Introduction to the special issue
Despite their historical similarities, in the early 1990s employment relations inAustralia and New Zealand appeared to be headed in different directions. While
employment relations reform in Australia took place within the traditional institutionsof arbitration and was guided by corporatist style agreement between the Labour
government and the Australian Council of Trade Unions, the Employment Contracts
Act 1991 signalled a radical reordering of employment relations in New Zealand. This
marked divergence produced a lively and interesting comparative literature, sparked
by a research workshop held at the University of Sydney in 1991. This literature,
which focussed on the institutional sources of divergence between the two countries,
anticipated what was to become the dominant approach to globalisation in thecomparative employment relations literature.
This special issue revisits the Australia-New Zealand comparison in light ofsignificant changes that have taken place in the two countries during the last decade.
The articles are edited and refereed versions of some of the papers presented at a
research workshop held at the University of Sydney in February 2005 which focussed
on recent developments in employment relations in the two countries and wasattended by many of the academics who attended the original workshop, as well as a
new generation of scholars from the two countries.
The articles in this special issue provide insight into the similarities and differences
which have developed in key aspects of employment relations in the two countries
since the early 1990s. The paper by Brosnan and Campbell focuses on labour market
outcomes and provide a nuanced understanding of the interplay between economic
and institutional context in shaping these outcomes. Ramia explores the connections
between social welfare and labour market reform in the two countries. The two papers
by Cooper and May and by Briggs focus on recent trends in the two labour markets:
Cooper and May discuss union trends and issues while Briggs overviews the changing
patterns of industrial conflict. Taken together, the articles in the special issue provide
empirical support for Barry and Wailes’s view that the Australia New Zealandcomparison reveals some of the limitations of the institutionalist arguments that havedominated contemporary employment relations scholarship. This suggests that theAustralia New Zealand comparison remains just as fruitful a ground for comparative
research and theoretical development as it was in the early 1990s.
The editors would like to acknowledge the generous financial support provided by the
School of Business at the University of Sydney for the workshop from which these
papers are drawn.
Michael Barry, John Burgess, Erling Rasmussen and Nick Wailes
November 2005

Revisiting the Australia-New Zealand Comparison
MICHAEL BARRY and NICK WAILES 1

Abstract
Labour market regulation in Australia and New Zealand has proceeded along a similar
trajectory, sometimes intersecting and other times appearing to take divergent paths.
Interest in comparing both systems of labour market regulation peaked in the 1980s
and early 1990s when there was a marked divergence. The structural divergence was
highlighted by the abolition of compulsory arbitration and the introduction of the
Employment Contracts Act in New Zealand. Since the early 1990s, there has been are-convergence in the structures of labour market regulation. This re-convergencehighlights a need to revisit the Australia-New Zealand comparison. This paper seeks
to re-conceptualise the comparison by highlighting some of the limitations of theexisting comparative literature and developing a broader framework that examines
both the structures of labour market regulation and the functions that labour market
institutions perform. In doing so, and in keeping with the earlier comparative
literature, it seeks to contribute to the theoretical matrix within which cross-national
industrial relations research is conducted.

Introduction
Australia and New Zealand share similar histories including similar patterns of
economic development and labour market regulation. During the 1970s both countries
were affected in similar ways by changes in the international economy and during the
1980s both countries elected labour governments who introduced market oriented
reforms (see Castles et al, 1996). Despite these similarities, Australia and New
Zealand appeared to take very different approaches to labour market reform in the
1980s and early 1990s. In Australia the Australian Labor Party (ALP) entered into asocial pact, called the Accord, with the Australian Council of Trade Unions (ACTU).
Under the Accord, changes in industrial relations were gradual and took place within
the existing institutions of industrial relations. In contrast, in 1984 the New Zealand
Labour Party (NZLP) initially eschewed a formal compact with the unions and New
Zealand governments introduced a series of radical changes in industrial relations
policy. The highwater mark of this divergence was reached in 1990. While the Accord
partners were pursuing ‘managed decentralism’ through award restructuring inAustralia, the newly elected National government introduced proposals in New
Zealand that were to form the basis of the Employment Contracts Act (ECA).
This apparent divergence in industrial relations policy, in two countries with similar
economic and political histories and similarly affected by changes in the international
economy, created the conditions for the development of a vibrant and insightful
1Michael Barry is a Senior Lecturer in Industrial Relations, Griffith Business School, Griffith
University. Nick Wailes is a Senior Lecturer in Work and Organisational Studies, School of Business,
University of Sydney.

1

comparative literature. While quite diverse, the main focus of this comparative
literature was the role organizational and institutional variables played in producing
industrial relations policy divergence in these most similar cases. In particular, thisliterature attributed much of the policy divergence to differences in the organizationof unions and employers and the autonomy and capacity of the state. With its focus on
the significance of institutional variables, the Australia-New Zealand comparative
literature provided strong empirical support for what was to become the dominant
analytical approach to the impact of globalization on national patterns of industrial
relations in the broader comparative literature.
Since the early 1990s there have been a number of changes in both countries whichsuggest the need to revisit the comparison between the two countries and to reassess
the conceptual and theoretical basis on which the original comparative literature wasbased. If industrial relations in Australia and New Zealand diverged during the 1980s,
it has shown a tendency to converge during the 1990s (see Barry and Wailes, 2004).
During the 1990s Australia experienced significant changes in labour market
regulation - starting with the shift to enterprise bargaining and culminating in the
introduction of the Workplace Relations Act in 1996 - which have brought it muchcloser to the pattern of labour market regulation in New Zealand under the ECA. Thisis likely to continue. The Howard Coalition government took control of both housesof the Australian Federal Parliament on July 1 2005 and has subsequently introduced
legislation which further erodes the traditional institutions of arbitration. Meanwhile
in New Zealand, the election of a Labour government and the introduction of the
Employment Relations Act (ERA) in 2000 has seen some attempt to re-collectivise
the labour market. This article argues that revisiting the Australia New Zealandcomparison, and taking these recent developments into account, provides anopportunity to reflect on the strengths and limitations of the theoretical frameworkthat informed the earlier comparative literature and may provide the basis for further
theoretical development.
The article is structured as follows. The first section briefly reviews the main findingsof the original Australia New Zealand comparative literature and its relationship to
broader debates in comparative industrial relations scholarship. The second section
reviews the limitations of the comparative literature and some of the theoreticalconcepts on which it was based. In light of these criticisms, the final section argues
that while institutional factors are important in shaping industrial relations outcomes,
comparative scholarship needs to take into account a broader range of variables and to
be based on a more complex understanding of the form and functions of institutions.

The Australia-New Zealand Comparative Literature
The apparent divergence between two similar countries in the late 1980s and early
1990s created the conditions for the development of a lively and insightfulcomparative literature (for a review see Wailes, 2003: 135-206). One catalyst for thiscomparative literature was a research workshop held at the University of Sydney in
May 1991. Papers from this workshop were subsequently published as Economic
Restructuring and Industrial Relations in Australia and New Zealand: a comparative
analysis edited by Mark Bray and Nigel Haworth (Bray and Haworth, 1993a).

2

As Bray and Howarth (1993b: 2) noted the development of a policy divergence
between two ‘most similar’ cases provided a rare opportunity to identify sources ofvariation. Broadly speaking, it is possible to identify three separate but interrelated
sets of explanations for divergence in the subsequent comparative literature. First, anumber of authors noted differences in the institutional structure and organisation of
the labour movement in the two countries. Specifically, they identified differences in
the unity of the labour movement, the power of the trade union central and the links
between the industrial and political wings of the labour movement in the twocountries. Bray and Walsh (1993), for example, argued that while both union
movements adopted a similar response to economic restructuring, the Australianlabour movement was more successful in implementing a strategic response to
economic restructuring because of the greater authority of ACTU in comparison with
its New Zealand counterpart. As they note “[By the 1980s] the ACTU was more
representative, due to mergers … [and] it developed better organisational structures
which more effectively bound federal unions to ACTU policy”. This meant that the
ACTU was in a position to deliver wage restraint under the Accord and also play arole in policy development. In New Zealand, by contrast, Bray and Walsh (1993: 132)
argued that there wasa belief by leading Labour politicians that the central union organisations - theFederation of Labour (FOL) and the Combined State Unions (CSU) - would
be unable to deliver their side of an accord. The historical legacy of weakcentral union organisation continued to frustrate any hopes of significant union
influence over national economic policy making.
The New Zealand Council of Trade Unions (NZCTU), a single trade union central,
was formed in 1987. However, in part because some powerful blue collar unions did
not affiliate, Gardner (1995) argues that it lacked the national authority andcohesiveness of its Australian counterpart and was unable to actively shape orparticipate in the national process of industrial restructuring (see also Bray and Walsh,1995).
These differences in organisational capacity of the labour movements were reinforcedby differences in the links between the industrial and political wings of the labour
movement. This reflected both differences in the extent to which ministers in theincoming labour governments had union backgrounds and the formal institutional role
played by unions in the policy development in the two countries. Castles et al (1996:13), for example, note that “the formal organisational role of unions in the federal
ALP is much more substantial than the NZLP: union affiliates normally control fewer
than half of the votes in an NZLP annual conference, but significantly more than halfin the federal ALP counterpart”. For them, the “attenuated links between the twowings of the New Zealand labour movement meant the virtual exclusion of a unionrole in policy formation, leaving the way open for the adoption of radical policies ofmarket liberalisation”.
A second set of explanations for differences in patterns of industrial relations reform
focused on organisational differences between employer bodies in the two countries.
Plowman and Street (1993), for example, contrast the growing unity of employer
opinion, about the need for dramatic labour market deregulation in New Zealand in
the lead up to the ECA, with the continuing fragmentation of employer opinion about3the scope and nature of the change in the operation of the arbitration system needed inAustralia during the 1980s and 1990s. During the 1970s, restructuring of employer
representation in New Zealand led to the formation of single peak employer body, the
New Zealand Employers Federation (NZEF) (Wanna, 1989). Similar attempts to forma Confederation of Australian Industry (CAI) in Australia during the 1970s failed(Mathews, 1991). Contributors to the comparative literature argued that thisdifference in organisational unity allowed New Zealand employers to have a much
more significant impact on the development of policy, than was the case for their
Australian counterparts (see, for example, O’Brien, 1994).
A third set of explanations for policy divergence focused on differences in theautonomy and capacity of the state in the two countries. Australia is a federation witha written constitution and a bicameral parliament. New Zealand is a unitary state withan unwritten constitution and a uni-cameral parliament. As Boston and Uhr (1996: 6465) note these differences mean that:
Australian and New Zealand governments operate in different constitutional
environments. The dispersed powers that are basic to the Australian federal
and bicameral system limit the capacity of a national government to transformgovernance… Australian national government has more of a brokeragecharacter than that of New Zealand, where governments have greater capacity
to impose new modes of and orders of rules.
For a number of contributors to the comparative literature these differences helped
explain the more radical pattern of industrial relations reform that developed in New
Zealand in comparison with Australia during the 1980s and early 1990s (see Mitchelland Wilson, 1993 and Bray and Neilson, 1996). This view is neatly summarised byBray and Walsh (1998: 380), in an article which appeared in the prestigious journal
Industrial Relations and in many ways represented the culmination of thiscomparative literature:
In New Zealand the absence of constitutional constraint enabled thegovernments to pursue rapid and radical change… in contrast, both Labor andCoalition governments in Australia were forced to make compromises because
they shared power with state governments, and new legislation had to pass anupper house of review, in which the government did not necessarily have amajority. Change was consequently incremental, making Australian
corporatism weaker, but also slowing the march of neo-liberalism.
Not only did the Australia-New Zealand comparative literature provide an explanation
for the policy divergence between two most similar cases, it also provided strong
support for what was to become the dominant criticism of the view that globalisation
would produce convergence in national patterns of employment relations. As Hyman(2001: 25) notes “if there is a dominant analytical premise of recent Anglo-American
research it is the principle that ‘institutions matter’”. This focus on institutionalarrangements reflected the growing influence of the ‘new institutionalism’ incomparative politics on comparative industrial relations scholarship (Wailes, 2000).
Locke and Thelen (1995: 26), for example, argue that, because institutionalarrangements, like bargaining structures and patterns of union organisation, play animportant role in shaping the policy preferences of actors, “international trends are not4

in fact translated into common pressures in all national economies but rather are
mediated by national institutional arrangements and refracted into divergent struggles
over particular national practices”. The Australia-New Zealand comparative literaturesuggested that quite small differences in institutional arrangements could produce
significant differences in national responses to pressures associated with globalisation.

Limitations and Recent Developments
While the Australia-New Zealand comparative literature highlighted the potential
significance of institutional arrangements in shaping the relationship between
international economic change and national patterns of industrial relations, subsequentdevelopments in the two countries and criticisms of some of the underlying
assumptions on which this literature is based suggest the need for rethinking thecomparison.
One set of criticisms focuses the significance that the comparative literature attributes
to institutional variables. Thus, for example, many of the contributions to thecomparative literature, either explicitly or implicitly, tend to assume that theinstitutions of arbitration played a similar role in shaping industrial relations outcomes
during the twentieth century. A number of recent studies has questioned thisassumption and argued that, despite similarities in arbitration, there are some
important historical differences between the two countries which help explain thepolicy divergence that developed in the 1980s. Thus, for example, Ramia (1998) takes
issue with Castles’ (1985) highly influential view that the two countries shared acommon pattern of social protection rooted in the institutions of arbitration. Ramia
demonstrates arbitration played a much more important role in providing social
protection in Australia than in New Zealand. Similarly Sandlant (1989) notes that,
despite the similarities in the institutions of arbitration in the two countries, there weresignificant differences in the wages policies developed in the two countries- with
Australia developing a broader and more generous pattern. He argues differences inwages policy help explain differences in the attitude of union movements in the twocountries to arbitration and also played a role in explaining policy divergences during
the 1980s in the two countries.
The tendency to ignore historical differences between the cases in the comparative
literature builds on existing historiographical tendencies in both countries, whichlargely attribute industrial relations outcomes to institutional arrangements. Theseassumptions too have come under scrutiny. One example is the trade union
dependency thesis. This argument, that unions were dependent on arbitration and that
arbitration fundamentally shaped their actions and behaviour, has been influential indebates about Australian unionism (Howard, 1977) but has its origins in New Zealand(Hare 1946) and has figured prominently in the Australia New Zealand comparative
literature (eg. Bray and Walsh, 1993: 123; Hince, 1993). Australian academics haverecently called this characterisation into question. Cooper (1996: 64), in a study of theOrganising Committee of the New South Wales Labour Council from 1900-1910,
argues that “the contribution of arbitration to union recruitment was ambiguous”.
Gahan (1996: 693), in a study of union action under arbitration, argues that “while
arbitration influenced the behaviour and character of individual unions…. [this is]very different from the view that arbitration has made unions dependent”. Both of5

these studies suggest that while arbitration was important, it was not the only factor
shaping union action and strategy. A related set of criticisms have also been made of
Plowman’s employer reactivity thesis (see Barry, 1995). The implication for theAustralia-New Zealand comparative literature is that the shared institutional heritageof the two countries may not fully account for the behaviour of unions and employers
and that it may ignore other important sources of difference in the two countries.
This theme is taken up by Barry and Wailes (2004), in their comparison of the impactof arbitration in Australia and New Zealand. They argue that, not only did arbitration
historically play a different role in the two countries, but that the origins of the policy
divergence that developed in Australia and New Zealand in the late 1980s and 1990s
can be traced back to developments in the late 1960s. This earlier divergence, theyargue, is a product of differences in the severity of the economic pressures that werebrought to bear on the institutions of labour market regulation in the two different
countries during this period. Indeed, they suggest that many of the organisational andinstitutional differences that are central to the Australia-New Zealand comparative
literature, like differences in the organisation of employer opinion, have their origins
in this earlier divergence. In an extension to this argument, Wailes et al. (2003) argue
that the policy divergence that developed in the late 1980s and early 1990s was not
only a function of institutional and organisational differences between the twocountries, but also reflected important differences in the economic situation facing thetwo countries. While both countries faced similar economic pressures, the economiccrisis facing New Zealand during the 1980s was much more serious than that which
faced Australian governments. They argue that this difference in external economic
imperatives shaped the extent to which employers and governments regarded theexisting institutional arrangements as sustainable.
Taken together these criticisms of the Australia-New Zealand comparative literature,and some of the assumptions on which it is based, suggest that there is a need to reexamine the role and function that institutions play in shaping industrial relations
policy and outcomes, and to take into account a broader range of variables, including
those that are non-institutional in character. This view about the need to go beyond
looking at institutions is reinforced if one compares the impact of labour market
reform on labour market outcomes in Australia and New Zealand during the 1980s
and 1990s. Despite important differences in the institutional arrangements that govern
labour markets in the two countries, there are notable similarities in the labour market
outcomes in Australia and New Zealand. During the 1990s both countries haveexperienced dramatic declines in trade union membership, collective bargaining
coverage and significant increases in individual contracting. Furthermore bothcountries have witnessed significant increases in wage inequality (see Harbridge andWalsh, 2002; Barry and Wailes, 2004: 438-441). While many of these features areshared with other developed countries, and these changes have been more dramatic in
New Zealand than in Australia, in international comparative terms Australia and New
Zealand represent extreme cases (Campbell and Brosnan, 1999: 354). The originalcomparative literature’s focus on institutions and policy outcomes, rather than theconsequences of those policies, may therefore exaggerate the differences between thecases.
Furthermore, policy developments during the 1990s have significantly eroded
differences in patterns of labour market regulation. Since the early 1990s there have6

been a series of significant policy changes in Australia which have brought it muchcloser to its New Zealand counterpart (for a brief overview, see Lansbury and Wailes,
2004). Of particular significance, this policy convergence took place despite thecontinued existence of the institutional and organisational differences that thecomparative literature regarded as so important in producing the policy divergencethat developed in the late 1980s and early 1990s. While there is little doubt that thebicameral nature of the Australian federal parliament has frustrated the ability of the
Howard government to introduce radical labour market reform, and that the pace ofreform will quicken now that it has control of both houses, the process of reform wasinitiated by the Keating Labor government in the early 1990s. The 1993 Industrial
Relations Reform Act, which amongst other things recast awards as safety nets andintroduced non-union agreements in the Federal jurisdiction for the first time,
represented an important rupture in the traditional pattern of Australian labour market
regulation (Gardner and Ronfeldt, 1996). This suggests that, while institutional andorganisational factors may play an important role in shaping policy outcomes, they
are not the only thing that matter.

Rethinking institutions
In a recent contribution, Godard (2004) has argued that if industrial relations
academics are to account for continued diversity in national patterns of employment
relations, they need to incorporate the insights of the new institutionalism. The
comparative literature on Australia and New Zealand draws heavily on the new
institutionalism and therefore provides a good opportunity to reflect of its strengths
and weaknesses. This section argues that the new institutionalism needs to focus on abroader set of variables. In particular, the Australia-New Zealand comparison implies
the need for comparative industrial relations scholars to go beyond thinking solely interms of convergence or divergence and to develop models which make it possible toexplain similarities and differences within the same conceptual framework. In order todo this, there is a need for industrial relations scholars to incorporate a role forinterests and ideas (as well as institutions) and, thus, examine the importance ofagency in shaping labour market outcomes. It also suggests that it is important forindustrial relations scholars to consider the complementarities between labour market
institutions and the other institutional arrangements which characterise national
capitalisms. Finally, we argue that the Australia-New Zealand comparison suggests
the benefits of IR scholars adopting a more explicit regulatory lens with which toview the role of labour market institutions.

Beyond Convergence and Divergence
Concern with issues of convergence and divergence have long been a key animating
theme of comparative industrial relations scholarship (see Bamber et al., 2004: 1226). Much recent debate in industrial relations scholarship has focussed on whether
changes in the international economy, associated with globalisation, are producing
convergent or divergent pressures in national patterns of industrial relations (eg. Katz
and Darbishire, 2000; Traxler et al., 2001). The Australia-New Zealand comparative
literature, however, highlights some of problems of such a framework. Whether
developments in Australia and New Zealand are characterised as convergent or7

divergent is in part a function of what is considered to be the dependent variable andover what period of time the comparison is taken. Thus, for example, if we were to
take the existence of arbitration to be the dependent variable, then Australia and New
Zealand clearly demonstrate divergence. However, if labour market outcomes are thedependent variable, it is less clear that Australia and New Zealand have divergedmarkedly. Similarly a comparison of developments in Australia and New Zealandfrom the mid 1980s to the early 1990s is likely to yield different conclusions from acomparison which considered developments from the late 1960s until the present day.
Institutionalist analyses tend to focus on sources of divergence between countries.
Pontusson (1995) suggests that this tendency is not just a reflection of methodologicalchoices. Rather it is more deeply rooted in the theoretical concerns of theinstitutionalist project. In particular, he argues that institutionalists tend to attributeanalytical primacy to polity centred institutional variables (like constitutions) and to
downplay or ignore the significance of other non institutional variables (likeeconomic structure). The result is that institutionalists “focus almost exclusively on
the nature and sources of variation between advanced capitalist countries, ignoring
what these political economies have in common” (Pontusson, 2005: 164). Pontusson
rejects this view and calls for the development of analytical frameworks, which go
beyond a simple convergence/ divergence framework and make it possible to explain
both the similarities and the differences between capitalism economies.

Interests, ideas and agency
Pontusson’s argument suggests that if comparative industrial relations scholarship isto provide insight into the complex nature of change taking place in national patternsof industrial relations then it needs to compare countries across a broader range ofvariables and reconsider the role of agency in shaping labour market outcomes. This
is not to argue that institutional frameworks are not important. Rather it is to suggestthat they are not the only factors that matter. As was noted in the previous section,differences in the interests of employers and unions appear to have played an
important role in producing different policy responses in the two countries from themid 1980s until the early 1990s (see Wailes, 2000).
A focus on the interaction between interests and institutions seems to be particularly
relevant given that much of the change that industrial relations scholars are interested
in involves changes to institutional arrangements themselves. As Hall (1998: 183)
puts it “to the degree that the core institutions are subject to change, the focus ofanalysis must shift (away from institutions) towards the socioeconomic or politicalcoalitions that underpin them and toward more dynamic theories of institutional
determination”.
The importance of interests, especially those of employers in particular labour market
arrangements, has become an increasing focus in the broader comparative literature.
Pontusson and Swenson (1996), for example, argued that employer interests played asignificant role in the collapse of centralised bargaining in Sweden in early 1990s.
More recently, Thelen (2000) has argued that German employers have resisted
wholesale decentralisation of bargaining because the benefits they gain from thecurrent system outweigh those that might be expected from such a change.

