technique for the regulation of social power”(Kahn- Freund, 1972: 4) and went on to make the point that while the law may support,
restrain and sometimes create social power the law itself is not the principal source of social
power. As with other social forces, the law is subject to the shifting winds of political,
economic and other contemporary social forces that change over time, sometimes rapidly andsometimes slowly. As the period from the mid-1980s to the mid-1990s illustrated relatively
extreme ideological perspectives can emerge rapidly and result in fundamental changes in ashort space of time before their excesses are restrained and a more balanced approach
restored. It is generally the more extreme positions that have such an impact. The more
moderate positions, as is inherent in the capability concept, tend to take longer periods tomature.
It must be also be recognised that the law is a prisoner of its own history. To paraphrase
Keynes’s well known comment, “even the most liberal modern lawyer is usually in the thrallof the ideas of long-dead judges and legislators”, a tendency that can be particularly apparent
in labour law. Common law notions of the nature of property and the common law concept
of “freedom” of contract remain powerful constraints on any debate on reforming labour law.
The legal origins of labour law in the law of feudal obligations and later the law of masterand servant continues, as Deakin’s paper illustrates, to carry the weight of its past. The
paper’s discussion of the prehistory of the capability concept shows how a range of historicalmind set, economic theory and political pressures come together in changing eddies to shape
the legal obligations imposed on the “working poor” at any particular time.

28

New Zealand Journal of Employment Relations 34(1): 27-33

Capability and the law
At the risk of oversimplification, Sen’s notion of capability posits that an individual’s
capability possibilities reflects their ability to utilise a personal set of functionings. The set ofutilisable functionings available to any individual will be determined by a mix of personal,
environmental and institutional factors. Central to this picture is Sen’s core notion of
conversion factors that structure an individual’s capability by setting limits to the freedom of
the individual to achieve their chosen set of functionings. The notion of a conversion factor
seems particularly apposite in a legal context given the strong gatekeeper role that is typically
performed by legal rules. As noted above, the nature of the gate may be the result of avariety of social pressures, but the law is perhaps the most direct and blunt implement fortranslating those pressures into a form controlling the ability to access a wide range ofsocietal and institutional resources.
Deakin, drawing on Supiot, notes the point that:
The capabilities of an individual depend on them having access to the means that theyneed to realise their life goals”. He goes on to make the point that these means include
a minimum standard of living and “the resources needed to maintain an ‘active
security’ in the face of economic and social risks” and states: “Thus ‘real freedom ofaction’ for entrepreneurs, in the form of protection of property rights and therecognition of management prerogative, has its equivalent in guarantees of humanresources for employees, (Deakin, 2005: 3).
Deakin’s paper argues that a capability approach “can be understood as an answer, of sorts, tothe neoliberal critique of labour and social security law” (Deakin, 2005: 3) The capability
approach, unlike the neo-liberal conception of labour law, accepts that employees, as much as
employers, need legal guarantees and protections if they are to participate in a market order.
And as Deakin notes, effective participation must mean more than formal access to theinstitutions of property and contract. Formal rights mean very little in the absence ofmeasures that provide underlying economic security. It is economic security, not formal
legal rights, that are necessary to maintain active and flexible labour market participation. It
is only when a measure of economic protection, housing, income and the like, is combinedwith measures that promote and open economic opportunities, such as training and protection
within employment, that most individuals enjoy genuine choices and the ability to develop
individual capability.
Law performs many functions but one of the most important is the allocation of risk withinsociety. In many cases, risk can be distributed by standard contractual mechanisms with the
expectation that the relevant risk can be commercially distributed through devices such as
pricing, insurance and the like. Employers are generally well placed to manage economicrisk through a combination of legal devices, for example corporate structures and the ability
to diversify capital investment, as well as through contract. Moreover, a combination of thecommon law rules of contract and property has the effect that employment risk is easily
shifted to employees. For example, at common law employment is effectively at willallowing the risk of economic downturn to be immediately mitigated by shifting it on to theshoulders of employees in the form of unemployment.

29

New Zealand Journal of Employment Relations 34(1): 27-33
Employees, unlike employers, can do little to distribute risk. Generally, they lack thefinancial resources to diversify financial risk through substantial savings. For mostemployees, the only effective means of risk diversification is through ensuring a range ofincome sources within the household, generally by having all adult members of the householdin some form of paid employment. Labour law has of course ameliorated some of these risks.
Most developed countries now provide some form of protection against arbitrary of
unjustified dismissal and most, although not New Zealand, provide for at least some measureof compensation in the case of redundancy. In the main, however, employee economic risk iscarried by the state through some form of social insurance or social welfare.

Deakin’s paper
Deakin’s paper focuses on the duty to work in labour and social security law. He considers
this from two perspectives, the first historical and the second looking forward tocontemporary European social and employment policy. The first part of his paper looks attransformations over time of the notion of the duty to work tracing changing attitudes tounemployment from the days of the English Poor Laws to the modern welfare state. While
much of this early history is of limited direct relevance to New Zealand, and later social
security approaches differ between the United Kingdom and New Zealand, this account ismarked by a number of themes that are reflected in New Zealand’s experience. One
particular theme is the changing, or perhaps more accurately cyclical, attitude to “able towork” which oscillates between a recognition that ability to work is largely a consequence ofeconomic and labour market conditions at any particular time to the notion that failure towork is largely a personal deficiency that should be addressed by state imposed disciplinary
or coercive sanctions. The paper goes on to deal with the breakdown of a welfare model thatexisted for much of the post-war period, essentially a model of social citizenship based on
employment and where economic security depended on labour market participation. Thismodel was however dependent on the state, through a variety of measures, guaranteeing
stable and well remunerated work together with a strong system of social insurance and wascentred on the idea of a “breadwinner wage” underpinned by collective bargaining (Deakin,
2005: 11).
The latter part of the paper deals with the problems that have occurred with this model as theresult of social and economic changes in the latter part of the twentieth and the early years of
this century. The neo-liberal approach to the labour market is, of course, fundamentally
opposed to this post-war model based on full employment. As Deakin notes, a highemployment rate is quite different from the traditional notion of full employment and isgenerally achieved at the cost of low paid flexible work which, in many cases, does notprovide access to a living wage. Labour market deregulation was accompanied by increased
restrictions on access to welfare benefits and subjecting those on benefits to a more
rigorously monitored regime. Deakin makes the interesting point that contemporary policy,
with its use of tax credits and wage subsidisation, is not dissimilar to the pre-1834 poor law.
While Deakin does not supply answers to the current problems in European social policy, andindeed could not be expected to, the paper does identify a number of issues that thosedeveloping such a policy will be required to face. What he does suggest is that the concept ofcapability may provide a basis for reinventing the welfare state so that the duty to work is
conditional on the state providing the conditions under which individuals are equipped for
effective participation in the labour market. The capability approach is seen as suggesting aparticular way of thinking about social rights, either as claims to resources or the right to take30

New Zealand Journal of Employment Relations 34(1): 27-33
part in procedural or institutionalised interactions (Deakin, 2005, p.16-17). Deakin sees someroom for movement of this type in some European Union instruments and having at least
some traction in judicial developments. His conclusion, however, has a more general appeal.
Deakin concludes that the idea of capability offers an alternative to neo-liberal policies whichview social rights as a fetter on the growth and integration of markets. Capability theory, bycontrast, considers the preconditions for effective participation in markets which extend
beyond contractual and property rights to collective mechanisms for the distribution of social
risks arising from the operation of markets.

Comment
In discussing Supiot (2001) and others Deakin (2005: 5) argues that labour law must put inplace “effective mechanisms for dealing with the effects upon individuals of economic
uncertainty.” Supiot, looking at the question in the context of increasing globalisation, is of
the view that such a change requires a new approach to the governance of work and inparticular one that allows the management of uncertainty. In the case of employees, he sees
the guarantee of the development of human capital and real freedom of action as essential inachieving this. The following comment looks at some of the challenges that a capability typeapproach might face in New Zealand.
Any debate on the future of labour law and social policy generally needs to take account of
the peculiar attitude to the law in common law based systems. The law in countries with an
English heritage is an amalgam of the judicially created common law and of parliamentarystatute law. The problem is that the legal mind often has a problem in grasping this rather
basic idea. At the heart of much common law legal education and legal philosophy is anunderlying belief that the common law is “real law” and that statutory “intervention” is not
only an inferior sort of law but one that should be regarded with considerable suspicion as“interfering” with “fundamental common law rights”. Inherent in the common law’s
approach is a simplistic dichotomy between property rights and contractual rights that
presents a major barrier to a capability based approach to social policy. Property rights havealways enjoyed, and continue to enjoy, a high and expanding level of legal protection.
Contractual rights, on the other hand, are dependent on the terms of the contract itself. In theparticular case of employment the common law right to terminate the contract, effectively atwill, has the effect of denying employees any clear legal stake in their employment. The
common law has never recognised that an employee might have protectable rights in thecontinuity of their employment. This is not so much a legal issue as an ingrained ideologicalone. Property has always been a flexible concept and the common law has never founddoctrinal problems in utilising this flexibility to give proprietary status to such abstract ideas
as “customer connection”, “team glue” and the like to enable this “property” to be protectedagainst errant ex-employees (Riley, 2005, 187-191). The purpose of employment at common
law is not to provide economic security for workers and their families but to allow theeffective utilisation of property.
This simplistic common law dichotomy has also been adopted by much of the law andeconomics movement where it is argued that the common law, being the aggregated result ofmany transactions, results in an economically more efficient legal outcome than is likely fromgovernment intervention (or as others might label it, legislation by democratically elected
legislatures). The enthusiasm for the common law, or at least what economists understoodthe common law to be, reached its zenith in the Employment Contract Act 1991. That Act
31

New Zealand Journal of Employment Relations 34(1): 27-33
abolished the pre-existing pluralistic industrial relations system that provided for a highdegree of joint regulation of working conditions and replaced it with one of employer
dominated, individualised, regulation of the employment relationship. Although there havebeen some significant reforms under the Employment Relations Act 2000 that give greater
recognition to employee economic interests, for example good faith obligations andconsultation rights, the Labour government adopted a very cautious approach to reform. For
example, it failed to make any reforms around the problems of redundancy and its approach
to job loss on the transfer of an undertaking was, at best, lukewarm.
To gain traction any radical change, such as a capability approach has to overcome thephilosophical deadweight of the common law, a task that is likely to be extremely difficult
where the common law is the only game in town unlike the situation in Europe. However, tothink of modern labour law as the common law with add-ons is a fundamental mistake. The
modern contract of employment, or employment relationship, only makes sense if seen as anintegrated legal structure comprising both the common law and statute (Anderson, 2007).
Labour law in this holistic sense does, of course, contain a range of protections from theminimum wage to protection against unjustified dismissal that might be seen as compatible
with a capability approach and certainly this conception of the law provides room for further
evolution in that direction.
The problem of the common law is less apparent in the second half of the capability equationthat of a welfare system more aligned to a capability based approach. New Zealand’s
relatively strong social welfare system is one that grew out of New Zealand’s own social
environment and, while not without faults, its underlying structure and philosophy is suchthat a major change in mindset is not necessary if a more capability focussed approach were
to be adopted. For example, the combination of ACC and universal superannuation provide a
relatively strong degree of economic security for those who are no longer able to work
because of accident or age. That being said, however, there are still issues in attitudes to thework-welfare interface and the personal versus social “fault” tension that seems inherent inany discussion of entitlement to unemployment benefits. The current recession will no doubt
once again highlight this tension although currently there appears to be some recognition, forexample in the ReStart programme,1 that some account must be taken of economic
misfortune in the transition from employment to unemployment. That being said there
continues to be strong conflicts between the “benefit” ethos that drives social welfare and a“social insurance” ethos that might more accurately reflect the need to provide economic
protection for those made unemployed by the state of the economy.
The capability concept is unlikely to become the dominant driver in labour law and the labour
law-welfare law interface, in the short term, but it does provide a force that is compatible
with many elements of New Zealand’s labour/welfare law structures and which can provide agreater degree of theoretical support for the progressive reform of those structures.

References
Anderson, G. (2007). Employment Rights in an Era of Individualised Employment. Victoria
University of Wellington Law Review. 38(3): 417-434
Deakin, S. (2005). The ‘Capability’ Concept and the Evolution of European Social Policy.
Working Paper No 103 ESRC Centre for Business Research, University of Cambridge.
32New Zealand Journal of Employment Relations 34(1): 27-33

Kahn-Freund, O. (1972). Labour and the Law. Stevens: London.
Riley, J. (2005). Employee Protection at Common Law. Federation Press: Sydney.
Supiot, A. (2001). Beyond Employment: Changes in work and the future of labour law inEurope. Oxford: OUP. (Translation of Au-dela de ‘lemploi, 1999).

Notes
1

On this programme see: http://www.workandincome.govt.nz/individuals/a-z-benefits/restart.html

33

New Zealand Journal of Employment Relations 34(1): 34-46

The Human Capability Framework Ten Years On
PAUL BARKER, LIS COWEY and SIMON MCLOUGHLIN∗

Introduction
Ten years ago, in October 1999, the Department of Labour published a paper,“Human Capability: a Framework for Analysis”. Setting out to explain the labour
market and its implications for public policy, the Human Capability Framework (theFramework) ended up having much wider impact and influence than was originallyenvisaged. Ten years on, it is appropriate to review the nature of that impact andinfluence, and to ponder the extent to which the contents of the document still
resonate.
This paper considers the human capability framework (the framework) from a policy
practitioners’ perspective. It outlines the genesis of the framework, its uses, andreflects on its utility as a conceptual framework to examine labour market issues. The
labour market has changed considerably over the past decade, and the paper examines
the framework’s ability to provide insights into the new challenges and emphasis that
this requires.
Development of the human capability framework (the framework) commenced in late1998, and an initial version formed the basis for the Department’s post election
briefing to the incoming Minister in mid-1999. This conceptual framework came overtime to fulfil a number of other purposes: it was used as a key policy development
tool within the department, and, in ensuing years it was also picked up and further
developed by a range of researchers and government departments to inform their own
thinking.
Of course, this framework is one of many frameworks or conceptual documents
developed by government agencies in recent years. These have included the Growthand Innovation Framework developed by the Ministry of Economic Development, andlater, the Government’s Economic Transformation Framework to name two.
Conceptual frameworks are developed by departments for a number of different
purposes, and with differing levels of neutrality towards any particular set of policy
choices. They are also developed in response to Governments’ or departments’ desire
to ‘brand’ their own particular approach. The main purpose of the framework
originally was to provide a conceptual framework for understanding the dynamics andforces at work within the labour market.

∗

Workplace group, Department of Labour, Wellington. The corresponding authors are:paul.barker@dol.govt.nz and lis.cowey@dol.govt.nz .

34

New Zealand Journal of Employment Relations 34(1): 34-46

The Framework
The Human Capability Framework is a conceptual model of labour market dynamics
that provides a comprehensive overview of key factors affecting the labour market, as
they were seen at the time. These factors relate to attainment of skills, the businessenvironment, the influence of regulatory regimes, and key social trends such as
population ageing.
It was intended to provide a clear account – and common language about - theDepartment’s strategic direction and policy focus, following a revision of the
Department’s purpose and mission in 1998. It sought to bring to life the new
Departmental purpose statement, “We link social and economic issues to enablepeople to develop and utilise their potential for the advantage of themselves and New
Zealand.” As such it was seen as being the analytical core for the Department’s
Briefing for the Incoming Minister in 1999. It was also explicitly designed to be acommon tool and reference point for policy development within the Department,
assisting in framing questions about what the areas of policy focus should be for the
Department, why they are important, and how the Government can affect them.1 A
companion document was developed for departmental staff, elaborating on how thevarious aspects of the Department’s work fit into the framework.
The framework identifies three core elements of the labour market: capacity (people’s
skills, knowledge and attitudes), opportunities (places where people can utilise theircapacity to generate income and other rewards) and matching (the process ofmatching the capacity that people have to the opportunities created). As such, it is areasonably uncontroversial formula, which, as one former Departmental official has
observed, is nothing more than a way of describing well-known economic
relationships of supply and demand as they relate to the labour market. The simplest
conceptualisation of the three elements is given in Figure 1 below:
Figure 1: Human Capability Framework

CAPACITY

MATCHING

OPPORTUNITIES

Department of Labour (1999) “Human Capability: A Framework for Analysis”

However, the framework also attempted to go one step further. Its notable feature is
its integrated view of the relationship between key economic and social objectives,
and the contribution of the labour market to both. It describes a broad view of themeans whereby a country’s workforce or human resources are developed, utilised, andcontribute to advancing wellbeing within society as a whole. On the supply-side,
individuals’ capacity is seen to be shaped by a range of personal, social, and education
factors, while on the demand-side, the nature of opportunities (both labour market and1Maré, D, presentation to the Department of Labour Management Board, 22 February 1999.

35

New Zealand Journal of Employment Relations 34(1): 34-46
non-labour market) are seen to be influenced by a range of social attitudes, andbusiness and regulatory settings – both national and international. Once matched,capacity combines with opportunity in contributing to social and economic well-being
for both individuals and society as a whole. This approach can be applied to analysis
at the levels of the system, communities and regions, and individual people.
This more complex account of the dynamics of matching opportunity with supply isgiven in Figure 2.
Figure 2: Human Capability Framework

Department of Labour (1999:19) “Human Capability: A Framework for Analysis”

As one of the architects of the framework has observed2, at one level the frameworkprovides scant guidance for policy: while it allows one to see a range of issues, it
doesn’t have any particular emphasis or argument. Of course, the value of aframework is not in providing a basis for argument on either side of a debate, but, as
Shaw and Eichbaum (2008) observe, its value is that “a policy framework assists in
explaining relationships of cause and effect in a given area of policy and can therefore
provide a rationale for a subsequent strategy… in short, a framework precedes a
strategy”.

Applications of the Framework
Within the group of the Department’s Ministers at the time, several adopted thelanguage of the framework in public statements on labour and employment issues inpublic speeches. According to the principal political and strategy advisor of the
Minister of Employment at the time, the “zeitgeist of the time was the move from [a]2Mare, D, personal communication, 20 May 200936

New Zealand Journal of Employment Relations 34(1): 34-46
social welfare [mentality] to social development”. In this context, the framework
allowed Ministers to tell this story particularly well, operating as it did as a“conceptually robust policy framework” that “joined up things across [the Minister ofSocial Development and Employment’s] portfolios” and “allowed the Minister somepurchase on macro-economic policy issues”3.
Within the Department of Labour, the framework was adopted to varying degrees.
The Labour Market Policy Group of the Department used it extensively as a ‘policy
primer’ until the Group’s demise in 2004, and it was also used within the Community
Employment Group among field workers as a problem diagnosis and discussion tool.
Some key policies developed by the Labour Market Policy Group were designed on
the basis of it, including the Government’s Employment Strategy and theGovernment’s interagency Skills Action Plan, which focused on measures to address
skill shortages.
Thus, the Employment Strategy, launched in July 2000, encompassed acomprehensive set of employment priorities, policies and programmes. Drawing on
the framework, it outlined objectives focused on capacity, opportunity and matching,as follows:•••“Create opportunity – maximise employment opportunities through a steady
growth in the demand for labour
Build capacity – encourage the development of skills that are valued in the labour
marketMatch jobs and skills – facilitate a well-functioning labour market, which
minimises barriers to the matching of skills and jobs and enables participation in
the labour market”.

In a similar vein, the Skills Action Plan addressed capacity through action areas“supporting skills development” and “attracting global skills and talent”; opportunity
was addressed through “assistance with regional / industry problem solving”; andmatching was addressed through “improving labour market information” and “helping
job seekers make better choices”.
Furthermore, structural organisation of the Labour Market Policy Group was
influenced by it, with one policy team focused on capacity (“people and skills”),
dealing with labour market participation and skills development issues and anotherfocusing on opportunities (work-place and regulatory issues). A senior-level advisor
worked across both teams, in the interests of addressing ‘matching’ between the two,and to some degree the two teams worked together on projects.
On the ‘opportunities’ side, there is less clear evidence within the Department of theframework’s utilisation as a conceptual basis, for example, in the development of
employment relations and health and safety regulatory policy. This perhaps suggeststhat the framework had a lower profile within the wider Department than it did within
the Chief Executive’s office, and the Labour Market Policy Group.

3

Eichbaum, C, personal communication, 4 June 200937

New Zealand Journal of Employment Relations 34(1): 34-46
The framework was also used and adapted in a number of different ways by othergovernment agencies, notably the Career Services, the Ministry of Women’s Affairs,
and work undertaken under the aegis of the Ministry for Agriculture and Forestry.
While its prominence has effectively receded, references to it continue to be found in
Government documents, for example, it was referenced as recently as 2008 in the
Ministry of Social Development’s Social Report.
The framework also attracted commentary from a variety of academics and labour
market analysts. Tipples (2004) for example provided an outline of the genesis of theframework and its incorporation into a number of government and non government
publications and work streams. These included the Canterbury Development
Corporation and the Mayor’s Taskforce for Jobs. As he notes, it was warmly
embraced by the Massey University Regional Labour Market Dynamics andEconomic Participation programme in particular, as a welcome contrast to theperceived mechanistic ‘human capital’ model promoted by the Organisation for
Economic Co-operation and Development (OECD).
It was enthusiastically received at the Labour, Employment and Work in New ZealandConference in 2001, where it was described as having a “view of individuals as being
embedded in a variety of social relations that affect their choices and aspirations”4. A
view that encapsulated the range of reasons for why people may be unemployed oroutside of the labour market was, of course, particularly timely in the context of ahigh levels of long term unemployment and lower labour market participation thancurrently. As Tipples has noted, however, the Framework was not without its critics
in academic circles, although critical commentary is not evident in relevant literatures.
Notwithstanding its possible critics, the framework continues to retain currency insome parts of academia: it features prominently in a recently published New Zealandpublic policy text-book chapter on employment policy (Shaw & Eichbaum, 2008).
After 2004 the framework fell into disuse as a policy tool within the Department ofLabour, partly due to a change in Departmental leadership and a focus on a new
operating model. Nonetheless, strategic documents developed by the Department
subsequently, such as the Skills Strategy Discussion Document developed in 2008,
can be mapped against it. The Skills Strategy document’s four priorities fall acrossthe three elements of the framework:•••

Capacity: priorities one and four, “increasing the literacy, language and numeracy
skills of the workforce” and “increasing the skills of young people in theworkforce.
Opportunity: priority two, “building the capability of firms to support managers
and workers to better develop and utilise their skills”.
Matching: priority three, “enhancing the relationship between the supply of skills
and the demand for them, including a focus on measuring skill acquisition andretention”.

4

Bartley et al (2001), cited in Tipples, Rupert (2002), “Practical Uses of the Human Capability
Framework – An Outsider’s View of a Concept Guiding Public Policy and Research”, Paper to theTenth Labour, Employment and Work Conference, Victoria University of Wellington, 21-22
November38

New Zealand Journal of Employment Relations 34(1): 34-46
So what then has been the lasting influence of the framework and what is its
application in today’s labour market?
The period during which the Framework was at its most influential in labour market
policy discussions coincided with a shift in policy attention which can becharacterised as moving from the ‘supply-side’ to the ‘demand-side’ of theframework. In the 1990’s and into the early 2000s, there was a significant focus on‘supply-side’ and matching issues in the labour market, as government priorities
centred on the need to increase labour force participation, and address concerns about
low skills and lack of ‘fit’ between education and training and the needs of businesses.
Concerns such as these underlay reform to both the education and training sector(including the establishment of the Tertiary Education Commission) and reform of the
public employment service which had recently been integrated with the income
support agency (creating a new Department of Work and Income in 1998).
The paradigm shift at that time was an increasing awareness of the extent to which theeconomy depended on having appropriately skilled – and available – staff to do work.
The nature of the demand-side tended not to be a focus for government intervention.
The prevailing view was that, in the main, the government should ‘leave business tobusiness’, with the exception of some level of business development assistance andsupport for community-based enterprise (the latter tended to have a strong
employment focus).
This approach was reversed in the early 2000s and government attention broadened tofocus more strongly on the demand-side. This was particularly driven by international
research from organisations such as the OECD which drew attention to New
Zealand’s dramatic slide in productivity ranking within the OECD over previous
years. While acknowledging the broad drivers of productivity, officials noted thecritical role of firms in generating productivity and sought to identify an appropriaterole for government in boosting firm productivity levels. The Ministry of Economic
Development undertook a number of studies and surveys aimed at understanding firm
performance and in-firm dynamics. Similarly, Statistics New Zealand established theBusiness Operations Survey5. A cross-government workplace productivity agenda
was developed, in collaboration with business and union groups.
Over this time period, significant economic and the labour market adjustments were
evident. The discussion below traces some of the main features of these changes,
before going on to consider where the framework fits in today’s labour market.

Changes in the labour market
The New Zealand labour market has changed considerably over the last decade. This
is of course consistent with one of the theses of the initial framework paper, whichstated that “labour market adjustment is continuous”. In 1998, the economy was inrecession following a strong recovery from the structural change and cyclical
downturns of the 1980s and early 1990s. In 2008, the economy was again in
5

The survey was established with input from the Ministry of Economic Development, the Departmentof Labour and the Ministry of Research, Science and Technology

39

New Zealand Journal of Employment Relations 34(1): 34-46
recession, but only after experiencing the longest expansion in around 60 years.
Figure 3 below illustrates this trajectory. Economic expansion led to a significant
improvement in labour market conditions from the late 1990s. This enabled public –and political – attention to broaden out beyond questions of unemployment, forinstance, to focus on more qualitative issues on both the supply and demand sides.

Figure 3: Economic and employment growth8

Annual average % change

64
20
Economic growth-2

Employment growth
-4
1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Department of Labour 2009

The most significant labour market change since the framework was developed isprobably the increase in jobs and accompanying fall in unemployment to historically
low levels. Economic expansion led to high employment growth of 2.2% per annum
on average from 1998 to 2008, which put an extra 420,000 people in work. By
comparison, the rate of employment growth in the past decade averaged 1.0% perannum across the OECD.
The main source of additional workers since 1998 came from outside the labour force.
The labour force participation rate (the proportion of working-age people who want towork) rose from 65.3% in 1998 to a record 68.6% in 2008 as more women and older
people (those aged 55 years and over) entered or stayed in the labour force.
Over the past few years leading up to 2008, most people entering the labour force
have found work as the unemployment rate fell from 7.5% in 1998 to 3.4% in late2007, its lowest level in over 20 years and one of the lowest in the OECD (Figure 4).
The fall in unemployment was experienced across much of the population. All 12
main regions of New Zealand had an unemployment rate below 5% in the year to
September 2007, compared to 1998, when only Wellington and Nelson/MarlboroughWest Coast were below 6% and Northland and Bay of Plenty were above 10%.
Unemployment rates also fell across ethnic groups and age groups.

40

New Zealand Journal of Employment Relations 34(1): 34-46
Figure 4: Unemployment rate
12

% of labour force

10
8
6
4
2

Unemployment rate

0
1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Department of Labour 2009

Although some groups are still under-represented in the labour market (for example,
Maori and Pacific people), the gains from Government initiatives aimed at getting
more people into work became much smaller than in the late 1990s. The focus
instead shifted towards raising the value of work (that is, raising productivity, as
mentioned above) and addressing the growing problem of skill and labour shortages.
At its peak, labour shortage became the main constraint for over a quarter of firms, thehighest proportion since the mid-1970s (Figure 5). A key difference with previous
upturns was that unskilled labour, not just skilled labour, became increasingly difficult
for firms to find.

Figure 5: Skill and labour shortages
30% of firms

25
20

A shortage of labour as the main
constraint on expansion

15
10
5
0
1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Department of Labour 200941

New Zealand Journal of Employment Relations 34(1): 34-46
Labour productivity is the amount of output produced per hour of worked. In New
Zealand, labour productivity grew strongly coming out of the 1997/98 recession but
slowed for much of the employment-led expansion of the 2000s until a rebound in
2007/08. On average, labour productivity grew by around 1.5% per annum from 1998
to 2008, slightly stronger than 1.2% per annum in the previous decade. However, itremained below that seen over the past ten years in nations such as the United
Kingdom (2.3%), the United States (2.1%), and Australia (1.7%).
Labourproductivity is the key determinant of a country's standard of living and New
Zealand's continued underperformance in this area has increased the focus on thisissue relative to the late 1990s. Part of this recent underperformance has been
attributed to the large increase in employment being concentrated among the lowerskilled, but New Zealand's level of labour productivity remains low relative to otherdeveloped nations, including those with similar levels of labour utilisation (Figure 6).
Figure 6: Labour productivity and labour utilisation across the OECD
Hours worked per person (OECD average=100)
150
140

Korea
Luxembourg

130
IcelandCzech Republic

120

New Zealand

110

Portugal

Switzerland

Japan Canada

GreeceAustralia

United States

Austria
Denmark
Hungary Finland
Ireland
PolandUK
SwedenItaly
MexicoSpain
Netherlands
Slovak Republic
GermanBelguimFranceTurkey100
9080

Norway

70
0

50

100
150
200
Output per hour worked (OECD average=100)

Source: 2006 OECD data

Where does the framework fit in today’s labour market?
Given shifts in the labour market and the economy, and in response to the worst world
recession in sixty years, the question arises: is the framework still useful? As noted
above, the framework envisaged the labour market going through continuous
adjustment.
Considering the economic context, it is clear we have come full circle since theframework was developed: the past decade ended the way it began, in recession. As
in 1998, tight monetary conditions, drought and financial crisis overseas led New
Zealand into recession in 2008. Slowing economic growth has resulted in an easingof skill and labour shortages and has seen the unemployment rate rise in the March2009 quarter to a six year high of 5 percent, with further increases expected in the
coming year. Recently we have seen some of the issues of the late 1990s beginning toreturn, including unemployment and underemployment.

42

New Zealand Journal of Employment Relations 34(1): 34-46

Nevertheless, the issues of productivity and skill and labour shortages are likely toonce again be prevalent in the medium-term. The ageing population and global
competition for migrants will put downward pressure on labour force growth andcontinue to put a spotlight on the need to lift productivity growth in New Zealand. In
recent years, much of our economic growth has been driven by labour utilisation (thatis, more hours of work), but we cannot rely on this to continue to drive growth. If wewant to achieve economic growth of 2.5%, as we did over the five years 1996 to 2001,
we would need to increase labour productivity by a significant amount, shown by thearrows in Figure 7. If we want to achieve growth of 3.5%, as we did over the five
years from 2001 to 2006, then we would need to increase labour productivity by evenmore.
Figure 7: Current and future composition of GDP growtha n nu a l % c han ge
4 .5 %
4 .0 %
3 .5 %
3 .0 %
2 .5 %
2 .0 %

la b o u r p ro d u ct iv it y
L a b o ur u tilis a tio n

1 .5 %
1 .0 %
0 .5 %
0 .0 %
19 9 720 02

2 0 072 01 22 01 720 2 220 2 72 0 322 0 372 04 220 4 720 5 2f iv e y e a r s to

Source: Department of Labour (2008: 11)

The importance of raising labour productivity growth is acknowledged by the new
government’s aspiration to close the income gap with Australia by 2025, which will
require productivity growth to rise to around 3% per annum. This will not be an easytask. Reaching a sustained rate of over 3% would be double our recent average
growth. Furthermore, it would be almost double what Australia has achieved inrecent times, which will be difficult given Australia and New Zealand tend to be
influenced by similar factors. Nevertheless, high labour productivity growth rates inexcess of 2% have been achieved in other similar nations, including Ireland, theUnited Kingdom and the United States. In particular, the example of Ireland
illustrates how productivity performance can turn around in a small nation, withaverage labour productivity growth of around 4% over the last 20 years. To do so,
New Zealand would have to overcome both its small size and its distance from othermajor world markets.
The recent shifts in the labour market have also seen the re-emergence of some oldpressure points in labour market. For example, rising unemployment and slowing
economic performance have once again raised the issue of matching unemployedpeople into jobs and helping create the conditions for sustainable employment growth.
What might be different with this part of the economic cycle is the coexistence of bothold and new problems. Work undertaken by the Department has shown that someskill shortages are persisting at the same time as higher levels of unemployment. New

43

New Zealand Journal of Employment Relations 34(1): 34-46
Zealand’s ageing population demographics will also further add to labour supply
pressures by dropping New Zealand’s relatively high labour force participation rate.
The changed economic environment still requires a focus on a number of trends thatthe framework provides a useful framework to explore. New Zealand’s low labour
productivity growth rates will continue to require a close look at the supply side of
New Zealand’s workforce – both employees and employers, and the factors that drive
its development and utilisation. Management and firm owner capability in particular
has emerged as a critical performance issue for New Zealand’s firms with importantconsequences for creating high performing work place cultures. The framework laysout some of the complexities of this issue: it is at once a demand-side issue and a
supply-side one. On the supply-side, issues of matching capability of managers with
opportunities are not of a different order than those of other workers, and the same
sorts of issues affect their recruitment as those of other workers. On the demand-side,
factors such entrepreneurial attitudes, consumer preferences, social attitudes toinnovation, the international environment and the business environment all have a rolein shaping the capability of managers in New Zealand workplaces.
While the current concern with unemployment and job security is heightened it is notunreasonable to assume that the quality of work will remain an issue. New Zealand’sstrong employment growth has given many new entrants to the labour market choices
and expectations that previous generations had not always enjoyed. The frameworkreminds us that effective matching of labour market supply with demand depends on
the relative attractiveness of labour market opportunities compared with otheropportunities. The high participation rates of NZ workers has meant that working
lives have had to be balanced with a range of other caring and community
responsibilities.
The previous policy focus on flexibility for workers has only recently shifted to create
an environment that compels employers to make adjustments while retaining jobs
(such as the 9 day fortnight). While economic conditions have shifted the employees’
focus onto job security, recovery will once again enable a relatively scarce workforce
to demand greater flexibility.
The framework does not assist much in identifying what relative emphasis should beplaced on any of these issues: that is a matter for detailed policy analysis and politicaldecision. What it does, however, is provide a coherent basis for the lines of inquiry
and analysis needed to develop well-rounded government policy relevant to the labour
market.
It is undeniable that the basic observations of the framework still hold: the labour
market is intrinsically linked to the changing state of the economy and underlying
social and demographic trends. This remains compelling from two points of view.
Firstly, it argues for breadth of focus. It reminds us that, for the labour market toperform effectively, policy in a number of separate but linked areas must be coordinated. The division of Ministerial responsibilities tends to encourage public
servants and individual Ministers to approach issues through a relatively narrowframe. Set against this, the lasting relevance of the framework is that it challenges us
to take a more comprehensive view of presenting problems.
Secondly, it
acknowledges the need for constant adjustment, in response to a dynamic system,

44

New Zealand Journal of Employment Relations 34(1): 34-46
while at the same time reminding us of the limits of policy measures that are targetedat any one element of the labour market. The framework is not a static picture but akaleidoscope, in which elements and the relationships between them constantly
change and adjust, and not all are equally easily amenable to government intervention.
From a practical point of view, the framework remains a useful tool in the policy
development arena to inform the range of analytical activities such as identifying therange of parties potentially affecting, and impacting on, a given policy issue;
analysing the underlying nature of a presenting problem; setting objectives;
identifying and analysing options for action, and designing an implementation andevaluation path.
It can, however, be criticised on the grounds that it does not tell an obvious story
about some of the more detailed dynamics within the system. This is particularly soon the demand-side. On the supply-side it clearly posits some points of influence
from various factors (indicated by direction of arrows within the diagram), forexample, individual attributes and family and whänau influences affect formal andinformal skill acquisition processes. However, on the demand-side, while a numberof important factors are identified, the framework is silent on the nature of therelationships between many of them. For example, what might be the nature of therelationship between consumer preferences, technology, regulatory environments andentrepreneurial attitudes, and how do these affect the creation of both labour market
and non-labour market opportunities?
These are complex issues, and they are no doubt beyond the capacity of any simple
framework diagram to capture. However, it is precisely in this area that some of ourmost challenging policy questions arise at present. When considering policy issues
such as workplace productivity, the framework is thus perhaps less illuminating foruse by the Department than it might be. For example, it provides little insight on thenature of the impact of the labour market on growth, as opposed to the impact ofgrowth on the labour market. The framework also perhaps does not readily lend itself
to analysis of demand-side ‘risk management’ issues such as occupational health andsafety and compensation for workplace injuries through ACC.
On the supply-side, too, the framework does not draw out some issues to the degree
that we might today. For example, issues such as the following might figure more
prominently: the relationships between immigration and both labour market supply
and demand; the influence of the nature of education supply (for example, availability
and cost of training, level of government funding and student support); and the role ofgood quality, accessible labour market information as an influencer on capacity andmatching.
The architects of the framework may not have foreseen some of the challenges of thelabour market ten years later. However it is sufficiently broad to accommodate new
analyses, and from that point of view it remains a valuable tool for labour market
policy thinking. That breadth now needs to be supplemented by greater depth inunderstanding the underlying dynamics within the framework, in particular the natureof the relationships between the various factors that drive capacity, opportunity
creation and the matching and rewards between them.

45

New Zealand Journal of Employment Relations 34(1): 34-46

References
Department of Labour (1999), “Human Capability: A framework for analysis”,
www.dol.govt.nz/publication-view.asp?ID=34
Department of Labour (2008) ‘Forces for Change in the Future Labour Market’,
Workforce, 2020, www.dol.govt.nz/PDFs/forces-for-change.pdf
Department of Labour, (2009) ‘Labour Market Outlook’, published 22 July 2009,http://www.dol.govt.nz/publications/lmr/lmr-labour-market-outlook.asp
OECD (2006) Compendium of Productivity Indicators, www.oecd.org/
dataoecd/4/22/37574961.pdf.
Shaw, R. and Eichbaum, C. (2008), Public Policy in New Zealand: institutions,processes and outcomes, Pearson / Prentice-Hall (2nd ed) Auckland.
Tipples, R. (2002), “Practical Uses of the Human Capability Framework – An
Outsider’s View of a Concept Guiding Public Policy and Research”, Paper to theTenth Labour, Employment and Work Conference, Victoria University of Wellington,
21-22 November.
Tipples, Rupert (2004), “The Human Capability Framework – An Important andUseful Framework for Understanding the Labour Market?”, New Zealand Journal of
Employment Relations, 29(1):3-20.

46

New Zealand Journal of Employment Relations 34(1): 47-61

Providing a Theoretical Foundation for Work-Life Balance –Sen’s Capability Approach
STEFAN KESTING* and CANDICE HARRIS**
Key words: Feminist Analysis, Structures of Constraint, Capability, Work-Life Balance

Abstract
After reviewing and summarising critical accounts of the Work-Life Balance (WLB) in two
special issues in academic journals in 2007, the paper turns to Amartya Sen’s capability
approach and feminist economics to address shortcomings and gaps in the WLB concept. In
particular, Sen’s capability approach can provide a substantial theoretical foundation for theso far conceptually underdeveloped and one-sided WLB. The aim of the application of Sen’s
ideas in this paper is to understand and sort out some of the complexities and biases inherent
in the WLB discussion. On the basis of this, further conceptual work might lead to a basic
integrated framework for WLB policies in the future.
“I believe that variety is part of human existence and in fact – though this is quite
irrelevant – that is a valuable attribute, though that is a very late idea, probably not be
met much before the eighteenth century” (Isaiah Berlin in a letter in 1986).

Freedom of Choice and Work-Life-Balance
An organisation promoting Work-Life-Balance (WLB) defines it as:
Work-life balance is about people having a measure of control over when, where andhow they work. It is achieved when an individual’s right to a fulfilled life inside andoutside paid work is accepted and respected as the norm, to the mutual benefit of theindividual, business and society … (Employers for Work Life Balance 2006, cited in
Fleetwood, 2007a: 351).
Closer to home, the Department of Labour in New Zealand defines WLB as: “effectively
managing the juggling act between paid work and the other activities that are important topeople” (cited in McPherson and Reed, 2007: 14). Surveys and critical reviews of the WLB
approach have recently identified considerable problems with this concept. Eikhof, Warhurst
and Haunschild, 2007, provide a concise overview of these criticisms and highlight threemajor shortcomings of WLB:*

Stefan Kesting is a Senior Lecturer in Economics at the Faculty of Business, Auckland University ofTechnology, New Zealand. Stefan.kesting@aut.ac.nz**
Candice Harris is a Senior Lecturer in Management at the Faculty of Business, Auckland University ofTechnology, New Zealand. Candice.harris@aut.ac.nz

47

New Zealand Journal of Employment Relations 34(1): 47-61

1) The premise that work is bad, “… that individuals tend to have too much rather than too
little work” (Eikhof et al., 2007: 326) and therefore working time arrangements are the pointof intervention;2) The premise that “life” can be equated with caring (mainly childcare) which is seen as afemale responsibility and that women are, therefore, the primary target of work-life balance
provisions;3) The assumption “… that work and life are separable and in need of being separated”(Eikhof et al., 2007: 326).
If the first premise is true, logically, overall reduction of working hours should be the primarygoal. However, Eikhof et al. point out that “… the most common policy prescription is not toshorten working hours but to provide employees with more flexibility in their working hours,
for instance by part-time working or flexi-hours” (2007: 326/327). With a particular emphasis
on work from home, Felstead, Jewson, Phizacklea and Walter’s article (2002) isrepresentative of a narrow flexibility oriented approach to WLB. This focus is even apparent
in their definition of WLB: “In short, work-life balance practices are those which,intentionally or not, increase the flexibility and autonomy of the worker in negotiating
attention and presence in employment” (ibid. 56). Such flexibility solutions are mainly driven
by employers’ interests to service a 24/7 economy and does not necessarily lead to an
employer-employee win-win situation (Lewis, Gambles and Rapoport, 2007). Thoughnarrowly focussed on the financial sector in Scotland, an article by Hyman and Summers “…
indicates the prevalence of management control of the work-life balance agenda andmanagement’s discretion in the operation of work-life issues” (2007: 367). Moreover,
employees and their representatives seem to accept this control without challenging it.
Employers perceiving recruitment and retention problems offer flexibility to draw into work
the reserve army of mothers1. The government shares this gendered perspective on WLP
because its “issue is not having better lives but breeding new lives; more specifically the
reproduction of the future labour force” (Eikhof et al, 2007: 328). This is the major concernof governments, particularly in Europe, in times of low fertility rates. In conclusion, state andemployers commonly define the WLB problem as one of separating life and work in order toaccommodate domestic and occupational responsibilities. Again Felstead et al’s article(2002) may serve as a typical example of this “family-friendly” motivation.
According to Eikhof et al. 2007, these standard WLB assumptions and the policy prescription
based on them are too simplistic. The long working hours problem might be over-stated.
Roberts (2007) argues that it may be that individual working hours are decreasing whilst thehours worked by households are increasing with more dual income and neo-traditionalfamilies as more women participate in the labour market. Further, work can be identified assatisfying, motivating and self-fulfilling. Empirical Research shows, regarding long hours as
negative depends on the general attitude towards work and whether work offers, and isdesired to have, social relations:Single men and women are least likely to work long hours and recently singled
women as well as widowed men and women most likely, suggesting work assustenance in times of personal difficulty; providing opportunity for socialisation or
distraction and an ‘escape from domestic stress’. For men there is no relationship48