8While the role of interests in shaping and sustaining particular institutionalarrangements has received increasing attention, there has been less explicit attention
paid to the role of ideas in shaping patterns of labour market regulation. Anyone
familiar with recent industrial relations developments in Australia and New Zealandover the past decade or so will be aware of the role that ideology has played in
shaping labour market regulation. Thus, for example, many of the features of the ECA
can be traced back to views of Hayek, an Austrian economists, and Epstein, a US
professor of law and economics, about how to structure labour regulation in a waythat maximises a particular type of individual freedom. In the New Zealand case,these views were strongly expressed by Penelope Brook (1990), a researcher working
for the New Zealand Business Roundtable at the time. The legislation recently
introduced by the Howard government in Australia also reflects a particular world
view, which amongst other things questions the legitimacy of unions.
There is growing body of literature on the relationship between ideas, institutions andinterests. Campbell (2002), for example, argues that ideas can take a number ofdifferent forms which affect policy making in different ways. These include
programmatic ideas which “help actors devise concrete solutions to policy problems”.
Thus, for example, Campbell notes that policy prescriptions based on supply side
economics took root in the US in the late 1970s because they offered what appeared
to be clear solutions to the economic problems facing the country at the time.
However, for Campbell (2002: 173), ideas can also take the form of public
sentiments, which reflect “broad based attitudes and normative assumptions about
what is desirable or not”. He demonstrates that supply side policy prescriptions in the
US in late 1970s resonated with generally held beliefs about the wasteness andcorruption of government. While he acknowledges that the institutional frameworkand the pattern of interests played a significant role in shaping how these ideas were
put into practice, his analysis nonetheless suggests that ideas may have an
independent impact on policy direction (see also Hall 1998). According to Blyth(2002: 11), “economic ideas also act as blueprints for new institutions. In sum, ideas
allow agents to reduce uncertainly, propose a particular solution to a moment of crisis,
and empower agents to resolve that crisis by constructing new institutions in line withthese new ideas”.
Taken together these arguments suggest that comparative industrial relations scholars
need to look beyond the role of institutions in producing national diversity and to
examine the interaction between institutions, interests and ideas in particular national
economies. They also suggest that industrial relations scholars need to be much more
attentive to the role of agency in shaping labour market regulations and outcomes.
Institutionalists tend to view institutions as constraints on action. Some even suggestthat institutions shape what actors see to be in their interests (Hall and Taylor 1996).
However, if we accept that institutions are not the only thing that matter, then we needto allow for the possibility that agency is not completely constrained by institutional
context.

9Institutional complementarities
For scholars interested in industrial relations developments in Australia and New
Zealand over the last 20 years, it is difficult to consider developments in labour
market regulation separately from others changes in the economy. For example, many
Australia and New Zealand IR scholars would accept that pressures fordecentralisation of bargaining are closely related to the erosion of tariff protection andthe development of independent central banks with control over monetary policy
settings. This points to the need to consider not just interests and ideas but also a
broader range of institutional variables.
One of the most important recent developments in institutionalist thinking has been
the growing focus on how institutions relate to one another. The most influential
version of this is Hall and Soskice’s (2001) varieties of capitalism (VOC) approach.
Hall and Sosckice distinguish between two broad types of capitalism - liberal market
economies (LMEs) and coordinated market economies (CMEs) - and argue that eachpossesses institutional complementarities which give them comparative advantages.
LMEs, such as the US, are those in which market mechanisms mediate therelationships between firms, between firms and their employees and between firms
and their investors. CMEs, like Germany, tend to use non-market and relationalmodes of coordination in the dealings between firms, between firms and employees
and also between firms and investors.
As Godard notes the VOC approach has a number of implications for industrial
relations scholarship. Specifically he argues it “demonstrates that economic andtechnological developments do not impose an immutable logic on economic and IR
systems… Rather, the extent to which they matter, and the way that they come to bereflected in IT practices is largely a function of the institutional arrangementscharacteristic of this systems” (Godard, 2004: 245). To some extent, this is reflectedin the growing literature on the connections between financial market structure andfirm IR practices. The contributions to Gospel and Pendelton (2004), for example,
demonstrate that differences in the structure of national financial systems affect theways in which firms finance their operations and that this can, in turn, the types of
employment relations practices they adopt.
Both Australia and New Zealand fit firmly in the LME camp and an understanding of
the institutional complementarities of LMEs may help account for some of thegrowing similarities in labour market outcomes that have been observed between thetwo countries since the early 1990s. The Australia-New Zealand comparison,
however, also points to the dangers of applying the VOC approach too generally.
Simply characterising the two countries as LMEs misses some of the importantdifferences between the countries and also makes it difficult to account for thesignificant amounts of change experienced by the two countries over the last two
decades. Thus, the Australia-New Zealand comparison suggests that while it isimportant for IR scholars to understand the interconnections between institutions oflabour market regulation and other institutional arrangements, there is a need for thisanalysis to be more fine grained than that advocated by the VOC approach.

10

Towards a regulatory lens
One way for industrial relations scholars to develop a more sophisticated means tocompare institutional arrangements is to shift away from focussing on the form that
institutions take and examine the functions that they play. This approach toinstitutions has its proximite origins in the work of Polanyi. Polanyi (1957) claims
institutions become embedded in social relations because the key factors of
production – land, labour and money – cannot be traded as commodities. For Polanyi,
any movement towards a self-regulating market, in respect of the key fictitious
commodities, is met by a protective societal response to re-embed market exchanges
in social relations through institutions. Polanyi refers to this as the “double
movement”. Thus, according to this perspective labour market institutions are created
to ensure that the consequences of commodifying labour, through the operation of aself-regulating market, are avoided.
In recent labour law scholarship, Polanyi’s approach has informed the development ofa ‘regulatory’ lens on changes in labour law. Howe (2005) and others have criticised
the characterisation of recent changes in labour law as one of deregulation.
The rhetoric of labour market deregulation often masks extensive legal re-regulationand juridification of social and economic systems or spheres to suit prevailingpolitical objectives. This rhetoric is based on a rather narrow definition of ‘regulation’and its purposes when it comes to the exchange of labour in the economy (Howe
2005: 1-2).
Legal regulation highlights the importance of viewing public (statute) and private(contract) law as overlapping and interacting rather than separate and distinct systemsof regulation (Collins, 1999). In a longitudinal study, Johnstone and Mitchell (2004)
examine the relationship, or “collisions”, between these two systems of regulation
over several centuries. Contrary to the popular view of the emergence of theregulatory state in the twentieth century, they argue that state instrumental regulation
has been the dominant form of labour regulation for centuries. For these authors, thesignificance of “regulatory” labour law during the twentieth century was not that it
supplanted “contract” law as a basis for regulating the employment relationship butthat it developed an important protective function, in the provision of minimum wages
and terms and conditions of employment.
We would argue that this focus on the regulatory role of institutional arrangements isparticularly useful for examining recent changes in industrial relations in Australia
and New Zealand. In particular, the decline of the structures of arbitral regulation inAustralia and New Zealand has not heralded the introduction of so called “at will”
contracting but, rather, has coincided with the creation of alternative employment
institutions, which in some cases perform similar regulatory functions to the previous
institutional structures. In New Zealand, an Employment Tribunal and Employment
Court replaced the Arbitration Court in 1991. These institutions solidified thetransition from collective to individual bargaining by strengthening and extending theprotection of individual rights. Under the ECA, any employee could file a personal
grievance if they unfairly suffered a disadvantage in any area of employment. The
transition from collective to individual rights was reflected in both the marked decline
in recorded industrial disputes and the marked increase in personal grievance claims

11during the 1990s (Harbridge, Crawford and Kiely, 2000). Under the Employment
Relations Act (ERA), a Mediation Service and Employment Relations Authority
replaced the Employment Tribunal by splitting its functions across two agencies. The
ERA represents, then, an attempt not to re-regulate the New Zealand labour market as
is often assumed but rather an attempt to re-collectivise it by the provision of specificprotections for collective bargaining and unionization.
Although it has been constrained by opposition in the Senate in the past, recent
electoral gains have made it possible for the Coalition Government in Australia to
introduce a new wave of industrial relations “reform”. The Workplace Relations
Amendment (Work Choices) Act (2005), amongst other things, extends unfair
dismissal exemptions to include organisations with up to 100 employees, introduces
secret ballots for union industrial action, further strips award entitlements to comply
with a new set of minimum standards, and attempts to streamline the process forindividual agreement making by removing the no disadvantage test.
On the institutional front, the Act will further emasculate the Australian Industrial
Relations Commission (AIRC), but, in doing so it will strengthen or create alternative
institutions to continue its pervasive regulation of the labour market. Under thechanges, the Government will strengthen the Office of the Employment Advocate byenabling it to certify collective agreements. The Government will also relieve fromthe Commission its role in determining wage adjustments for low paid workers but
will establish a Fair Pay Commission so as to preserve this important institutional
function. The Government will also continue its campaign to “reform” industrial
relations in the building and construction industry by giving further powers and amuch increased budget to the Building Industry Taskforce, a specialist industry
regulator it created in response to recommendations from Cole Royal Commission
into the industry. These changes highlight a pattern of regulation reminiscent of thatwhich occurred in Britain during the 1980s and 1990s where, “paradoxically in aperiod when deregulation has been claimed to be the driving force of public policy
under the influence of the neo-liberal strand of New Right ideas, more new central
regulatory agencies have been created than ever before” (Baldwin, Hood and Scott,
1998: 6).
It is not our intention to argue an institutional regime based on individual bargaining
is likely to produce the same social protections as one based on collective regulationof employment. However, we would argue that a regulatory lens, which focuses on
the role that institutions play, provides a framework for thinking about changes inpatterns of labour market regulation and rethinking similarities and differences acrosscountries.

Conclusion
This article has reviewed some of the main features of the comparative literature onindustrial relations reform in Australia and New Zealand from the mid 1980s until theearly 1990s. This literature attributed the apparent policy divergence between these
two most similar countries to differences in the organisation of labour and capital, andto differences in the autonomy and capacity of the state. In doing it drew attention to
the importance of institutional arrangements in accounting for diversity in national

12patterns of industrial relations. Thus it pre-empted what was to become the dominant
theoretical approach to examining the relationship between globalisation andindustrial relations in the broader comparative literature.
Criticisms of the Australia-New Zealand comparative literature and recent
developments in the two countries, suggest that there is a need for comparative
industrial relations scholars to rethink the focus on institutional arrangements. In the
final section of this article we outlined four ways in which the institutionalist
approach needs to be improved if it is to account for contemporary patterns ofindustrial relations. These include developing conceptual models that go beyond
attempting to establish whether countries are converging or diverging and which
focus on similarities and differences between cases. Central to this is shifting from ananalytical framework which privileges institutional variables to one which examines
the interaction between institutions, interests and ideas. It also involves broadening
the focus of study away from labour market institutional arrangements andconsidering the complementarities between institutions across national capitalisms.
Finally, we argued that industrial relations scholars are likely to benefit from anapproach which focuses not just on institutional structure but also considers thefunctions that institutions play. Therefore just as the literature which comparedindustrial relations developments in Australia and New Zealand, in the late 1980s andearly 1990s, had implications for the broader comparative literature, we would argue
that the contemporary comparison of industrial relations developments in these twocountries have a number of important lessons for industrial relations scholars who areinterested in explaining continuity and change in national patterns of employment
relations.

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17Strikes and Lockouts in the Antipodes: Neo-Liberal Convergence inAustralia and New Zealand
CHRIS BRIGGS1

Abstract
By international standards, labour disputation during the post-war boom was moderateor mid-range in New Zealand whilst Australia was part of a group of strike-prone
nations. However, significant convergence has occurred between the two nations as
strikes have declined and lockouts have re-emerged. Though there were differencesin timing and the extent of change, and Australian unions still retain a stronger
capacity to mobilise members into disputes, the overall trend has been strong
convergence to bargaining systems with low levels of disputation and ascendant
employers. A combination of economic and institutional factors explain these trends,
a conclusion which is broadly consistent with the existing Trans-Tasman comparative
literature, though the quantitatively greater influence of bargaining fragmentation on
Australian unions and disputation will also highlighted.

Introduction
Australia and New Zealand represent the ‘almost perfect’ cases (Wailes, 1999) for‘most similar’ comparative studies. Both are settler-capitalist societies colonised by
the British, both are small trading nations vulnerable to international economic
vicissitudes and both developed systems of compulsory conciliation and arbitration
for settling labour disputes throughout most of the twentieth century. The disputation
statistics of both nations are also similar and relatively comprehensive, further
enhancing the scope for comparison.
Australia and New Zealand have experienced some of the most far-reaching neoliberal reforms in the OECD, especially New Zealand which completely dismantled
its century-old industrial relations institutional framework in one single legislative
swoop. Comparative analysis highlights some differences between Australia and New
Zealand but overall illustrates the effectiveness of neo-liberal institutional reform infragmenting labour markets, de-mobilising trade unions and lowering disputation. In
both nations, strikes have fallen dramatically - especially New Zealand where
officially recorded disputes have almost disappeared – amidst a resurgence in
employer militancy and lockouts. Disputation levels in Australia remain significantly
higher but the overall picture is one of unmistakable convergence towards New
Zealand – a bargaining system with low disputation, low union bargaining power andascendant employers. This convergence will probably continue as a newly re-electedconservative government in Australia implements radical industrial relations reform
including extraordinary limitations on strikes - but there is a possibility that theextremity of the changes, the politicisation of industrial relations and a coordinatedunion campaign could lead to a short-run upsurge in disputes.

1

Chris Briggs is a Research Fellow at acirrt, University of Sydney.

2
Disputation Trends: Strikes Down, Lock-outs Up!
The difficulties in cross-national comparisons of labour dispute statistics owing todifferences in definitions, collection techniques and measurement standards are wellknown. Happily, these problems do not bedevil comparisons between Australia and
New Zealand. Australian and New Zealand dispute statistics are among the mostcomprehensive in the OECD and quite similar. Both have low thresholds for the
inclusion of disputes. Until 2000, both nations included all disputes which led to theloss of 10 working days at which point New Zealand lowered their threshold to just 5
working days. Neither country makes exclusions found elsewhere such as disputes in
the public sector, political strikes and employees indirectly unable to work
(Aligisakis, 1997). Both nations use more or less the same definition of lockouts but
unlike Statistics NZ, the Australian Bureau of Statistics (ABS) does not distinguishbetween lockouts and strikes in collating or presenting its data on labour disputes.
However, the development of a lockouts database for Australia now allows forcomparison (Briggs, 2004a). So in terms of aggregate disputation statistics Australia
and New Zealand are highly comparable.
Australia was more dispute-prone than New Zealand throughout the post-war era.
Throughout the 1960s, the portion of workers involved in industrial action in New
Zealand was only around one-quarter of Australia, stoppages per employee varied
between around one-third and one-half the level prevailing in Australia. In terms ofworking days (WDL), Australia’s WDL/1000 employees rate from 1962-1981 wasalmost two and a half times higher than New Zealand (Creigh and Poland, 1983: 82 &112-113). Consequently, Creigh and Poland (1983) classified New Zealand as part ofa mid-range group of nations in relation to work stoppages but classified Australia
with nations displaying ‘relatively high average stoppage incidence rates’.
Figure 1: Number of Labour Disputes, Australia and New Zealand, 19702003
3 500

No. of Disputes

3 000

2 500

2 000

Australia
NZ

1 500

1 000

500

20
02

20
00

19
98

19
96

19
94

19
92

19
90

19
88

19
86

19
84

19
82

19
80

19
78

19
76

19
74

19
72

19
70

0

Year

Source: ABS, Industrial Disputes, Cat. No. 6321.0; New Zealand Department ofLabour (1970-2003), Work Stoppages.

3However, beginning from the 1970s, there is a significant convergence in the numberof labour disputes although there are some significant differences in trends between
Australia and New Zealand - as illustrated by Figure 1 above.
Even with one of the lowest statistical thresholds for the inclusion of disputes, work
stoppages virtually disappeared in New Zealand during the 1990s, whereas thenumber of disputes in Australia has actually trended upwards in the past five or six
years after a major decline from 1970 onwards. Whilst this reflects a highly
fragmented bargaining system, it also suggests Australian unions retain something ofa capacity to mobilise members into disputes by comparison with New Zealandunions. A higher ratio of WDL per unionist in Australia than New Zealandthroughout the 1990s also fits with this interpretation (Briggs, 2005).
As the legal capacity to use industrial action has become more limited, Australianunions have also been more adept at organising ‘corporate campaigns’ as analternative to industrial action. Some examples include the Textile, Clothing andFootwear Union’s ‘fair-wear’ campaign using publicity actions in concert with church
and community groups to pressure retailers to sign a code of conduct refusing to use‘outworkers’ in sweatshops (Weller, 1999) and shareholder activism by the mining
and bank unions to resist anti-union employment strategies (Cutcher, 2004).
Corporate campaigns are extremely rare, if not more or less unheard of to date in New
Zealand, though the union movement is starting to consider these as it re-emerges
from the Employment Contracts Act (ECA) period (Beaumont, 2005).
Figure 2: Australia & New Zealand: WDL/1000 Employees, 1970-2003
1400

WDL/1000 Employees

1200

1000

800

Australia
NZ

600

400

200

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

1970

0

Year

Source: ABS, Industrial Disputes, Cat. No. 6321.0; New Zealand Department ofLabour (1970-2003), Work Stoppages.

Trends in WDL/1000 employees, generally considered the best overall measure of
disputation, diverge significantly during the 1970s and 1980s but converge strongly
from the early 1990s. WDL/1000 employees in Australia trends consistently,
gradually downwards whereas New Zealand trends upwards gently from the 1970s,

4culminating in a major labour market confrontation in the mid-1980s (reflected not
only in WDL but also other indicators such as duration of disputes and lockouts),
which was obviously decisively won by employers as WDL/1000 employees dives
subsequently. From the early-to-mid 1990s, Australia has been ‘catching-up’ withNew Zealand, as disputation has declined strongly – as is illustrated by figure 2.
The scale of this graph makes the two nations appear closer than they are as Australia
has generally maintained a rate of 50-75 WDL a year since the mid-1990s whereas in
New Zealand disputation fell almost as low as it could without completely vanishing(less than 10 WDL). Nevertheless, the overall convergence is unmistakable.
Whilst strikes declined, lockouts re-emerged strongly in both Australia and New
Zealand. Table 1 documents key trends in relation to lockouts in Australia for the two
half-decades since the right to lockout was introduced at the beginning of 1994.
Table 1: Lockouts, Australia, 1994-2003
1994-98
WDL to Lockouts as a Proportion of all 1.6%
Disputes

1999-03
9.3%

0.3%

2.0%

‘Long’ Disputes (i.e. greater than 20 days) 7.7%
comprised by Lockouts

57.5%

Lockouts as a proportion of all disputes

26.6%
Proportion
of
WDL
to
Lockouts, 3.0%
Manufacturing
Source: ABS, Industrial Disputes, Cat. No. 6321.0; Briggs (2004a).
Lockouts are still relatively rare, only 2 per cent of disputes involved a lockout, but
the number of WDL in disputes involving a lockout increased over five-fold during
the second half-decade of enterprise bargaining to just under 10 per cent.1
Additionally, just over half of ‘long’ industrial disputes (defined by the ABS as longer
than a month) in the past five years were lockouts. Lockouts still comprise a small
proportion of disputes but they are significantly more likely to evolve into drawn-out
industrial disputes with high economic, social and personal costs. The take-up inlockouts has been led by manufacturing employers where lockouts have increased
from just 3 per cent of WDL to labour disputes to a remarkable 26 per cent.
In New Zealand, whereas lockouts comprised between 0 and 2-3 per cent of disputes
from 1970-1990, the proportion of disputes comprised by lockouts was just over orunder 10 per cent for much of the 1990s before easing to around 5 per cent (New
Zealand Department of Labour, 1970-2003). The surge reflects the decline in strikes
but also a pronounced increase in aggressive employer bargaining strategies. New
Zealand does not collect figures on WDL for lockouts but the proportion of disputes
accounted for by lockouts was significantly higher than Australia from the early
1990s onwards – as is illustrated by Figure 3.2

5

Figure 3: Lockouts as a Proportion of Labour Disputes, 1970-2003
14

12

10

%

8

6

4

2

19
70
19
71
19
72
19
73
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03

0

Year

Source: New Zealand Department of Labour (1970-2003), Work Stoppages.
Overall, there are some important differences in disputation patterns and trends
between Australia and New Zealand but there is unmistakable evidence of
convergence. Labour disputation in Australia fell in a more gradual, less far-reaching
fashion to the quite abrupt collapse which occurred in New Zealand. Both nations
have experienced substantial falls in disputation but the decline has been
extraordinarily steady in Australia, and has stabilised at a moderate level ofdisputation by international standards in recent years, whereas disputation levels in
New Zealand collapsed to almost negligible levels during the 1990s after a crescendoin the mid-1980s. In both nations, lockouts re-emerged strongly as strikes declined.
Explanations for these similarities and differences between disputation trends inAustralia and New Zealand are now considered.

Explaining Disputation Trends: the Role of Economic Factors
Economic changes and reforms underpin the general direction, timing and extent ofdisputation trends in both nations. Both nations are small, open trading economies
with a high dependence on agriculture and resources production. The commonly
observed effects of globalisation on union bargaining power, competitive pressures
stiffening the resistance of employers and governments to industrial action andlowering the potential gains apply strongly to both Australia and New Zealand whichremoved most tariff and non-tariff barriers during the 1980s and 90s. Local sites ofmulti-national corporations have the added risk of head-offices penalising them byredirecting investment and work to other national subsidiaries in the event of extended
stoppages. The President of Australian Industry Group (AIG), Peter Nolan, the major
representative of manufacturers, observes:
You have the whole global competition issue … (and) You’ve got global
parents looking all around the world to see where they are going to invest theirdollars. Those investment dollars are extremely fluid … the overseas parent is6getting reports daily (during a labour dispute) ‘what is going on? When is thisgoing to fix itself?’ So it demands a speedy reaction … I think that is asignificant difference to where things were 10 years ago. I think thosepressures on manufacturers to remain viable, competitive … doesn’t sit
comfortably with protracted industrial action (Peter Nolan, personal interview,
October 16, 2003).
Other types of structural change which led to the decline of union membership,essentially the shift away from sectors, occupations and workplaces with high union
density to those with low union density (Peetz, 1998), also help explain the decline in
strike levels. Put simply, there are fewer of the blue-collar workers that historically
led industrial campaigns and the casualisation and fragmentation of the blue-collar
workforce has left it much less strike-prone.
However, these economic changes and associated neo-liberal reforms wereconsiderably deeper and faster in New Zealand than Australia. Following the end of
the post-war boom in the 1970s, both nations were enveloped by economic crisis
characterised by large external deficits and stagflation, but the depth of crisis and theearly 90s recession was much deeper in New Zealand (Wailes, 1999: 193-194). New
Zealand also embarked on what is often considered the most radical programme of
neo-liberal reform in the OECD. In a ‘policy blitzkrieg’, the New Zealand economy
was transformed from ‘one of the most interventionist to one of the most open andmarket-based’ (Conway & Orr, 2000) through comprehensive economic liberalisationand deregulation. Australian economic policy has followed a similar path byliberalising its currency, opening up the economy and de-regulation but the pace andextent of reforms was significantly moderate by comparison. A significant portion of
causality for the similarities in general disputation trends, as well as variations in thedepth and timing, lay in these economic factors.
However, economic factors cannot be considered a complete explanation. Cyclicaleconomic conditions factors have been observed to be less powerful in shaping
disputation trends (Healy, 2002: 81; Shalev, 1992: 117). So it is with Australia and
New Zealand. After a long period of ‘jobless recovery’ from the early 1990s
recession, both nations have experienced significant falls in unemployment in recent
years, especially in New Zealand where unemployment has fallen beneath 4 per centsince the election of a Labour Government. Whilst unemployment rates are currently
at their lowest levels in both nations since the 1970s, disputation levels havecontinued to fall in Australia and maintained their negligible presence in New
Zealand. Institutional and policy reforms - and the associated fragmentation of labour
markets, bargaining systems and trade unionism – have also played an important rolein weakening the link between economic cycles and strikes.