New Zealand Journal of Employment Relations 34(1): 47-61

between having children and working long hours; for women there is, but theevidence is mixed, (Eikhof et al., 2007: 330).
If there is a trend of long working hours becoming desirable for both men and women tofulfil career ambitions and rising consumptive aspirations, this signifies a cultural shift towhat is sometimes called “affluenza”. That is, a lifestyle which emphasises material wealthand status, or in other words “conspicuous consumption” (Veblen, 1899).
Moreover, the interdependence of fatherhood and the long working hours points toward a
traditional gendered definition of child care obligations. Such a gendered view is confirmed
in Martin’s (1990) deconstruction of a supposedly “family friendly” statement made by the
CEO of a large company. She stresses that: “When work is conceptualized as separate fromfamily concerns, the conflicts encountered by working mothers are defined as private
problems that must be solved individually; the corporation is not responsible” (ibid. 344). For
her, the ideological public/private dichotomy is the “… linchpin supporting discrimination
against women” (ibid. 356). Consequentially, women having to undertake a “second shift”
might not see long working hours as the source of their time squeeze but rather blame theirmale partners who insufficiently contribute to household chores and child care.
Thus, Eikhof et al. conclude: “Better work-life balance might be attained not with flexible
working for women but persuading men to finally shoulder equitable domestic responsibility”(2007: 331). Ransome (2007) introduces the idea of a ‘total responsibility burden’ to accountfor this equity issue as a matter of negotiation between adult partners in a household.
In a nutshell, the implicit assumption that life equals child care and that work tends to be
overwork does include a gender bias and does not fit all. Therefore, this specific use of theconcept already somewhat limits the choice and self-determination of those who try to use it
to achieve a higher degree and autonomy in balancing the demands of different types ofactivities (that is: paid and unpaid).
Though in practice work and “life” may not always be as separated as suggested in theliterature and common ideology, it is still conceptually and analytically useful to think ofspheres of life and work as separate. This is, for instance, clearly done by Felstead et al.
Because employment may be conceived as the purchase of time and presence, they argue:
Spaces and times of employment have boundaries, therefore, which are juxtaposed to
not-work times and places. Structurally complex societies require the negotiation ofthese boundaries – both in the sense of establishing where they lie and managing theprocess of crossing from one life activity to another, (Felstead et al., 2002: 55).
On the other hand, even the critical deconstruction of the ideological public/private
dichotomy by Martin (1990) and her suggestions for overcoming and re-embedding it are
based on an analytical separation of spheres of work and other activities in life on a very
basic level. Hence, no matter how much the separation thesis holds empirically, it has its
merits analytically and even normatively as in Habermas’s colonisation thesis2 (1995) and
Polanyi’s notion of the double movement3 (Polanyi, 1957; Baum, 1996 and Block, 2003).
Moreover, having questioned the general validity of WLB’s premises, one should not
overlook that overwork and the problem of combining child care responsibilities and a career49

New Zealand Journal of Employment Relations 34(1): 47-61

are certainly prevalent for parents with dependent children in New Zealand (Calister, 2005aand 2005b). However, as Harris and Pringle (2007) highlight, owner-managers of SMEs andChinese migrants to New Zealand might view work interests as synonymous with theirpreferred leisure and life passions and hence, the aforementioned premises of WLB do not
apply to them. There appears to be a cultural dimension in life style choices andarrangements which needs to be integrated.
Apart from being empirically questionable, WLB premises are mainly ad hoc assumptions
and suffer from a lack of theoretical foundation. Guided mainly by state and employer
interests to source the labour force pool of mothers with dependent children, it does notinclude the notion of freedom of choice for all employees to fulfil their specific needs andinterests (Fleetwood, 2007b). Though the term suggests more freedom – a wider range of life
opportunities and a process to attain and guarantee those is not systematically build into theconcept of WLB (Fleetwood, 2007a: 352). What is regarded as a greater chance to enjoy life
in all its varieties may differ according to cultural and ethnical background, social status,
gender, age and other parameters (Fleetwood, 2007a: 353 and Lewis et al., 2007). A possible
theoretical foundation with such an emphasis on having a better quality of life according to
one’s own particular ambitions and talents is provided by Sen’s capability approach: “Itrepresents the various combinations of functionings (beings and doings) that the person canachieve. Capability is, thus, a set of vectors of functionings, reflecting the person’s freedom
to lead one type of life or another” (Sen ,1995: 40).

Capabilities
Sen argues that not all aspects of agency and well-being are captured in the notion of
maximising utility. Translated into the world of employment and work this means: theoptimal return on investment in human capital utilised on the labour market does notnecessarily lead to the greatest degree of freedom of choice and happiness for all employees.
WLB policies maximising the use of human capital while minimising the cost for child careprovision are the primary goals of employers and government according to their vested
interests. However, this might not lead to happiness or well-being of employees. To decide
whether WLB policies lead to higher degrees of freedom or autonomy and capacity to enjoy
life, employees’ happiness and well-being needs to be accounted for. However, such anevaluation is complex. Sen states that well-being may even have nothing to do with
momentary happiness or fulfilment of desires: “‘Being happy’ is not even a valuational
activity and ‘desiring’ is at best a consequence of valuation. The need for valuation inassessing well-being demands a more direct recognition”, (Sen, 1992: 46). And: “While
being happy may count as an important functioning, it cannot really be taken to be all there isto leading a life …” (Sen, 1995: 54).
Moreover, cases are imaginable where individuals might value certain acts and their freedom
to act very highly, though these acts might have no positive effect upon their well-being oreven a negative one: “Indeed, the person himself or herself may have reasons for pursuinggoals other than personal well-being or individual self-interest” (Sen, 1992: 55). Sen’s
favourite example to illustrate this distinction is ‘fasting’:50

New Zealand Journal of Employment Relations 34(1): 47-61

For example, ‘fasting’ as a functioning is not just starving it is choosing to starve
when one does have other options. In examining a starving person’s achieved wellbeing, it is of direct interest to know whether he or she is fasting or simply does nothave the means to get enough food. Similarly, choosing a life-style is not exactly thesame as having that life-style no matter how chosen, and one’s well-being does
depend on how that life-style happened to emerge, (Sen, 1995: 52).
This highlights the strong relevance of the capability approach for life-style choice which isvery relevant for WLB.
Freedom to choose is a value in itself, despite the utility resulting from an act:
If, for example, all the alternatives other than the one actually chosen, were to beeliminated, this need not affect achievement (since the chosen alternative can be stillchosen), but the person clearly has less freedom, and this may be seen as a loss ofsome importance (Sen, 1992: 60).
To illustrate this loss with an employment related example. Imagine someone is conditioned
or channelled to become a highly capable and successful website designer, earning a highsalary, and it could be determined that this would optimise his or her income and constitutes
the way this person can contribute the most to society. Though this appears to be and optimal
choice, still something is lost, if this individual is not allowed (does not have the capability)
to try out other aspects (functionalities) of her or his personality (e.g. did not have the chance
to become a third rate rock musician, janitor or stay-home-dad/mum).
If the goal of WLB policies is to open up a greater realm of autonomy and life opportunities,
then the freedom of process to attain goals is as important as the compatibility of ourachievements with our preferences and their optimality in terms of providing utility (Sen,
2002a: 526). Sen points out, that preferences are relevant in judging processes in two
different – though interrelated – ways:“(1) Personal process concern: individuals may have preferences over processes that
occur in their own lives;(2) Systemic process concern: they may also have preferences over the processes that
operate as general rules in the working of the society” (Sen, 2002c: 624).
Point (1) is violated if mothers and fathers, for instance, are obliged and have no choice thanto negotiate WLB issues merely at home without any chance to negotiate and make changes
in their work place arrangement or vice versa. To understand point (2), think of bargaining
between employers and employees on an individual level compared to collective bargaining
and/or the legally guaranteed right to a variety of WLB arrangements for employees incomparison to ones based on the goodwill of their employers.
The WLB approach is not alone in disregarding these process freedom issues. According toSen, this neglect is also apparent in the underlying dominant philosophies of economics andethics: “Since utilitarianism and libertarianism have been very influential in ethics andwelfare economics (in different parts of them), the overall effect has been the neglect ofprocess considerations as a part of any crucial valuational exercise” (Sen, 2002c: 628).
51

New Zealand Journal of Employment Relations 34(1): 47-61

Though in most cases, well-being might be related to agency, sometimes positive well-being
might occur without any causal link between the acts of a person and his or her well-being(e.g. a patient in a hospital or the child of a caring parent). Thus, maximising one’s own
utility and the freedom to act are not the only welfare criteria either. Sen highlights therefore
the distinction “… between ‘the occurrence of A’ and ‘the occurrence of A through our own
efforts” (Sen, 1995: 58).
To defend ones capabilities or freedom to act, not only negative freedom (absence of external
coercion and constraints of action) but also positive freedom (autonomy in the sense of
absence of inner pressure) has to be guaranteed (Berlin, 1970). The deconstruction of Martin(1990) shows how this positive freedom in terms of WLB is culturally or ideologically
framed in setting particular boundaries of the public/private dichotomy. Only in case of given
negative and positive freedom, agency might lead to self-fulfilment (Sen, 1992: 56-7)4:… I have found it more useful to see “positive freedom” as the person’s ability to do
the things in question taking everything into account5 (including external restraints aswell as internal limitations). In this interpretation, a violation of negative freedom
must also be – unless compensated by some other factor – a violation of positive
freedom, but not vice versa, (Sen, 2002b: 586).
These freedoms and distinguishing them from well-being are key for Sen:
Capability is primarily a reflection of the freedom to achieve valuable functionings. It
concentrates directly on freedom as such rather than on the means to achieve freedom,
and it identifies the real alternatives we have. In this sense, it can be read as areflection of substantive freedom. In so far as functionings are constitutive of wellbeing, capability represents a person’s freedom to achieve well-being, (Sen, 1995:
49).
John Davis’s interpretation of Sen’s approach leads to four different combinations ofindividual advantage:
These two distinctions yield four sometimes overlapping, but relatively distinct,
concepts of individual advantage for Sen (see Table 1). They are; (1) well-being
achievement, (2) agency achievement, (3) well-being freedom, and (4) agency
freedom …. The first represents the traditional concern of mainstream economics withindividuals’ satisfying their own preferences. The second …, concerns individuals’
ability to achieve goals that do not involve their own well-being. The third concerns
individuals having the freedom to pursue their own well-being. The fourth concerns
individuals simply having the freedom to pursue all their goals, whether or not they
are successful in achieving them, (Davis, 2002: 486-487).
Table 1: Sen’s four concepts of individual advantage
Freedom to achieve
Freedom to pursue

Well-being
Well-being achievement(e.g. old-age pensions)
Well-being freedom(e.g. occupational choice)

Other goals
Agency achievement(e.g. heroic sacrifices)
Agency freedom(e.g. fasting)Source: Davis, (2002: 487)
52

New Zealand Journal of Employment Relations 34(1): 47-61

Davis concedes that such a multi-goal framework might be criticised for its insufficiency indetermining social policy, however, its advantage is “… the flexibility it provides in being
able to address the great variety of different types of valuation problems that social policy
confronts” (Davis, 2002: 487). In regard of our topic: WLB to attain well-being achievement(i.e. optimal use of human capital) or agency achievement (i. e. being able to care for ones’
children) is not enough to guarantee a full freedom of choice concerning ones life-style.
The approach of capability (agency) and well-being allows Sen and his colleague Martha
Nussbaum to come up with a universal catalogue of core human functional capabilities(Nussbaum, 2000: 78-80), which are indispensable for human well-being and agency. This is thelist of headings of those central capabilities: 1. life, 2. bodily health, 3. bodily integrity, 4. senses,
imagination and thought, 5. emotions, 6. practical reason, 7. affiliation (A. social interaction andB. self-respect), 8. other species, 9. play, 10. control over one’s environment (A. political and B.
material). Though such a catalogue lays the ground for interpersonal comparison of well-being,
freedom and distributive justice, the concept remains inevitably vague and demands for moredetailed criteria that have to be discussed and agreed upon and might be cultural specific in its
their concrete form (Gestalt) (Nussbaum, 2000).
So, what can be learnt from Sen’s capability approach for the WLB? Firstly, though there aresome universal criteria of what well-being means. These are only broadly and vaguely
defined. Well-being and other goals can be pursued either in “life” or in “work” or in both.
Therefore, life cannot be, per se, good and work bad. How well-being is defined is
individually, socially and culturally specific. If life is equated with (child) care activities andwork mainly seen as overwork, our capabilities are unduly limited. Secondly and related, thefreedom to achieve and pursue a particular level of WLB has to be considered when
implementing WLB policies. In this attention has to be paid to personal as well as systemic
process concerns. According to the capability approach, implementing WLB entails a process
allowing for the widest possible range of meanings and combinations of WLB and a highdegree of liberty and fairness in voicing all those alternative views.

The Gendered notion of Care
Further theoretical foundation for WLB can be gained from alternative economic theory
developed by feminist economists and philosophers like Nancy Folbre, Martha Nussbaum
and others6 (Davis, 2002; 2003).
According to Nancy Folbre’s arguments, it is mainly caring labour which provides the basic
human needs and thus, well-being for children. She defines caring labour as: “… labor
undertaken out of affection or a sense of responsibility for other people, with no expectation of
immediate pecuniary reward” (Folbre, 2003: 214). To foster caring through social policy is what
WLB is mainly concerned about. Folbre points out:
… an emphasis on rewarding caring has somewhat anti-market implications, simply
because the market does not elicit caring” (2003: 224). However, something has to bedone to provide enough caring labour to sustain a certain society. “If you do not literally“value” caring labor, its supply may decline. But if you start running out, you cannot buy
more at the corner store, (Folbre, 2003: 224).

53

New Zealand Journal of Employment Relations 34(1): 47-61

On the other hand, providing positive rewards, such as public remuneration for caring labour,
could have the effect of reinforcing the existing sexual division of labour and we should also
recognize that debates over public policy often hinge on values that, in the long run, influenceboth norms and preferences as Folbre explains in detail in her book The Invisible Heart (2001:
44 and 99).
Thus, commercialisation of caring labour might undermine its primary non-monetary motivationand WLB practices focussing on work arrangements might cement the gendered division ofhousehold chores and childcare.
Davis suggests combining Sen and Nussbaum’s capability approach with Folbre’s structuresof constraint (i.e. to be embedded in different kinds of social groups and their norms thatform identities). From my point of view, such an amalgamation with Sen’s liberal ideas aboutcapabilities could lead to well founded concept of WLB. Folbre’s structures of constraint
analysis, which is primarily concerned with the dilemmas that women face and the unequal
division of care giving responsibilities between women and men, offers an especiallyvaluable framework for treating individual identity as a problem of negotiating multiple
group identities. Davis’s arguments lead to certain evaluative criteria for social policy. The
policies should “… place value on having opportunities that are not taken up, a person’s
capabilities then need to be seen as the range of alternatives they have, even if none of thesealternatives would have been preferred” (Davis, 2002: 488). They should, also, allow men
and women to freely and successfully negotiate a variety of different often complex groupinvolvements over one’s lifetime including care responsibilities. Davis gives an example: “…
a woman exercises her reproductive rights by not having children and electing to care for
elderly or disabled family members” (Davis, 2002: 493). Social policy according to him, inthis example, should not only be evaluated in terms of allowing care successfully andefficiently given to the elderly or disabled person but also in terms of capabilities of the caregiver:In the case above regarding public compensation for family labor devoted to caring
for others, public compensation needs to be defended not just in terms of promoting
the capabilities of those who provide family labor, where this concerns being able toaccomplish all the activities (or functionings) involved in caring for others, but also interms of promoting such individuals’ capabilities to move back and forth between
caring and their other social group involvements, (Davis, 2002: 493).

The New Zealand Context
Articles by Hyman (2008) and Ravenswood (2008) and our evidence from two case studies
suggest that the critical and theoretical arguments put forward concerning gender and WLB
are relevant for New Zealand. Whilst Hyman describes the gendered structures of constraints,
Ravenswood reviews the nature of recent WLB related law changes.
Though recent legislative changes (parental leave eligibility and the Flexible Employment
Arrangement Act, 2007) seem to have led to some WLB improvements according to a study
conducted by the Families Commission (2008):

54

New Zealand Journal of Employment Relations 34(1): 47-61

The benefits for families were clear in terms of reduced stress levels and improved
quality of time with families. However, substantial numbers reported that they did nothave the flexibility they wanted while others experienced a trade off of flexibility forlower pay and status, (Hyman, 2008: 7/8).
Thus, the actual freedom to pursue and achieve for employees is limited and how far it goes
seems to rest mainly on the culture of the particular workplace according to Hyman.
The case of a mother trying unsuccessfully to establish time banking to flexibly adjust
working time to the particular demands of her life analysed by Simon-Kumar (2008),
documents the priority of business interest in employer-employee negotiations concerning
WLB issues. This case underlines Sen’s process concerns. If the social and economic goals of
employer and employee are not compatible, fairness of WLB solution hinges on thebargaining power of each side in the negotiation. Domett rightly argues in her thesis on WLB
in New Zealand: “However, the gender-neutral and individualised language of work life
balance masks its discriminatory systemic effects” (2006: 1). It is certainly difficult tonegotiate flexibility individually for employees as pointed out in the consultation regarding
flexible work by the Department of Labour (DoL, n.d.). Moreover, the department lists someof the aforementioned discriminatory effects. Two disadvantaged groups identified are
women and shift workers (DoL, 2006: 10). As Ravenswood (2008) points out, theEmployment Relations (Flexible Working Arrangements) Amendment Act 2007 grants
employees with children under the age of five or with disabled children the right to request
flexible work schedules. By limiting the right to flexibility to these particular conditions, thelaw indicates that the focus of this government initiative amongst others is merely on
increasing labour force participation of parents and not to allow for a higher freedom of life
style choice in general. The priority of business needs is also apparent in the lists of grounds
upon which the employer may refuse the request for change to working conditions according
to the act: “detrimental effect on quality, performance and ability to meet customer demand;inability to reorganise work among existing staff; inability to recruit additional staff; planned
structural changes and burden of additional costs” (Ravenswood, 2008: 38).
Ravenswood concludes: “These policies, therefore, aim to fit employees’ lives around theaccepted way of working rather than changing organisational culture” (2008: 37). Hence, thetrue freedom in terms of Sen’s capability approach achievable under the current WLBoriented legislation in New Zealand is fairly limited.
Nevertheless, the case of Switzer Home shows that a supportive workplace culture can havepositive whilst limited WLB outcomes for employees. The Claud Switzer Memorial Home
has provided relief, welfare and benefit for older people within the Kaitaia region for close to
60 years. Established in 1950, it has grown from 15 beds to currently 72 beds. It has 70 staff
with an average age of 45 years old. At Switzer, 95% of the staff are female and 50% are
Maori. The remainder of the staff are Pacific Islanders, New Zealand European, or British.
The vision at Switzer is to provide leadership in the care of older people, and a range ofservices for their changing and diverse needs (Harris and Verreynne, 2008).
The nature of the work meant that staff had to conduct work that is physically andemotionally demanding, so the challenge was to determine how they can work smarter rather
than harder. Switzer knew it had to find ways of organising their physical environment andworkforce structure to respond to the growth in demand for their services. General Manager
55

New Zealand Journal of Employment Relations 34(1): 47-61

Jackie Simkins and her team changed the structure of the organisation to focus on residents
and caregivers. Previously, trustees and senior management were at the top of theorganisational chart. Once this was redesigned residents and caregivers feature at the top andtrustees and management are at the bottom of the chart. Introduction of the team structure
created more cohesion in the workplace. Empowering people to make decisions for their own
teams developed greater pride in the staff themselves and their work areas resulting in a morepositive workplace culture. Across the workplace, staff collaborated to develop their own
workplace rules including house rules, misconduct and gross misconduct guidelines. The
management team measured health and safety performance indicators including sick leave,
accidents and injuries, shift patterns, workload monitoring, infection control and number ofhours of training. They also have developed their own standards and systems, for example, aworkload monitoring system to make sure they have right number of carers in any area. As aresult of the focus on measuring what matters in consultation with staff, the areas of financial
performance, retention, morale, and participation have definitely improved. Jackie Simkins
credits productivity increases to three factors – changed organisational structure emphasising
teams, stakeholder collaboration, and creating an environment where everyone contributes toleadership (Harris and Verreynne, 2008). Besides positive productivity outcomes and making
employees happier in their work, the discretion given to teams allows for some WLB effects
because it addresses the process concerns pointed out by Sen. On the other hand, the Switzer
case also illustrates Folbre’s structures of constraints and confirms Hyman’s account (2008)of the disadvantaged position of a low paid female workforce in care professions in New
Zealand. If work is a bare necessity and its value is generally underrated in society as Hyman
points out, there is little room for negotiations leading to WLB improvements despite thevery favourable company culture and attitude by management in this example.
The second case, Paewai Mullins, underpins the argument that work does not necessarily play
the role of a negative influence to be limited to achieve WLB. Instead, it can be turned into an
instrument to gain a better life. However, to achieve this, the case also demonstrates that ashift away from the business case for WLB is needed.
Paewai Mullins Shearing Limited is a fourth generation shearing contracting business basedin the small rural town of Dannevirke, situated about three hours north of Wellington. The
company services more than 150 woolgrower clients, handling in excess of 2 million sheep
per annum. Their clients are spread from the Hawkes Bay to Wellington and over to Taihape
and Wanganui. They employ close to 40 staff with this number expanding up to 120 for a
four month period from December to the end of March (Harris, Mullens, Ravenswood,
Laneyrie, and Markey, 2009).
When Mavis and Koro Mullins purchased the business in the mid 1980s from her father, theywanted to operate according to the original philosophy of providing work for Whanau(family) and trying to assist other family members onto the land, and continue growing thebusiness. It is this overlying philosophy and the four supporting Maori values ofWhanaungatanga (family), Matauranga (life-long learning), Maanakitanga (unity andrespect), and Tino Rangatiratanga (self-empowerment and leadership) that have driven
productivity growth. Key to the significant growth of their business, predominantly over thelast 15 years, has been the development of a strong workplace culture and productivity gains
through attention to the four Maori values that they hold key to their lives and therefore
business (Harris et al, 2009).

56

New Zealand Journal of Employment Relations 34(1): 47-61

Koro Mullins stated that they recognised shearing as one of the toughest industries and thatthey wanted to ‘put the gloss on it’. Paewai Mullins have successfully professionalised theirworkforce through increased rewards for workers and considerable training in both life andjob specific skills. They have not only worked with staff to build work specific skills, but
continue to demonstrate commitment to assisting younger staff to develop careers and gain
wider life skills. Managers start with the premise that everybody has ability and potential.
Young people who otherwise have few skills or training are taken on in a Pre-Training
programme and/or apprenticeship schemes. The pre-training programme is designed to give
people an introduction to the industry and the work. Advice is given on flexibility, corestrength and general fitness to avoid the risk of injuries. Completion of the three day
programme enables new workers to go into a shed with some base level skills, thereby notslowing down processes. Senior staff also support new staff through a mentoring or coachingrole, passing on their skills and knowledge. This builds a sense of unity and team amongst
workers and empowers employees through a leadership role. It also provides clear career
paths from ‘apprentice’ through to senior staff who have more involvement in the business.
Supporting people into a profession with huge potential in terms of remuneration andinternational travel has provided many unskilled workers with attractive careers. Thisapproach has returned to the company greater loyalty, retention and longevity. “If you are notbringing young people in, you risk dying,” says Mavis Mullins, Director (Harris et al., 2009).
Improving skill levels has lifted productivity levels and addressed issues such as retention.
However, Paewai Mullins goes beyond training and support their staff to stay in theprofession. Clean, comfortable accommodation is provided along with a gymnasium. To
empower staff to take responsibility for their health, sessions were run to give themknowledge on issues such as second cuts and grease boils. A local Maori Health Provider was
also used to educate staff on sexual health, substance abuse and gambling issues. The foodserved to the shearing staff in the accommodation quarters has changed over the years toinclude more variety and the right type of food to enable staff to perform well. A full timecook has been employed to provide balanced meals. Because the industry is such a physicalone, there is now a greater awareness of protein needs, carbohydrate needs, and hydration(Harris et al., 2009).
A productive workplace culture at Paewai Mullins is built through supporting employees andcreating opportunities for employees to succeed. Paewai Mullins Shearing Ltd operates undera flat structure where everyone works so it is not unusual for employees to be working next toone of the Directors. “Being a productive worker is about being a good team member, as
performing as a team is smart working”, says General Manager Aria Mullins (Harris et al.,2009).

Freedom and Work-Life-BalanceThis movement backward and forward from paid work to caring responsibilities on a daily
basis and across the life cycle is the explicit aim of WLB arrangements (Felstead et al., 2002:55), though high levels of capability in this area are not widely achieved in practice.
However, an encompassing WLB should allow for a wide variety of combinations ofdifferent functionings (for instance work and coaching a boys’ soccer team or other volunteer
activities, reduced work load because of illness or particularly intensive or scattered work
patterns according to cultural or otherwise individual specific consumption patterns).
57

New Zealand Journal of Employment Relations 34(1): 47-61

According to Sen, the capability to freely choose between different sets of functionings, i.e.
to find one’s own preferred combination of work and other activities and identities is basedon freedom in several respects. It can mean to achieve a high level of well-being (for instanceto stay healthy, to earn a living wage), the freedom to define ones level of well-being (e.g. towork like mad though it is not healthy), to achieve non-work related goals (for instance tocare for children, the elderly or sick or troubled friends) and the freedom to pursue goals likeartistic or religious expression, trying to live off ones veggie garden, travel on a shoestring or
jump off the cliff etc..
For a society to guarantee such a high level of capability, it is crucial to understand personaland systemic process concerns, that is, to organise negotiation and bargaining about WLB in
a participatory way which allows for cultural diversity and equal voice for employers,
employees and other interested parties. So far, policies to attain WLB are designed without
much consultation or participation of those who work and other functionings than childcare
are largely ignored. Part of negotiation, debate and bargaining about WLB has to be whether
work time arrangements adjust to other functionings or family and private time arrangements
adjust to work demands (Martin, 1990: 356). Such open and free processes require an equal
power balance of all vested interests (employer associations, unions, the government andother interest groups) and an inclusion of all kinds of possible functionings to account for all
areas of freedom and well-being.
In our interpretation, whilst Sen’s capability approach defines and helps to distinguishbetween different aspects of freedom and well-being it offers a framework for developing amore open and less biased approach to WLB. Folbre’s work on caring labour and structuresof constraint enable us to make some of the underlying biases in the use of WLB more
explicit. The strength of both theoretical frameworks lies in providing basic criteria toevaluate government interventions and company based WLB policies and strategies not indevising particular solutions as the case evidence from New Zealand shows. In future work
they could be used as a screening device to identify international best practice policies toimprove WLB.

References
Baum, G. (1996). Karl Polanyi on Ethics & Economics. Montreal: McGill-Queen’s
University Press.
Berlin, I. (1970). Four Essays on Liberty. New York: Oxford University Press.
Berlin, I. (1986). A letter on Human Nature. New York Review of Books. 2004: 51(14): 26
Berlin, I. (1991). Isaiah Berlin, en toutes libertés: entretiens avec Ramin Jahangebloo. Paris:
Editions Félin.
Block, F. (2003). Karl Polanyi and the Writing of The Great Transformation. Theory andSociety. 32: 275-306.

58

New Zealand Journal of Employment Relations 34(1): 47-61

Calister, P. (2005a). New Zealand fathers: Overworked, undervalued, and overseas? Paper
presented at the NZ Men’s Issues Summit. Christchurch August 2005.
Calister, P. (2005b). Overworked Families? Changes in the Paid Working Hours of Families
with Young Children, 1986-2001. Social Policy Journal of New Zealand. 24: 160-184.
Davis, J.B. (2002). Capabilities and Personal Identity: using Sen to explain personal identity
in Folbre’s “structures of constraint” analysis. Review of Political Economy. 14(4): 481-496.
Davis, J.B. (2003). The Theory of the Individual in Economics – Identity and Value. London
and New York: Routledge.
DoL (Department of Labour) (n.d.). Flexible Work – overview – consultation. 14 May 2009
retrieved from: http://www.dol.govt.nz/consultation/qualityflexiblework/results.asp
DoL (Department of Labour) (2006). Quality Flexible Work: Increasing Availability andTake Up in New Zealand. Discussion Paper. November 2006.
Domett, T. (2006). The Politics of Work Life Balance: The New Zealand Case. MA thesis,
University of Auckland.
Eikhof, D.R., Warhurst, C. and Haunschild, A. (2007). Introduction: What work? What life?
What balance? Employee Relations. 29(4): 325-333.
England, P. and Folbre, N. (2002). Involving Dads: Parental Bargaining and Family WellBeing. In C.S. Tamis-LeMonda and N. Cabreraed (eds.). Handbook of Father Involvement:
Multidisciplinary Perspective. pp. 33-64. Mahwah: Lawrence Erlbaum Associates.
Families Commission (2008). Give and Take – Families’ Perception and Experiences of
Flexible Work in New Zealand downloadable at http://www.nzfamilies.org.nz
Felstead, A., Jewson, N., Phizacklea, A. and Walters, S. (2002). Opportunities to Work at
Home in the Context of Work-Life Balance. Human Resources Management Journal. 12(1):54-76.
Fleetwood, S. (2007). Rethinking Work-Life Balance: Editor’s Introduction. International
Journal of Human Resources Management. 18(3): 351-359.
Fleetwood, S. (2007b).Why Work-Life Balance Now? International Journal of Human
Resources Management. 18(3): 387-400.
Folbre, N. (2001). The Invisible Heart – Economics and Family Values, New York: The New
Press.
Folbre, N. (2003). Holding Hands at Midnight. In D. K. Baker and E. Kuiper (eds.) Toward a
Feminist Philosophy of Economics. pp.213-230. London and New York: Routledge.
Habermas, J. (1995[1982]). Theorie des Kommunikativen Handelns. 2 Vols., Suhrkamp,Frankfurt a. M..
59

New Zealand Journal of Employment Relations 34(1): 47-61

Harris, C. and Pringle, J. (2007). Work-Life-Balance: Who is the Target for the Silver Bullet?
Mimeographed. AUT University.
Harris, C. and Verreynne, M. (2008). No Rest for the Intrapreneur: The Case of Switzer Rest
Home. Paper presented at the 22nd annual ANZAM (Australian and New Zealand Academy ofManagement) conference. Auckland, December 2008.
Harris, C. et al. (2009). Culture of Productivity: The Case of Paewai Mullins, paper presented
at the AIRAANZ (conference in Newcastle Australia 2-4. February 2009.
Harris, C. Mullens, M., Ravenswood, K., Laneyrie, F. and Markey, R. (2009). Culture of
Productivity: The Case of Paewai Mullins. Paper presented at the AIRAANZ Conference in
Newcastle Australia 2-4. February 2009.
Himmelweit, S. (2000). Alternative Rationalities, or Why Do Economists Become Parents. In
Open University, Open Discussion Papers in Economics. no. 28. Milton Keynes. Economics
Discipline. Faculty of Social Sciences: The Open University.
Hyman, J. and Summers, J. (2007) Work and Life: Can Employee Representation Influence
Balance? Employee Relations. 29(4): 367-384.
Hyman, P. (2008). Pay Equity and Equal Employment Opportunity in New Zealand:
Developments 2006/2008 and Evaluation. New Zealand Journal of Employment Relations.
33(3): 1-15.
Lewis, S., Gambles, R. and Rapoport, R. (2007). The Constraints of a ‘Work-Life Balance’
Approach: An International Perspective. International Journal of Human Resources
Management. 18(3): 360-373.
McPherson, M. and Reed, P. (2007). Work-Life Balance in the New Zealand Context. In M.
Waring and C. Fouché. (eds.) Managing Mayhem: Work-life Balance in New Zealand. (pp.
24-34). Wellington, New Zealand: Dunmore
Martin, J. (1990). Deconstructing Organizational Taboos: The Suppression of Gender
Conflict in Organizations. Organization Science. 1(4): 339-359.
Nussbaum, M. (2000). Women and Human Development. Cambridge UK: Cambridge
University Press.
Polanyi, K. (1957[1944]). The Great Transformation. Boston: Beacon Press.
Ransome, P. (2007). Conceptualizing Boundaries between ‘Life’ and ‘Work’. International
Journal of Human Resources Management. 18(3): 374-386.
Ravenswood, K. (2008). The Role of the State in Family-friendly Policy: An Analysis ofLabour-led Government Policy. New Zealand Journal of Employment Relations. 33(3): 3444.

60

New Zealand Journal of Employment Relations 34(1): 47-61

Roberts, K. (2007).Work-life balance – the sources of the contemporary problem and theprobable outcomes: A review and interpretation of the evidence. Employee Relations. 29(4):334-351.
Sen, A. K. (1992). On Ethics and Economics. Oxford and Cambridge: Blackwell.
Sen, A. K. (1995). Inequality Reexamined, New York and Oxford: Russell Sage
Foundation and Clarendon Press.
Sen, A. K. (2002a). Markets and Freedoms. In A. K. Sen. Rationality and Freedom. (pp. 501530). Cambridge, US and London: Harvard University Press.
Sen, A. K. (2002b). Opportunities and Freedom. In A.K. Sen. Rationality and Freedom. (pp.
583-622) Cambridge, US and London: Harvard University Press.
Sen, A. K. (2002c). Processes, Liberty and Rights. In , A.K. Sen. Rationality and Freedom.
(pp. 623-658) Cambridge, US and London: Harvard University Press.
Simon-Kumar, R. (2008). Approve to Decline: A Feminist Critique of ‘Fairness’ and‘Discrimination’ in a Case Study of EEO in the New Zealand Public Sector. Women’s Studies
Journal. 22(1): 20-36.
Taylor, C. (1985). Philosophical Papers. Cambridge, UK: Cambridge University Press.
Taylor, C. (1989). Sources of the Self: Making of the Modern Identity, Cambridge. US:
Harvard University Press.
Veblen, T. (1899). The Theory of the Leisure Class. New York: Macmillan.

Notes
1

Though the empirical study by Felstead et al. (2002) does seem to contradict this statement, the authors of theenquiry concede that this might be due to limitations of their quantitative approach (ibid. 66).
2

Habermas describes the “life-world” as endangered by a total exploitation and dominance of the “system”.

3

For Polanyi the exchange of labour on a self-regulating market requires work to be no longer embedded inother activities. However, he also claims that such a transformation is never totally complete and faces
countervailing tendencies in society. He calls this double movement.
4Charles Taylor (1985; 1989) supports Sen’s interpretation of Berlin’s philosophy stressing the importance ofboth freedoms whereas Berlin emphasised the detrimental effects of philosophies based mainly on positive
freedom and therefore prioritised negative freedom (Berlin, 1991).
5

The emphasis is in the original.

6

Compare e.g. England and Folbre, 2002 and Himmelweit, 2000

61

New Zealand Journal of Employment Relations 34(1): 62-76

A Workplace View of Drivers and Barriers to Developing
Human Capability
JANE BRYSON and PAUL O’NEIL*
Abstract
This paper reports recent research in New Zealand workplaces investigating institutional,organisational and individual influences on the development of human capability. The
concept of human capability is used as a counterbalance to the organisationally
instrumental view of individuals and institutions prevalent in contemporary skills debates.
Drawing inspiration from Sen’s capability approach, the research examines drivers andbarriers to capability development reported by workers, managers, unions, businessowners, and industry commentators. In conclusion, the paper presents a summary of aframework to assist managers, union organisers, and policy makers to analyse conditions
impacting on human capability development in and for workplaces.

Introduction
In recent years, skills have been much discussed in the academic and policy literatures, andmany OECD countries have advanced ‘high skills, high wage’ economic visions. Skills
have been portrayed as somewhat of a silver bullet for economies lagging in the
productivity stakes, and as a natural corollary of the knowledge economy. Yet we knowthat skills, although necessary, are not a sufficient condition for economic growth andprosperity (Brown, Green & Lauder, 2001; Keep, 2003; Ryan, 2007). Recent thinking on
workplace productivity takes a more multi-faceted view of the ingredients for economic
growth and success (Department of Labour, 2008; Fabling & Grimes, 2007; Ryan, 2007).
The seven drivers of workplace productivity identified by the tripartite Workplace
Productivity Working Group (see: www.dol.govt.nz/workplaceproductivity/drivers.asp)
typify the micro economic view of the organisational factors impacting on performance.
These also reflect much of the thinking in the high performance work systems literature.
Even so, the contributing academic literatures, such as work and organisation studies,labour economics, and human resource management, treat features of individuals andworkplaces (such as skills) as purely instrumental to organisational success, and thereby
economic prosperity. Humans involved in work are portrayed as resources or capital at thedisposal of organisations and employers benevolent enough to utilise them. Few
discussions place the human as the central concern. Nor do these discussions acknowledge
that the human contribution to society is one not solely derived from work, and that theorganisational contribution is not solely an economic one.
This paper reports on research which has been analysed using Sen’s notion of humancapability to examine how the institutions, organisations, and individuals associated withworkplaces, both drive and constrain the development of human capability: that is theopportunities, freedoms and social arrangements which enable people to live lives they*Dr. Jane Bryson is a Senior Lecturer, Victoria Management School and Associate of the Industrial
Relations Centre. Victoria University of Wellington. Jane.bryson@vuw.ac.nz

62New Zealand Journal of Employment Relations 34(1): 62-76
have reason to value. By taking a human capability starting point it attempts to move thedebate to a more holistic view. This focus on human capability development permits: i) a
view beyond purely organisationally instrumental notions of individual skill; ii)
examination of not only workplaces and individuals but also the institutional environments
in which they exist: social, economic, labour market, and so on; and thus iii) a
consideration of the impact on human capability of social arrangements associated with
employment. The paper proceeds by briefly outlining some of the academic debates
surrounding skills and workplaces, and the consequent appeal of the perspective of Sen’s
capability approach. It then describes case study research conducted in a range of New
Zealand organisations investigating the development of human capability. The paper
concludes by presenting a framework of the main factors which drive and undermine
developing human capability in and for New Zealand organisations.

From human capital to human capability
Our research project focused on human capability development in and for the workplace,and the various influences on that institutionally, organisationally and individually.
Thinking about this drew us to research literatures which addressed skills, learning, humancapital, human capability and achievement, in work related contexts. We found that theever expanding commentaries on learning organisation, human resource development(HRD), human resource management (HRM), workplace learning, and adult education
were largely underpinned by an implicitly instrumental view of skills and humancapability as a tool for the achievement of organisational goals. The pervasiveness of thisassumption is due in no small part to the popular uptake of human capital theory andresource based views of the firm. These perspectives, which have travelled variously from
economics to strategic management and to human resource management, provide
appealing logic for organisations to behave in a short-term, self-interested manner. For
instance, human capital advocates would argue that it is not reasonable to expect
employers to act in the development interests of employees who may then leave theorganisation, or who may not use all their skills for the benefit of the organisation. On thisbasis, narrowly defined firm-specific skills are the most an employer would invest in –with an expectation of gaining all the pay-off from these skills. Similarly from a resource
based view, skills and knowledge and other attributes of certain employees are regarded as
the organisations strategic asset to be utilised and retained through various HRM practices.
However, the small but growing critical strands of these literatures (particularly inworkplace learning and adult education) are an informative counterbalance. In recent
years, human capital theory as the dominant school of thought in HRD has been widely
criticised. These include suggestions that it commodifies learning (Baptiste, 2001), ignores
power relations, is fixated on individualistic market relations and is unable to deal with thegeneral problem of underutilisation of investment in learning (Livingstone, 1999). Others
claim it only generates an efficient amount of HRD and training activity under very
restrictive assumptions (Kaufman, 1994; Wang & Holton, 2005) that it ignores that HRD
is embedded in work processes, and that it distracts attention from other processes bywhich HRD resources are allocated in organisations. Thus, although human capital theory
has some explanatory power, it also has shortcomings and is certainly not a universally
appropriate guiding principle.