The Role of Institutional Factors: from Arbitration to Neo-Liberalism
Australia and New Zealand are distinctive as the only two advanced market
economies to develop systems of compulsory conciliation and arbitration throughout
most of the twentieth century. Under the conciliation and arbitration system, all forms
of industrial action were outlawed because in the florid prose of pioneering Australianjudge, Henry Bourne Higgins (1915), conciliation and arbitration was to substitute for7‘the rude and barbarous process of strike and lockout.’ In practice, the blanket
prohibition of industrial action under the conciliation and arbitration was
unenforceable and sanctions were only used in exceptional disputes. Paradoxically,
although both nations legislated for a right to strike (and lockout) for the first time asbargaining was decentralised, the accompanying institutional and policy changes haveeroded the capacity of unions to undertake industrial action and led to lower levels of
stoppages.
The industrial relations institutions of both nations have now been remodelled(Australia) or completely dismantled (New Zealand) by neo-liberal legislativereforms. In New Zealand, the Conservative National Party, simply eradicated thecentury-old institutional framework of the arbitral system through the Employment
Contracts Act (1991) within a couple of months of coming to power. The ECA
abolished the industrial tribunals and the multi-employer award system, replacing
them with individual employment contracts and collective employment contracts (acontract between an employer and two or more employees), but favouring individual
contracts which were considered the ‘natural’ state of affairs (Anderson, 1994: 124).
The ECA completely removed the legal status of trade unions, referring only to‘employees organisations’ without according them any legal rights or requiring
employers to even recognise and bargain with these organisations. The object of the
ECA was to replace the arbitration system with a ‘individual contractual order’(Wailes, 2003: 153).
Australian legislators retained the tribunals and awards but placed them firmly in the‘shadow’ (Gardner & Ronfeldt, 1996) of enterprise bargaining. The tribunals could
only arbitrate as a ‘last resort’ where the dispute threatens the national economy orhealth and safety. Awards have been limited in scope to twenty ‘allowable matters’
and repositioned as a ‘safety net’ to underpin enterprise bargaining. Only singleemployer agreements and strikes are recognised. Non-union and individual
agreement streams were introduced alongside collective bargaining. Vestiges of theaward system do remain but a highly fragmented, decentralised bargaining system has
emerged since the 1990s.
In both nations, as the dispute-settling powers of the tribunals were wound back anddecentralised bargaining was introduced, recognition of the need to create legal spacefor industrial action as part of the bargaining process led to legal distinctions between
lawful and unlawful industrial action. A limited immunity from civil liabilities forstrikes lockouts used to exert pressure during the bargaining process was introduced.
Consequently, industrial action was now illegal with few exceptions outside notified
bargaining periods every few years. Previously legal forms of industrial action such
multi-employer strikes, secondary boycotts and sympathy strikes were also outlawed(although multi-employer strikes have been re-legalised in New Zealand). So
although there was a statutory right to strike for the first time, it effectively
represented a contraction in the circumstances and ways in which unions could takeindustrial action.
Furthermore, by replacing an unenforceable blanket prohibition of industrial action
with the statutory construction of legal and illegal forms of industrial action andopening up pathways to the common law courts, legislators encouraged the active

8
policing of these boundaries by employers and their solicitors. Anderson’s (2004:
8.25) observation in relation to New Zealand applies equally to Australia:… it seems to have become more acceptable to utilise the law as a means ofcombating strikes and lockouts. The categorisation of a range of strikes as
lawful seems to have led to a much greater willingness to use the law against
unlawful strikes. During the period when virtually any strike was unlawful
there seems to have been a greater reluctance to take full advantage of the law.
In addition to the visibly increased role of the common law courts and solicitors, inAustralia the role of the AIRC has also been transformed from the arbiter of disputes
to one of ‘policing the perimeter’ of the bargaining system (Slevin, 1998; Stewart,2004). More than most aspects of labour relations, disputation is sensitive to changes
in the law and the way it is applied.
By limiting industrial action to bargaining periods every few years, the wellestablished linkage between economic cycles, union bargaining power and industrial
action have been substantially weakened. As Hodgkinson & Perera (2004: 440 &455) concluded after running regression tests:
Previous economic analyses which attempt to explain levels of industrial
action have focused on macroeconomic conditions whereby strike levels are
assumed to move in a pro-cyclical manner … However, under enterprisebargaining, workers are constrained by ‘no more claims’ clauses during thelife of each agreement. Thus pay claims cannot be timed to take advantage offavourable economic conditions and must be left until the termination ofagreements … regardless of prevailing economic conditions … the conditionsof enterprise agreements prevent workers taking advantage of cyclicalimprovements in economic conditions to pursue wage claims, as was thesituation in Australia under the award system.
Workers are less like to enjoy significant bargaining due to economic changes but
even where they do institutional limitations may prevent them from using industrial
action to take advantage as they could under the award system.
The other major institutional change has been the fragmentation of bargaining,
especially significant in the decline of WDL to disputation in Australia. As Figure 4
illustrates, the Australian union movement was much more cohesive than the New
Zealand movement and more effective at building national campaigns.
In four major national campaigns in Australia from 1970 to the early 1980s, over 25
per cent of the workforce was involved in industrial action (peaking in the 1976
protest strike at the removal of universal health insurance at 38 per cent) whereas just
10-15 per cent of the New Zealand workforce were generally involved in industrial
action over the same period. In New Zealand, the portion of the workforce engaging
in industrial action rose in the aftermath of the 1968 ‘nil wage order’. A statutory
incomes policy was in force for all of 8 months from 1971-84 (Boston, 1984; Wailes,
1999: 326-333; Walsh, 1994).

9Figure 5: The Scope of Industrial Action, Australia and New
Zealand, 1970-2003
40

35% of Employees

30

25

Australia
NZ

20

15

10

5

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

1970

0

Year

Source: ABS, Industrial Disputes, Cat. No. 6321.0; New Zealand Department ofLabour (1970-2003), Work Stoppages.

Industrial action and worker unrest built gradually throughout the 1970s but nevererupted in the spectacular fashion of Australia. It then began to decline after the mid1980s spike, dropping sharply to almost negligible levels from the early 1990s. In
Australia, after contracting from the peaks of the1970s, the portion of the Australian
workforce engaging in industrial action increased gradually throughout the 1980s,
peaking in the last major national union mobilisation around the decentralisation of
bargaining before also sharply dropping during the 1990s. The portion of theAustralian workforce which has taken industrial action in the past five years, just 2-3
per cent, is now only marginally higher than New Zealand.
A structural break in Australia’s pattern of disputation, union mobilisation and labour
relations occurred with the inception of a quasi-corporatist ‘Accord’ between the ALP
and ACTU (1983-96). The core of the Accord was a commitment by the ACTU to‘no-extra claims’ in exchange for centralised real wage maintenance ‘over time’,increases to the social wage and consultation in the policy-making process (ALPACTU, 1983). Econometric studies have almost universally concluded the Accord
was a significant factor in the major decline in disputation throughout the 1980s(Beggs & Chapman, 1987a & b; Healy, 2002; Morris & Wilson, 1994 & 1999).3 The
Accord, remarkably successful at reproducing union commitment to centralised wagesetting, broke the cycles of industrial action and periodic wage explosions. The twoAustralian strike peaks in 1973-74 and 1980-81 were the vehicles for wage
explosions. In the late 1980s, when the centralised wage system could easily haveunravelled at the crescendo of a roaring boom with major skill shortages in key
sectors such as metals manufacturing which had previously been the precursor to
wage explosions, the ACTU was able to avert a wage explosion, primarily by linking$4.9 billion of tax cuts to a renewed commitment to the centralised wage system. As
Bill Kelty (ACTU Secretary) later said:

10
I think most people thought that we were going to have some form of wage
explosion … many people thought it was time to get whatever they could outof the system but we held firm and it would have been impossible to gettoday’s (1991) historic low rate of inflation without that 1989 decision (the taxcuts) which bought off a wage explosion (Kelly, 1992: 493).
The ACTU also defused labour market hot-spots through special agreements andallowance increases where possible or alternatively isolated recalcitrant unions
determined to break out of the centralised wage guidelines to coercive state power.
The emergence of the ‘new right’, an ultra-conservative cabal of businessmen,lawyers and politicians which successfully targeted some militant unions with
common law actions, was another threat to unions operating outside the aegis of theAccord and the ACTU (Briggs, 2002).
The introduction of enterprise bargaining virtually signalled the death of national
industrial campaigns. The ACTU had still organised national mobilisations within theaegis of the Accord for occupational superannuation (1986) and to pressure the AIRC
on national wage rulings. Australian unions retained a greater capacity for mobilising
workers into industrial action than New Zealand but the last major national surge in
disputation was, ironically, orchestrated by the ACTU in 1990-91 to pressure the
AIRC into decentralising bargaining. Aside from protest strikes organised against
conservative legislative reforms, nationally (1996) and at state level (New South
Wales, 1991; Victoria, 1992; Western Australia, 1993), bargaining and industrial
action has subsequently been scattered, infrequent and dis-connected. Significant
industrial action still occurs in some pockets of blue-collar sectors such as mining,
construction and manufacturing and the white-collar ‘new heartlands’ such asteaching and nursing. But the decentralisation and fragmentation of bargaining
removed the focal point national wage-setting provided for national mobilisation,
erected obstacles to multi-employer strikes and bargaining and severed theinstitutional mechanisms such as comparative wage justice which linked strong andweak unions. Consequently, Australian unionism lost much of its capacity tomobilise as a movement which clearly is a significant factor in the large numericalfalls in WDL to stoppages. Similar dynamics operated in New Zealand with thefragmentation of bargaining in the early 1990s but as New Zealand unions did notmobilise as widely as Australian unions or as frequently as a movement it was less ofa factor in falling levels of disputation.
Neo-liberal legislative reforms have also played a key role in the resurgence oflockouts. Institutional features of the arbitration system such as compulsory union
recognition, the tribunals’ authority to arbitrate legally-binding settlements to disputes
and coordinated employment regulation virtually removed the opportunity andincentive for such lockouts (Briggs, 2004b; Macfie, 1992).4 Australian and New
Zealand conservatives delivered unique freedom for employers to deploy lockouts.
Whereas other OECD nations either prohibit lockouts or limit them to circumstances
under which employers are considered to require them to ‘equalise’ bargaining power,
Antipodean conservatives enabled employers to use lockouts against unorganised
workers and to de-collectivise bargaining (see Anderson, 1994; Briggs, 2005).
Liberal lockout regulations created greater opportunities to use lockouts whilst rising
union/non-union wage differentials created pressures and incentives for employers totake advantage of this opportunity. In Australia, lockouts remain virtually unheard of

11
outside of the Federal Jurisdiction (which was the only jurisdiction to establish astatutory right to lockout) whilst lockouts surged under the Employment Contracts Act(see Briggs, 2004a & 2004b). The militants in Australia (and New Zealand) are now
often employers instead of unionists.
Whereas some of the neo-liberal New Zealand strike laws have been removed by aLabor Government, Australian strike law and industrial relations is set for a further
dose of neo-liberal reform. Under the Employment Relations Act (ERA) 2000, the
New Zealand Labour Party lifted the prohibition on strikes/lockouts for a multiemployer agreement, introduced a 40-day freeze on strikes/lockouts from theinitiation of bargaining, introduced public mediation services and prohibited the useof replacement employees during strikes/lockouts (Anderson, 2004: 8.2). In Australia,
after surprisingly capturing a majority in the upper house of Federal Parliament in the2004 Federal Election, the Liberal-National Party is on the verge of passing the
Workplace Relations Amendment (Work Choices) Bill into law. Work Choices
extends the circumstances under which industrial action is prohibited, imposes alegalistic secret ballot process for unions and create almost open-ended rights for thesuspension or termination of industrial action. The AIRC can suspend or terminate
industrial action upon application if it is ‘adversely effecting’ an employer or any‘third party’ (individual or business). The Minister for Workplace Relations can
simply issue a declaration suspending or terminating the industrial action if theindustrial action is being ‘taken, or is threatened, impending or probable’ which
would cause ‘significant damage to part or all of the Australian economy’. It is so
open-ended it is difficult to think of a strike which will not be open to legal challenge.
AWA lockouts will no longer be legally recognised but lockouts are not subject to theballot process and legal remedies against industrial action are clearly designed forstrikes. Once the Work Choices Bill is enacted, Australia will become the only OECDnation which legally discriminates in favour of lockouts against strikes.

Conclusion
Overall, Trans-Tasman trends in labour disputation closely conform to theconclusions reached by comparative studies of industrial relations reform in Australia
and New Zealand (Barry & Wailes, 2004; Bray & Walsh, 1998; Wailes, 1999; Wailes& Ramia, 2002). Namely, Australia has experienced more gradual and less farreaching neo-liberal reform than New Zealand, but through a process of ‘slowcombustion’ labour market de-regulation, Australia has been converging on New
Zealand. Australia, traditionally one of the most strike-prone nations in the OECD, isnow ‘moderate’ or ‘average’ by comparison whilst New Zealand has one of the lowest
levels of work stoppages in the OECD. There is unmistakable convergence between
the two nations towards bargaining systems with low disputation, low union
bargaining power and ascendant employers.
Economic factors have underpinned the general trend and differential timing of thefalls in disputation in both nations but neo-liberal institutional reforms have alsotransformed Antipodean industrial relations, including labour conflict. The right-tostrike was accompanied by a considerable tightening of the circumstances underwhich unions could take industrial action, the active policing of the boundaries
between lawful and unlawful industrial action and the fragmentation of bargaining

12
and solidarity which ended national campaigns including widespread disputation.
Institutional and economic factors are inter-linked as restructured economic
institutions and bargaining rules have both exposed workers to global economic
pressures whilst limiting their ability to exploit cyclical bargaining power where it
exists.
Australian unions still retain a greater capacity to mobilise workers into disputes but
further convergence is likely in view of recent political and legislative events.
Following the re-election of the Labour Party in New Zealand, more of the samemight be expected though there could be a moderate upturn in disputation as major
unions continue to strive to re-establish multi-employer collective bargaining. In
Australia, the extraordinary limitations on industrial action will probably lead in thelong-run to further convergence but the extreme character of the new legislation adds
a new degree of volatility to Australian industrial relations which makes predictionsdifficult. Work Choices potentially sets the scene for confrontations over rights toorganise and basic employment conditions and unions are planning a long campaign,
potentially including civil disobedience. Work Choices aims to accelerate the neoliberal fragmentation which has led to falling labour disputation but it is not out of thequestion, especially in the short-run, that it leads to a resurgence of labour disputes.
Notes
1. It should be noted the definition of a ‘lockout’ by the ABS which underpins thesefigures is quite narrow. The ABS (2002a) defines a lockout as a ‘total or partial
temporary closure of one or more places of employment … by one or more employers
with a view to enforcing or resisting demands or expressing grievances, or supporting
other employers in their demands or grievances.’ Excluded from the ABS definition
are stand-downs (or ‘lay-offs’), common law actions refusing to pay employees notworking as directed (due, for example, to selective work bans), ‘lockouts’ which
terminate rather than suspend contracts (for example, it excludes the 1998 waterfront
lockout by Patricks Stevedores which attempted unsuccessfully to replace theirunionised workforce) or ‘de-facto lockouts’ where the employers does not formally
lockout their employees but triggers a strike with an unconditional demand theirunionised employees sign individual contracts. Without systematically searching forthese other types of withdrawal of work by employers, around 30% of the disputes
investigated in the course of fieldwork were excluded on the basis that they fell into
one of these four other categories. These figures therefore represent a conservative
estimate; lockouts as more commonly understood (i.e. the refusal to furnish work as abargaining tactic) are significantly more common.
2. Unfortunately, the number of lockouts is the only data-item collected in New
Zealand limiting the scope for comparison. However, to give some appreciation of
the significance of the difference in the proportion of disputes constituted by lockouts,
in Australia 2 per cent of disputes translated into just under 10 per cent of working
days lost because lockouts are longer on average than strikes. If a similar ratio ofdisputes/working days lost applied in New Zealand, the portion of working days lost
to lockouts would come to just under 30 per cent.
3. For a dissenting view, which claims declining strike levels in Australia merelyreflected international trends, see Perry (2004).
4. Although no official figures on lockouts exist for Australia, it is universally agreed
they were extremely rare throughout the twentieth century (Briggs, 2004a: 112) whilst

13
in New Zealand there were less than 15 lockouts from 1925 until the early 1970s(Anderson, 1994: 125).

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Relative Advantages: Casual Employment and Casualisation in Australia
and New Zealand
IAIN CAMPBELL and PETER BROSNAN1

Abstract
Australia and New Zealand share a common experience of casual work. In both countries acategory of ‘casual’ has long been permitted under labour regulation, and in both countries
this has been associated with concerns about precariousness in employment. At least up until
the recent period, labour regulation in both countries sought to limit casual employment insimilar ways through quantitative restrictions and through prescription of a ‘casual loading’on the hourly rate of pay. Yet, in spite of these strong parallels, casual employment seems
less significant in New Zealand as a proportion of the total workforce and it seems to lack thesame pace of growth as in Australia. This article asks why there should be this difference. It
sketches out an answer that focuses on employer calculations and choices (within theframework of labour regulation, including custom and practice). We suggest that the relativeadvantages of casual employment to employers are narrower and less imposing in New
Zealand. We warn that this cannot be taken as a source of comfort about the better quality ofwork in New Zealand. The compression of relative advantages is partly because of thegreater access of casual employees to standard rights or benefits but it is also partly becauseof the poorer conditions of permanent workers.

Introduction
Labour restructuring in the current period has produced major changes in the employment
structure of advanced capitalist societies. Though common themes are evident, including
widely-shared concerns about increased precariousness, there is surprising diversity in theway in which the changes have unfolded in individual nations. This article explores acomparison of one aspect of labour restructuring in Australia and New Zealand. We startwith the familiar Australian phenomenon of casualisation and the underlying category of‘casual’ work. We work our way outward from this starting-point, examining what is known
about analogous phenomena in New Zealand. In particular, we consider a crunch question:
Why are casual employment and casualisation less significant in New Zealand than inAustralia?

Casual Work and Casualisation in Australia
Casual work and casualisation in Australia have attracted a great deal of research over the past
fifteen years in Australia. At latest count, almost one hundred scholarly articles, reports orbooks have taken up aspects of the topic. There is no room here to summarise all that is
known. We just summarise two points that seem particularly salient, drawing on one recent
1

Ian Campbell is Senior Research Fellow at the Centre for Applied Social Research, RMIT University,
Melbourne. Peter Brosnan is Emeritus Proffesor, Griffith University.
Many thanks to Deborah Tucker, Richard Whatman, Robyn May and the journal’s referees for offering usefulcomments on casual employment in New Zealand.

contribution (Campbell, 2004; see also Pocock, Buchanan and Campbell, 2004; O’Donnell,2004).