63

New Zealand Journal of Employment Relations 34(1): 62-76
These critical literatures also show that workplaces can be characterised as more or lesssupportive of learning, and that various factors are influential in this including: job design,
the context in which workplace learning takes place, access and opportunity, particularorganisational strategies and goals (Billett, 2002a; Billett, 2002b; Billett, 2004; Fuller &Unwin, 2004, Keep, 1997). It also shows that there remains a persistent gap between thehaves and have-nots in access to development opportunities (Rainbird, Munro & Holly,2004). Our own cases (Bryson, Pajo, Warm and Mallon, 2006) confirm these findings,
showing that opportunities may be differentially experienced according to level in theorganisational hierarchy or type of job. This critical perspective in the literature has
seriously questioned the assumed mutuality of purpose and outcome of learning activity
for the individual and the organisation (Thomson, Mabey, Storey, Gray & Iles, 2001;
Fenwick, 1998). The amount of choice and self-direction individuals have in their own
learning and career is arguable (Grimshaw, Beynon, Rubery & Ward, 2002) and theassumption that individual learning and knowledge are commodities, useable fororganisational competitive advantage is still pervasive (Casey, 2003; Gherardi, 2000). In a
critique of learning organisation and the knowledge based economy, Casey argues that“economic discourses of work and organisations, and of adult education, have precluded
significant attention to the cultural dimensions of work – the non-material, personal andrelational aspects of productive activity – which defy economic and productivity
measures” (2004: 620). She appeals for education and skill acquisition to be directed
towards goals of self and community development for living and working in participatory
democratic society.
Another strand of the HRM and management literature which is highly influential fororganisational practice and discourse is that pertaining to high performance work systems.
This literature debates the emergence and shape of new forms of work organisation whichhave appeal as the high-wage, high-skill productive base upon which contemporary socialand economic development aspirations can be met. Proponents of high performance work
systems argue for bundles of HRM practices which feature: performance based pay, teamwork, firm specific skill selection and development, employee involvement and flexible
work arrangements. Research is mounting to prove the link between these practices andtheir goal – increased firm productivity (Department of Labour, 2007; Fabling & Grimes,
2007; Huselid, 1995). The, not unreasonable, logic of the link between high performancework systems and productivity is that such practices “raise employee productivity byraising employee skill levels and motivating and engaging workers more effectively”(Department of Labour, 2007). Indeed, in a recent survey of employee experiences of highperformance work systems in New Zealand workplaces, Macky & Boxall concluded“empowerment levels look healthy...but if links between empowerment, training, rewards
and communications were stronger, employee productivity and commitment would likely
be higher” (2008: 14). However, one could also argue that, from a worker’s perspective,
there is a fundamental tension whether, in this emergent model of high performance work
systems, employee relations are constructed so as to empower them and increase theirintrinsic rewards through work or whether they are constructed to simply extract greater
effort. There is a tendency in the high performance work systems construct to exaggerate
the rationality and effectiveness of HRM practices to ‘create a social system in support of
the technical system’ and to underplay the agency of management and workers in
resolving the social tensions and technical constraints that occur in work.
In summary then, the range of skill, HRM and productivity debates are largely constrainedby narrow conceptions of the role of workers, managers and organisations (focused on

64New Zealand Journal of Employment Relations 34(1): 62-76
short run productivity), and do not acknowledge or fully explore the possibilities of humancapability within organisations and society. Drawing on the work of Amartya Sen, wecharacterise capability as a positive freedom to achieve things in order to live a life which
one values and has reason to value. We utilise this broader notion of human capability toprovide an alternative starting point from which to examine institutions, organisations andthose that are part of them.
Sen’s use of the concept of ‘capability’ originates in debates within welfare economics andis principally applied in the context of economic development. Sen’s thought has been
widely summarised and presented in the literature (see for example, Pressman &Summerfield, 2000; Osmani, 1995; Gasper, 2002). Sen, himself, has provided manysummary accounts of his thoughts (see for example Sen, 1984; 1985;1987; 1992; 1995;
1999). Whilst Sen’s ‘capability approach’ raises complex philosophical issues and isdeveloped out of a detailed critique of mainstream economic approaches to welfare, theessential point of departure of Sen’s work is his focus upon human well-being and withinthat his arguments that the purpose of development is the expansion of people’s well-being
and freedoms so that people have the opportunity to expand their achievements.
As Sen himself (1993) and other commentators (Robeyns, 2000; Sehnbruch, 2004)
emphasise, the capability approach operates at several levels, but is mainly a framework ofthought, or a mode of thinking. The major constituents of the capability approach are theconcepts of functionings and capabilities. In Development as Freedom, Sen offers a set ofdefinitions of functionings and capability:…the concept of “functionings”… reflects the various things a person may value
being or doing. The valued functionings may vary from elementary ones, such as
being adequately nourished and being free of avoidable disease, to very complex
activities or personal states, such as being able to take part in the life of acommunity and having self-respect… A capability [is] a kind of freedom: thesubstantive freedom to achieve alternative functioning combinations (Sen, 1999:75).
Functionings are, thus, the ‘beings and doings’ of a person, whereas a person’s capability
is the various combinations of functionings that a person can achieve. The two concepts
are related but distinct in that:…a functioning is an achievement, whereas a capability is the ability to achieve.
Functionings are, in a sense, more directly related to living conditions, since they
are different aspects of living conditions. Capabilities, in contrast, are notions of
freedom, in the positive sense: what real opportunities you have regarding the life
you may lead (Sen, 1987: 36).
A key point that Sen makes is that the availability of a commodity (such as a money wage,
or a job, or training) does not necessarily or automatically imply that people can achieve
an intended act or state of being. With the concept of ‘functionings’, Sen is trying tocapture the notion that what ‘doings and beings’ a person achieves depends uponcommand over a particular set of commodities, one’s individual circumstances, thephysical and social environment one lives in, and all other factors that may impact on theconversion of commodities into achievements.

65

New Zealand Journal of Employment Relations 34(1): 62-76
Finally, crucial to the capability approach of Sen, is what Browne, Deakin, and Wilkinson(2004) refer to as the conversion factors which facilitate freedom or capability. These
conversion factors are the characteristics of people and the society and the environment
they live in, which together determine a person’s capability to achieve a given range offunctionings. Personal characteristics in this sense include such things as a person’s
metabolism, age and gender. Societal characteristics would include such things as societal
norms, legal rules and public policies. Environmental characteristics would include suchthings as climate, physical surroundings, infrastructures and legal-political institutions.
Thus, to contrast human capital and human capability, and the ways in which they fit
together, is illuminating. According to Sen human capital refers to “the agency of humanbeings, through skill and knowledge as well as effort, in augmenting production
possibilities” (1997: 1959) On the other hand, human capability is about the ability ofhuman beings to live lives they have reason to value. Sen discusses the nature of the twoconcepts and some important points of comparison. First, both concepts focus on humanbeings and their abilities. In this respect, they have a common reference point. Where theydiffer, however, is that human capital is often viewed in terms of its contribution to
productivity within an organisation whereas human capability looks at its contribution in amuch broader way in terms of the extent to which these abilities enhance people’s lives ingeneral. It could be argued that it is the same distinction that separates employers andemployees. Employers want to grow people’s abilities for use in production whereas
employees are developing their abilities not only for work but also to contribute to theirwider wellbeing. To some extent the definition of capability depends on whether you
perceive individual capability as the end goal or whether you view the individual as an
input to the overall goals of organisational capability.
In summary, a focus on human capability can provide a more integrated way of
considering organisational ends, individual needs, and societal outcomes. It forces a morestrategic view of human development, one which accepts the connection between
individual, society and organisation. The capability approach of Sen provides an importantalternative lens through which to identify the factors that lead to the optimal developmentof human capability in New Zealand organisations. It asks, what are the social
arrangements that lead to the ability of people to do or be something? Whilst not denying
the relevance of the concept of human capital, its focus upon skill and its individual
rational acquisition misses the point that the individual also needs the effective means toapply such skill into an achievement. Skills are only a part of a wider concept of a person’s
broad capability to achieve his or her goals. Our research explores how this capability
develops or declines depending on daily circumstances in life and work, at least as muchas on formalised periods of education and training.

Investigating views from New Zealand workplaces
The Foundation for Research, Science and Technology (FoRST) provided funding for our
research to identify conditions for the optimal development of human capability in New
Zealand organisations. We utilised a multi-level, multi-method approach to conducting the
research in order to capture the breadth of perspectives and factors influencing humancapability. After an extensive literature review, data were derived from 3 main sources: 1)
an examination of collective employment agreements held in the employment agreements
longitudinal database of the Industrial Relations Centre at Victoria University of66

New Zealand Journal of Employment Relations 34(1): 62-76
Wellington; 2) a series of case studies in 4 industry sectors; 3) a series of targeted focus
groups with expert groups.
What we examined in the database
The database contains collective employment agreements which are coded, and can besearched, according to specific clauses or contract provisions. Thus, early on in the
research project we were able to instigate coding of provisions related to training,
workplace learning, flexible work, and other capability development opportunities that had
been bargained into agreements. The database also contains annual union membershipsurveys which allow us to estimate levels of union density in New Zealand.
What we did in the case studies
The case studies were our main instrument for qualitative investigation of influences onhuman capability in and for the workplace. Participants in the case studies were drawn
from what might be regarded as the wider capability community associated with each of
the four industry areas we investigated (wine making, furniture manufacturing, mental
health services, and Maori businesses). We conducted over 200 semi-structured interviews
with employers, workers, unions, industry associations and Industry Training
Organisations (ITOs), local education providers, regional authorities, and otherorganisations in the supply chain of each industry. The interviews were designed to look at
individual, organisational and institutional issues. We found that for most workers the term
‘capability’ had limited meaning, thus we focused on obtaining a development history
from each worker in order to understand how they had got to where they currently were
job-wise, why certain choices had been made along the way, and what had been helpful
and what had hindered them achieving what they wanted. This proved to be very helpful in
identifying drivers and barriers to the development of human capability. Interviews withmanagers and owners covered similar questions and also asked how they developed
workers and how the organisation and industry in general approached skill and capability
development. Interviews with education providers and industry representatives canvassed
opinion on human capability development practices and issues (driver and barriers) for theindustry.
What we did in the focus groups
The final phase of the research involved a series of focus groups with 45 subject matter
experts in order to test the framework of developing human capability that emerged fromthe case study, database and literature review phases. The subject matter experts included:a group of government policy advisors; a group of organisational consultants andresearchers; a group of unionised workers; a group of non unionised workers; a group of
managers from both unionised and non unionised workplaces; a group of union organisersand delegates. A final verification of the practical utility of the framework was conductedwith two further focus groups: a group of Human Resource Managers; and a group ofunion educators. The focus group discussions explored drivers and barriers to humancapability development, in particular what workplace and job characteristics facilitate
capability development and what workers want in a job in order to add to their capability.

67

New Zealand Journal of Employment Relations 34(1): 62-76
Within this paper we focus on the institutional, organisational and individual factors thatenabled or constrained the freedom of opportunity for workers to achieve things theyvalued.

Findings
A key result from examining the collective employment agreements database showed that
despite the permissive nature of the Employments Relations Act, 2000 provisions withincollective employment agreements remain limited largely to complying with the minimum
standards of new legislation. For instance, the amendment of the Holidays Act in 2006 toextend the social right for annual leave for full-time employees from three weeks to fourweeks per year has been reflected in agreements (Blackwood, Feinberg-Danieli, Lafferty,
O’Neil, Bryson, Kiely, 2007). In addition, the database showed that union density in theprivate sector remains low and barely keeps pace with increased labour market
participation. The reality of the limited results of collective bargaining within a permissiveframework led us to think more seriously about human capability as the ability to achievethings and how an institutional framework such as the employment relations system helps
or hinders the positive freedom for people to achieve things.
The case studies, collectively, shed further light on the impact on human capability of suchinstitutional arrangements. Although, the qualitative findings of the case studies have beenreported in detail elsewhere (Blackwood, Bryson & Merritt, 2006; Bryson et al. 2006;
Bryson, 2007; Bryson & Merritt, 2007; O’Neil, Bryson, Cutforth & Minogue, 2008;
O’Neil, Bryson & Lomax, 2008), in this paper we present a summary of key findings. The
case study interviews yielded a breadth and depth of information on both formal andinformal influences on development. In particular, while identifying the development
influences (positive and negative) within the organisation, a capability approach also
helped us to focus on the influences from outside the organisation, and a far wider range ofthe informal but highly significant capability development activities within theorganisation. We used the analytic device of drivers and barriers to summarise the key
influences on the development of human capability following analysis of all the case study
interviews. These two categories were then subdivided according to the level they werereported as occurring:•••

Institutional: Broad societal arrangements such as policy, regulation, legislationand social attitudes
Organisational: Factors relating to practices within organisations
Individual: Factors personal to the makeup of an individual

Table 1 presents a condensed summary of key themes identified in the case studies.
Following the table we discuss some of those factors in terms of their impact on humancapability.

68New Zealand Journal of Employment Relations 34(1): 62-76
Table 1: Summary of drivers and barriers to developing human capability
Drivers
Role
of
the
state
infrastructure, policies, norms
which endorse industry andorganisational practices
Economic conditions

Barriers
Lack of coordination between
different incentives in infrastructure
and policy; contracting out of service
provision;
schoolsand
otherinfluences

Organisational

Supportive
employers,
managers and supervisors; pay
systems; work design andpractices;
occupationalrecognition and professional
standards

Beliefs and values of board, senior
management team, owner and/or
general manager; short term focus;
organisational strategy; small size oforganisation; lack of mechanisms forgenuineemployee
input/union
absence and/or a transactional focus
in the employment relationshipIndividual

Aspiration
toimprove;proactive individual behaviour;
confidence;
community
connections

Lack of awareness or confidence orpro-activity; mode of employment
and bad jobs; poor schooling, life andwork experiences

Institutional

Although we were able to isolate institutional, organisational and individual factors foranalytical and presentational purposes in Table 1, this does not mean to imply that they are
unrelated or unconnected at the different levels. Institutional factors influenced
organisational and individual choices, just as organisational practices influenced individual
choices and (in some cases) vice versa. Below, we report on some of the interesting
connected flows of influence between these levels, in particular: economic conditions andbusiness strategy; nature of the ‘employment’ relationship; industry-wide responses;
influence of those with power; individual experiences and confidence.
The uncertainties of competition in an open economy and in export markets drove
differing business strategy responses which in turn impacted capability development.
These strategies were usually focused on achieving production flexibility in various ways for instance, through an emphasis on quality, or alternatively a focus on costcompetitiveness. This was also evident in the public sector where state agencies drove
funding contracts requiring efficiency and quality of service provision. We found that acommon practice to achieve flexibility in both the private and public sectors was thecontracting out of service or production to contractors and subcontractors. This practice
operated as both a driver of and barrier to capability development. In the private sector,
such contract arrangements more often constrained capability development of contractors
who were tightly resourced to deliver with no margin for development. In the public
sector, although this was in part the case, the contracts also often specified requirements
for the contractor to meet certain professional development standards and cater to otherdevelopment needs.
This also highlighted that the nature of the employment relationship (core employee
through to sub contractor or temp) impacted significantly on whether capability
development was acknowledged as the concern of the organisation or not. We found,paradoxically, that some workers having moved to independent contractor status in order69

New Zealand Journal of Employment Relations 34(1): 62-76(they hoped) to access the freedoms they needed to live the type of life they valued,
discovered other significant constraints they had not anticipated. For instance, the need tomaintain cash flow led to acceptance of sub optimally resourced contracts. On the other
hand we also spoke to some workers for whom seasonal employment provided the (social)arrangements which enabled them to live as they wanted. In the off-season, they pursued
other lifestyle options ranging through creative activities, to physical pursuits such as
skiing, hunting, fishing and generally ‘going bush’.
Also, at an institutional level, vocational education infrastructures and industry responses
were influential. The presence of industry-wide responses to economic and other pressuresoften encompassed a concern for capability. Industry strategies acted as drivers and served
to ameliorate the tendency to very short term focus of many of the organisations wevisited. The reputation of apprenticeship training or other qualifications, the perception ofavailability of work in the industry, the experience of secondary school, were allimportant.
A clear theme at the organisational level was the influence of the board, managers andsupervisors. People in positions of power over others, whether it was formal managerial
power, or power conferred by age, experience, or earned through respect, wereconsistently reported to be central to facilitating achievement of individual capability. For
example, workers reported key capability development experiences due to the regular
encouragement and support of certain managers, supervisors and colleagues, and also fromany key person, such as ‘Mum’ or a respected friend. These were important in increasing
individual confidence, feeling of value, and thus willingness to develop. This was further
emphasised in reflections by employees on their capability development being hindered byunsupportive bosses and “guys in the past who’ve been narrow minded about sharing
knowledge or skill development” (worker). In addition, deliberately short term businessstrategies combined with a lack of desire to engage with workers at any level other thanhierarchically based direction and control, both proved to be massive barriers to capability
development of any sort. As one worker noted: “If you don’t have a good employer, it
makes it harder “. This inability or unwillingness of owners and managers to acknowledge
and utilise worker knowledge in its broadest sense was detrimental to workers andultimately, one surmises, the organisation. A number of themes around the individual’s
freedom to act (or not) also emerged. These included tensions over job security, how‘skilled’ workers are ‘made’, and an absence of occupations or career paths in theworkplace.
Focusing on capability also enabled researchers to discern the fine line between the worker
classified with a ‘good’ attitude and those labelled with a ‘bad’ attitude. Beneath the ‘bad’
attitude often lay literacy issues, poor education and/or family experiences, poor
employment experiences, and in some cases just immaturity or fear of commitment. In theworkplace, people who have had these experiences sometimes appeared to lackconfidence, or not be motivated. One worker summed up a common view saying: “Selfconfidence – a lot of people are very unconfident about their ability to undertake training
and achieving”. On the employer side, this manifested as: “It is hard to find young guys
with [a] work ethic and sense of responsibility and good social skills”.
Capability development was dependent on employers, supervisors, proactive employees
and their wider social networks, and on industry and institutional initiatives. As one
worker put it: “You really have to do it yourself… [the company] expects people to ask, to70

New Zealand Journal of Employment Relations 34(1): 62-76
be proactive”. Workers who had the awareness, confidence and interest to ask, make time,
shape the work environment to suit their needs, were more likely to get the capability
development they desired. Access to, and take up of, opportunities through work werepositively influenced by proactive individual behaviour. Individuals are not without someagency in most work situations, the question is whether they exercise it or not. Interviews
with workers revealed that numerous factors determine this including awareness of rights
and possibilities in work and life, issues of identity (cultural, occupational, etc), confidence
and self efficacy. These, in turn, are linked to educational and family experiences,
presence of role models or supportive facilitators at work and outside of work.

Building a framework for developing human capability in New Zealandorganisations
In the final phase of the research, we discussed the drivers and barriers and other factors
from the literature with expert focus groups. Several iterations of these discussions helped
refine a detailed framework outlining the factors which drive and undermine developing
human capability in New Zealand organisations. Table 2 presents a summary of theframework of factors. The detailed framework, which is reported in full in Bryson(forthcoming), describes the conditions in which these factors act to drive humancapability development and the conditions in which they undermine it. Following, as anillustration of the full framework, is explanation of just one factor from each of the levels(institutional, organisational, and individual) and the conditions which make the factor
drive or undermine human capability.
The institutional factor “nature and state of the product market” drives human capability
development when there are collaborative, networked employer responses (across industry
or region), for example through ITOs or other sector groups, or government initiatives
focused on specific sectors. On the other hand, uncoordinated, fragmented responses areassociated with a spiral downwards in human capability.
An example of the impact of differing conditions on the organisational factor “philosophyof economic and working life” shows that an encompassing approach by organisations
including ethical, sustainable approaches, and /or in some businesses the Maori
philosophy of ‘production for use’, drives human capability. Other driving conditions weremanagement belief in the goals of the organisation, and facilitation of team work andreflective practice. Employers, managers and supervisors supportive of capability
development were highly influential, as was a respect for workers as a ‘whole’ person withcitizenship rights in the organisation. A long term view of the business and developing
human capability was an important driving condition, and in Maori organisations this was
sometimes expressed as a vision of iwitanga with iwi economic self determination. On theother hand, conditions under which ‘philosophy’ undermined human capability
development included the existence of instrumental commercial visions based on adefinition of value defined by the extent it can be bought, sold and turn a profit. Associatedwith this are boards and senior management teams which prioritise shareholder returnahead of workforce development. In SMEs, the beliefs of the owner or general manager
can work either for or against human capability. In all organisations, a short term focus ofbusiness owners and business strategy can seriously undermine capability development forthe business and the industry. An absence of management of the relationship between
employer and employee, and between employee and employee also compromised
71

New Zealand Journal of Employment Relations 34(1): 62-76
capability. Similarly a focus on the employment relationship as purely transactional
undermined capability development.
An example of an individual factor is that of “attitude, confidence and self efficacy”.
Attitude was consistently found to drive capability, in particular the willingness and desire
to learn, and interest in the work. Aspirations to improve one’s lot in life or that of one’s
family drove capability development, as did personal beliefs and interests which
influenced career choice and desire to foster personal development or well being.
Proactive individual behaviour was also a key driver which led to shaping of one’s work
environment or asking for the development one required. However, undermining
capability was lack of awareness, confidence, pro activity or organisation based self
esteem which led to unwillingness to push for improvements. The absence of confidence,motivation and no way to access it, and poor attitudes to work and capability development
were all powerful undermining conditions.
Table 2: Overall factors identified as driving or undermining human capability
development in different conditions
Institutional

Organisational

Economic
Philosophy of economic &• Nature & state of the working life
product market• Nature of the labour Key structures & practices• Scale of operation
market• Work organisation• Nature of the legal form
& design
of employment• Skillformation• Geographic setting
arrangements
Role of the State/public policy• Workplace• Publicly
defined(industrial)standards
relations&• Public funding
cultures• Policy
concerningindigenous community
Educational arrangements• Infrastructure• Integration of different
elements• Sensitivity/engagementwith local condition
Cultural/ideological legacies

Individual
Attitude , confidence & self
efficacy
Educational experience
Perceptionofwork
arrangements & cultureLife,capability&
experience beyond work

At the outset, we noted that a human capability perspective encouraged us to examine theimpact of opportunities, freedoms and social arrangements associated with employment on
people’s ability to live lives they value. The research has clearly indicated the importanceof this broader notion of human capability. Each of the factors identified in the framework
has sets of conditions in which they drive human capability, and other conditions in which
they constrain it. These conditions reflect the changing pattern of opportunities, freedoms
and social arrangements to which people are exposed. The research has reinforced that72

New Zealand Journal of Employment Relations 34(1): 62-76
what happens in workplaces influences human capability, that institutional arrangements
also matter, and the interplay between them.
The full framework goes some way to explicating what arrangements make a difference.
The organisational practices that make a difference for human capability are not dissimilar
to forms of good human resource management practice. For instance, high performancework systems could have value in developing human capability but a reorientation isnecessary in order to achieve change to the status quo. Such a reorientation, inspired by
Sen’s capability approach, is to acknowledge and encourage organisations not only as
economic contributors to society but also as capability enhancing institutions in society.
Work organisations are the providers and guardians of good quality jobs and work
environments essential to the development of human capability. There is an imperative forthem to support and encourage the reorientation of industries, boards, business owners,
employers, managers, trade unions, workers and shareholders, to a longer term focus on
the balance between the dual goals of enhancing human capability and economic
wellbeing. Only through this will the limitations of the human capital approach andresource based view of the firm be overcome.

References
Baptiste, I. (2001). Educating lone wolves: pedagogical implications of human capitaltheory, Adult Education Quarterly. 51: 184 – 201.
Billett, S. (2002a). Workplace pedagogic practices: Co-participation and learning. British
Journal of Educational Studies. 50(4): 457 – 481.
Billett, S. (2002b). Toward a workplace pedagogy: Guidance, participation, andengagement. Adult Education Quarterly. 53(1): 27 – 43.
Billett, S. (2004). Learning through work: Workplace participatory practices. In H.
Rainbird., A. Fuller and A. Munro. (eds.). Workplace Learning in Context. (pp. 109 –
125). London: Routledge
Blackwood, L., Bryson, J. and Merritt, K. (2006). Case report on the Furniture
manufacturing industry in NZ: discussion paper. Industrial Relations Centre: Victoria
University of Wellington. pp.16
Blackwood, L., Feinberg- Danieli, G., Lafferty, G., O’Neil, P., Bryson, J., and Kiely,
P.(2007). Employment Agreements: Bargaining Trends & Employment Law update
2006/2007. Industrial Relations Centre: Victoria University of Wellington. pp.170
Brown, P., Green, A., and Lauder, H. (2001). High Skills: Globalisations, Competitivenessand Skill Formation. UK: Oxford University Press.
Browne, J., Deakin, S. and Wilkinson, F. (2004). Capabilities, social rights and European
market integration. In R. Salais and R. Villeneuve. (eds), Europe and the politics ofcapabilities. (pp. 205 – 222). New York: Cambridge University Press.