Casual work and labour regulation
Casual employment was an old form of employment, prominent in Australia in industries
such as the waterfront, construction, shearing, meat preserving and flour milling (O’Donnell,
2004, 12). It was marked by a strong degree of commodification, where the worker enjoyedlittle more than a simple entitlement to a money wage in exchange for being at the disposal of
the employer.
As labour regulation has developed, casual employment has come to be firmly embedded inlabour regulation. Indeed, it is impossible to understand casual employment without anappreciation of the structure of labour regulation. The Australian system has had little
statutory regulation. The common law provides an underlying structure. However, the main
vehicle of labour regulation has been through the arbitration system and the awards produced
by it – legally binding prescriptions of wages and conditions laid down by independent quasijudicial tribunals (Creighton and Stewart, 2005). Though it was a complex patchwork, theaward system, together with supplementary agreements, acted reasonably effectively togeneralize minimum conditions to a majority of the waged workforce. Coverage was broad;though declining during the 1970s and 1980s, it was still 80 percent of all employees in 1990
(Campbell and Brosnan, 1999). On the other hand, however, enforcement was often poor,
leading to an undermining of award regulations in sectors where non-compliance became
widespread.
In most awards, full-time permanent employment was the axis along which standard rights
and benefits were defined. As in most other OECD countries, it formed the pivot for thecreation of a dominant norm of ‘standard employment’. Other forms of employment werecovered in special clauses, which often specified exemptions from the standard provisions.
The vast majority of awards included a casual clause, which allowed some employees to be
hired without standard rights and benefits (but with a casual loading on the hourly rate ofpay).
The substantive content of casual clauses in awards and agreements can be easily
summarised. First, the definition of casual was generally very broad, with employees often
defined, somewhat tautologically, as ‘casual’ because they are paid ‘as such’.2 Second, casualclauses generally offered some mechanism of control, designed to limit the use of casual
employment. However, these controls were often poorly designed. Sometimes they set
restrictions on how casuals could be used, such as when, under what conditions and for how
long, but more often they took the simple form of proportional limits or quotas (casual
employees calculated as a proportion of the total number of employees or total number ofhours). The third point relates to the extent of the exemptions from rights and benefits. The
precise extent varied from award to award, but in general it was surprisingly wide. Casual
employees had relatively few rights and benefits in awards and agreements, apart from theright to an hour’s wage in exchange for an hour of work performed. Finally, we can note thata casual loading on the hourly rate of pay was found in almost all awards (justified as
2This definition is even used in some legislation, for example the West Australian Minimum Conditions of
Employment Act, 1993.

compensation for foregone benefits, as compensation for irregular employment and as adeterrent for employers).
The history of award regulation of casuals stretches back to the origins of the arbitration
system. It is likely that award regulation in areas where casual workers existed initially aimed
just to boost wages through a casual loading on a base rate of pay. In making the Builders
Labourer’s Award in 1913, Justice Higgins noted the point that casual pay for builders’labourers – a group who were employed casually at the time – should be higher to compensate
them for the uncertainty of their employment. In making the award, Higgins noted that “notone employer objected” (Builders Labourer’s 7 Com Arb 210,218 (1913)).
This structure of award regulation persisted through to the end of the century in Australia,
though with some amendments (including supplementing awards with independent
agreements in the changes since the early 1990s). An audit of 50 federal awards conducted in2000 (Commonwealth Government, 2000, 32-37, see also Attachment B, Schedule A),
suggested that almost all (47) had casual clauses. All of these incorporated loose definitionsof casuals. All but two of these provided for a casual loading, most commonly 20 percent.
The audit took place after the Workplace Relations Act 1996 proscribed quotas, and it
indicated that, while twelve had restrictions on the length of engagement of casuals, most had
no restrictions or much looser restrictions.
Award regulation has been crucial in shaping the practice of casual employment. The overall
effect was to establish a sharp divide in the employment structure (and the workforce). The
predominant form was permanent employment, which attracted an increasingly-wide range ofrights and benefits. Other forms such as fixed-term employment, work on employment
programs and traineeships sprang up at the margins. But casual work emerged as a form of
employment that was the most common alternative to permanent work and that displayed thelargest reduction or shortfall of rights and benefits. The shortfall permitted for casuals
spanned numerous dimensions of the employment relation, extending well beyond theemployment insecurity often associated with casual work. Casual clauses signalled a type of‘officially sanctioned’ gap in the regulatory system. But also important was the effect of twoother gaps, associated with the partial coverage and the poor enforcement of existing rules,
which similarly acted to nurture unprotected employment. Thus, casual employment can beseen as a form of employment that straddles the border between the regulated and unregulated
sectors, displaying a shortfall in protection in both sectors.
The features of labour regulation identified above help to define the opportunities for
employers. Numerous casual clauses, broad definitions, poor controls, together with partial
coverage and poor enforcement, mean that labour regulation provides few barriers to the useof casual employment. In short, in the absence of other barriers, casual work appears readily
available to employers. At the same time, the fact that casual employment – even in theeffectively-regulated sector – displays such a large shortfall in protection means that casual
work appears as a highly flexible resource, which offers employers numerous advantages andcan be used by employers in many different ways.
Given these features, it is not surprising that casual jobs can be highly diverse. For example,
around two-thirds of workers classified as ‘casual’ in their main job are part-time(representing approximately 60 percent of all part-time waged workers), while the remaining
one third are full-time (representing approximately 13 percent of all full-time waged workers).
Diversity in casual jobs is matched by diversity both in the groups that participate in casualwork and in the forms of their participation. One crucial aspect concerns the peculiar
phenomenon of what are sometimes called ‘regular’ (or ‘long-term’ or ‘permanent’ or‘ongoing’) casuals, often distinguished from ‘irregular’ (‘short-term’ or ‘true’ or ‘genuine’)casuals. Such workers are used by employers in a regular, long-term manner that is similar to
the manner in which permanent employees are used. However, they are deprived of thestandard employment rights and benefits normally associated with permanent work (Owens,
2001). This disadvantage extends to other areas of their life too; for example, regular casual
employees may be denied bank loans because their employment is not “permanent”. In effect
employers are able to abuse the opportunities of casual status, by substituting such casual
workers for permanent workers. Regular casual workers have become prominent in Australia.
In recent years, some state tribunals have been prepared to reclassify casual workers aspermanent after a qualifying period, usually six months. This has not happened in the federal
jurisdiction.

The Size and Rate of Growth of Casual WorkIn short, the category of casual in Australia covers distinct ways of using casual workers. Thereis a large amount of irregular and short-term casual work. But perhaps most surprising (andmost problematic) is the large amount of regular casual employment, in which employees areable to build up long periods of tenure.
The official statistics confirm the large size of the casual workforce. According to one
conventional measure used in recent years by the Australian Bureau of Statistics (ABS), a‘casual employee’ can be defined as an employee who is not entitled (in his or her main job)
to paid annual leave and paid sick leave. This is a robust definition, which captures important
aspects of the practice of casual employment (Campbell and Burgess, 2001). ‘Casual
employees’ in this sense numbered 2,249,300 persons in August 2004. They represented 27.7
percent of all employees (or around 23.5 percent of the total employed labour force). Thesefigures point to a trajectory of strong growth or casualisation, the number having risen from
850,000 persons or 15.8 percent of all employees in 1984. The rate of growth was mostpowerful in the 1980s and early 1990s, but it has slowed down in the period of employment
growth since the mid-1990s, just keeping ahead of the expansion in other forms of
employment.
The process of casualisation has occurred across the board, including in all major industry
groups. It is more difficult to estimate the relative rates of growth for regular and irregularcasual workers. Data on tenure for casual workers from 1993 to 2002 suggest significant
growth in all groups, but with a faster rate of growth amongst casual workers with relatively
long periods of tenure with the one employer (ABS Cat. No. 6254.0).

Casual Work in New Zealand
Unfortunately, research into casual work in New Zealand is relatively meagre. Moreover,labour force data are less detailed than their Australian equivalents. Nevertheless, it ispossible to develop a few tentative arguments.

Casual Work and Labour Regulation
New Zealand offers the closest comparison to Australia in its experiences of casual work
(Campbell, 2004). The most compelling parallel is at the level of labour regulation. It is truethat statutory regulation of labour conditions has been more important in New Zealand than inAustralia. Nevertheless, beginning from the end of the 19th century, New Zealand developed
a similar – though by no means identical – labour regulation system, which supplemented
statute with compulsory conciliation and arbitration and the setting down of awards(MacIntyre, 1987). As in Australia, the award system functioned as the main mechanism ofgeneralization to spread gains in wages and conditions to the vast majority of workers.
However, as Schwartz (2000, 78-79; see also Barry and Wailes, 2004) points out, the New
Zealand version was more weakly institutionalised and had less comprehensive coverage,
even during its heyday. Even prior to the abolition of the award system in 1991, many
workers in strong unions stood outside the award system and relied on so-called ‘enterprisebargains’ to improve wages and conditions. Coverage was estimated as just 60 percent in
1987. As in Australia, poor enforcement was also a problem, exacerbated by the large
number of small employers in the New Zealand economy.
As in Australia, the use of casual labour in New Zealand pre-dates the arbitration system(Martin 1990). As labour regulation developed, casual labour was integrated into the system.
New Zealand’s Court of Arbitration would seem to have led the way. Explicit casual loadings
had been in New Zealand’s awards for about a decade before Higgins’ 1913 decision inAustralia.
The substantive content of awards in Australia and New Zealand developed to have
similarities (and some subtle differences). New Zealand awards, like those in Australia,
defined rights and benefits for permanent employees, thereby helping to establish a norm ofstandard employment, but they allowed room for other forms of employment through special
clauses. Casual clauses were common, but they were not in all awards (New Zealand
Treasury, 1990, 148). The definitions of ‘casual’ varied from award to award, but they tended
to be tighter and more specific than in Australia. In particular, the definitions often explicitly
incorporated a notion of restriction in the use of casual workers. They tended to stress that theengagements of casuals should be on an “as needs” basis, and they often imposed limits on
the engagement of casuals; the maximum duration of employment – usually about a week,
and a minimum period of payment (and hence of work) – usually about three hours a day.
When the definition was restrictive, there was little need for a separate mechanism of control.
It is difficult to gauge the precise extent of the exemptions from standard rights and benefits
that were associated with casual work. However, the general principle of casual employment
as work with only a basic entitlement to an hourly wage seems to have been influential. In
common with Australia, the clauses often stipulated a casual loading on the hourly rate ofpay. Again in common with Australia, these loadings sometimes were designed to penalise
employers for using casual labour and sometimes to compensate the worker for lost earnings
due to the casual nature of the work. Once the awards constrained the use of casuals, the firstintention became the main one. In some awards the casual loading was non-existent; in others
it was at least as high as one-third (e.g. Wellington District Grocers’ Assistants Award, 1931).
In spite of some differences, the two systems developed in parallel, often copying each other’sinnovations (Woods, 1963). However, New Zealand has been able to use statute tosupplement award regulation to a much greater extent than Australia. After World War II,
New Zealand introduced legislation which provided some basic rights for all workers, such as

the Holidays Act 1946 and the Minimum Wage Act 1946. These established a floor of basic
rights that boosted protection for casual workers, including some who may not have been
covered adequately by an award. Nonetheless, the loose nature of casual employment
probably allowed some employers to evade their responsibilities and, as in Australia, gaps anda lack of enforcement left casual employment at the margins of the labour market such thatcasual workers in New Zealand, along with those in Australia, straddle the border between theregulated and unregulated sectors.
Casual work in New Zealand is diverse, though less so than in Australia. Casual workers canbe full-time or part-time, though they are more likely to be part-time. The paradoxicalpresence of ‘regular’ casuals can also be detected. Whatman, Harvey and Hill (1999, 5) statethat they “encountered definitions of casual workers as casual-casual, regular-casual andpermanent casual” in the three industries of accommodation, winemaking and brewing. The
term is mentioned in some awards (Ferguson, 1997), though it is difficult to assess its
significance.
Awards were abolished as a result of the Employment Contracts Act in 1991, to be replaced
by a system that preserved some room for single- and multi-employer collective agreements
but was primarily oriented to individual contracting. Casual employment fitted well into the
Employment Contracts Act environment (Ferguson, 1997). The Employment Relations Act,
which the incoming Labour government introduced in 2000, reversed in part the earlier Act,but it failed to restore awards.
The disappearance of awards had an effect on the regulation of casuals. Although thecollective agreements that succeeded awards sometimes just rolled over the provisions of theaward, in the medium term, casual clauses tended to be dropped from agreements and where
they survived they often failed to specify a casual loading. Nevertheless, this did not mean
the disappearance of the label “casual”, which continued to be used as a term in everyday
parlance, to be mentioned in written contracts, and to appear in provisions in statute andcommon law judgments.
New Zealand law does seem clearer as to what is casual labour, although it is still a “greyarea” (Ferguson, 1997, p.123). In general, the courts have found that to be a casual employee,
work must be irregular and uncertain. Even where an employee is explicitly employed as acasual, such as a written contract which specifies as such, if the pattern of work becomesregular the worker will have become a part-time or full-time permanent employee. Thus, tocease to offer work once such a pattern of employment had become established would
constitute a dismissal, and the former employee could seek a legal remedy (Butterworths
ER103.20). This is not to say that a person could not be a permanent casual. For example, acatering firm dependent on irregular commercial contracts might have on their books several
waiters who are offered work for each function catered for. Thus the relationship might
continue for many years, but work each week would be uncertain and irregular depending on
the contracts won (Butterworths ER103.20).
In short, there are strong parallels in the relationship between labour regulation and casual
work between New Zealand and Australia. However, there are also some subtle differences.
One important difference is the greater provision of rights and benefits for casual workers in
New Zealand through statute. Moreover, even with respect to award regulation before 1991,
New Zealand differed from Australia as a result of the tighter restrictions on casual work,
which seemed more likely to be based on limits on the length of engagement of casuals. Thistended to restrict casual work in practice to short-term and irregular work. Finally we cannote that the abolition of awards seems to have been accompanied by a disappearance of
casual clauses and provisions such as the casual loading.

The Size and Rate of Growth of Casual Work
Where New Zealand most obviously differs from Australia is in relation to estimates of thesize and pace of growth of casual employment. Data on the size and nature of the casual
workforce are sparse, and there is little case-study research to fill the gaps in knowledge (butsee Whatman, Harvey and Hill, 1999; WEB Research, 2004). Two Department of Labour
phone surveys of employees in 1993 and 1997, which divided employees into ‘permanent’and ‘casual’, produced estimates for casual employment of 11 percent (Tucker, 2002, 21).
One of the few other data sources is a workplace survey (Brosnan and Walsh, 1996, 1998;
Allan et al, 2001), conducted in 1995 in New Zealand (and simultaneously in Australia andSouth Africa). This produced an estimate for ‘occasional’ employees, defined as “employees
hired on a periodic basis as need arises”, of 5.4 percent of the New Zealand workforce. The
term ‘occasional’ was used for two reasons: because the term casual is not widely known inSouth Africa, and also to capture the component of irregular casuals in the Australian data.
This category is sometimes identified in the published results as ‘casual’ or ‘casual/occasional’ (Brosnan and Walsh, 1998, 29-30), and it is a different measure than theAustralian Bureau of Statistics measure of casual. If we bring together the categories of‘occasional’, ‘temporary’ and ‘fixed-term’ from that study, the proportion is recorded as 11
percent (Brosnan and Walsh, 1998, 29-31), which is identical to the Department of Labour
figure.
Though the precise extent is unclear, these figures suggest that casual workers represent a
sizeable proportion of the workforce in New Zealand. However, this is still much less thanthe comparable figure for Australia. Any Australia-New Zealand comparison is complicatedby the different categories in the available data. However, the 1995 workplace survey does
allow a direct comparison using similar categories. The category of ‘occasional’ was 9.9
percent in Australia (compared to 5.4 percent in New Zealand). If we group together the
categories of occasional, temporary and fixed-term, the figure is 14.6 percent in Australia(compared to 11 percent in New Zealand). In commenting on these figures, Brosnan andWalsh (1998, 31) stress that “no matter which definition we use, be it casuals, casuals plus
temporaries, casuals plus temporary plus contractors/ consultants and so on, Australia has lessof its labour force in secure employment than New Zealand”.
It seems clear that New Zealand has fewer casual workers in its employment structure. It
clearly has fewer irregular or genuine casuals. It is unlikely to have anywhere near the same
number of regular casuals. It still may be true, however, that some industries have significant
numbers of casuals. For example, case studies of industries such as accommodation, callcentres and labour hire in construction point to a predominance of casual and temporary work
(Whatman, Harvey and Hill, 1999; WEB Research, 2004; Hannif and Lamm, 2004).
What about the pace of growth? ‘Casualisation’ has been used in the past as a loose term tocover general trends (Anderson, Brosnan and Walsh, 1994) or specific trends in industries
such as retail (Brosnan, 1991). More recently, casualisation is cited as a trend in industries
such as the waterfront (Reveley, 1999) and accommodation (Whatman, Harvey and Hill,
1999, 5, 109). However – at least in the narrow sense of a growth in the proportion of casualworkers – casualisation does not seem to be anywhere near as prominent in other industries asin Australia. Evidence from two workplace surveys in 1991 and 1995 in fact suggested adecline in the proportion of ‘occasional’ workers in the workforce (Brosnan and Walsh, 1996,
9-10; but c.f. Tucker, 2002, 31). As Carroll (1999, 120) notes, the evidence is thin. However,
it is certainly not suggestive of the strong growth that is so clearly apparent in Australia.

Why Are Casual Employment and Casualisation Less Significant in New Zealand?
So, why are casual employment and casualisation less significant in New Zealand? To thiscrunch question we can add others. Is the lower proportion of casual workers a positive
indicator, which reflects well on the policies followed in the 1980s and 1990s? Does it meanthat employment is less precarious in the New Zealand labour market? Drawing on theanalysis developed for Australia, we can frame the answer to these questions in terms of theinteractions between employer calculations and choices and the labour regulation system.
Casualisation in Australia cannot be explained easily by appealing to shifts in employee
choices or structural change. There are groups of workers for whom casual employment is aconvenient option. Students are a case in point. The fact that some entitlements are cashed
up into a casual loading may suit their consumption patterns, and the irregular and part-timework may also suit their preferences. There is no evidence that such groups have grownsignificantly in number (Campbell, 2000). Some New Zealand researchers (e.g Rasmussen
and Deeks, 1997), following the limits of the official statistics, focus on part-time
employment as a symptom of casualisation. However this is a very imperfect indicator for
capturing the differences between the two countries. Indeed, the degree of part-time
employment is approximately the same in Australia as New Zealand.
As for structuralchanges, there is no evidence that these have led to substantial employment growth inindustries which could only operate with casual employment. This point, needs to beunderstood without the background noise of employer rhetoric. Many Australian employers
in industries such as hotels claim that the pattern of demand is such that they need a casuallabour force. Against this, however is the evidence that other hotels operate very profitably
with a permanent labour force.
Most researchers, including ourselves, emphasise the demand side of the labour market,
encompassing the impact of labour regulation and employer calculation and choices. This
analysis suggests that the crucial mechanism for changes in the significance of casual
employment in Australia is employer choices about the structure of employment in theirenterprise, primarily based on perceptions of the relative advantages of casual employment(Campbell and Brosnan, 1999; Campbell, 2001). A decisive shift took place in the 1970s,
linked to increased competitive pressures and weakened labour market conditions. As a result
employers started to show an increasing willingness and an increasing ability to realise theadvantages of casual work.
It should be noted that the explanation does not rely on changes in labour regulation. We
stress an underlying continuity in the relevant features of labour regulation up to now. The
patchwork nature of the Australian system, marked by numerous hidden gaps, and without
any underpinning floor of basic rights, was decisive in making casual employment available
to employers. However, the system had been little changed in the way it treated casual work
since the early years of the twentieth century. It is true that the labour regulation system haschanged in other ways, in particular as a result of the neo-liberal program of ‘labour market

deregulation’ in the 1990s. This can be seen to have had a slight direct impact. On the one
hand, ‘deregulation’ has opened up more opportunities for the use of casuals – loosening
award restrictions, enhancing employer power and contributing to changes in employer
perceptions. It has widened the existing gaps (Campbell and Brosnan, 1999, 360-362, 371374). However, ‘deregulation’ was mainly aimed at the wages and conditions of permanent
workers. There have been some signs of deterioration in wages and conditions for part-timepermanent workers, but so far such deregulation has not had its intended effect on full-timepermanent workers (Campbell and Brosnan, 1999).
From the mid-1970s on, New Zealand employers faced just as much economic pressure as
their Australian counterparts. Perhaps more. They could use the category of ‘casual’ if theywanted. But they did not (or at least not to the extent that employers did in Australia). Whynot?
We put to one side the challenge of theorising employer interests in detail. Instead, we
assume that employer interests are the same in both countries and are focused on generating
profits. We concentrate on examining the relative advantages of using casual employment,
first in Australia and then in New Zealand. Australian employers gain five types of advantage
by using casual labour. First, they gain operational, financial and administrative flexibility.
Secondly casuals are rarely eligible for promotions or to be on experience-related pay scales;thus despite casual loadings, they tend to be the most lowly-paid workers. Thirdly, they candismiss a casual worker without fear of legal or financial claims. Fourthly, the conferring of
casual status on a worker gives the employer a psychological advantage. When a worker istold that they are a casual, they are more likely to perceive themselves as being at the
periphery of the firm with limited rights. Moreover, the peripheral status of their employment
may make them less likely to question managerial decisions on a wide range of issues.
Finally, employers save on various benefits which permanent and fixed-term workers gain by
right (although these may be offset by the casual loading).
The first and second sets of advantages arise out of the very nature of casual labour and also
apply to the use of casual labour in New Zealand. The third is quite different. As wediscussed above, New Zealand law gives better protection to casual workers. A casual worker
whose hours become regular would be deemed to be a part-time worker, and would have legal
rights should they be dismissed unfairly or due to redundancy (Ferguson, 1997; Butterworths
ER103.20), and there is also the danger that an employer who misuses casuals may findthemselves in a difficult position if they are inspected by the Department of Labour. Thesepossibilities do not stop unscrupulous behaviour, for some employers have been found not
paying casuals their holiday pay. But they do discourage it.
As to the fourth advantage, the psychological benefits for the employer, this may apply withequal force in New Zealand. However the greater range of rights may modify its effect insome cases. Nonetheless, the evidence does seem to suggest that some New Zealandemployers do use casual employment to keep their labour force more subservient (Hannif andLamm, 2004).
The final advantage is more complicated and difficult to evaluate. Selected generalentitlements for casuals and permanent or fixed-term workers are set out in Table 1, where‘YES’ signals a general entitlement, while ‘NO’ signals an absence of a general entitlement(though the specific benefit may be available to some workers under awards and agreements).
As can be seen, the main benefit to Australian employers in employing casuals is that they

avoid paying for annual leave, public holidays and sick leave. They also avoid paying for
bereavement leave in most states. Depending on the number of hours worked by casuals, they
may also avoid paying the superannuation levy of 9 percent. Australian wage cases, which
review the casual loading, attempt to monetarise the value of the benefits foregone. The
debate ranges around issues such as superannuation, and sick leave and other special leaves
which may or may not be taken when they are available. Thus union estimates of the benefits
foregone can be over 40 percent. The relevant tribunals generally grant loadings of the orderof 20-25 percent. While the union estimates are obviously at the high end – assuming the
maximum use of sick leave, being paid for all public holidays etc – it is clear that an employer
can reduce hourly labour costs by using casual labour. Moreover, because casual workers
rarely receive pay rises or promotions, their basic wage remains low, thereby conferring afurther advantage on their employer. To sum up, even if an employer pays the casual loadingof 20-25 percent, careful use of casual labour can result in clear financial advantage. If theemployer does not have to pay the casual loading, the financial advantage from the use of
casuals can be very considerable.
Table 1: Employment form and employment benefits
Paid Unpaid
Paid
holiday sick parental
leave leaves

Paidparental
leave

Long
serviceleave

BereaveSuperanmentn-uationleave, etc

Australia
Permanent
or
fixed
Yes
term fulltime
Permanent
or
fixed
Yes
term parttime
Casual

No

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

If > $450
a monthNo

Yes a)No

Yes

Q a) W

If > $450
a month

Yes

Yes

Yes

No

Yes

No

Yes

Yes

Yes

No

Yes

No

Yes

Yes

Yes

No

Yes

No

New Zealand
Permanent
or
fixed
Yes
term fulltime
Permanent
or
fixed
Yes
term parttime
CasualYes

Notes: Q
in Queensland.
W
in Western Australia.
a) only after periods of continuous service

The situation in New Zealand is quite different. Casual loadings have largely disappeared,
but even with this fillip a cost advantage of casual employment to employers is hard to
identify. New Zealand workers receive fewer benefits, e.g. three weeks annual leavecompared with four weeks in Australia, minimal or no long service leave, and no legal
guarantee to superannuation. On the other hand, the benefits they do enjoy are available tocasuals as well as permanent employees. The new Holidays Act 2003, follows earlier
Holidays Acts in specifying eleven public holidays, and three weeks paid annual leave (after
12 months employment). The new Act extends employee rights by giving a statutory right tofive days special leave (after six months employment) for all employees. Thus there is no
obvious financial benefit from using casuals, other than they may be employed on the lowest
rates of pay.
The changes over the past twenty years in New Zealand have not, at least at the general level,
widened the relative advantages of casual employment; on the contrary, any relativeadvantages appear to have been compressed. This is largely because of movements that haveaffected permanent workers. New Zealand experienced similar pressures for ‘labour market
deregulation’ as in Australia, but the outcome in New Zealand was much more radical andcomprehensive (Harbridge and Walsh, 2002). As noted above, this had some effect on casualwork. However, the major effect was on permanent workers. The so-called ‘minimum code’survived, and this acted as a floor on wages and conditions for both permanent and casual
workers. But some of the rights and benefits specified in awards and agreements forpermanent workers – in particular penalty rates – largely disappeared (Harbridge and Walsh,2002). This directs our attention not only to the fifth set of advantages listed above but also
to the first set, couched in terms of ‘flexibility’. Using some of the new ‘flexibility’ opened up
in connection with permanent workers, in particular the new flexibility of working-timearrangements, may have become more attractive to employers in the 1990s than using casuals.
In short, compared with Australia, the relative advantages of casual work to employers in
New Zealand are compressed. This is the result of two main processes. On the one hand,
there is the compression from below, as a result of the access of all workers to a floor ofminimum conditions. On the other hand, there is the compression from above, in particular asa result of the deterioration in the conditions of permanent workers after the changes of theearly 1990s.