73

New Zealand Journal of Employment Relations 34(1): 62-76
Bryson, J. (2007). Human Resource Development or Developing Human Capability?
Chapter 10. In S. Bolton and M. Houlihan, M. (eds.) Contemporary Human Relations in
the Workplace: Searching for the Human in Human Resource Management. UK: Palgrave
Macmillan
Bryson, J. (Ed) (forthcoming). Beyond Skill: Institutions, Organisations and Human
Capability. UK: Palgrave
Bryson, J and Merritt, K. (2007). Work and the development of human capability.
Formation Emploi: Revue Française de Sciences Socials. Numero Special: Pour une
approche par les capacites avec Amartya Sen. 98: 41-53.
Bryson, J, O’Neil, P. (2008), Overview of findings on developing human capability:
discussion paper, Industrial Relations Centre, Victoria University of Wellington, 49pp.
Bryson, J., Pajo, K., Ward, R and Mallon, M. (2006). Learning at work: Organisational
affordances and individual engagement. Journal of Workplace Learning. 18(5): 279-297
Casey, C. (2003). The learning worker, organisations and democracy. International
Journal of Lifelong Education. 22(6): 620-634
Casey, C. (2004). Knowledge-based economies, organisations and the sociocultural
regulation of work. Economic and Industrial Democracy. 25: 607-627
Department of Labour (2007). High performance workplace practices in APEC
economies: accessible at: http://www.dol.govt.nz/workplaceproductivity/research/highperformance-workplace.asp
Department of Labour (2008). The Skill-Productivity Nexus: Connecting industry training
and business performance. Department of Labour and Industry training Federation,
Wellington, New Zealand.
Fabling, R. and Grimes, A. (2007). HR practices and firm performance: what matters andwho does it? Occasional Paper 07/02, Ministry of Economic Development. Wellington
Fenwick, T. (1998). Questioning the concept of the learning organisation. In S. Scott, S.,
B. Spencer, and A. Thomas, A. (Eds). Learning for life. (pp.140 – 152). Toronto:
Thompson Educational Publishing.
Fuller, A. and Unwin, L. (2004). Expansive learning environments: Integratingorganizational and personal development. In H. Rainbird, A. Fuller and A. Munro. (Eds).
Workplace Learning in Context. (pp.126 – 144). London: Routledge
Gasper, D. (2002). Is Sen's capability approach an adequate basis for considering humandevelopment? Review of Political Economy, Vol. 14, Iss. 4, pp. 435-461.
Gherardi, S. (2000). Practice – based theorizing on learning and knowing in organizations,
Organization. 7(2): 211 – 223.

74

New Zealand Journal of Employment Relations 34(1): 62-76
Grimshaw, D., Beynon, H., Rubery, J. and Ward, K. (2002). The restructuring of career
paths in large service organizations: ‘Delayering’, upskilling and polarization. Sociological
Review. 50(1): 89 – 116.
Huselid, M. (1995). The Impact of Human Resource Management Practices on Turnover,
Productivity and Corporate Financial Performance. Academy of Management Journal.
38(3): 635 – 672.
Kaufman, B.E. (1994). The economics of labour markets (4th ed.). Texas: Dryden
Keep, E. (1997). There’s no such thing as society…: Some problems with an individual
approach to creating a Learning Society. Journal of Education Policy. 12(6): 457 – 471.
Keep, E. (2003). Skills policies in England: strategic directions and lessons for others.
Presented in Leadership 2007: The Industry Training Federation Annual Conference 2003:
Wellington, New Zealand.
Livingstone, D.W. (1999). The Education - Jobs Gap: Underemployment or economic
democracy. Toronto: Garamond Press.
Macky, K and Boxall, P. (2008), Employee experiences of high-performance work
systems: An analysis of sectoral, occupational, organisational and employee variables,
New Zealand Journal of Employment Relations. 33(1): 1 – 18.
O’Neil, P., Bryson, J., and Lomax, H. (2008). Maori research strand, Discussion paper forthe developing human capability project. Industrial Relations Centre: Victoria Universityof Wellington. pp.29
O’Neil, P., Bryson, J., Cutforth, T and Minogue, G. (2008). Mental Health Services inNorthland, Discussion paper for the developing human capability project. Industrial
Relations Centre: Victoria University of Wellington. pp.49
Osmani, S. (1995). The entitlement approach to famine: an assessment. In K. Basu, P.
Pattanaik and K. Suzumura. (eds), Choice, Welfare and Development: a Festschrift in
Honour of Amartya Sen. (pp.253 – 294). Oxford: Clarendon Press
Pressman S. and Summerfield, G. (2000). The Economic Contributions of Amartya Sen.
Review of Political Economy. 12(1): 89 – 113
Rainbird, H., Munro, A. and Holly, L. (2004). The employment relationship andworkplace learning. In H. Rainbird, A. Fuller and A. Munro, A. (Eds.). Workplace
Learning in Context. (pp.38 – 53). London: Routledge
Robeyns, I. (2000). An unworkable idea or a promising alternative? Sen’s capability
approach re-examined. Mimeo, University of Cambridge: Wolfson College.
Ryan, R. (2007). Why workplaces matter: the role of workplace practices in economictransformation,
Wellington,
DepartmentofLabour.
http://www.dol.govt.nz/workplaceproductivity/research/why-workplaces-matter.asp

75

New Zealand Journal of Employment Relations 34(1): 62-76
Sehnbruch, K. (2004). From the Quantity to the Quality of Employment: An Application of
the Capability Approach to the Chilean Labour Market. CLAS Working Paper No. 9.
Centre for Latin American Studies: Berkeley,Sen, A.K. (1984). Rights and Capabilities.
Development. Oxford: Blackwell

In A.K. Sen, Resources, Values andSen, A.K. (1985). Well-being, Agency and Freedom: The Dewey Lectures 1984. The
Journal of Philosophy. 82(4): 169 – 221.
Sen, A.K. (1987). The Standard of Living. In G. Hawthorn. (ed). The Standard of Living,
Cambridge: Cambridge University Press.
Sen, A.K. (1992). Inequality Re-examined. Oxford: Clarendon Press.
Sen, A.K. (1993). Capability and Well-Being. In M. Nussbaum and A. K. Sen. (eds). The
Quality of Life. Oxford: OUP.
Sen, A.K. (1995). Gender inequality and theories of justice. In M. Nussbaum and J.
Glover. (eds). Women Culture and Development: a Study of Human Capabilities. (pp. 259– 273). Oxford: Clarendon Press.
Sen, A.K. (1999). Development as Freedom. Oxford: OUP.
Sen, A. K., (2002), Rationality and Freedom. London: Belknap Press.
Sen, A. (2004), Capabilities, lists and public reason: Continuing the conversation. Feminist
Economics, 10(3): 77-80
The Workplace Productivity Working Group (2004), The workplace productivity
challenge: summary report, Wellington, Department of Labour.
Thomson, A., Mabey, C., Storey, J., Gray, C., and Iles, P. (2001). Changing patterns ofmanagement development. Oxford: Blackwell.
Wang, G.G. and Holton III, E.F. (2005), Neoclassical and institutional economics asfoundations for human resource development theory. Human Resource Development
Review. 4(1): 86 – 108.

76

New Zealand Journal of Employment Relations 34(1):77-93

Lessons learned from the long term application of amonitoring and evaluation process based on the capability
approach
JOHN SCHISCHKA*
Abstract
This paper evaluates the utility of the Capabilities Approach (CA) to empower
communities and to guide development appraisal mechanisms. Volunteer Services
Abroad (VSA) is a New Zealand non-governmental organisation (NGO) working in thearea of international development. One of VSA’s development partners in Vanuatu is theindigenous NGO Pri Skul Asosiesen Blong Vanuatu (PSABV). The central aim of
PSABV is to bring together all those concerned with the development of pre-school
education in Vanuatu. In particular, VSA volunteers are working with PSABV toimprove the quality of pre-school education especially in remote rural parts of Vanuatu.
This project was used to pilot a CA based monitoring mechanism. The lessons learned
from the long-term application of a CA based participatory appraisal methodology areapplied as a means of ascertaining the long-term results for the children, parents andother community stakeholders involved in the programme.

An Introduction to the Capability Approach and its Applicability in a
Development SettingThis article attempts to demonstrate the utility of the capability approach (CA) toempower communities and to guide evaluation mechanisms. The article commences withan introduction to the CA and how it can be applied in the development setting. There isthen a discussion of the background of the Vanuatu case including: Pri Skul Asosiesen
Blong Vanuatu (PSABV), Volunteer Service Abroad (VSA), and the educational context.
Following this, there is a description of the case study. Next, important themes from thestudy are related and finally conclusions are presented on the outcomes from this process
for the capability of the communities, pre-schools and agencies involved.
Nobel Prize winning economist Amartya Sen has outlined an alternative to appraising
economic development (Sen, 1999). Sen argues that it is necessary to go beyond
traditional measures of material success to encompass concerns of social development.
He believes this may be done by focusing on enhancing capabilities to achieve education,
health and other goals – through the use of the CA. Central to his framework is its focus*

Dr John Schischka, School of Business, Christchurch Polytechnic Institute of Technology, PO Box 540,
Christchurch 8015. schischkaj@cpit.ac.nz

77New Zealand Journal of Employment Relations 34(1):77-93
on the freedoms generated by commodities rather than just the commodities themselves.
Sen argues for the necessity to examine capabilities that people have to choose a life thatthey have reason to value. While development projects can supply goods and facilitate
the acquisition of functionings, it is in combining these in the course of the development
project that an individual’s and a community’s capabilities set expands which results ingreater freedom. This expansion of capabilities results in greater choice and is central todevelopment. A framework demonstrating the relationship between these four key
concepts is shown in the diagram below developed by the author in Schischka (2005).
Figure 1: Sen’s Capabilities Approach

FREEDOM

Capabilities Set
A

Goods

B

C

D

E

F

Functionings

The CA has a number of implications, not least that agencies involved in the funding anddelivery of development work, look for new ways of appraising the success of theirinterventions. For some time, there has been comment in the literature and amongst
development practitioners on the effectiveness of some Aid programmes. Rehnstrom(2000:1) notes that:
The effectiveness of development cooperation has been the subject of muchdebate, and while some critics continue to argue that aid is wasteful, a morecommonly held view is that development cooperation can be justified on grounds
that are not merely humanitarian. While recent research is beginning to show
more clearly under which conditions aid can be most effective, what remains lessclear is the extent too which different bilateral or multilateral organisations
have been able to contribute to social progress and improved standards ofliving. (Emphasis added).

78

New Zealand Journal of Employment Relations 34(1):77-93
Dasgupta (2001: 32) has noted that:
Policy evaluation techniques that were developed in the 1970’s, while formallycorrect, neglected to consider resource allocation in the wide variety of nonmarket institutions that prevail throughout the world…I have argued that theevaluation of policy changes can only be done effectively with a fairunderstanding of the way socio-economic and ecological systems would respondto the changes.
The problem has been that, in not properly considering the socio-economic context andthe perspective of those involved in the projects, more harm may be caused to them than
good by the operation of the development programmes.
There have been other calls for some time from development practitioners to re-examine
development programmes in order to develop evaluation techniques that better
encapsulate the views of the poor. Chambers’ (1995: iv) statement is typical of this view:
In assessing conditions and seeing what to do, professionals’ realities areuniversal, reductionist, standardised and stable. The [views] of economists
dominate [and are] expressed in poverty thinking, concerned with incomepoverty, and employment... Both projects [namely] the Northern project, [whichhas] the more industrial and urban conditions, [inserts] categories onto Southern
project [which has] more agricultural and rural realities. Both have force but missmuch and mislead. (emphasis added).
Research reported here outlines a longitudinal study conducted by the author with
development partners in Vanuatu, which aims to apply the CA to develop appraisal
methodology suitable for development initiatives that allows for reduction in thispropensity to “miss much and mislead” and seeks to capture more of the realities of theparticipants in development programmes.

The Background of the Vanuatu Case: PSABV, VSA in an Educational
Context.
Pri Skul Asosiesen Blong Vanuatu
The PSABV was established in the early 1980s and has been the main agent inintroducing a progressive approach to early childhood education (ECE) throughout
Vanuatu. The PSABV has worked with the Vanuatu government to ensure that earlychildhood education has moved from being solely community-based and relying on
voluntary effort to a situation where early childhood education has become a recognised
and valued sector of education in Vanuatu, managed and staffed by a mix of trainedteachers and volunteers.

79New Zealand Journal of Employment Relations 34(1):77-93
During the late 1990s, as there was a limited supply of locally trained early childhood
educators, PSABV turned to volunteer sending development agencies for support. A
request was made to the New Zealand NGO Volunteer Service Abroad (VSA) for an
early childhood educator for assistance. By 1999, the first New Zealand pre-school
teacher started her volunteer assignment as a Pre-School Adviser with the PSABV in Port
Vila, Vanuatu. This was the beginning of a long-term relationship between the PSABVand VSA, and set the pattern for the subsequent assignment of a series of volunteers.

Volunteer Service Abroad
VSA aims to deliver volunteer programmes that address key development needs inpartnership with local organisations. Accordingly, VSA has developed a Monitoring and
Learning Framework (MLF) as a means of monitoring and evaluating the quality andprocesses of its programmes and operations against intentions and values set out in aformal statement of strategic intent (VSA, 2006a).
This study is one in a series of studies undertaken, as part of the MLF, to monitor andevaluate the work of VSA’s international development programmes. Lessons learnt fromthis research will be applied to this and other programmes, with the aim of improving thequality of VSA’s development practice. A significant role of the research is to contributeto VSA’s declared intention that “New Zealand volunteers, partner organisations, andcommunities abroad share skills and knowledge to help improve quality of life, and build
self-determining communities and stable nations” (VSA, 2006b: 2).
Context of Pre-school Education in Vanuatu
Most of Vanuatu’s rapidly growing population live in rural areas (around 80%) and are
dependent upon subsistence agriculture for their livelihoods. New Zealand’s Agency forInternational Development (NZAID) estimates 40% of the population experiences
poverty or hardship and notes:
Lack of access to education opportunities and unemployment are increasingly
serious issues for young people. Urban drift is becoming a problem as people lookfor better opportunities in the towns. In recent years the population has grown
faster than the economy, and services such as education and health have fallen
behind (NZAID, 2008).
Vanuatu is rated 118th on the UNDP Human Development Index (between Guatemala
and Egypt), (UNDP, 2005).
The formal education system in Vanuatu today is a product of a particular approach toeducation, dominated by church mission schools, and developed by the British andFrench during the colonial period. As a result, Anglophone and Francophone schools arestill in operation throughout Vanuatu and many schools are run by religiousorganisations.

80New Zealand Journal of Employment Relations 34(1):77-93
The Vanuatu Ministry of Education is aware of the problems. In 2001, the Ministry noted“…despite enormous efforts and [considerable] costs, Vanuatu’s education system is notproducing the desired results.” (2001: 58) This concern is not limited to Vanuatu; it is a
Pacific-wide problem. A group of leading Pacific educators concluded that “…three
decades of considerable investments in education has not made a significant impact on
the educational developments of Pacific communities” (Pene, Taufe'ulungaki andBenson, 2002: 1). What has been missing in the educational development of Vanuatu has
been the influence of Ni-Vanuatu educators, and the ‘ownership’ and active participation
by parents, local teachers and communities. The beginnings of a paradigm shift can now
be detected. Early childhood education programmes, and the development of the PSABV,
are important in this shift in educational philosophy and practice.
A recent movement to re-think Vanuatu education, and assert an indigenous, Ni-Vanuatu
perspective, was documented following a Regional Colloquium on Education in 2001
(Sanga, Niroa, Matai and Crowl, 2004; Sanga, Chu, Hall and Crowl, 2005). This movetowards indigenous self-assertion is summarised in Jean-Pierre Niroa’s statement: “Wemust think and act as Ni-Vanuatu and do away with Anglophone and Francophoneagonies” (Sanga et al, 2005: 38). Hence, the CA based participatory monitoring andevaluation methodology utilised in this study is located within this growth of earlychildhood education, the development of the PSABV, and the context of a wider social
movement. A movement brought about by a change in thinking about education in
Vanuatu, and informed by an appreciation of the development needs, and rights, ofchildren and their parents.

A description of the Case Study
The CA based monitoring process utilised a participatory, focus group process reported
in detail below. The CA is reflected in this focus group process, both through the actual
questions asked, the participatory process employed, in the resulting evaluation andcommentary on changes in opportunities and choices experienced by participants andtheir children.
(a) The focus group process
Focus group interviews were conducted with groups of self-selecting parents andextended families of pre-school age children enrolled in PSABV pre-schools. The first setof interviews were carried out in seven different villages in North Pentecost in January
2006, in a location deemed to be appropriate by the local people such as the village preschool or meeting house. The second sets of interviews were conducted in seven villages
and communities in Espiritu Santo and Malo Islands in June-July 2006, most of whichwere in a more developed and urbanised context than the first set of interviews. The
general aim of the focus group study was to determine the perspectives of parents andcommunity members on what had happened for their children since their involvement in
the programmes of PSABV. Opportunity was also provided for the parents to give theirsuggestions for the future development of the PSABV programmes and resources.

81

New Zealand Journal of Employment Relations 34(1):77-93

Present at the meetings was the PSABV key teacher or provincial coordinators who wereable to observe in detail the focus group approach. Initial consultation took place with
the PSABV staff and the staff counterparts (the VSA volunteers) to determine the mostappropriate village pre-school groups to act as the pilot studies and the most appropriate
timing for the focus groups so as to minimise the intrusiveness into the lives of theparticipants. The longer term aim of this project is to have local staff become trained in
the focus group approach so that they may be able to assume the role of the focus groupfacilitators.
Optimising the opportunities for inclusiveness required considerable efforts and therealisation that for the parents of the pre-schoolers, there are many competing calls on
their time. In some cases, the focus group locations were moved in location to allow for
important activities such as the vanilla bean harvest. In other instances, the focus groups
were re-scheduled to fit in with important cultural activities related to celebrations suchas weddings, funerals and coming of age ceremonies. In all cases, the focus groups were
held where local communities felt best for them to occur, whether they were the village
meeting house, the grounds of the pre-school or elsewhere.

(b) The discussion guide used in the focus groups
The discussion guide, developed in consultation with PSABV staff, is discussed below:
Introduction: background to study,
outline of what will happen to the results.

requestforfull

participation

andThis gave the opportunity for all participants to become familiar with the aims of thestudy, for the facilitator to ask that all present take part fully but to also make it clear that
if they did not want to be involved they could leave at the start of the process or during
the course of the focus group discussion. It was also important to establish that the resultsof the focus group would be used in the research process but also that the contents of the
discussion were primarily owned by the participants and that they would receive theresearch results.
Questions
1) When did you and your children join the group - how did you come to be involved?
This question aimed to encourage everyone present to answer and is designed to makepeople feel involved and comfortable by identifying early on what all the participants
have in common. This also allowed each of the individuals to reflect on how they and thepeople in their village became involved in PSABV. In this way, there was the possibilityof a comparison (as outlined in question three) between the situation when they first got
involved and how things were for them now that they and their children had been
engaged in PSABV activities for some time.

82

New Zealand Journal of Employment Relations 34(1):77-93

2) What were your expectations for you and your children when you joined?
This built on question one and was aimed at eliciting more information from therespondents on how they perceived the project and their aspirations when they started. It
was planned that this question would provide further basis for comparison in question
three – in particular on how the choices and opportunities that they had expected toreceive for them and their children compared with what actually did occur for them.
Another important aspect of this question and others used in this discussion guide wasthat it was open-ended so as to enable the respondents to determine the direction of the
response. Framed as an open ended question, Krueger writes: “The answer is not implied,
and the type or manner of response is not suggested, individuals are encouraged torespond based on their specific situation” (1998: 31). It is then possible to delve into what
is on the mind of the participants rather than what the moderator thinks is on the mind of
the participant and this is at the essence of this research.
3) What changes have resulted from your involvement?
4) Have you had any new choices and opportunities for you and your children since yourinvolvement in the programme?
These were the key questions in the discussion guide and the one for which most time
was allocated. Question three was a more general question aiming to obtain the parents’observations on any variations they had seen. In question four, the plan was for theparents to elaborate further in more of a capability approach context. The participants
were given the opportunity to nominate the choices and opportunities that they felt were
important so as to give the maximum chance for them to express, in their own words,
how it was that they and their children’s lives had changed in the time they had been
participating in the programmes. It should be noted that in question four, the words“choices” and “opportunities” were used as these were seen to be ones which theparticipants would be able to readily relate to and it was felt that they also captured theessence of “capabilities” and “functionings” as used by Sen in the CA. The use of theterms “functionings” and “capabilities” would have been ideal from an academic point ofview but may not have been so easily understood by the participants.
The hope was that the participants would start by identifying aspects which could becalled increased functionings. That is, new skills that they and their children may havedeveloped since they have been in the projects. It was hoped that this would lead on toelaboration of new lifestyle choices that they now had, in particular new capabilities thatthey had developed.
Did you expect these changes?
This follow up question intended to elicit from those involved any surprisingdevelopments that occurred since they had been involved in the programmes. In this way,83New Zealand Journal of Employment Relations 34(1):77-93
the respondents had the opportunity for personal reflection on the development processthat they were undergoing.
5) What suggestions do you have for the future of the PSABV programme?
This question was included at the request of PSABV and was aimed at obtaining theperspectives of parents and other community members on how the NGO could better suit
their needs. When asking this question, care was taken to avoid unrealistic participant
expectations.
6) Summarise, ask if there was anything that was missed and promise to provide asummary of research findings and express thanks
In this part, the researcher gives a short summary of the major findings that have comeout of the focus group session and allows the chance for participants to add any further
comments that they may have thought of at the end. It was also considered to beimportant to reiterate to the participants that they will be receiving feedback from theresults of the study that they take part in.
c) Collaborative Training Session
Following a second field trip in Sanma Province, it was considered that there would be
benefit in a collaborative training session with Provincial Coordinators at the national
conference so as to allow key staff the opportunity to gain feedback from the two studies
conducted and to gain their input and to experience the focus group methodology. It wasalso considered that there would be benefit in future interviews with class one primaryteachers to determine their perspectives on the differences that attendance at PSABV preschools makes in children’s lives and education. In November 2007, a collaborative
training exercise was carried out with PSABV provincial co-coordinators at the annual
conference of the association in Vila. During this time key, PSABV staff had theopportunity to develop and contribute their perspectives on the focus group methodology.
This allowed for advancement of capabilities at another level – that of the provincial
coordinators trainers within the PSABV movement.
d) The capability approach and the focus group methodology used in the study
The parallels between the participatory approaches to project appraisal (such as focus
groups) and the CA have been noted in the literature – see for example, Alkire (2002),
Apsan Frediani (2006), and Pellisery and Bergh (2007). The participatory appraisal
methodology, developed and used in this project, is based within the CA and allows forevaluation of a programme’s progress in terms of criteria that are especially relevant to
the participants in the programmes. Sen argues that “…in analysing social justice, there isa strong case for judging individual advantage in terms of the capabilities that a personhas, that is, the substantive freedoms he or she enjoys to lead the kind of life he or she hasreason to value.” (1999: 87). Furthermore, Sen suggests that “…in this perspective,
poverty must be seen as the deprivation of basic capabilities rather than merely as

84

New Zealand Journal of Employment Relations 34(1):77-93
lowness of incomes, which is the standard criterion of identification of poverty” (ibid:
87). From a CA perspective, the aim of the focus groups utilised in this study is todetermine the extent to which the programmes of PSABV, supported by VSA are
alleviating the deprivation of these basic capabilities of the parents and children involved.
Fundamental to the focus group methodology is that the village communities where thepre-schools are established are at the centre in this evaluation process:One of the strengths of the focus group method is that it allows participants to
identify for themselves the choices and opportunities they have learned or
discovered through their participation; that is, it assists participants to recognize
the active expansion of their own capability sets (Schischka, Dalziel andSaunders, 2008: 21).
The main objective of the focus group project was to provide the Ni-Vanuatu people
involved in PSABV programmes in the villages with a participatory tool whereby they
can regularly take part in the appraisal of the programmes. The appraisal of the
programmes has particular reference to the stated aims of PSABV:To bring together all people concerned with the care, education, and health of preschool children, so that through contact and discussions with each other, themembers will seek ways to promote the development of pre-school education…
To work with the community to develop and improve village pre-schools… James(2004: 141)
The methodology utilised was based around focus groups which had been successfully
applied in case studies of two poverty alleviation programmes in other Pacific locations.
The results of which are reported in Schischka et al. (2008). Using focus groups within
Sen’s CA has two particular strengths for practitioners. First, it is a mechanism forfacilitating reflective participation by programme members. In the group interviews withthe parents (and in some cases extended families) of PSABV children, participants wereable to reflect on the way the programme had helped them to discover capabilities they
already had, but which they had not previously realised could be valuable in creating selfhelp opportunities. Second, the focus groups are a mechanism for providing information
to external agencies on the participants’ life choices that they themselves value and havereason to value.

Key themes emerging from the focus groups
Theme one was the efficacy of the CA based focus group methodology in empowering
the communities in Vanuatu that work with PSABV. As the long term aim is for thefocus group methodology to become part of the regular operation of the PSABV in all
their activities, it is seen as important that the focus group methodology is adapted to
local circumstances and that can be owned locally. In this way, it is not dependent on an
outside facilitator but rather can be implemented by local people as part of thedevelopment cycle that they are taking part in. It is anticipated that the Researcher will

85

New Zealand Journal of Employment Relations 34(1):77-93
return to the community pre-school groups in the future to appraise the extent of successof the incorporation of the focus groups into the programmes of PSABV and to advise on
any modifications that might become necessary to the methodology and discussion guidein future years. The focus groups also allowed parents the opportunity to increase theirawareness of the effect of PSABV programmes operating in their villages.
In the terms of the CA, it is argued that what is necessary is that the participants are able
to discover for themselves the valuable functionings that they have been able to develop
and it is useful to return to Sen’s original definition of capabilities. The necessity ofpeople’s involvement in the process of development and appraisal is accentuated when it
comes to the consciousness raising process that should occur when they are able to realise
the “…substantive freedoms that they have been able to achieve alternative functionings”
or in the way that the participants are more likely to understand the freedom that they aredeveloping “…to achieve various possible lifestyles,” (Sen, 1999: 75).
Not only is it essential, therefore, that the people involved in the development andappraisal process not come up with the criteria by which the projects can be appraised
through such means as the focus group process, but it is also important that they get
immediate and ongoing feedback of the results of this analysis, since the discoveries they
make in the appraisal are part of their discovery of the development process. It is
important that the results of focus group deliberations are owned by those participants
rather than simply “extracted” by outsiders for analysis elsewhere. After a time, thefocus groups can provide a clear trend as to how the capabilities of groups are developing
and comparisons can be made regularly over time without the need for outside control
groups for comparison.
However, it is also important that field workers, supervisors and management ofdevelopment organisations regularly monitor the results of participatory methods, such as
focus groups. It is important for them to be aware of the motivations of the participants –what sorts of functionings they see as valuable to develop and what alternative
capabilities they wish for. This is also important because this kind of discussion amongst
the participants will give opportunity for real contribution to programme design by those
who are supposed to be benefiting. It will also be possible with regular appraisal by focus
groups for the management to be regularly conversant with the changes that are occurringin the lives and perspectives of the participants in a systematic way. There is also the realprospect of the results of the focus groups being used as a means of accountability of thedevelopment agency to participants – a way of making explicit how far the projects
provided are succeeding in discovering or expanding the capability set of the participants.
These focus groups should be used as a way of returning again and again to theparticipants in a continuous cycle of appraisal that is incorporated into development
initiatives. It is argued here that it can be through the use of participatory methods suchas the focus groups used in this study can realise these freedoms to achieve various
possible lifestyles and thereby enhance their capabilities. The incorporation of the focus
group methodology into the capabilities approach can be shown in a diagram (figure two)
which is an adaptation of figure one earlier in this article.

86New Zealand Journal of Employment Relations 34(1):77-93
Figure 2: The Capabilities Approach Revisited: A model which puts thedevelopment process occurring for the participants at the centre of the appraisal
process and which incorporates the capabilities approach.

Freedom
Capabilities Set
A

B

C

D

E

F

Development Process
revealed by Focus
Groups.

Goods

Functionings

This diagram shows that the capabilities approach can, indeed, be operationalised using
focus groups to appraise the development processes that are going on in the minds andlives of those participating in the programmes. While development agencies can provide
goods and increase functionings, it is possible to argue that development has only truly
occurred when “the free and sustainable agency” as stated by Sen, is developed andparticipants are able to actively expand their own capabilities set. The arrow leading fromgoods and functionings represents the development process that occurs for individuals
involved in development initiatives such as the PSABV. It is the realisation of thisdevelopment process that is going on within them that is important to capture in theappraisal method that is developed – the realisation of the extent to which Sen would saythat they are “achieving alternative functioning combinations (or less formally put, thefreedom to achieve possible lifestyles)” (1999: 75). It is the consciousness raising87New Zealand Journal of Employment Relations 34(1):77-93
process whereby the participants realise the extent to which their capability set has
expanded that the focus groups have been able to highlight and to appraise.
The diagram shows that this appraisal is an overtly qualitative and subjective process –the participants are describing in their own terms the potentials within themselves that are
being developed when they take part in these projects. By looking back at the time they
have been taking part they can see how their lives and their perspectives have alteredsince they received the ‘goods’ of the project and started to develop the ‘functionings’
that they have reason to value. They can also reflect on the way in which their ‘capability
set’ is expanding.
Implicit in the two-way arrow of the diagram leading from the focus group is that there
needs to be continual re-evaluation of the goods and functionings incorporated into a
project. Development is acknowledged as a dynamic process and the needs of a group ofparticipants will change over time. For example, Vanuatu may be hit by another major
cyclone in the future that will greatly affect the relevant goods and functionings that theparticipants value in the immediate recovery phase from such a catastrophe. This, in turn,
could change the capability set that a project would develop.
The methodology revealed in this diagram is one that is flexible enough to cover manydifferent contexts. This methodology does not attempt to develop a ‘master list’ of‘central human functional capabilities’ or ‘central values of the poor’. Rather it
recognises that participants in development programmes such as PSABV are aheterogeneous group, that poverty is a multi-faceted condition and that poverty reduction
programmes should reflect this diversity. Consequently effective appraisal of these
programmes should allow for, or even encourage, the changing and diverse perspectivesof those involved.
Theme two was that the CA based focus group methodology has allowed the views of theparticipants to be expressed and this is revealed in the following analysis of thetranscripts of the focus group interviews. Primary, the realisation amongst many parents
that pre-school is the foundation of children’s learning and what they do while attending
helps them get ready for Class One at primary school. A number of comments were madeby parents in various pre-schools to the effect that their older children had performedmuch better at primary school in comparison to those children who had not had theopportunity to attend a pre-school. Related to this better performance was the greater
confidence that the children had gained from their exposure to the pre-school activities
such as the games and toys which help them to be able to write, read and understandbasic mathematics.
Also of significance was what the parents came to realise when reflecting on their own
understanding of the learning of pre-school age children. A number noted that it isbeneficial to allow the child to gain independence in play and learn to solve problems on
their own and that the children had this opportunity at the village pre-school.

88New Zealand Journal of Employment Relations 34(1):77-93
The use of the local vernacular language as the main medium of instruction in the preschools attracted generally favourable comments form the parents interviewed. A
common sentiment was that it is important that the child is familiar with his/her own
language first before he/she learns a new language like English.
The focus groups offered the opportunity for constructive criticism of the programmes
they were involved in. A number of parents saw need for permanent materials for classrooms including concrete floors, corrugated iron roofs to make the buildings of the preschools more durable and water tank storage facilities to make better use of the rain that
falls in the wet season. However, there were also many positive comments concerning the
pride communities felt in constructing buildings and equipping them using local
materials. An important outcome of the discussions in the interviews was the unexpected
results that the parents had come to realise after they and their children had been involvedin the activities of PSABV for some time. The focus group discussions gave the parents
the opportunity to actively reflect on the consequences for their communities and children
due to the presence of PSABV pre-schools in their villages.
Related to this was the realisation of the importance of the involvement of different partsof the village. It was seen by a number of parents that this participation was important tomaintain the momentum of the pre-school in the long term. A common sentiment wasthat there are a large number of commitments that individuals households have and thecontribution to the village pre-school was sometimes hard to maintain in the long term.
Having an active and effective Chairman and committee was cited as an important
requirement for the pre-school to develop in the district especially when it came to fundraising and the construction of new buildings, as well as the maintenance of existing
facilities.
Comments revealed the importance that the parents gave to the need for the wholecommunity to work together for the pre-school to be successful in their community. The
integration of older people into the pre-schools was seen as very important when they
visited the class to pass on customs, songs, stories and dances.

Conclusions on the Outcomes from this Process for the Capability of theCommunities, Agencies and Schools Involved
The focus group analysis provided the participants with the opportunity to voice theiropinions on a wide range of changes which had occurred in their lives, to consider the of
the scope of the projects and to relate the standards by which they would wish to appraise
the effectiveness of the programmes. That is, the findings show that development does
not involve just giving people skills or physical goods, rather, in the terminology of thecapabilities approach, development is a process involving people actively enhancing theirfunctionings and thereby recognising their own capabilities that already exist. The focus
group process also makes it possible to identify the choices and opportunities that theparticipants are realising are becoming available to them through their participation – thatis, the active expansion of their own capability sets. In this way, the capabilities and89

New Zealand Journal of Employment Relations 34(1):77-93
processes revealed in the focus group findings represent a significant appraisal ofdevelopment for those individuals and groups involved in the projects.
The focus group methodology allows for the highlighting of the paradigm shift that isrequired in advancing education opportunities for all children. According to Swain,
James and Schischka (2008: 48)
Over two thirds of Ni-Vanuatu children are currently excluded from the education
system before secondary school. Girls are actively discriminated against. Examcentred schooling has led to elitism and nepotism with many inequities. The basic
human right of access to education has been denied for many Ni-Vanuatu
children. However, change, led by early childhood educators, is underway. The
beginnings of a paradigm shift can now be detected as learner-centred earlychildhood education programmes have spread throughout Vanuatu. It is expectedthat this shift will percolate up.
The changes in their children identified by the parents, and the many advantages of local
ownership of the PSABV kindis revealed in the focus groups reported above, indicate that
there is an increasing realisation amongst parents of the value of the active learning
environment provided in PSABV pre-schools. The reports of the focus group interviews
allow PSABV management to better articulate these benefits to policy makers andfunding providers. They have also aided increased recognition of the important role
PSABV plays and provided impetus for provision of resources to enable the growth andconsolidation of PSABV programmes.
Moreover, the results of the focus group studies, undertaken in a number of village
communities, demonstrate the wide engagement of these communities in the learning andeducation of their children. Active engagement was a requirement at the outset as villages
had to demonstrate their commitment to the establishment of a kindi by providing land,building a local material school and other facilities, and actively participate in theestablishment of the kindi. This approach ensured that the principles of partnership andparticipation were central to the work of the PSABV in rural Vanuatu. The consequencesof this partnership approach, that have been identified in the evidence gathered for thisstudy, and have been profound for families and communities throughout Vanuatu.
The transcripts from the interviews in both the remote rural context and the moredeveloped urban situations revealed some significant capability outcomes from the resultof the programmes of PSABV. Specifically, the realisation amongst many parents thatpre-school is the foundation of children’s learning. Also, that what children do while
attending kindi helps them prepare for Class One at primary school, their future
education, and greater parental involvement and understanding of their children’s
education.
The focus group interviews also revealed quite specific capability needs of Key Teachers,
Provincial Coordinators and local people involved with the PSABV. The need for trainedteachers in isolated rural communities was identified by many and this need reflected the90

New Zealand Journal of Employment Relations 34(1):77-93
views of returned VSA volunteers and PSABV management. High training needs, very
limited access to any training opportunities, and difficulties in travelling away from home
for training characterised the situation of local teachers. When it comes to training needs
at PSABV, demand most often exceeds supply. The focus group methodology was
successfully utilised and adapted by key PSABV staff in both remote rural and urban
contexts outlined and represents a sustainable long term option for training and awarenessraising within the limitations of time and resources that this organisation operates.
In other instances, the focus groups allowed for the contrasting views of the parents to bearticulated, such as, where they made suggestions for priorities for resources for the preschools. While it was important that unrealistic expectations were not raised in the courseof the focus groups, they provided an opportunity for parents to report back to theprogramme staff their views on ways in which the pre-schools could develop to bestreflect what the parents valued.
Finally, local PSABV stakeholders developed the local Bislama name for the focus groupprocess – “Janis blong toktok”, which translates as “the chance to talk”. The focus groups
allowed a chance for all community members to “exercise their voice”. Central to Sen’s
CA is the concept of expanding capabilities, and this is provides a useful framework foranalysis of the situation of the many parents and children who have participated in thedevelopment and management of village pre-schools. The focus groups also provide ameans by which organisations like VSA working with development partners can integrate
the views of their development partners into the ongoing development of theirprogrammes.

References
Alkire, S. (2002). Valuing Freedoms: Sen’s Capability Approach and Poverty Reduction.
Oxford: Oxford University Press.
Apsan Frediani, A. (2006). ‘Participatory methods and the capability approach’, Human
Development and Capability Association Briefing Note
Chambers, R. (1995). Poverty and Livelihoods: Whose reality Counts? Institute ofDevelopment Studies. Discussion Paper 347.
Dasgupta, P. (2001). Valuation and Evaluation. In O.N. Feinstein and R. Picciotto (eds.)
Evaluation and Poverty Reduction – World Bank series on Evaluation and Development
Volume 3. New Brunswick: Transaction Publishers.
Friere, P. (1970), Pedagogy of the Oppressed. Continuum, New York.
Friere, P. (1974), Education for Critical Consciousness. Continuum, New York.

91

New Zealand Journal of Employment Relations 34(1):77-93
James. J. (2004). Early Childhood Development in Vanuatu. In K. Sanga, J. Niroa, K.
Matai and L. Crowl. (eds). Re-Thinking Vanuatu Education Together. (pp. 136-156).
Institute of Pacific Studies, University of the South Pacific: Suva.
Krueger, R. (1998). Analyzing and Reporting Focus Group Results. Thousand Oaks:
Sage.
NZAID. (2006).
2010.Wellington.

NZAID

Vanuatu

NZAID(2008),
website:Retrieved December 2008

Development

Programme

Strategy2006-

http://www.nzaid.govt.nz/programmes/c-vanuatu.html

Pellissery, S. and Bergh, S. (2007). Adapting the Capability Approach to Explain the
Effects of Participatory Development Programs: Case Studies from India and Morocco.
Journal of Human Development. 8(2): 283-302.
Pene, F., A. Taufe’ulungaki & C. Benson (2002), Tree of Opportunity: Rethinking PacificEducation. Institute of Education, University of the South Pacific, Suva.
Rehnstrom, J. (2000). Development Cooperation in Practice: The United Nations
Volunteers in Nepal. Tokyo: United Nations University Press
Sanga, K., Niroa, J., Matai, K. and L. Crowl. (eds). Re-Thinking Vanuatu Education
Together. (pp. 136-156). Institute of Pacific Studies, University of the South Pacific:
Suva.
Sanga, K., Chu, C., Hall, C. and C. Crowl. (eds.) (2005). Re-Thinking Aid Relationships
in Pacific Education. He Parekereke Institute for Research and Development in Maori
and Pacific Education, Victoria University, Wellington, and Institute of Education,
University of the South Pacific, Suva.
Schischka, J. (2005), The Capabilities Approach in Economic Development. Doctoral
Dissertation. Christchurch: Lincoln University.
Schischka, J. (2006), Research on Participatory Appraisal Methodology for Pri Skul
Asosiesen Blong Vanuatu – Report on Focus Group Interviews Conducted in North
Pentecost Villages Communities during January 2006. Unpublished MS.
Schischka, J. (2006a), The Long Term Operationalisation of the Capabilities Approachby a New Zealand Based Development Agency in Different Socio-Cultural contexts.
Paper presented to the sixth International Conference on the Capability Approach,
September 2006. University of Groningen, Holland.

92

New Zealand Journal of Employment Relations 34(1):77-93
Schischka, J. (2007), Research on Participatory Appraisal Methodology for Pri Skul
Asosiesen Blong Vanuatu – Report on Focus Group Interviews Conducted in Sanma
Village and Town Communities during June/July 2006. Unpublished MS.
Schischka, J., Dalziel, P. and Saunders, C. (2008). Applying Sen’s Capabilities Approachto Poverty Alleviation Programs: Two Case Studies. Journal of Human Development.
9(2): 229-246.
Sen, A. K. (1999), Development as Freedom. New York: Alfred A. Knopf,
Swain P., James, J. and Schischka J. (2008). Janis Blong Toktok: Pri-Skul Asosiesen
Blong Vanuatu and the role of New Zealand Volunteers. Voluntary Service Abroad Case
Study Series Number Two. Wellington: Volunteer Service Abroad
Vanuatu Ministry of Education. (2001), Draft Education Master Plan. Ministry of
Education: Port Vila.
VSA. (2006a). Monitoring and Learning Framework. Wellington: Volunteer Service
Abroad.
VSA. (2006b). Strategic Intent 2007-2011. Wellington: Volunteer Service Abroad

93

New Zealand Journal of Employment Relations 34(1):94-102

Chronicle: October, 2008 – January 2009
October 2008
The upcoming November election provided a platform for political parties to trumpet
their employment policies. The Press reported an announcement by Minister ofLabour Trevor Mallard that the Government planned to introduce requirements forbusinesses to give staff minimum notice periods and payouts if they propose to lay off
workers. Mr Mallard said that options for a statutory minimum for compensation andnotice would go out for public consultation in early 2009. This announcement cameamongst predictions of a sharp rise in unemployment due to the world financial crisis.
The NZ Herald reported on the National Party’s proposal to introduce a 90-day trial
period for new employees in firms that employed fewer than 20 people. The National
Party’s Employment Relations Spokesperson Kate Wilkinson claimed that New
Zealand was the only country in the OECD (apart from Finland) that did not have atrial period for new staff. She said that a trial period would give smaller employers
confidence to take on new employees with the knowledge that if they did not workout, they could be dismissed. The article went on to note that the proposal would
affect most of the country's companies as 350,000 (96.8% of all firms) employed 19
or fewer full-time staff. Wilkinson also suggested that Small Medium Enterprises(SME) lacked the human resource capacity to make good employment decisions andthat the policy would give them the confidence to take on people. She concluded thatthe policy included enough safety mechanisms to protect people from being exploitedby bad employers.
In a response to this announcement, Minister of Labour Trevor Mallard called on the
National Party to clarify its position on whether new teachers would face 90-day trial
periods or not after conflicting comments from two spokespersons. The National
Party’s Education Spokesperson Anne Tolley had previously said that teachers would
not be included in the policy but subsequently, at a Council of Trade Unions election
forum, Employment Relations Spokesperson Kate Wilkinson said that teachers would
be included.
The celebration of Labour Day was foreshadowed by a Dominion Post article which
said that more New Zealander’s than ever were working in excess of 50 hour’ a week.
This level was exceeded only by South Korea in the developed world. Reasons given
for working longer included changing economic conditions meant that households
could not survive on one income. Business NZ’s chief Executive Phil O'Reilly said
that workers could not continue “slogging away day after day” but until they started
thinking smarter and productivity increased, the 40-hour week would be a dream for
many. Council of Trade Unions’ President Helen Kelly cited research that stipulated
that those working in excess of 50 hours fell into two categories. The first group of
workers worked long hours to make ends meet, and the second group of workers
earned a good wage but were part of a work culture that caused them to work longhours.