Conclusion
Both Australia and New Zealand stand out in cross-national comparison because of theprominence of the unusual category of casual work. This similarity is perhaps unsurprising
given the parallel history of labour regulation and labour market institutions in the twocountries. Nevertheless, this article focuses on some intriguing differences, including
differences that have emerged in the most recent period. The analysis remains exploratory,
but it suggests that an explanation for the New Zealand experience of less casualisation and alower density of casual employees in the workforce can be found in the fact that the relativeadvantages of casual work to employers are not as sharp as in Australia.
This analysis needs to be deepened. However, it is important to stress that we are not arguingthat New Zealand has better conditions in its labour markets. It is true that it has less casual
employment. But this is not the same as less precariousness. As we suggest above, NewZealand has less casual employment at least partly because of the radical program of ‘labour
market deregulation’ in the 1990s. Far from reducing precariousness, the changes of the
1990s are best seen as having spread precariousness from its previous heartlands into larger
and larger sections of the permanent workforce.
The policy implications of this study are relatively straight forward. If Australia wishes todevelop a committed, highly skilled workforce, it must offer jobs which are secure and where
the employees receive benefits commensurate with their skills and experience; in other words
the many holes in the legislative and administrative framework need to be tightened up so thatcasual work is not abused. For New Zealand the lesson is even simpler, the protections thatare in place against abuse of casualisation must be maintained and even strengthened. Bothcountries must guard against the lure of degrading conditions for the core group of permanent
workers.

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Union Revitalisation in Australia and New Zealand, 1995-2005
RAE COOPER and ROBYN MAY1

Abstract
This articles examines the factors which have led unions in Australia and New
Zealand to adopt an organising strategy since the mid 1990s. Previous research inAustralia and New Zealand has tended to treat unions strategy as a direct or indirect
response to institutional context. This article focuses on the role of more union centricfactors in shaping strategy. It demonstrates that even though the two union
movements have experienced a switching in the institutional context they face, similar
developments in both union movements have produced similar shifts in strategic
direction.

Introduction
While there have been numerous comparative studies of the labour movements ofAustralia and New Zealand (Gardner 1995, Bray and Walsh 1993, Bray and Walsh
1995), for the past decade there has been no analysis of the context for, or the relative
strategies of, unions in these countries. Much has changed during these ten years. In
Australia, the regulatory regime has been ‘decentralised’ and later ‘individualised’,
the award system has been stripped back and the powers of the Australian Industrial
Relations Commission (AIRC) to set wages and conditions and to intervene indisputes have been all but undone. This is a radically different backdrop to unionism
than was in evidence when the most recent comparative perspective on unionism waswritten. This was the time of the Accord compact between the ACTU and the ALP, it
was an environment of centralised wage fixation and it was a time when unions held anumber of rights which have since been taken from them.
In New Zealand, the 1990s was a period of decline and devastation for unions
following the Employment Contracts Act 1991 (ECA). Union membership, density
and collective bargaining coverage collapsed in the immediate years after the ECA
and continued to decline until 1999. Since that low, and following the election of aLabour coalition government in 1999, a degree of re-regulation in the form of the
Employment Relations Act 2000 (ERA) and other social reform, has taken place,albeit within a ‘post ECA’ context. Almost five years into the ERA the New Zealandunion movement is finding its feet again, growing slowly year on year since 1999 andre-establishing a level of legitimacy denied for the previous decade.
This re-examination of the comparative strategies of Australian and New Zealandunions is structured thus. The following section outlines in brief our framework foranalysing Australian and New Zealand unionism in and since the 1990s. Here we1

Rae Cooper is a Lecturer in Work and Organisational Studies, School of Business, University ofSydney. Robyn May is a Research Assistant, Social Science and Planning, RMIT University,
Melbourne.
Thanks to Bradon Ellem, Tim Ayres and the anonymous referees for their helpful suggestions on
earlier drafts.

1

briefly discuss earlier comparative work on the two union movements as well as
setting out the contribution of a number of Australian, New Zealand and international
scholars whose research on union revitalisation informs our work. The next section
presents an analysis of the state of unionism in New Zealand in the post-1995
environment, before moving to a discussion of Australian unionism during the same
period. We conclude with a discussion of the similarities and differences in thestrategies of both union movements and the critical factors which have shaped them.

Union revitalisation in Australia and New Zealand: A framework
A clear theme emerging from the work of a number of writers making a mid-1990’s
analysis of unionism in Australia and New Zealand is that the institutions which
dominate the industrial relations landscape also dominate, if not determine, union
features, strategies and outcomes. Researchers often identify a direct relationshipbetween the institutions ‘around’ unions and the generation of union strategies,
arguing for instance that wage fixing institutions and structures determine union
action. Even when researchers make an attempt to incorporate elements of unionism
into their analysis, union strategy is often seen as a by-product of interaction between
existing union features and the features of other institutions. That is, ‘external’
institutions have an indirect, but nonetheless a causal relationship with union strategy(Bray and Walsh 1993, 1995; Gardner 1995).
More recent work on union crisis both in Australia, New Zealand and in othercounties emphasises that forces and factors external to unions (such as union security
arrangements, employer hostility and changes in the regulation of work) are critical inprompting, if not necessitating change in union structures and strategies (Boxall &Haynes, 1997; Heery, 2002; Peetz, 1998). However researchers examining union
renewal strategies have also identified a range of union-centric features (such as
leadership factors, full-time officer commitment) which are critical for explaining
both the process and the nature of union strategic innovation (Carter 2000; Cooper
2001 & 2003; Heery et al 2000a, 2000b and 2000c; Oxenbridge 1997, 2000 & 2003)
In this paper we analyse the impact of changes in the institutional environment upon
unions and unionists, but in so doing we attempt to avoid an excessively‘institutionalist’ approach. Our argument is that whilst social, economic andinstitutional factors have indeed played an important role in shaping union responses,
these offer an incomplete explanation for union choices. Our analysis gives a central
place to union strategic choices. This framework allows us to identify the interactionof institutional change and union strategy, rather than to simply view unions as thepassive victims of change (for a similar framework, see Frege and Kelly 2003).

The State of New Zealand Unionism in 2005
Every year since the introduction of the Employment Relations Act in 2000 by the
Labour/Alliance Government, union membership in New Zealand has risen. Overall,
the four years 1999-2003 has seen membership rise by 13 percent, or a little over
39,000 members. The annual increases have been variable. In 2000 membershipincreased by 5.4 percent, in 2001 it was 3.6 percent and for the last two years the rate2

of annual increase has dropped to 1.5 percent. In terms of union density, the raw
figure, which arguably provides the clearest measure of union strength, strong labour
force growth over recent years has meant density has effectively stalled at between 21
to 22 percent of all wage and salary earners. Looking further we find a distinct
polarisation of membership, more than half of New Zealand’s trade unionists work in
the public sector and private sector density is a worrying 12.4%. Women are 53% of
all trade unionists and the areas of recent union growth; education, health and to alesser extent the public service, are those dominated by women workers (May et al.,2004).
At the peak council level, three distinct but intertwined strategic choices have become
apparent since the late 1990’s. First, following the merger of rival peak union bodies,
the Trade Union Federation (TUF) and Council of Trade Unions (CTU) in 2000, andthe return to one peak council, a new discipline has emerged within the ranks ofaffiliates endorsing the CTU to exercise a high degree of informal authority. This
followed widely supported change of leadership in the CTU in 1999. Second, andonly possible because of the first, a strong central lead has been given to thepromotion of organising as the way forward for unions. Third, an evolving formal
and informal engagement with Government (commenced in the late 90’s when
Labour was in opposition), carving a role for unions as both a natural partner for
consultation and giving unions a platform upon which to pursue their agendas. This
has necessitated a cohesive ‘single–voice’ approach by unions to maximise theopportunity for influence.
It is fair to say that in 2005 we have seen a growing sense of optimism amongst New
Zealand’s unionists. Significant gains by a number of unions, notably nurses andteacher unions, through reinstating industry bargaining and strong campaigning, havelifted the spirits of the union movement. A nation-wide campaign for a 5% wage
increase was begun earlier in the year, dubbed the ‘fair share - five in 05’ campaign,and some sectors, particularly metals have seen industrial action. In the run up to theGeneral Election in October 2005, the CTU was actively campaigning on the points ofdifference between the political parties.

New Zealand Institutional Changes
The 1990’s saw New Zealand at the vanguard of neo-liberal ‘reform’. Dubbed the‘New Zealand experiment’, and spanning market liberalization, free trade, deregulated
labour markets, and small government, the series of radical changes commenced in1984 by a Labour government were stepped up once the National Party took office in1990 (Kelsey, 1995). At the forefront of labour market deregulation was the
Employment Contracts Act 1991 (ECA), the impact it had on New Zealand’s tradeunions has been well documented (Kelsey, 1995; Harbridge, 1996; Anderson, 1991).
Whilst the dismantling of the system of compulsory arbitration, commenced with theLabour government, the ECA went much further, prohibiting compulsory
membership provisions, and placing individual and collective contracts on the samefooting whilst making negotiation of multi-employer contracts difficult. The ECA
also gave employers veto rights over union access and allowed non-union groups orindividuals to negotiate collective agreements. The changes were widely supported
by employers and represented a victory for business lobby group, the Business Round3

Table, a powerful organization that at one time boasted 57 Chief Executives fromNew Zealand’s largest corporations (Kelsey, 1995).
The impact of the ECA on unions was devastating. By 1994, union membership anddensity had halved, and collective bargaining collapsed to where it was the method of
pay determination for only an estimated one-fifth of the workforce (Harbridge &Honeybone, 1996). Membership loss occurred at all levels, from workplace toindustry and also from the impact of wide-scale job losses in the public sector
following contracting-out and restructuring. By the end of the 1990’s membershipwas highly concentrated in the public sector, manufacturing, and to a less extent thetransport and storage sectors and unions effectively found themselves relegated to thestatus of single site bargaining agents, servicing rather than organising, members(Goulter, 2003, Gardner 1995:53-54)
The delivery of the Labour Party’s promise to remove the ECA, with the enacting of
the ERA in October 2000, marked the beginning of a turn around in the legitimacy of
the union movement rather than a watershed in union fortunes. That Labour coalition
government, and the minority government elected in 2002, governing with the supportof the Greens and United Future, has taken a measured approach to re-regulation ofindustrial relations. The Employment Relations Act 2000 and the recently enacted
Employment Relations Amendment Act 2004, despite the howls of protest from
employer groups, represent moderate reform, a degree of re-regulation within a clear
ECA context. The ERA does not replace that lost through the late 80’s and 90’s,
instead it carves a ‘third way’ of mediation (solving employment relationshipproblems), ingraining the individualistic nature of grievance and dispute, and gives
unions a ‘hand-up’ with access rights, information disclosure and attempts to change
workplace culture via a strong emphasis on good faith. The ERAA 2004, presented asa ‘fine-tuning’ exercise endeavours to strengthen good faith principles with penalties
for breach, requirements on employers to conclude bargaining, unless there is genuine
reason, offers protection for low paid vulnerable workers in the situation of transfer,and proposes measures to deal with free loading via an attempt to circumvent pass on
and also by allowing the establishment of a bargaining fee where a union andemployer agree.
At the same time, the government has advanced a broader social agenda in large partthrough improvements to the minimum code. The minimum wage has been increased
by 36% since June 2000 (from $7 per hour to $9.50 per hour in April 2005), 4 weeks
annual leave introduced, effective April 2007, and taxpayer funded paid parental
leave of 12 weeks (rising to 14 weeks from December 2005, with a 6 monthqualifying period) introduced. The government has also improved minimum sickleave and domestic leave provisions, mandated time and a half, plus a day in lieu, for
all work on statutory holidays and strengthening health and safety legislation. Each ofthese changes has been vigorously opposed by employer groups who have throwntheir support behind former Reserve Bank Governor, now Leader of the National
Party, Don Brash. Brash believes the ECA did not go far enough and has opposed theintroduction of four weeks leave and penalty rates for public holidays (see, Brash,
23/7/04, ‘pay off time for unions’).

New Zealand Peak union strategic revitalization

4

In 2000 the rival peak organisations, the TUF and CTU merged amicably, ending
seven years fall out over the CTU’s response to the ECA. The current formation,
operation and functioning of the peak body is arguably the most stable and powerful,particularly in relation to influence over and coordination of affiliates, in the history
of New Zealand union movement. The turning point was new leadership in 1999,
marking a determination by unions to put the hardship of the 90’s behind them.
Currently, thirty-six unions, representing some 88% of trade union members, areaffiliated to the CTU. Only 2 of the largest 20 unions are outside of the CTU
structure. The CTU has no formal power over affiliates, however currently a highdegree of mutual trust, confidence and shared vision is apparent. The lack of control
over wage bargaining by the CTU (observed by Gardner, 1995:49), remains, in part
this is due to the lack of institutional structures for industry coordinated bargaining.
The new informal authority vested in the CTU has allowed it to embark on a numberof innovative programs. Recognising asymmetries within the movement, in particularthat high growth well resourced unions are in relatively well unionised areas (public
sector density is approx 60% in NZ) whilst private sector unions who have the task ofreaching out to the 7 in 8 private sector workers not unionised, are resource poor andstretched beyond capacity; the CTU has facilitated a number of ground-breaking
responses. First, via a CTU re-unionisation fund resource-rich public sector unions
are encouraged to contribute resources, with the private sector unions allowed to draw
upon the funds and resources to organise in new areas. Second, unions have beenencouraged to work with other unions in their particular industries to ensure thatworkers are being represented in the most efficient manner, with the long term aimthat there be fewer unions in each particular industry. This fits within the CTU’s
program of industry focus on all issues ranging from training, growth and innovation,organising and engagement with the state. Third, the CTU has facilitated a series ofdelegates’ forums where the Prime Minister and senior Ministers engage with uniondelegates in various regional forums, in a formal and informal setting. These forums
are not controlled by the CTU or union leaders, rather delegates are encouraged to ask
questions of the Ministers and PM about issues that affect them, often these issues do
not neatly coincide with their respective union agendas. These unscripted exchanges
changed the debate over the ERA reforms in a number of areas, and have assisted the
beginning of a regeneration of delegate structures at workplaces, broadening theinclusiveness of the movement.
Institutions impact on the degree to which unions are empowered or constrained to act
upon the choices they make. The active promotion of an organising approach by the
CTU is a case in point, resource intensive this requires money and scale, features notcommon to New Zealand unions. Those unions who pioneered the organising
approach (SFWU & Finsec) in particular have done so in both the ECA and ERA
institutional context (see Oxenbridge, 1997), and the rationale for this choice whilst it
has evolved and been refined, remains the same. What is different in the post 1999
climate is that push for renewal via organising is now led by the CTU leadership andbroadly supported by affiliates at large. Further the CTU has strategically placed
itself in a position best suited to taking advantage of the window of opportunity
offered by the ERA climate and institutional supports, such as access rights and goodfaith bargaining requirements. Upper most in their mind is the knowledge that a
Brash led National government would mean a return to the past.

5

The CTU has forged strong links, both personal and formal with the ACTU, both
movements benefiting from a sharing of ideas and resources across the Tasman. This
close relationship, facilitated by a shared vision on renewal strategies, has enabledboth movements to cut down on duplication of resources, work together on training
for delegates, organize a biannual organizers conference, and develop joint campaigns
and strategies. This close cooperation has allowed a more rapid development andtake-up of organizing and growth strategies and is hard evidence of unions’ capacity
to act in a way that is not simply a response to the institutional environment.

The state of unionism in Australia in 2005
Australian unions are reeling from the impact of a multitude of forces. Ongoingchanges in the nature of work and the composition of the labour force have taken theirtoll upon the membership levels and industrial clout of unions (see Peetz 1998).
Legislative change enacted at the federal level in 1996 made it more difficult forunions to undertake their most basic functions, organising, bargaining and therepresentation of members effectively. At the same time employers, encouraged intheir endeavors by the federal government, have shown an increasing willingness toengage in anti-union behaviour.

Table 1: Australian and New Zealand union membership and density 1976-2003
Year

1976
1982
1986
1988
1990
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003

Australian
Members
(mil)
2.51
2.57
2.59
2.54
2. 66
2.51
2.38
2.28
2.25
2.19
2.11
2.04
1.88
1.90
1.90
1.83
1.86

Density
Australia
%
51.0
49.5
45.6
41.6
40.5
39.6
37.6
35.0
32.7
31.1
30.3
28.1
25.7
24.7
24.5
23.1
23.0

Density
NZ
%
_
_
_
_
43.0
35.6
33.0
28.6
26.7
24.1
23.0
21.9
21.1
21.6
21.6
21.4
21.4

Some indicators of union power are quantifiable including: union membership anddensity levels; levels of industrial disputation; and the extent of union influence overthe determination of the wages and conditions of workers. While there are obviously

6other dimensions to and indicators of union strength (see Frege and Kelly, 2003),
even a cursory analysis of the performance of unions in these areas suggests a
movement in crisis.
Australian Bureau of Statistics (ABS) data collected in August 2003, shows aggregate
membership standing at 1,866,700 and membership density at 23 per cent (ABS6310). While in three of the four past years aggregate membership has (marginally)grown in the longer-run, the trend has been against unions. In 1992 for the first timein living memory, aggregate union membership began to fall and it continued to sothroughout the decade (ABS, 6310.0 see Table 1). Looking to union density, thesituation is even worse. There was a freefall in density in the 1990s. By 1994 less thana third of the workforce was unionised; by 2000 less than a quarter of workers were
union members and in 2003 the figure was lower still.1
Declining bargaining reach is as much a symptom as an indictor of diminished union
power. While there is some debate as to the extent of influence unions have over thewages and conditions of workers, the available evidence suggests that a large and a
growing group of workers have their pay set on an individual basis without
representation (see Watson et al., 2003). Campbell (2001) argues that ‘management
unilateralism’ rather than genuine collective bargaining is the key process determining
workplace outcomes for the majority of employees. Union capacities have been
diminished in other areas. For instance ABS data indicate that industrial action,measured by the number of working days lost and the number of workers involved,
has declined substantially over the past two decades (ABS 6321.0). In recent years
even when major disputes involving industrial action have been waged they havetended to be defensive in nature and have aimed at minimising union defeat, such as
to secure worker entitlements or to ward of anti-union actions by employers, rather
than to make significant gains for workers (Wiseman, 1998; Cooper, 2003; Gorman,
1996).
As their industrial power has weakened, so too has the ability of Australian unions to
influence political decisions and to shape policy outcomes. With the crumbling of theAccord upon the election of the Howard government in 1996, unions lost their (attimes problematic) access to the levers of national political power. As described inlater sections of the paper, the Howard government has done its best to undermine
union power in the workplace but has also successfully undone any semblance ofconsultation between the movement and government. The unravelling of external
power has real implications for power relations within union ranks. For one, the
ACTU’s ability to exercise internal authority over affiliates has been weakened.
Earlier, for instance in relation to the amalgamations programme of the early 1990s,
the ACTU wielded significant authority over affiliates and drawing upon external
power bases was able to coerce in some cases unwilling affiliates to acquiesce to its
demands (Griffin, 1991). As the 1990s progressed, the ACTU was in retreat, and inthese conditions, was forced to cast off its earlier role as the driver of union strategy
and instead to adopt the role of a ‘servicing organisation’ for affiliates (Briggs, 1999).

Australian Institutional Changes

7Groundbreaking changes to the regulation of work and employment relations began in
the late 1980s with the ‘managed decentralism’ of the second tier system. This was amilestone in that it represented the first time that wages and conditions of
employment were able to be negotiated directly between employers and theirassociations and unions (McDonald and Rimmer, 1989).2 This system maintained aclear role for the industrial tribunal, relied upon awards as the instrument throughwhich flexibility could be achieved and, reaffirmed that unions were the sole
representatives of workers in bargaining. While flexibilities were obvious, pressure
for further ‘reform’ was building. After being put under pressure from all sides, theCommission introduced the Enterprise Bargaining Principle in the second (October)
National Wage Case of 1991. Under this principle, the position of unions wasrecognised and retained but more radical changes were enshrined in the Industrial
Relations Reform Act 1993. These included, among other things, the introduction of a
non-union (collective) bargaining stream. It would not be long before unions weremore comprehensively marginalised from the bargaining process.
The most radical changes in industrial relations regulation of the past fifteen years
were ushered in after the election of the Howard government in 1996. Speaking at a
Young Liberals’ Conference on the eve of his government’s election, John Howard
alluded to his vision for ‘decollectivising’ employment relations:the goals of meaningful reforms, more jobs and better higher wages, cannot be
achieved unless the union monopoly over the bargaining processes in our
industrial relations system is dismantled. (Howard, 1996, quoted in vanBarneveld and Nassif, 2003)
The passage of the Workplace Relations Act 1996 went some way to achieving theseaims and marked a new era of decollectivism and individualism in the regulation of
the wages and conditions of Australian workers. This Act stripped back the content ofawards, necessitating that unions protect workers’ entitlements by attempting to push
award stipulations into enterprise agreements. It seriously curtailed the ability of the
AIRC to intervene in industrial disputes and introduced hefty fines for unions taking‘unprotected’ action. The Act introduced individual Australian Workplace
Agreements (AWAs) which excluded unions. A range of other changes in the Act
made it more difficult for unions to access workplaces and to represent workers andeasier for employers to choose whether, and to what extent, they would negotiate andbargain with the collective representatives of their workers. As such the Act has been
identified as enshrining a ‘decollectivist’ ethos in the regulation of employment(Peetz, 2002). It signaled the diminution of formal and external regulation of work
and workplaces through awards and the intervention of the AIRC. The workplace, andto some extent the individual contract of employment, was the locus for regulation.3
Changes to the union environment have not sprung exclusively from the legislative
agenda of the Howard government. Certainly being locked out of various forms ofbargaining, no longer having a robust award system which can be used to enforce
union standards and having next to no recourse against employer anti-union activity
through the Commission has not helped unions. However, it would be wrong tosuggest that the legislative and regulatory regime alone has left unions where they aretoday. Managerial prerogative has been further increased by the militant activity ofsome Australian employers and by an increasingly interventionist (anti-collectivst)

8

Federal government. Australian studies have identified a range of employer tactics
used in order to avoid unionisation or to reduce union influence in their workplaces
during the 1990s. These include: discriminating against union activists in relation topay, redundancies and other employment conditions; introducing non-union
agreements; taking industrial action in the form of ‘lockouts’ in response tounionisation or union bargaining demands; monitoring employees; using strategic
recruitment and selection techniques to manipulate union sympathies in theworkplace; and establishing alternative representative forms (Briggs, 2004; Edwards,
2003; Ellem, 2003; MacKinnon, 2003a; Peetz, 2002; Townsend, 2004). Most
researchers in the area agree that in Australia the use of such anti-union tactics has
been on the rise in the post Workplace Relations Act, 1996 environment (see forexample Briggs, 2004; Mackinnon, 2003). Another key change in the post-1996
environment has been the hard-line anti-union policy approach of the federal
government. On top of their legislative agenda, the Federal government has played an‘activist’ role, promoting and in some cases, such as in higher education requiring
anti-union employer behaviour (see Howe, 2005; Cooper, 2004).
What have these changes meant for Australian unionists? Quite simply, declining
membership, decentralisation and, later, individualisation of bargaining, theincreasing inability of unions to call upon bodies such as the AIRC to enforce
standards or to resolve disputes, diminishing rights to access and to bargain forworkers, increasing employer militancy and the anti-union activism of government
have shifted the balance of power away from unions and towards employers. Indeed,life looks set to get a whole lot tougher for Australian unions in mid-2005 when thegovernment takes control of the Senate and is able to comprehensively apply its
industrial relations wish list.
Australian Peak union strategic revitalization
What has been the response of Australian unions to these thoroughgoing changes intheir environment?4 For the national peak council, the ACTU, the decade to 2005 was
one of strategic reorientation centred on ‘organising’. Beginning in the early 1990s
the peak union expended considerable energy urging affiliates to adopt neworganising strategies in order to build membership and renew a union presence inAustralian workplaces. This included both direct organising initiatives and broader
attempts to garner affiliate support for the organising agenda. The earliest and best
known organising initiative was Organising Works 1994, a training programme
designed to inculcate union officials with a commitment to new member growth andto teach innovative organising techniques. By 2005 over 450 organisers had graduatedfrom the programme (see Cooper, 2003 for an overview of further direct initiatives).
After the election of Greg Combet to the Secretary-ship of the ACTU in 1999, theorganising strategy was given renewed vigour. The two signature strategy documentsof the Combet leadership, unions@work (ACTU 1999) and Future Strategies: Unions
working for a fairer Australia (ACTU, 2003), both articulated an ‘organising’ vision
for Australian union activity. The difference between these recent organising-focussed
strategy documents and the recovery strategies, such as mergers and individual
services provision, issued from the heart of Accord unionism (see for example ACTU
1987) could not be starker. The more recent documents, urge affiliates to devote
unprecedented resources to new member organising and building hardy workplace9

organisation as well as developing union strategic campaigning capacities while
broadening union constituencies. While peak council policies and prescriptions andindividual union action another, there is evidence that in workplaces and union in
branches across the country have indeed heeded the ACTU’s call to organise (seeCooper and Ellem, 2005; Ellem, 2004; Griffin and Moors, 2002; Tattersall, 2005 )What explains the adoption of the organising strategy by the Australian national peakcouncil? Any explanation of strategic innovation must clearly incorporate the massivechanges in the environment for unionism. The ACTU’s organising strategies did notarise within a vacuum but in the context of a significantly weakened union movement
suffering declining membership and under attack from a conservative federal
government and increasingly anti-union employers. For the ACTU, these factors
combined to create a significant ‘crisis’ in its external environment. It is undeniable
that consciousness of crisis, and the desire to find ways out of it, sparked theorganising debate within Australian unions as occurred in many other internationalsettings (Hurd, 1995; Grabelsky and Hurd, 1994; Oxenbridge, 1997). However, arange of further influences helped shape ACTU revitalisation strategies during the
1990s. These include: the extent of leadership endorsement for organising; the power
and authority of the peak council, and; ‘organisational learning’ drawing upon theexperiences of Australian and international unions.
We have known for many years the critical influence that union leaders have over the
strategic direction of their organisations (see Undy et al., 1981). There could be no
more powerful an advocate for change than the ACTU Secretary. The accession ofCombet to the leadership of the peak council had the consequence of ‘mainstreaming’organising (see Cooper, 2000). ‘Organising’ was not new to the ACTU in the later
1990s, but it was not until Combet’s leadership that the future directions of the
movement were explicitly aligned and integrated with an organising agenda.
The peak council’s pursuit of the organising agenda throughout the 1990s remained
non-coercive in nature. Instead, individual unions ‘opted into’ organising strategies
rather than being forced to adopt them. Clearly this approach recognised that - due todiminished power resources discussed earlier in the paper - the peak council could not
impose specific organising forms and goals upon affiliates. Thus, it chose - andarguably was forced – to avoid a more interventionist approach (see Cooper, 2003).
There is ample evidence that the changes in the approach of the ACTU drew upon theeffectiveness, or otherwise, of previous union strategies both in Australia and abroad.
For instance, a decision to develop and run a broad-based union education programme
including training for senior union leaders in the late 1990s resulted from what wereseen as the shortcomings of previous strategies, such as Organising Works. ACTU
officials also borrowed heavily from the experiences of other union movements,
particularly in North America and New Zealand. During the past decade official
exchanges, speaking tours and training programmes involving officials from theUnited States and New Zealand have been sponsored by the ACTU as a part of theorganising strategy. This was taken to a new height in 2003 when the Secretary of the
New Zealand CTU was recruited to take on a strategic organising role within the
ACTU, based in Sydney. Organisational learning both reflecting upon past Australianstrategy and borrowing from the experiences of unionists across the Pacific Ocean is
critical in explaining the nature of ACTU innovation during the decade to 2005.

10

Strategic revitalisation in New Zealand and Australia: Implications &Conclusions
Australian and New Zealand unionists find themselves in rather different politicalsocial and institutional places in 2005. To a certain degree we have identified a‘swapping’ of the environments in which the respective union movements operate.
The Workplace Relations Act, 1996 ushered in changes which made it harder forunions to organise, bargain and to effectively represent workers. However, as
challenging as the outcomes of this legislation were for unions, the Howard
government was unable to gain outright control of the Senate between 1996 and 2005
and as such their ability to pursue a more thoroughly decollectivist agenda were heldin check. This will change late in 2005 when we can expect an Australian version of
the Employment Contracts Act. On the other hand, after having suffered for nine
years under the ECA, New Zealand unions find themselves in 2005 in a not dissimilar
environment to that of the early Accord years in Australia, without the formal
structures of corporatism, but nonetheless in the midst of developing close working
relations with government and rapidly expanding their sphere of influence to a wide
range of public policy matters.
However, the movements of both Australia and New Zealand share what can only bedescribed as a severe crisis in relation to density and membership, with density sitting
at 23% and 21% in the respective counties. While on recent trends there is more cause
for optimism in the New Zealand union ranks, with less than a quarter of workers
unionized in either country both movements face the looming possibility of pressuregroup status.
The CTU has been through something of a revival and in 2005 the peak body is moreunited than at any time in its history. This new-found authority is a combination of
the strong endorsement from affiliates for a centralized focus on renewal strategies
and the necessity of a single voice to take advantage of the more favourable politicalclimate. In Australia, the ACTU retains its long-held place as the voice for unioninterests. However, this must be qualified with the recognition that the unraveling of
external sources of power has reduced the peak council’s ability to wield coercive
power over affiliates, as was witnessed during Accord unionism. While it may
represent a single voice for union interests in Australia, as far as the Federal
government is concerned, it is a voice to be ignored as they seek to marginalise unions
not only from the regulation of work but from public policy making.
The mood amongst New Zealand unionists is optimistic, there is a sense that they
have a window of opportunity to make real gains for members and this has focused
the attention on renewal strategies. By comparison, in Australian unions - whilst there
is a firm resolve to pursue renewal strategies - many leaders, officials and members
are depressed about the ability of unions to weather the storm ahead.
There has been considerable change in the industrial relations regulatory institutions
in both counties. In Australia, the decentralism of the late 1980s was undone as theformalised and collective regulation of workplaces was replaced by a more informal
and individualist system. This system afforded employers an increased prerogative,

11

the government encouraged them to use it, and use it they did. In New Zealand,
managerial prerogative was firmly entrenched by the ECA and has proved hard to
shift, despite the current government’s attempts at ‘culture change’ via emphasis on
good faith bargaining. The fact remains that the vast majority of New Zealandworkers have their pay and conditions determined by ‘managerial unilateralism’, andthe individualist ethos of the 1990’s remains firmly embedded (May et al, 2004:15).

Explaining Union Strategic Choices in Australia and New ZealandAustralia and New Zealand unions spent a good deal of the past decade in anenvironment which undermined their effectiveness and indeed their capacity to invent
strategies for renewal. However, the period from 1995 to 2005 was not characterized
by union stasis in either country. Both movements showed a determination to put inplace strategic innovations which would ensure their survival. The comparison
revealed a remarkable similarity in the strategies of the peak councils in both counties.
In Australia, the ACTU attempted to expose affiliates to both the message and thepractices of organising unionism from 1993 through a number of direct and indirect
initiatives. However, it was not until 1999 that a more thoroughgoing commitment toorganising became evident. In New Zealand, a centralized focus on organizing only
came in 1999, with new leadership, endorsed by affiliates to pursue this approach. Up
until this point the CTU had facilitated discussion and some international exchange onorganizing strategies but organizing had essentially been pioneered by individual
unions; SFWU and Finsec.
The establishment of an organising strategy as a path for the future was critically
influenced in Australia by the ACTU mission to the USA in 1993, and in New
Zealand, led by individual unions in the early 1990’s with exchange visits by various
US and NZ officials. In Australia, the search for innovative strategies for renewal wasa response to what was ahead; for New Zealand it was the bitter realization that state
dependence was no longer a viable survival strategy which sparked it. This suggeststhat whilst the search for innovation was catalysed by different local experiences,international exchange between peak union bodies was central to the development of
those strategies.
Our comparison has reaffirmed that union strategic choices are influenced by thecontext in which they are made. In both countries, interest in organising was firstsparked by crisis arising from massive changes in the institutional setting for unions
as well as in the relationship between unions and other actors in the industrial
relations world. However, these changes in themselves are not enough to offer acomplete explanation of the process undergone by either union movement. This
analysis suggests that union-centric factors are vital for determining union strategic
choice. As Frege & Kelly note, ‘explaining actors’ strategies by their institutional
context alone is too simplistic and deterministic’ (2003:12). In Australia, increased
leadership endorsement for organising-focused innovation, following from theelection of a new ACTU Secretary was identified as a critical influence upon the peakcouncil’s strategy. The (dwindling) power and authority of the peak council
paradoxically both spurred change in the ACTU’s strategy and limited the extent towhich affiliated unions could be forced to adopt a particular course. The CTU, having

12never had the kind of authority over affiliates the ACTU had, is now strongly
endorsed by affiliates to provide the lead on renewal strategies.
It seems almost a truism that the ways in which unions interpret their environment isimportant in shaping their responses to it (Frege and Kelly 2003). Yet, mostcomparative studies of Australian and New Zealand union strategies to date haveunderplayed the importance of this process. Our work suggest that by sharpening ourgaze into the union world, we can uncover a range of union features and relationships
which shape the nature, the process and the timing of union change. This includes anumber factors within national union movements, such as leadership change andsupport for strategic reorientation, as well as between national union movements,
including dynamic exchanges between national peak councils.

Conclusion
The period since 1995 has been a time of real crisis for unions in both countries. This
crisis has partly stemmed from the paring back of the traditional regulatory
mechanisms in Australian industrial relations and a shift to an individualised anddecollectivised employment relations environment. In New Zealand, it has been fromthe impact of the ECA and broader structural change. It is clear that these changes
have had a palpable impact upon unions, essentially making it harder to undertake
their traditional role and suffering the double burden of operating with considerably
less resources. Whilst in New Zealand there has been a degree of re-regulation since2000 and a markedly less hostile environment, the ECA legacy remains and theinstitutional structure has not been reassembled.
Despite the quite different environments faced by both movements at the present time,
both have made significant innovations directed at renewal. This has been a process ofadapting to a changed industrial and political environment, but it is clear that the exact
nature of that response is not predetermined by the environment. By placing unions at
the centre of our analysis and viewing them as something more than reactive players,
we can begin to understand the factors contributing to the convergence of strategies ofboth union movements, despite the divergence in their external environments. Whilst
we agree with the conclusion of many comparative industrial relations researchersthat ‘institutions matter’ (Frege & Kelly, 2003:11) our argument is that unions canand do take on the role of strategic actors in deciding their own fate. The closeworking relationship and shared vision of the ACTU and CTU in operation at the
moment, is concrete evidence of this. Whether this will translate into a renewal ofunion power is another question.
Notes
1.
Another significant feature of the changing shape of unionism during the pastten years has been a shift in the gender composition of membership and theunionisation of men and women. While men remain more highly unionised than
women, the difference between their unionisation rates has closed considerably since1993. During the past decade, Australian unions have become more feminised, at leastin terms of women’s share of union membership. In 1993 39.5 per cent of union13

members were women, in 2003, 43.7 of Australian unionists were female (ABS6310.1 1993-2003).
2.
Apart from apart from the well-entrenched over award bargaining system invarious industries and over time.
3.
More thoroughgoing changes to industrial relations legislation which willfurther enshrine the individualisation of employment and reduce unions’ ability totake effective action were being flagged announced at the time of writing (see Cooper
2004 forthcoming)
4.
Space precludes a full discussion of union strategy at the workplace, branchand national levels and as such the ensuing discussion concentrates upon national
peak council policy and practice from the late 1980s to 2004.

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17

Industrial Relations in the Context of Workfare: Comparing
Australia and New Zealand
GABY RAMIA1

Abstract
The objective of this paper is to assess the implications of workfare for thecomparative analysis of Australian and New Zealand industrial relations since the1980s. It argues that examining the relationship between industrial relations and social
protection, and in particular their fusion in the domain of “workfare”, helps to accountfor the recent re-convergence between the two regimes since the mid 1990s. Yet
beneath the overarching re-convergence, a workfare comparison illustrates that
Australia is now more marketised than New Zealand. This is internationallysignificant as workfare allows governments to appear to cater more for social
protection than they do.

Introduction
The institutional and political processes which determine workers’ social safety-nets
have been in focus throughout the history of industrial relations scholarship. Yet
labour market protections exist within the context of broader “social protection”
regimes, where social protection represents the summation of all policies andinstitutions which shield citizens from the potential insecurities of life in a market
economy. With noteworthy exceptions the broader protection context has not beenprominent in studies of Australian and New Zealand industrial relations, whether
comparative or national in orientation.
In light of the intellectual challenge presented by incremental transformations in work
and welfare over the last three decades (Sarfati & Bonoli, 2002), it is timely forscholarship to take greater account of the relationship between industrial relations andsocial protection, particularly given the fusing of the two spheres in the lives of manyas they combine work with receipt of social security benefits. The primary objectiveof the current article is to contribute to the analysis of this phenomenon by assessing
the implications of workfare for the comparative analysis of Australian and New
Zealand industrial relations since the 1980s. The intermeshing between work andwelfare is considered in the context of increasing recourse to “workfare”, thephenomenon of jobseekers and other welfare beneficiaries having to engage in workor work-like activities in return for receipt of their social security benefits andservices.
The central argument of the paper is that examining workfare helps to account for thegreater similarity between the industrial relations frameworks of New Zealand andAustralia since the mid 1990s. However, considering workfare reveals a greater
1

Gaby Ramia is a Senior Lecturer in the Department of Management at Monash University. He wishes
to thank the anonymous referees and the editors of the special issue for their helpful comments.

marketisation in Australia. The drift of the reform agendas of both regimes toward
workfare forms part of a broader international movement calling for an industrial
relations analysis of the debate on workfare and the examination of work as acomplex policy domain. This debate is significant for comparative industrial relations
scholars in that it has allowed some governments to appear to cater more genuinely
for social protection than indeed they do. The paper explains the further marketisationof Australia, and the similarities between the two regimes, by reference to thecomparative literature on industrial relations and social policy change.

Integrative Frameworks and the Role of Workfare
The workfare phenomenon draws its inspiration from productivity enhancement
principles in industrial relations, labour economics and labour law (Carney, Ramia
and Chapman, 2006; Ramia, Chapman and Michelotti, 2005). Yet, as discussed
below, workfare programmes are implemented within the institutional realm of social
policy. Accordingly, an analysis of Australian and New Zealand industrial relations
which incorporates workfare draws simultaneously on frameworks covering therelationship between industrial relations and labour markets on the one hand, andsocial policy and social protection on the other.
As discussed in previous studies (Ramia and Wailes, 2006), more of these integrative
frameworks have emanated from the latter literature than from the former. Over timesocial policy scholarship has progressively come to consider labour market
protections as well as those of the social security and broader welfare systems. Indeed,from its beginnings the field of social policy was virtually inseparable from industrial
relations, the latter being the body of scholarship which most closely scrutinised
labour market minimum standards and other protections (Webb and Webb, 1897).
Yet, as is well known to social policy analysts and welfare historians but not theirindustrial relations counterparts, the Webbs as academic parents of the field were also
key to the birth of the contemporary field of social policy (Webb and Webb, 1911).
The tradition set by the Webbs in the two fields suffered a long hiatus after WorldWar II (Ramia, 1998: 19-24). Subsequently, in the post-War period, given the threedecades long economic boom, industrial relations became a somewhat secluded fieldunder Dunlop’s (1958) “systems” tradition, and social policy did much the same aspart of Titmuss’s “social division of welfare” (Titmuss, 1958). For its part, as is well
documented, industrial relations has retreated further into isolation from broadersocial concerns by moving closer to human resource management and management
studies generally as worker protections are studied increasingly in organisation-based
analyses of the employment relationship. From the other side, several strands of social
policy literature since the 1960s have combined to help in the process of fusing social
problems with industrial relations phenomena. This includes: the “rediscovery ofpoverty” in the mid-to-late 1960s (Townsend, 1962; 1979); analyses in the 1970s and1980s on the so-called “fiscal crisis” of the welfare state (O'Connor, 1973; Mishra,
1984); and feminist scholarship on the work-welfare-household interface (Wilson,
1977).
Social policy research in the comparative arena has been equally important, spawned
as it was mainly by the need to assess the differential welfare effects of labour2markets and social policies in different nations and regions (Esping-Andersen, 1990).
Nations deal with “public/private interplay in social protection” in different ways
(Sarfati & Bonoli, 2002). For industrial relations, the most important and mostprominent arena of public/private fusion is that of workfare. The concept of workfarerefers to the phenomenon of jobseekers and other welfare beneficiaries engaging inwork or work-like activities in return for the right to receive social security benefits
and services. As discussed further in the final sections, Australia’s Work-for-the-Dole
scheme typifies workfare in a strong, compulsory form.
Though it has various institutional and policy characteristics in different countries andregions (Peck, 2001; Lodemel and Trickey, 2000), as a basis for contemporary
regimes of unemployment compensation it originated in the US (Wiseman, 2000).
Despite its American origins, however, its international significance is underpinned
by its application across most developed and many developing states. China is asignificant example of the latter, with unemployment only relatively recently having
been officially recognised by policy authorities (Leung, 2003). Whereas traditionalsocial policy is increasingly deemed “passive”, workfare has at its core, “activity” inreturn for a jobseeker’s social security benefits and training and placement services.
Given that it involves reciprocal obligations for jobseeker and government, workfare
represents a shift “from [rights-based] citizenship to [commercial] contract” (Carney
and Ramia, 1999) in employment policy.
Inherent to workfare are industrial relations productivity principles, though these arechannelled principally through the system of jobseeker compensation rather than
through labour regulation (Carney, Ramia and Chapman, 2005). Invoking theprinciple that the unemployed should make a moral contribution in return for the
taxation revenues they draw upon, versions of workfare range markedly: from
relatively progressive, high-choice and capacity-building models in parts of Northern
Europe, to punitive, comparatively ungenerous and highly privatised models as in the
United States and Australia (Lodemel and Trickey, 2000; Ramia and Carney, 2001).