94

New Zealand Journal of Employment Relations 34(1):94-102
The Press reported that junior doctors had finally ratified their collective employment
agreement which featured an 8.68% pay rise. This brought to an end a protracted
dispute that had lasted for 15 months and led to doctors to take strike action in May
and June 2008 (see May and July Chronicles).
The Dominion Post reported in early October that Wellington bus drivers were again
threatening strike action. After another round of negotiations, a new offer was madeby the employers which included a cash payment of $300 plus a new pay offer of a
7.5% rise, and this new offer was accepted by the drivers. The Taranaki Daily News
reported that workers at Fitzroy Engineering in New Plymouth threatened to strike if
their pay negotiations did not reach a satisfactory outcome. However, they accepted a
6.5% pay increase over 12 months, which constituted a significant cut on their initial
demand of up to 15%.
Fast-food giant McDonald’s featured prominently in the media during October. The
Timaru Herald reported that union employees at all five McDonald’s outlets at
Auckland Airport took industrial action in an attempt to gain pay equity with theirunion colleagues at KFC, Starbucks and Pizza Hut. The Secretary of the Unite union
Matt McCarten claimed that members who went on strike and protested at the airport
were harassed by security staff and police, and the union's organiser was threatenedwith a trespass notice. The Waikato Times suggested that McDonald’s employees in
Hamilton had asked their customers not to eat at McDonald’s at all. The workers
wanted McDonald’s to lift its minimum pay rate from $12 per hour to at least $12.80
per hour with allowances to pay for length of service. A McDonald’s spokesperson
was quoted as saying that the company supported the right to strike but there weremany ways workers could earn more money and the company preferred to give pay
increases on performance rather than service.
McDonald’s featured again in a Press article with a report that the Kaiapoi outlet wasgoing to appeal an Employment Relations Authority decision that awarded $15,000 toa teenage worker (see September Chronicle). The Authority ruling found that theemployee had been constructively dismissed after joining a union. The same franchisereceived further publicity in the Press when the union representing another employee
claimed that the employee was forced to finish her shift despite her foot being runover in the restaurant car park. A Unite union organiser Joe Davis said the 17-year-old
girl was working on the drive-through when her foot was run over as she delivered
food to a parked car. She suffered a swollen foot but her manager told her she still
had half an hour until her shift finished and made her carry on.
A Dominion Post article claimed that high staff turnover at the Accident
Compensation Corporation was attributed to a “bullying culture” and a massive
workload. This was despite a Department of Labour investigation in 2004 into
complaints of overwork, stress and bullying at ACC. Figures showed that since May
2007, 630 staff had resigned (out of 2600) and that since 2003, 56 personal grievancecases had been taken by staff members. The turnover rate of around 25% per annum
did not compare favourably with comparable government agencies such as Housing
New Zealand and Auckland District Health Board who had around 15% staff
turnover. In the article, a former employee was quoted as saying that there wasdefinitely a “bullying culture” and the management approach was “dictatorial”.

95New Zealand Journal of Employment Relations 34(1):94-102
According to the Dominion Post, the Supreme Court had agreed that it would hear thecase of unlawful discrimination of a senior Air New Zealand pilot who was
automatically demoted when he turned 60. The pilot went from being a Boeing 747
captain and flight instructor to the lower rank of first officer when he turned 60 in
September 2004. The appeal would be against a Court of Appeal decision that age
discrimination was not the reason the man lost rank and was moved to a lower-paying
job (see July Chronicle). The appeal was seen as having the potential to clarify theway discrimination issues are defined and decided.
The NZ Herald reported that an Auckland school teacher, who took a case to the
Employment Relations Authority claiming he was repeatedly bullied by other staff,
was so difficult to work with that his dismissal was entirely justified. The teacher
claimed that his workload was intolerable and maintained that he was bullied by otherstaff. It was also asserted that his dismissal was in retaliation for having complained
to the Ministry of Education about college management. The Authority found that theteacher’s workload was not “out of sync” with other teachers and that he was given
adequate support which included an extra day off a month. It was also found that hewas not bullied by his colleagues, but rather that they acted in an “entirely
predictable” way in frustration at the way he behaved towards them. The Authority
added that the teacher appeared to have little insight into the effects of his behaviouron those with whom he interrelated with.
The NZ Herald featured an article detailing the impact of casualisation on sectors of
the workforce and gave the example of a Middlemore Hospital kitchenhand employedby Spotless Services. The employee worked on average 20 to 30 hours a week forfour years but was still a casual worker. The worker said that although she wasworking 40 hours at the moment, it was ‘off and on’ and that she needed secure work
to support herself, her sick husband and four children. The article went on to say that
despite nine years of Labour-led governments, her experience was commonplace. The
Service and Food Workers Union suggested that the trend toward using casual
workers had become a serious problem. In response, the Minister of Labour Trevor
Mallard had drafted legislation which would give Labour Department inspectors thepower to determine whether ‘casual’ employees were, in fact, really permanent
employees (see June Chronicle). The bill would also provide a code of employment
practice for casual workers, and would require that unionised workers in labour hirecompanies to be paid at least as well as unionised workers employed directly by an
employer that hires the labour hire company.

November 2008
The Herald on Sunday reported that small and medium business owners welcomed
the news that the 90-day probation period policy was likely to be implemented by the
newly elected National government (see September Chronicle). Employment
Relations Spokesperson Kate Wilkinson indicated that the new government had not
set a time for implementing the policy but an indication would be given once
parliamentary roles had been announced.
Both the NZ Herald and the Waikato Times reported that The Dairy Workers’ Union
had given Fonterra notice of a strike planned to begin on 17 November 2008. The

96

New Zealand Journal of Employment Relations 34(1):94-102
union was seeking an 8% increase but the employer had offered 5% plus a 2.5% lumpsum payment. The National Secretary of the New Zealand Dairy Workers’ Union
James Ritchie said the collective bargaining agreement, which covered about 4,500
people, was historically the most serious negotiating situation the union had with
Fonterra. It was later reported in the Waikato Times that the parties had reached asettlement after two days of negotiations. The agreement still required ratification by
the members before the strike notice would be withdrawn. Fonterra claimed that theoffer was a fair and appropriate agreement that would give security for both sides in
the current turbulent economic and financial climate.
An ongoing dispute at Ports of Auckland flared up again with the NZ Herald reportingthat the Ports of Auckland Company had received notice only an hour before its
annual Christmas party of a one-day strike by members of the Maritime Union. The
union withdrew the notice after a technical error, but Branch President Denis Carlisle
said another strike notice would be issued. Predictably, the reaction from Ports of
Auckland management was that the strike notice was “disappointing, unnecessary andprovocative” in difficult economic times. The Maritime Union claimed that it was thecompany that was being provocative by making it increasingly difficult for the union
to hold meetings for its members.
There was further unrest at McDonald’s with a report that unionised workers wereplanning to burn an effigy of Ronald McDonald at a meeting in Auckland (seeOctober Chronicle). Unite union members were taking part in a meeting to mark both
Guy Fawkes day and to emphasise anger over work and pay conditions. Unite’s
National Director Mike Treen was quoted as saying that “...young, angry workers are
telling the world’s biggest fast food company that we’re not lovin’ low pay and unfair
rostering...” According to Mr Treen, low pay and irregular work hours were among
the main concerns but McDonald’s Communications Manager Kate Porter claimed
that McDonald’s had already agreed to the demands for secure work hours and thatthe planned strikes were an attempt at “news grabbing”.
The Waikato Times reported that Hamilton bus services were disrupted by a 24-hour
drivers strike after a breakdown in pay talks between bus company Go Bus anddrivers who were members of the Northern Distribution Workers Union (seeSeptember Chronicle). Drivers indicated to Go Bus that they would not accept cash
fares but, in turn, Go Bus responded that this refusal was not acceptable and that it
would lock out the union drivers. However, within a week the drivers ended the fiveday strike and accepted a 5.6% pay increase. Union Secretary Karl Andersen said thebus drivers had to settle for an offer of $14.27 per hour but would have preferred$15.50 an hour.
The ongoing case of the leading medical specialist wrongly dismissed after trying toe-mail photographs of his genitals to a female friend remained in the news with
Dominion Post recorded his successful appeal in his battle for a costs award in the
Court of Appeal. The Court determined that he could remit his appeal for costs backto the Employment Court, after a previous judgment that awarded no costs. The
doctor was dismissed after pictures of his penis were found on his work computer. He
was reinstated to his $200,000 position by the Employment Court in November 2005
after a ruling that he had been unjustifiably dismissed. Subsequently, the doctor
claimed more than $195,000 in costs which was rejected by the Employment Court.

97New Zealand Journal of Employment Relations 34(1):94-102
The Court of Appeal concluded that the judge failed to deal separately with the issuesof remedies and costs.
In a sign of the times, the Dominion Post suggested that corporate chiefs andbusinesses were hiring bodyguards and extra security to protect themselves fromdisgruntled employees who had lost their jobs. The article claimed that the fallout
from the financial crisis had made several chief executives hire round-the-clock
protection as sacked or redundant workers threatened both them and their families. In
one case, a bodyguard maintained protection of a chief executive for several weeks,
while another monitored the movement of a former employee.
Although there was an economic downturn it was highlighted in media reports that a
number of initiatives were being used to prevent staff layoffs. Helene Higbee, directorof a specialist remuneration consultancy, informed that while most of her clients werelooking at making staff redundant, some were doing their best to retain and redeploy
people. These actions included redeployment of staff into other areas, a freeze on
hiring new staff, not replacing staff as they leave as companies try to do more withless. Budget reviews also looked at ways to trim spending such as calling travel halts.
However, the reality for unions was that redundancies were increasing at a great rate.
The President of the National Distribution Union claimed that the union had been“right up to our necks” in redundancies.

December 2008
There was extensive coverage in the mainstream media regarding the introduction of
the 90-day probation period amendment to the Employment Relations Act. The
Dominion Post informed in early December that the National-led Government looked
set to introduce a 90-day probation period for new employees into Parliament underurgency. The introduction of the Bill was predicted to run into “stiff opposition” andwas seen as a test of the relationship between the National Party and the Maori Party.
There was no select committee hearing required because the changes were signalledin the election campaign and the Bill introduced in 2006 by Wayne Mapp went before
a select committee. This lack of “public debate” drew criticism from the union
movement who called it an attack on worker’s rights. Former MP Laila Harre claimed
that this was “the first step to wind back workers’ rights and protections”. She further
criticised the push to pass the bill before Christmas as “ideological” and that it was“unashamedly backing bad bosses against vulnerable workers”.
Later in the month, the Dominion Post and the Press published articles suggesting that
the Government could extend legislation which would allow the 90-day probation
period to cover all employers. The explanatory notes to the Bill stated that“[c]onsideration could be given to evaluating the outcomes of this legislative changewith a view to extending it to cover all employers in future." Minister of Labour Kate
Wilkinson was quoted as saying that the Government was open to such an extension.
There were further media reports on the operation of the Employment Relations
Authority when an article appeared in the NZ Herald which criticised the operation of
the Authority. The article cited the Parentline / Maxine Hodgson case (see September

98New Zealand Journal of Employment Relations 34(1):94-102
Chronicle) and added that reform of the Authority was high on the government’s
agenda. The article suggested that the Minister of Labour Kate Wilkinson wasplanning to make the Authority keep records of its proceedings, allow the crossexamination of witnesses and make it act more “judicially'”. One senior employment
law practitioner commented that legal costs had crept up and that taking a case to the
Authority could be more expensive than taking a similar case to the Employment
Court. The Head of the Authority James Wilson said that the increased costs werepartly due to a 2004 amendment to the Employment Relations Act allowing dismissalon the grounds of what “a fair and reasonable employer would have done in all thecircumstances”. According to Mr Wilson, hearings that lasted more than a day had
increased 50% since the law change. Unions and employers generally felt that thesystem was working well but just needed “tweaking” with Tony Wilton, of theEngineering, Printing and Manufacturing Union (EPMU), claiming that compulsory
mediation and the use of the Authority had made resolving employment disputes
much less costly.
A further NZ Herald article on the Auckland waterfront dispute which began in late2006 after the collective agreement expired claimed that it was “lumbering intoanother year” (see October Chronicle). An Employment Relations Authority
investigation into claims breaches of good faith by both parties had been adjourned
until 2009. The article stated that that the port company appeared “unenthusiastic”
about the Maritime Union’s latest proposal and that prospects of a settlement looked
shaky.
The Nelson Mail highlighted that an Auckland bar manager was awarded nearly$36,000 in compensation and lost wages. The woman was demoted from her job as abar manager one week after she informed her employer that she was pregnant. She
was then dismissed a month later after she was accused of lying about her work hours.
A high profile television personality Craig Busch, also known the “Lion Man”, lost
his claim for temporary reinstatement at the Zion Wildlife Park in Whangarei,
according to the NZ Herald and the Dominion Post. The articles reported that Mr
Busch had been dismissed for alleged serious misconduct, including allegations ofmajor breaches of safety protocols, inappropriate behaviour in the workplace,
performance issues, failing to keep proper training records and causing loss ofrevenue through cancelling tours. What made the case more sensational was that hehad been dismissed by his mother and that some of his fellow staff members had
threatened to resign if he was reinstated.
The Unite union received further media coverage after accusing research company
Digipoll of victimising union members at its Hamilton call centre. The Waikato Times
reported that the union has instructed its lawyers to file a claim in the Employment
Relations Authority citing bullying, intimidation and workplace segregation. The
union attacked Digipoll owner Dr Gabriel Dekel, calling him “psychopathically antiunion”. The article featured Dr Dekel’s response where he denied that he was antiunion, but he also argued that his line of work was not suited to unionism, with clientdemand erratic and with many of his workers “otherwise unemployable”. Dr Dekel
said the union did not acknowledge “the uniqueness” of his operations and, if forced,
he would outsource all his jobs to call centres overseas.

99

New Zealand Journal of Employment Relations 34(1):94-102
In yet another case of workplace bullying, the NZ Herald recorded the unsuccessful
claim of an employee dismissed for bullying a fellow worker. The man claimed that
he was dismissed because his employer wanted to avoid the cost of making him
redundant. The Employment Relations Authority found that his employer Auckland
firm Buckley Systems (BSL) was justified in sacking the man because of his abusive
and aggressive behaviour towards his fellow worker. The behaviour included pouring
yellow or brown coloured primer paint on the man’s overalls to make it appear he hadsoiled himself, making loud and sudden noises to cause fright and filling his gloves
and facemask with tuna, as well as smearing it on some of his equipment. The
harassment escalated to physical assault and the employee eventually resigned. An
exit interview revealed the extent of the victimisation. The company investigated andthe perpetrator was dismissed for serious misconduct. The Authority concluded that“an employer acting in a fair and reasonable manner” would have dismissed the man.
A Dominion Post article published an analysis of the Employment Relations
Authority and its decisions which had been conducted by the Employers andManufacturers Association (EMA). The analysis of awards over the past five years
showed that complainants in Wellington were consistently awarded the highest
compensation for the hurt and humiliation involved in unjustified dismissals. The
Wellington payouts averaged $8,536 in 2007 while Christchurch averaged $6,630 and
Auckland $5,526. The analysis identified Wellington member Denis Asher, as making
the highest average awards of all the 17 members in 2004, 2005 and 2006, although
he was eclipsed in 2007 by Maria Urlich of Auckland. Auckland lawyer Eska
Hartdegen was quoted as saying that the variations showed that authority members
were “a law unto themselves”. The EMA had said in previous annual surveys thatcompensation claims were “a gravy train still picking up speed”, with the number of
personal grievance claims taken to the authority rising from 340 in 2004 to 436 in2005 and 515 in 2006. However, the latest analysis showed that the number of claims
had dropped to 416 in 2007.

January 2009
There was a dearth of reporting on employment relations in January 2008. Apart fromthe focus on further changes to employment relations legislation, most reporting
concerned disputes before the Employment Relations Act.
Reform of employment relations legislation remained on the agenda. A NZ Herald
article suggested that the Government needed to go further in overhauling the
Employment Relations Act if New Zealand was to survive the recession. Once again,
there were claims that restrictive employment law was one of the major hurdles forsmall to medium enterprises (SMEs). A survey conducted by a coaching company,
the Results Group, claimed that 94% of all the businesses surveyed stated that
“unworkable employment law” was the primary issue they faced. The announcementof an employment summit by Prime Minister John Key was seen by the Minister ofLabour Kate Wilkinson as a forum which could “offer a good opportunity forbusinesses and unions to raise their primary concerns and promote any initiatives,
particularly with respect to productivity and employment opportunities”.

100New Zealand Journal of Employment Relations 34(1):94-102
The NZ Herald suggested that the primary school teachers’ union, the NZ Educational
Institute, was taking its “first shot” at the recently passed 90-day employment trial
period. The union wanted to omit the trial period provisions from the kindergarten
teachers' collective agreement with the Ministry of Education. The union sought anagreement from the Ministry of Education and various kindergarten associations thata 90-day trial period was “neither necessary nor desirable”. The National Secretary of
the NZEI Paul Goulter stated that the Ministry of Education needed “to realise that
law change did not just deprive workers of personal grievance rights, but had asignificant effect on the labour market”.
In yet another employment issue involving McDonald’s (see November Chronicle),
the Sunday Star Times reported that a disagreement over payment of $10 worth of
McDonald’s burgers had escalated into a year-long employment dispute costing
thousands of dollars. Daniel Gledhill, an employee at McDonald’s branch in Mana
(Porirua), won his case for unjustifiable dismissal before the Employment Relations
Authority. However, the Authority told both parties that they should have been able
to settle the dispute themselves. Gledhill, who had worked at the McDonald’s branch
for three years and had a clean work record, was dismissed in October 2007 for giving
away $10 worth of fast food to friends. He took a personal grievance, claiming that hefelt pressured to give the food away, but intended to settle the bill after his shift
finished. However, he only paid the staff discount rate of $4 and accepted that heshould have paid the full amount. Gledhill was not awarded any remedies as his
actions had contributed to the employment dispute. It was found that the McDonald’s
branch did not conduct a reasonable inquiry into the incident and did not have hearevidence before dismissing Mr Gledhill.
Both the NZ Herald and the Waikato Times reported on the case of a breakfast radio
announcer from Tokoroa who claimed unjustifiable dismissal after a public “bust-up”
with his manager. The employee was unsuccessful in his claim for reinstatement andcompensation. The man was dismissed after he loudly challenged the mayor of
Tokoroa at a public meeting while dressed in clothing that identified his employer.
The man’s manager said she was embarrassed by his actions as local people
recognised him and associated him with working at the radio station. The
Employment Relations Authority found that the man’s conduct outside of working
hours did impact on his employment and his behaviour was “manifestly injurious to
the interests of the employer” and could bring his employer into disrepute.
The Dominion Post reported that the Defence Force was ordered to pay $100,000 to adoctor who was dismissed after raising concerns about her ability to treat patients in anaval decompression chamber. The treatment of the doctor was labelled as “callous,
hasty and rash” by the Employment Relations Authority. The Doctor had met with
her then manager to express concerns about her own work in the hyperbaric unit,
stating that she believed it was not safe for her to continue working as she was notadequately trained nor qualified. Hours later she was dismissed on the grounds thather duties could be altered only by mutual agreement. Additionally, it was claimed
that the doctor was not an employee because she worked under an independent
contractor agreement. However, the Authority ruled that, although the doctor worked
under an independent agreement, the nature of the employment meant that an
employment relationship existed. The Defence Force was ordered to pay her $81,072

101

New Zealand Journal of Employment Relations 34(1):94-102
in lost wages, plus a further $20,000 compensation for “emotional trauma anddistress”.
Another employment dispute involving a high profile personality reached the media.
Real-estate agent and former television star Michael Boulgaris was ordered by the
Employment Relations Authority to pay back $163,635 in unearned commission. An
Authority ruling determined that Mr Boulgaris, who had a major role in the ‘Location,
Location, Location’ TV series, had to pay back the money to Wensley Developments
Ltd who had employed him as a salesman in Queenstown. The dispute focussed on a$535,000 commission paid in advance. Mr Boulgaris had only earned $339,990 when
he resigned. Boulgaris claimed that he did not owe on the pre-paid commission as his
employer had misrepresented what he would earn. The Authority found no merit in
his argument.

Erling Rasmussen & Colin Ross
Auckland University of Technology

102