Comparing New Zealand and Australia
Understanding industrial relations in the social protection and workfare context firstrequires consideration of the relationship between industrial relations and social
policy. Historically this relationship in New Zealand and Australia conformed largely
to one model rather than two. Francis Castles’ concept of the wage-earners’ welfare
state (WEWS) captured the interplay (Castles, 1985), his work being most influential
among those seeking to understand the evolution of arbitration within Australasia’s
overall social protection pattern (Ramia and Wailes, 2006). In explicating the WEWS
model Castles argues that the policy pattern which characterised the two countries’social protection regimes for much of the twentieth century was built on fourinterdependent policy planks; two of which engaged mainstream industrial relations
and social policy institutions.
First, industrial relations was central, Australia and New Zealand having establishedthe world’s only nationally applicable compulsory arbitration systems. These were
the institutional mechanisms for providing worker protection through minimum wages
and working conditions. Second, industry protection gave employers strong economic3

incentives to adhere to the labour minima. Third, selective immigration policies wereused as means to exclude migrant workers entering from countries which had lower
than Australasian-standard wages and conditions. By design, as well as being
motivated by racial discrimination, selectivity in immigration was a tool to avoid
downward pressure on labour remuneration. Fourth, a comparatively early but
minimalist and residual state welfare system was developed in both countries, relying
first on a combination of the market and the family and second on a last-resort safetynet in the form of state-provided welfare benefits and services.
Progressively from the 1970s, the WEWS arrangements were reconceived. The reconception sowed the seeds of what later became workfare programmes; which havecome to dominate the social protection landscape in many countries. Policy change
has had its international context in widespread debate stemming from the OECD’sagenda of making welfare receipt more active and less passive. This has driven
restructuring of traditional methods of service and benefit delivery (OECD, 1988;
1990), which as outlined below has occurred with significant fervour, though withdifferent timing in different nations. From the labour market side workplaces havebeen restructured so as to be more “flexible”, again an OECD agenda (OECD 1986),
designed to aid labour markets to adapt to continuing shifts in international demand.
The traditional protective settlement in Australia and New Zealand tied together
arbitration, immigration, industry protection and residual welfare. On the other hand,the new relationship has evolved into one principally containing the industrial
relations and social policy agendas and invoking workfare as part of the restructuringof social protection. As argued in the next section, the increasing integration of these
arenas has not been subject to extensive discussion within the comparative
Australasian industrial relations literature.
Industrial relations and social policy change over the last three decades in the twocountries is well documented; though in two literatures rather than one (especially,
Bray and Haworth, 1993; Castles, Vowles and Gerritsen, 1996; Castles, 1996; Ramia,
1998; Wailes, 2003). The use of immigration as a labour supply instrument was all
but abandoned and the industry protection agenda was gradually phased out, thoughless gradually in New Zealand than in Australia (Bell,1993 and 1997; Kelsey, 1993;
Kelsey, 1995: 94-99). These shifts formed part of a significant break with tradition
following the entry of Britain into the European Economic Community in the 1960s,
breaking with it the guaranteed trade markets which Britain represented for theAustralasian economies.
In the industrial relations arena, by the early 1990s differences between New Zealandand Australia were pronounced; indeed more pronounced than at any previous stage
in the two countries’ evolution since the end of the 19th century. This new divergencewas seen in the regulation of employment conditions (Mitchell and Wilson, 1993), in
the unity and relative power-bases of employers and employers’ associations(Plowman and Street, 1993), and in trade union and broader labour movement
strategy and strength (Sandlant, 1989; Gardner, 1995). By the early 1990s, almost
overnight with the enactment of New Zealand’s Employment Contracts Act in 1991,
compulsory arbitration and collectivism were abandoned and replaced by voluntarism
and individualism. A drastic decline in trade union density was effected in the4process, and reliance on statutory minimum labour conditions was increased markedly(Harbridge, 1993).
These statutory minima were largely absent from the Australian labour market, atleast at the Federal level. Federal government involvement in the setting of conditions
was always Constitutionally limited in Australia, though indirect involvement throughthe Commonwealth and State arbitration system was always a prominent feature (eg.
McCallum, Pittard and Smith, 1990: 348-349). The differences in relation to social
policy in this period were similarly marked. New Zealand remained relatively
unchanged until the National Party came to power in 1990, replacing the fourthLabour government. By that time, Australia was in the midst of a transformation in
the way social security and broader welfare services were provided.
This is explicable in terms of ever-closer interplay between the social policy andindustrial relations agendas, and an associated drift toward a workfare approach. The
process of intertwining social policy with industrial relations began in 1983 as part of
the Prices and Incomes Accord, an agreement between the (then) Labor Government
and the peak trade union body, which established a wage-“social wage” trade-off(ALP/ACTU, 1983). Under the Accord, real wages over time would be allowed
gradually to decrease, with a greater share of GDP channelled away from labour andtoward capital. This was designed to increase aggregate investment and employment,
underwritten by a neo-corporatist industrial relations environment based on peak-levellabour movement co-ordination and an emphasis on industrial conflict management.
As part of the bargain, the conditions of those who were left behind in the expected
GDP growth would be ameliorated by a more substantial social wage, which took theform of “direct income transfers or provision of [social and human] services”(ALP/ACTU, 1983: 4). The wage-social wage tradeoff was substantial, though thebenefits to workers and to beneficiaries were diminished over time (Hampson, 1997),
with the attention moving to active labour market programmes – evolving into theantecedents of contemporary workfare by the late 1980s; though it is integration or
fusion rather than inter-dependence which typifies workfare. Training policy isperhaps the best example of Australia’s nascent workfare agenda; which wasimportant because it developed significantly earlier than its New Zealand counterpart.
As part of the Labor Government’s Working Nation package in 1994 (Australia,
Prime Minister, 1994), the so-called Job Compact involved an unemployed person
being offered either a job or subsidised training in return for the person accepting boththe offer and the employer assigned to them. The arrangement thus simultaneously
engaged employers (who employed or trained), the social security authorities (whopaid the benefit/subsidy) and the job-seeker (who performed the work/training). The
job-seeker had a multiple status, therefore: of trainee, of worker and of social security
beneficiary, all at the same time (Ramia and Carney, 2001).
Subsequent changes under the current Liberal/National Government have watereddown this explicit form of policy interaction. Yet, under the Job Network - the scheme
which replaced Working Nation - the general approach is one of “mutuality ofobligation” (OECD, 2001; Considine, 2001; Carney and Ramia, 2002). This agenda
steps up the emphasis on work-like activity in jobseekers and embeds social policies
within the language and ethos of a labour market relationship through workfare. As
Walters (1997: 224) argues, the activisation of social policy “seeks to make us all5

workers”, including those who do not engage formally in paid labour. Thus, thepattern is one of social policy moving closer to the labour market, rather than thelabour market moving closer to social policy.
In contrast to the integrationist approach in Australia, New Zealand’s National
Government in the early 1990s de-coupled industrial relations from the social policy
agenda. This was part of a more hard-line, classical Friedmanite form of neoliberalism (Ramia, 1998: chps. 8 and 9) characterised by the philosophy of treating
labour markets as markets, with limited redistribution mechanisms to be channelled
only through the state. In this regime, workfare was all but absent. The problem in the
New Zealand case was that the distribution occurring through the state was overtlysocially regressive. This was best seen in 1991, when – alongside the Employment
Contracts Act - radical cuts in the level of benefits and social and human services
were introduced. As well as the tightening of eligibility criteria, cuts were made to
unemployment, sickness, widow’s and domestic purposes benefits. The most severe
reductions were applied to unemployment payments, which in some categories of thetarget population decreased by 30 percent. In addition, the age of eligibility forsuperannuation was raised from 60 to 65, and the health, housing and education
systems were changed to take on a more user-pays basis (Kelsey, 1995: 120-121, 214224).
Despite the major divergence during the 1980s and into the early 1990s, however,there has been a re-convergence between Australia and New Zealand since the mid
1990s. This is best seen in the central piece of industrial legislation in each country;with Australia moving closer to New Zealand in some key respects, and New Zealandalso edging closer to the Australian model in others. New Zealand’s current Labour
Government, first elected in 1999, replaced the Employment Contracts Act with the
Employment Relations Act in 2000, instituting the re-introduction of explicit
recognition for unions and more generally watering down the more radical aspects ofthe predecessor Act (Wilkinson, Harbridge and Walsh, 2003). Australia’s Workplace
Relations Act of 1996 had earlier brought it somewhat closer to the New Zealand
Employment Contracts Act, though it now stands closer still to the current legislation
across the Tasman (Wailes, Ramia and Lansbury, 2003). In effect the two are closer tomeeting each other in the middle than at any stage since the early 1990s.
The social policy agendas of the two countries have also been drawn closer together,with workfare the primary common characteristic. As outlined above, up to the early
1990s New Zealand was on a path of de-coupling industrial relations from social
policy, in pursuit of a model whereby the labour market is separated from theredistributive responsibilities of the state, which were handled almost purely throughminimalist, residual, state-instituted social policies (Ramia, 1998: chp. 8). Yet fromthe mid-1990s, New Zealand has moved closer to the Australian model of active
benefits, relying as these do on the ethos of mutual obligations. This includes
experimentation with an Australian-style work-for-the-dole scheme, whereby somecategories of unemployed must perform certain mandated hours of work in order to beeligible for jobseeker’s allowance (Nevile & Nevile 2003; New Zealand Herald2004). In 1996, the New Zealand government went as far in connecting
unemployment payments with industrial relations language as to replace benefits witha “community wage” (Higgins 1999). Some of the country’s workfare programmes
have taken on the contracting-out approach to the delivery of programmes in so-called

6

quasi-markets (Bartlett, Roberts and Le Grand, 1998). This is the raison d’être of thecontemporary Australian approach to employment services under the Job Network.

Industrial Relations, Social Protection and Workfare: Issues for Comparativists
Despite the overriding similarities between New Zealand and Australia, it is possible
to overstate the re-convergence argument. Yet, when considered in long-term
perspective alongside the major divergence between the Australia and New Zealandof the 1980s and early 1990s, the contemporary similarities are more compelling thanare the differences. Workfare aids in uncovering the sources of this increased
similarity. Within an approach which incorporates workfare, it is a broader andelaborated concept of work which joins traditional meanings of the term. The
Australian Job Network has arguably constructed work so as to incorporate the worklike activities of the unemployed alongside the work of formal members of the paid
labour-force. When viewed in light of workfare, Australia is a more radical model ofmarketisation than is New Zealand. Workfare is a key element in the broader
international quest to understand two key features of contemporary capitalism: theever-greater integration of the once more separate worlds of commercial work andpublic welfare; and the increasingly covert nature of the neo-liberal project. Theseissues are now discussed in turn.
Comparativists have been largely unable to explain fully how and why Australia and
New Zealand have become increasingly similar since the mid 1990s. Wailes, Ramia& Lansbury (2002) argue that this lacuna has its prime source in over-emphasis on
institutionalist analysis, which does not effectively streamline with similarities anddifferences in the political and economic preferences over time among the mainindustrial relations “interests”. Institutionalism, they contend, tends to emphasise
difference and underestimate the similarities which national policy regimes often
show in the face of common global economic pressures. The current analysis does nottake issue with this argument. Rather, it makes the complementary argument that
another dimension of the problem of explaining recent similarities between Australianand Zealand industrial relations lies in re-conceiving the content of industrial relations
change. Part of the change in content has been the re-framing of the role of social
protection in and outside the labour market. In their account of “the differing fates ofcorporatism under the two Labo(u)r Governments”, for example, Bray and Walsh(1993) for the most part do not capture the significance of the industrial relationssocial protection relation inherent to Australia’s wage-social wage trade-off under the
Accord; and the failure to adopt such arrangements in New Zealand. More recent
work (Bray and Walsh, 1998) has the same characteristic, the result being two-fold:an overemphasis on differences between New Zealand and Australia in relation to theinstitutions of the industrial relations system; and the promotion of a view ofindustrial relations as largely exclusive of its social protection context. To be fair,however, particularly in relation to content, Bray and Walsh’s analysis applies only tothe period prior to the introduction of New Zealand’s Employment Relations Act,
which as argued earlier was a major development contributing to New Zealand’s
move towards the Australian model after the mid-1990s.
The importance of the social protection context is seen in particular in the recasting of
the traditional division between employment and non-employment. This affects the7concept - and indeed the political influence – of industrial relations explanations forlabour market change. As Walters (1997) argued at a relatively early point in theevolution of closer interplay between labour markets and welfare systems, thetraditional welfare state was built upon the assumption of a full-time, usually male,
workforce. This was in his terms an “exclusive” definition of work, and thus by
implication industrial relations was more strongly justified in focusing on theinstitutions of industrial relations systems in the tradition of Dunlop (1958), as
discussed earlier in the paper. Yet, by virtue of the rise of workfare, social policy hasborrowed from industrial relations; and this has implications for comparativists inboth fields. In social policy, it points up the death of the social citizenship rights ofwelfare beneficiaries, replacing them with a widespread convergence around workfare(Handler, 2004). In industrial relations, it implies the broadening of the concept ofwork.
In line with this, industrial relations analysts might bring groups of workers who havebeen less conspicuous in mainstream research closer to the centre. This is justified by
the employment focus of social policy scholars. As Bonoli and Sarfati (2002) suggest,social policy over the last two decades has followed an “employment-at-all-costs”
approach to the work-welfare relation, which is strongest in the Anglo countries.
If current trends [in the work-welfare nexus] continue, the dividing line between
employment and legitimate non-employment may start to encompass other socialgroups which have not traditionally been expected to participate in the labour market.
In the United Kingdom, for instance, persons with disabilities are being invited to aninterview where their job prospects are evaluated. … In the United States, in view ofcurrent and expected labour shortages, attention is turning increasingly towards older
people. … The risk is that marginal groups will be forced against their will into low
quality employment in order to comply with the values of an anti-welfarist andemployment-oriented majority (Bonoli and Sarfati, 2002: 473-474).
The contributions of industrial relations scholars such as Standing (1999; 2002) are
important for their simultaneous attention to work and welfare as two sides of thesame coin, without privileging workfare-type compulsion. These have their broader
base in the longstanding work of the ILO on the importance of linking labour-force
employability with human dignity and minimum standards of legal social protection;
though more recently this has taken “security” as its underpinning (ILO, 2004;
Standing, 2002).
Conceivably, problematising the social protection and workfare contexts of labour
market regulation is indispensable if industrial relations analysts are to be maximallyeffective in challenging the inequity of the employment at all costs and anti-welfarist
perspectives. Beyond being merely a dimension of the internationally populist agenda
of so-called “new progressive” centre-left politics (Giddens, 2003), workfare isarguably a central component of the current incarnation of neo-liberalism. Neoliberalism today is characterised by the continuation – perhaps a moderation in somecountries, though a continuation none the less – of marketisation apparently
ameliorated by individual self-help and ongoing work or work-like activities.
Australia took on this agenda earlier than New Zealand, and indeed earlier than mostother countries. This is seen most clearly in its adoption of several agendas: theOECD’s active society push in the late 1980s; reciprocity of obligations under8

Working Nation in the mid 1990s; and finally, the mutuality platform of the Job
Network since 1998.
As part of the same continuum, Australia has taken on the excesses of neo-liberalism,
albeit in a more covert form than did New Zealand before it. In the early 1990s, the
New Zealand National Government’s welfare cuts and the Employment Contracts Act
signalled a harsh form of the industrial relations-social protection relation,
characterised largely by non-relation. Australia took a slower approach, which has
helped to institutionalise neo-liberalism more strongly for the long haul. The Australia
programme, using as it did the politically populist language of assistance for those
who help themselves while also providing individualised services, provided other neoliberal governments with a model of how to appear to cater for the mutualintermeshing of the industrial relations and social protection agendas.
This has gone largely unrecognised in industrial relations debate. Australia is an
excellent example of a policy regime which subverts social protection through aconcerted push for work or work-like activities. Social policies thus reach out to thelabour market concepts of industrial relations, rather than industrial relations shifting
to take on more social protection principles. Regardless, politically, integration of any
kind between the two areas is a particularly potent weapon in the quest to (at leastappear to) cater for the growing labour market and demographic groups who must
habitually interchange between work and the receipt of welfare benefits, and who
often must combine the two simultaneously. This includes the working poor, youth
and older workers, and those whose family responsibilities pose especially difficult
challenges for their worklives (Sarfati and Bonoli, 2002). Again, Australia has beenahead of New Zealand in imposing the language and implementing the policies ofintegration. This arguably reflects the fact that the Party in government spearheading
the policies for the first decade was Labor, and that the politics of the Accord
compelled the Labor Party to take a more time-consuming approach. As argued here,
however, marketisation in the workfare form has arguably seen its moment moreclearly, and earlier, in Australia.

Conclusion
The concept of work has been transformed by virtue of its context in a workforce withcharacteristics which challenge traditional industrial relations analysis. Though there
is a significant literature exploring the relationship between labour markets and social
protection, industrial relations scholars have not played a major role within this. Morework is needed to enhance scholarly understanding of the ways in which theinstitutions which shape employment conditions interact and are interdependent withprotective mechanisms inside and outside industrial relations systems. Recognising
the blurring boundaries between work and welfare, employment and nonemployment, the current analysis has argued that the comparative analysis of New
Zealand and Australian industrial relations is aided by considering the wider social
protection context. In particular, the concept of workfare was used to discuss therelation between industrial relations protections and the conduct of work or work-like
activities for the receipt of social security benefits.

9Workfare adds explanatory potential to comparative accounts which seek to accountfor the greater similarity between Australia and New Zealand since the mid 1990s. In
addition, it reveals that Australia is now the more marketised labour market model.
While the two industrial relations regimes are more similar than they were during the
1980s and early 1990s, Australia has a more commercialised workfare programme
under the Job Network. While New Zealand authorities experimented with a workfor-the dole scheme and commercialised labour market and training programmes, it is
the Australian approach which rests more comfortably in the realm of managerialist
employment services. The latter combines a growing work-for-benefit ethos,
extensive private sector involvement in the determination of unemployed people’s
standards of living as they search for work using profit-seeking placement agencies,
and increasingly decentralised industrialised relations under the Workplace Relations
Act. On one view, that this difference has largely evaded comparativists in industrial
relations is testament to the less obvious methods used by contemporary governments
to advance their neo-liberal agendas.
Workfare renders it easier to combine the language of self-help, which is politically awinner, with the language of extensive programmes; such that rejection ofprogrammes is often seen to be excessive to an employment-focused and antiwelfarist public. These and other factors place work in a somewhat different context,
one which considers new and different categories of workers and workers who have amarginal attachment to the labour market. Even if the worker does not have a formal
attachment to the market, their life may well be governed by jobsearch administration
principles which mirror the employee’s quest to meet the employer’s demands. Thisphenomenon is significant for all scholars studying labour and social protection.

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14

Unions and Union Membership in New Zealand: Annual Review for 2004
LEDA BLACKWOOD, GOLDIE FEINBERG-DANIELI and GEORGE LAFFERTY∗

Introduction
This paper reports the results of Victoria University’s Industrial Relations Centre’s annual survey oftrade union membership in New Zealand for 2004. The survey has been conducted since 1991,
when the Employment Contracts Act 1991 (ECA) ended the practice of union registration and thecollection of official data. This year we report changes in union membership, composition, anddensity from December 2003 to December 2004, taking an historical perspective to compare theindustrial relations periods framed by the ECA and the Employment Relations Act 2000 (ERA).
For the year to December 2004, union membership increased by 3.6 percent (a net increase of
12,427 members). This builds on five years of growth with an overall 17 percent increase since1999 (Crawford, Harbridge, & Walsh, 2000). Moreover, union density is 21.1 percent, slightly
down from 2003 due to union recruitment not keeping pace with strong labour force growth (4.8%
for wage and salary earners) over the year (May, Walsh, & Otto, 2004). Notwithstanding a recent
decline in members in retail, wholesale, restaurants and hotels, the last eight years has shownconsistent membership growth – this has outstripped growth in wage and salary earners (Crawford,
Harbridge, & Hince, 1997). Conversely, manufacturing – which is also a large employer – has seen
a steady decline in union membership over the same period. This decline is from a relatively large
membership base and more than one-quarter of wage and salary earners in manufacturing remain
members of their union.

Methodology
Our survey included only those unions registered as at 31 December, 2004, as per the Department ofLabour website of registered unions (see www.ers.dol.govt.nz/union/registration.html and DOL
Annual Report 2004). In late January 2005, each of the registered unions was sent a survey
requesting membership numbers as at 31 December 2004. One hundred and four unions responded.
For those that did not, details were obtained either through telephone contact, or based on last year’s
figures verified by the Registrar of Unions (DOL, 2004, 2005). In the time between last year’s
survey and the return of this year’s survey, 13 unions deregistered and two new unions registered,bringing the total number of unions to 170 (see Appendix for explanation of union registration
under ERA).

Trade union membership and density
Table 1 shows trade union membership and density since 1991. Union density is defined as the
proportion of potential union members who belong to a union.1 One commonly used measure ofunion density is based on the total employed labour force. We present this figure here, but note that∗

Leda Blackwood, Goldie Feinberg-Danieli and George Lafferty are Senior Research Fellow; Project Coordinator; andDirector respectively, at the Industrial Relations Centre, Victoria University of Wellington. This study is part of a larger
project which receives funding from the Foundation for Research, Science and Technology (Contract no. Vic X0301).
The authors are grateful to all the union officials who assisted with this research.
1

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

1

it includes people who are not usually potential union members (for example, employers, selfemployed and unpaid family members). A more accurate measure of union density is also presented– this figure is based on wage and salary earners only.

Table 1: Trade Unions, Membership and Union Density 1991-2004
Potential
union Union density
membership
Union
NumberTotal
Wage(1) / (3) (1) / (4)Yearmember of unions employed and%%ship
laboursalaryforce
earners
(1)
(2)
(3)
(4)
(5)
(6)
51432566
1518800 1196100 33.9
Dec 1991
43.0
42816058
1539500 1203900 27.8
Dec 1992
35.6
40911267
1586600 1241300 25.8
Dec 1993
33.037590682
1664900 1314100 22.6
Dec 1994
28.6
36220082
1730700 1357500 20.9
Dec 1995
26.7
33896783
1768200 1409300 19.2
Dec 1996
24.132780080
1773200 1424000 18.5
Dec 1997
23.0
30668783
1760900 1399100 17.4
Dec 1998
21.9
30240582
1810300 1435900 16.7
Dec 1999
21.1
318519134
1848100 1477300 17.2
Dec 2000
21.6
329919165
1891900 1524900 17.4
Dec 2001
21.6
334783 174
1935600 1566400 17.3
Dec 2002
21.4
341631
181
1986100
1598700
Dec 2003
17.2
21.4
354058 170
2073800 1676200 17.1
Dec 2004
21.1
Source: Household Labour Force Survey, Table 3, Table 4.3 (unpublished), HLFQ.SAA3AZ,
Industrial Relations Centre Survey
Figures in columns 3, 4, 5 & 6 are different to those reported in previous years due to a population
rebase by Statistics NZ in June 2004, see HLFS population rebase: June 2004 quarter, July 2004)
In 2004, total union membership increased by 3.6 percent (12,427 members). This builds on the five
years of growth since the introduction of the ERA, producing an overall 17 percent increase inunion membership since the nadir of 302,405 in 1999 (Crawford, Harbridge, & Walsh, 2000). For
unions working to rebuild after the devastation of the ECA period, this is an encouraging sign.
Although union membership showed strong growth in 2004, it did not keep pace with the evenstronger growth in the labour force generally (4.4%) and in the wage and salary earners component(4.8%). As a consequence, there was a slight decrease in union density of 0.1 and 0.3 percent
respectively. Union density has now been hovering between 21 and 22 percent since 1998
(Crawford, Harbridge, & Hince, 1999), during a period of strong labour force growth coupled withhigh natural membership attrition (for example, through retirement and turnover). A slowing
economy and slowing labour force growth – as widely predicted – coupled with the continuation ofcurrent trends in union membership growth, should see an increase in union density.

2Agriculture
5%Construction
6%

Personal & other services
6%

Other
1%

Finance & business
13%

Public & community
services
25%

Retail & restaurants
23%
Manufacturing
15%

Transport, storage &communication
6%

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

Personal & otherserv ices6%

Finance & business

Retail & restaurants

4%

4%

Other industries

Transport, storage &4%communication
11%

Manufacturing
20%
Public & community
serv ices
51%

Figure 2: Distribution of union members across industry sectors.

3

Union membership and employment by industry
In this section we look at the distribution of wage and salary earners (see Figure 1) and of union
members (see Figure 2), across industry sectors (classified according to the Australia New ZealandStandard Industry Classification). This provides a more nuanced picture of patterns of union
representation in the New Zealand context.
In December 2004, the largest concentrations of New Zealand wage and salary earners were in
public and community services (25%); retail, wholesale, restaurants, and hotels (23%);
manufacturing (15%); and finance, insurance and business services sectors (13%: see Figure 1).
Union membership was overwhelming concentrated in public and community services (51%),
followed by manufacturing (20%) and transport, storage and communication sectors (11%: see
Figure 2). These sectors are not major growth areas of the labour force (Statistics New Zealand,
unpublished tables). In contrast, the large retail, wholesale, restaurants, and hotels sector which
employs 23 percent of all wage and salary earners and is a growth area had only four percent of total
union membership.

Change in union membership and employment by industry
Table 2 examines gains and losses in membership by industry and Table 3 compares these withchanges in wage and salary earner employment.

Table 2: Union membership change by industry 2003 – 2004

Dec 2003

Dec 2004

Change 2003-2004
Number
(%)

3656
1029
71936
3763
6201
17849

3417
1668
71504
4628
5729
15861

-239
639
-432
865
-472
-1988

-7
62
-1
23
-8
-11

New
members
breakdown
%
-2
5
-3
7
-4
-16

34153

38692

4539

13

37

13148

13402

254

2

2

17427
172469
33735
75164
63570
341631

19974
179183
35048
76909
67225
354058

2547
6714
1313
1745
3655
12427

15
4
4
2
5
3.6

Membership private sector
160208163927
Membership public sector
181423190131
Source: Industrial Relations Centre Survey, 2004

3719
8708

2.3
4.8

20
54
11
14
29
100
(12427)30
70

Industry group

Agriculture, fishing, forestry etc
Mining and related services
Manufacturing
Energy and utility services
Construction & building services
Retail, wholesale, restaurants,
hotelsTransport,
storageandcommunication
Finance, Insurance and businessservices
Personal and other services
Public and community services
Govt admin and defence
Education
HealthTOTAL

4When we examined changes in union membership from the previous year, the largest gains were in
public and community services (particularly health); transport, storage and communications; andpersonal and other services. These three sectors accounted for 43 percent, 29 percent, and 16
percent, respectively, of the increase in union members. Coming off a small membership base,mining experienced very strong membership growth of 62 percent.
Conversely, in the large retail, wholesale, restaurants, hotels and manufacturing sectors,
considerable losses in membership were reported. This is an important, yet difficult industry sector
in which to recruit (and retain) members due to high levels of part-time and casual work, and highturnover – particularly in times of strong economic growth. Reflecting the volatility in this sector,
the 11 percent loss of members in retail, wholesale, restaurants, and hotels followed a ten percent
increase in the previous year.
Of concern for unions will be the ongoing decline in manufacturing, which accounts for the largest
proportion of union members in the private sector. The one percent drop in union membership inmanufacturing in 2004 is on the back of a three percent decline in 2003 and a one percent decline in2002 (May, Walsh, & Otto, 2004; May, Walsh, Thickett, & Harbridge, 2003). This decline islargely attributed to the loss of unionised jobs overseas, and high attrition through retirement for thisaging sector of the workforce.
Table 3: Union membership change and labour force change 2003 - 2004
Union
Change in Labour
Change inmembers
members force
labourIndustry groupDec 2004
2003-4
Dec 2004 force%(000)
2003-2004%
Agriculture, fishing, forestry etc
3417
-7
75.6
0
Mining and related services
1668
62
6
54
Manufacturing
71504
-1
259
4
Energy and utility services
4628
23
8.9
-6
Construction & building services
5729
-8
99.2
9
Retail, wholesale, restaurants, 15861
-11
392.6
2
hotelsTransport,
storageand 38692
13
105.5
5
communication
Finance, Insurance and business 13402
2
211.1
10
services
Personal and other services
19974
15
105.3
-3
Public and community services
179183
4
411
8
35048
4
78.0
5
Govt admin and defence
76909
2
158.6
8
Education
67225
5
174.4
9
Health and community
TOTAL
3540583.6
1676.2
4.8
Source: Industrial Relations Centre Survey, 2004

Public / private divide5In addition to industry breakdown, our survey asks unions to estimate how many of their members
work in the private sector and the public sector. With the substantial membership gains in public,
community and other services, most union membership growth was from the public sector (70%).
Moreover, 53.7 percent of all union members are employed in the public sector – up from 53.1
percent in 2003 (May, Walsh, & Otto, 2004).
The preponderance of union membership in the public sector, which accounts for only one-quarterof all wage and salary earners in New Zealand, is reflected in a public/private divide in union
density figures. We have used the Quarterly Employment Survey (QES) to estimate total
employment by public and private sector. Table 4 shows that the public/private divide in New
Zealand is somewhat greater than in our main international comparators (Blackwood, FeinbergDanieli & Lafferty, 2005).
Table 4: Union Density – public and private sectors in selected countries (2005)
Country
Union density
Public sector
Private sector
New Zealand
21
66
12Australia
23
46
17
Canada
30
70
18
UK
26
60
17
USA
13
36
8
Source: Statistics New Zealand, QES March 2005; Australian Bureau of Statistics 2005; Human
Resources and Skills Development Canada 2005; UK Dept of Trade and Industry 2005; US Dept ofLabor 2005; Industrial Relations Survey, 2004.

Changes in union density

Table 5: Density by industry 2003, 2004
Approx. density
Approx. density
Industry group
2003 (%)
2004 (%)
Agriculture, fishing, forestry etc
4.8
4.5
Mining and related services
26.4
27.8
Manufacturing
29.0
27.6
Energy and utility services
39.6
52.0
Construction & building services
6.8
5.8
Retail, wholesale, restaurants, hotels 5.1
4.0
Transport, storage communication
34.1
36.7
Finance, insurance & business 6.8
6.3
services
Personal and other services
16.0
19.0
Public and community services
45.1
43.6
48.3
44.9
Govt administration & defence
51.0
48.5
Education
39.5
38.5
Health & community services
Source: Household Labour Force Survey – wage and salary earners component, unpublished,
Statistics New Zealand, 2004. Industrial Relations Centre Survey

6Table 5 shows the density figures by industry for 2003 and 2004. Density has been calculated byusing the wage and salary earners only component of the Household Labour Force survey, thus
eliminating the self-employed and employers from the calculations. Government administration anddefence, education, and health and community services continue to be strongly unionised. So too doenergy and utility services, transport, storage and communications, mining, and manufacturing –although there has been some slippage in the latter. Unions, however, are struggling to maintain apresence in the remaining industries which are predominantly private sector.

Changes in union membership and density 1996 and 2004
Table 6 shows that the number of wage and salary earners in New Zealand grew by 13.5 percent in
the eight years between December 1996 and December 2004, while union membership grew by
only 4.5 percent. Disguised within these figures, however, is an 11 percent drop in union
membership between 1996 and 1999, followed by a 17 percent increase between 1999 and 2004
(Crawford, Harbridge, & Hince, 1997; Crawford, Harbridge, & Walsh, 2000).
Union membership growth has outstripped employment growth in retail, wholesale, restaurants, andhotels – large employers of wage and salary earners, experiencing sustained growth. Sectors wherestrong employment growth has outstripped membership growth, producing a decline in density,
include mining and related services, construction and related services, and transport, storage andcommunication. These are relatively small industry sectors, however, so the failure of union
membership to keep up with employment growth has not had too great an impact on overall density
figures. Of more concern is the decline in membership in manufacturing – a large, though not
rapidly growing, area of employment – and in finance and business services.
Table 6: Changes in wage & salary earners and union membership, 1996 – 2003

Industry group

LabourLabourforce Dec force
Dec 2004
1996
(000)
(000)

Labourforce
change1996-2004
(%)
11.5
122.2
4.4
-28.8
37.2
22.3
20.3
20.3

Union
membership
1996-2004(%)

Agriculture, fishing, forestry etc
67.8
75.6
218.5
Mining and related services
2.7
6.0
45.8
Manufacturing
248.1
259.0
-9.2
Energy and utility services
12.5
8.9
-23.9
Construction & building services
72.3
99.2
-12.9
Retail, wholesale, restaurants, hotels
321.0
392.6
49.0
Transport, storage and communication 87.7
105.5
-10.2
Finance, Insurance and business 175.5
211.1
-47.5
services*Public, community & personal 417.9
518.4
24.0
19.9
services (includes some private sector
employment)
TOTAL
1408.31598.713.5
4.5
Source: Household Labour Force Survey, wage and salary earners component, 1996 & 2004,
unpublished, Statistics New Zealand* Note: Public and community services and personal and other services are combined for the
purpose of comparison with 1996 figures.

7

Gender and ethnicity
Women comprise only 46 percent of the New Zealand labour force (Household Labour Force
Survey, Dec 2004 Table 3, Statistics New Zealand 2004), yet constitute 52 percent of union
membership. This strong participation rate reflects women’s high representation in public andcommunity services and has been evident for the last decade with around 48-50 percent of union
membership being female.
This year only 27 unions advised that they collected statistics on ethnicity. These unions covered
133,969 employees or 38 percent of total union members. Table 7 shows a higher representation ofMaori and Pacific Islander peoples than their representation in the labour force would lead us to
expect. Interpretation of these figures needs to be tentative as inspection of survey returns suggeststhat some unions may be placing employees for whom they do not have ethnicity information in the‘Other’ category.

Table 7: Ethnicity by sample and labour force 2004 – where details are provided
Survey sample
Ethnic group
Total labour force∗(%)(%)
NZ European:
50.4
77.7
Maori:
11.5
9.6
Pacific Peoples:
10.1
4.5
Asian:
1.5
N/a
Other:
26.4
8.2
Total
100
100
∗ Statistics New Zealand, Household Labour Force Survey, December Quarter 2004, table 5. No
breakdown given for Asian working population

Trade union numbers, distribution of membership by size, and affiliation
Table 8 shows the number of identifiable trade unions, categorised by size, at the commencement
and conclusion of the ECA period (1991 and 1999 respectively: Crawford, Harbridge & Walsh,
2000; Harbridge & Hince, 1993), and four years into the ERA period (2004). Refer to Table 1 forthe number of trade unions for all years from 1991 onwards.

Table 8: Membership by union size 1991 – 2004, selected years
M’shipMay 1991
Dec 1999
Dec 2004
range
No. Members%
No.
Members% No. Members
Under
4
2954
1
48
12703
4
133
19561
1000
1000
– 48
99096
16
22
43709
14
24
51689
4999
5000
– 8
64268
11
3
19669
7
5
36147
9999
10000+
20
43680072
922632475
8
246661
Totals80
603118100
82302405100
170
354058
Av. Size
7539
3688
2083
Source: Industrial Relations Centre Survey

8

%
6
15
10
70
100

The only clear effects of regulatory regimes on the industrial relations landscape in New Zealandare in relation to the number of trade unions. The requirement in the Labour Relations Act 1987,
that unions have a minimum membership of 1000, set in motion union amalgamations and mergers
leading to a dramatic drop in trade union numbers from 259 in 1985 to 104 in 1990. The ECA(1991) abolished registration provisions making identification of unions difficult. Estimates suggest,
however, that there was a further drop in numbers during this period, varying between 58 in 1992
and 83 in 1996. Reversing this decline, the ERA’s requirement that only registered unions could
participate in collective bargaining, and its setting of a low membership threshold for registration at
15 members, saw the number of registered unions more than double to a high of 181 in 2003 (seeTable 1 and May, Walsh & Otto, 2004).
Although the ERA has seen a growth in the number of unions, most new unions are small,enterprise or workplace based, and do not see themselves as unions in the traditional sense. Many
exist solely for the purposes of negotiating a collective agreement and they tend to have extremely
limited resources. Moreover, their entry has done little to change the distribution of union
membership. Small unions (those with fewer than 1000 members) still only account for 6 percent ofoverall membership, and large unions (those with more than 10,000 members) account for 70
percent of all membership. It is these large, well established, and better resourced unions that
account for most of the membership growth (May, Walsh & Otto, 2004).

Peak body affiliations
Only 38 of the 170 registered unions are CTU affiliates (see Table 9). However, with 310,451
members, CTU affiliates have 88 percent of total union membership and represent 17 of the 20
largest unions in New Zealand. This proportion has been consistent throughout the period of the
ERA. Moreover, in the year to December 2004, CTU affiliated unions increased their membershipby 13,011. In contrast, 584 members were lost from non-affiliated unions.

Table 9: NZCTU affiliation 1991 – 2004
Year

NZCTU Affiliate unions

Members

43445116
1991
33339261
1992
33
3211191993
272969591994
25284383
1995
222784631996
202535781997
192382621998
192357441999
262735702000
322897322001
342934662002
362974402003
38310451
2004
Source: Industrial Relations Centre surveys
Discussion

9

Percentage of total
membership in CTU
affiliates
86.5
79.2
78.5
78.9
78.5
82.2
77.4
77.7
78.0
85.9
87.8
87.7
87.1
87.7

The union movement has been successful during recent years in arresting the precipitous 1990s
decline in both membership and density. The number of union members has increased consistently
over the past five years, while density has remained at a stable, albeit historically low, level. Whilemembership growth has been slightly outstripped by overall labour market growth within an
expanding economy, the widely-predicted economic slowdown could well see an increase in union
density, as labour turnover declines and fewer new casual or short-term jobs are created in such
lowly-unionised areas as retail, wholesale, restaurants and hospitality. Where people have fewer
alternative labour market opportunities, they are more inclined to remain in their current positions –a situation that should be more conducive to union membership. Unions might also seek to address
the problem of retention directly, through making it easier for individual employees to retain theirunion membership, while moving between jobs.
The legislative environment established by the Employment Relations Act 2000, and its subsequent
amendments, has no doubt contributed to this relative success for the union movement – a situationthat is likely to remain reasonably favourable for unions in the foreseeable future. At the time ofwriting, it has been confirmed that Helen Clark will continue to be Prime Minister in a Labour-led
government. In such a context, a dramatic shift from the ERA’s moderate support for collective
bargaining, union membership and good faith in the employment relationship should continue.
Major challenges remain, however. Unions continue to be handicapped by the persistence of freeriding: despite legislative encouragement for collective bargaining, many non-union members
continue to benefit from the flow-on of pay and conditions previously negotiated by unions. The
amendments to the ERA in December 2004 may prove at most a minor impediment to thecontinuation of this practice. The low incidence of both union membership and collective bargaining
in the private sector also stands out as an important issue: the public sector has increasingly emerged
as the contemporary union heartland, while some traditional private sector areas of union strength(most notably, manufacturing) have exhibited a decline. There are signs, though, that successful
campaigns in 2005, such as the EPMU’s ‘five in 05’, have attracted considerable momentum andgenerated greater support for unionism in the private sector. In short, therefore, the overall trend isreasonably encouraging for unions and the labour movement, but still the great majority of New
Zealand’s employees remain non-unionised. The reinvigoration of the union movement has gainedsome strength, though, with the NZCTU and several key unions playing significant roles.

References:
Australian Bureau of Statistics (2005), catalogue 6310.0 Employee Earnings, Benefits and Trade Union
Membership. Canberra, ABS.
Blackwood, L., Feinberg-Danieli, G., and Lafferty, G. (2005), Employment Agreements: Bargaining Trends
and Employment Law Update 2004/2005, IRC, Victoria University of Wellington.
Crawford, A., Harbridge, R., and Hince, K. (1997), Unions and Union Membership in New Zealand: Annual
Review for 1996. New Zealand Journal of Industrial Relations, 22(2): 209-216.
Crawford, A., Harbridge, R., and Hince, K. (1999), Unions and Union Membership in New Zealand: Annual
Review for 1998. New Zealand Journal of Industrial Relations, 24(3).
Crawford, A., Harbridge, R., and Walsh, P. (2000), Unions and Union Membership in New Zealand: Annual
Review for 1999, Working Paper 11/00, IRC, Victoria University of Wellington.
Department of Labor (2005), Union Members Survey, Washington D.C, Department of Labor.
Department of Trade and Industry (2005), Trade Union Membership 2004, London, DTI.

10

Department of Labour (2004), ERA Info, Volume 16, July 2004, DOL.
Department of Labour (2005), Unpublished data, DOL.
ERS Website www.ers.dol.govt.nz/union/registration.html
Harbridge, R., and Hince, K. (1993), Unions and Union Membership in New Zealand 1985 – 1992. New
Zealand Journal of Industrial Relations, 18(3): 352-361.
Human Resources and Skills Development Canada (2005), Union Membership in Canada – 2004, Ottawa,
HRSDC.
May, R., Walsh, P., Thickett, G., and Harbridge, G. (2003), Unions and Union Membership in New Zealand:
Annual Review for 2002. New Zealand Journal of Industrial Relations, 28 (3): 314-325.
May, R., Walsh, P., & Otto, C. (2004), Unions and Union Membership in New Zealand: Annual Review for2003. New Zealand Journal of Employment Relations, 29 (3): 83-96.
Statistics New Zealand (2002, 2003, 2004), Household Labour Force Survey, unpublished reports.
Statistics New Zealand (2005), Quarterly Employment Survey, March 2005.

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

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

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

11

Book Review
Erling Rasmussen (ed.), Employment Relationships: New Zealand’s Employment
Relations Act. Auckland, Auckland University Press, 2004, 210 pages.
Although New Zealand employment relations has gone though extreme changes overthe past 20 years, there have been few scholarly commentaries on the debates
underpinning the changes and their impacts. Therefore, it is good to see that there isan edited book entitled ‘Employment Relationships: New Zealand’s Employment
Relations Act’. It reviews the development and operation of employment relations
reforms in New Zealand since 1999, with the Employment Relations Act 2000 (ERA)
as the book’s centre piece. This book follows a similar formula to the RaymondHarbridge’s edited ‘Employment Contracts: New Zealand Experience’ from 1993
which was written following the introduction of the Employment Contracts Act 1991.
As the Harbridge book, this book provides a number of different angles and allows,
therefore, for a variety of opinions on what was/is a controversial change toemployment relations.
There are thirteen chapters, one of which provides the reader with an overview. The
contributors cover policy formation, the role of the media, collective bargaining,
unintended consequences of the ERA, good faith bargaining, role of the institutions,and the reactions by employers, employees and unions to the ERA. The final chapter
sets the ERA in a wider public policy context and poses the question: where to fromhere?
While the book provides a comprehensive coverage of the Act, its consequences andendeavours to anticipate the final draft of the Employment Relations Law Reform
Bill, it was written prior to its passing and some of the assertions will need to be readwith this in mind. However, this does not detract from the overall intention of thebook which shows that many of the predictions surrounding the introduction of the
ERA have not come to fruition.
The first chapter by the former Minister of Labour, Margaret Wilson, sets the tone forthe rest of the book by giving a detailed account of the employment relations policy of
the Labour-Alliance Government. The author outlines the rational for the Act which
was to reintroduce collective bargaining and to once again accommodate the role ofunions in the bargaining process. She also emphasises the need to facilitate
harmonious relationships between employers and employees with good faithunderpinning this arrangement and providing the cornerstone of the Act.
The chapters on collective bargaining, employees and unions as well as those
covering legal matters indicate that, in spite of the tenet of the Act, there has been no
significant uptake of collective bargaining by workers in the private sector and that
individual bargaining is still the preferred option. In fact, the chapter on collective
bargaining indicates that there has been an unanticipated reaction to the Act:
collective bargaining has declined as many non-union collective contracts have turned
into individual employment agreements. This is explained partly by employers’
approach to bargaining. Research undertaken by the Department of Labour show that
employers were aware of the requirements under the ERA but the way that they

handled employment relations issues had not changed since the implementation of theAct.
The three chapters that look at unions note that, to a large extent, the union movement
is still struggling to gain recognition with private sector employees. This is especially
so in small to medium enterprises where most employees are not experiencing thebenefits of the ERA. The issue of ‘free-riding’ – addressed by the 2004 Amendment
Act – has clearly been a problem for unions as employers have tended to pass onunion-negotiated improvements to non-union employees.
The chapters dealing with legal matters also highlight how the good intentions of the
Minister have been unsuccessful in moving the employment relationship fromcontractual to a more humane relationship. Furthermore, the contributors arrive at thesame conclusion, albeit from different routes, namely that embarking on abstract
concepts as the basis of legislative reforms are fraught with difficulty. The chapter ongood faith shows that the predicted avalanche of court cases has turned into the total
opposite: there is a lack of good case law on the practical application of the concept ofgood faith. In that sense, the chapter called ‘the law moves in mysterious ways’ isvery appropriate and it does indicate that there are many, complex influences on New
Zealand employment law. So far, however, the new employment institutions appear
to have worked reasonably well and the analysis of institutions comes to astraightforward recommendation: don’t mess with success.
The last chapter looks at the wider agenda for employment relations and social equity
in New Zealand and the ERA is seen as a key component of this ‘social democratic’policy drive. The author suggests that following the recent wave of employment
relations reforms, the coming years will prove the lull after the storm. The major
reforms in employment relations have been done and only fine-tuning will be required
to firmly embed an inclusive employment relations system in New Zealand. Whether
this is a correct prediction, only the future can tell.
Overall, this book is a much needed addition to the rather limited research on recentchanges to employment relations legislation. It also presents a number of salient
trends and new information. It clearly illustrates why the ERA was considered socontroversial: the chapters by employer and union representatives (the viewpoint of
Business New Zealand and Council of Trade Unions respectively) come to very
different evaluations. Business New Zealand argues that employers’ right to manage
has been inhibited by the ERA and it will impact negatively on business performance
while Council of Trade Unions argues that this is a modest piece of legislation andstronger, additional measures are necessary to move the labour market and theeconomy forward. Finally, the book’s particular strengths are that it can be read by awider audience - academics, students and the general public - and that it has identified
and discussed the complex issues that surround the subject of employment relations in
a comprehensive and accessible manner.
Barry Foster, Massey University