Contents Page: NZJER, 2015, 40(1)
Name

Title

Janis Bailey, Robin Union power in retail: contrasting
Price, Amanda Pryman cases in Australia and New
and Jane Parker
ZealandDavid
Brougham, Work-familyenrichment,
Jarrod Haar and Maree collectivism,
andworkplaceRoche
cultural outcomes: a study of New
Zealand Māori

Page
Number

1-18

19-34

RaymondMarkey, Quality of work environment andKatherine Ravenswood quitting intention: A dilemmaand Don J. Webber

35-52

Gemma Piercy and Bill The skills productivity disconnect:
Cochrane
Aotearoa New Zealand Industry
Training policy post 2008 election

53-69

Stephen Blumenfeld

New Zealand’s Employment Law
Agenda 2014:
Collective Bargaining and Unions
in an Election Year

70-86

New Zealand Journal of Employment Relations, 40(1): 1-18

Union power in retail: contrasting cases in Australia and New
Zealand
JANIS BAILEY,* ROBIN PRICE,** AMANDA PYMAN*** and JANE
PARKER****
Abstract
Retail employees are the prototypical vulnerable, low-paid employees and, for that reason,
unionism and its benefits, such as collective bargaining, provide important social protection.
However, the reasons that make employees vulnerable also reduce union power, though thatis not to say that retail unions lack agency. This article analyses the power resources and theirdeployment in the respective retail unions in Australia and New Zealand (NZ). The twounions’ strategies are quite different, and provide interesting contrasts in approaches andideology. The implications for theory are that ideology matters, with respect to union strategy(and should be attended to more thoroughly in studies of union renewal), and – as others havealso argued – the wider institutional context has a very significant influence on outcomes forunions and their members. The implication for practice, therefore, is that both workplace andextra-workplace strategies in the political and other arenas remain central for the low-paid.

Introduction
Industrial relations (IR) and unionism in retail are neglected areas of academic research inAustralia, as they are worldwide (Tilly & Carré, 2011). In particular, the issue of retail union
power has not been explicitly addressed in the academic literature, despite the likelihood that
it is highly constrained, given the demographics and job characteristics of retail employees,
the nature of the industry and, as Dølvik and Waddington (2004: 31) point out, “thederegulated and decentralized nature of employment” in the services sector worldwide. In
this paper, we contribute to the comparative literature on trade unions by analysing thestrategy of retail unions in two countries, using the lens of union power. The unions inAustralia and NZ are, respectively, the Shop, Distributive and Allied Employees Association(SDA), and FIRST Union (the National Distribution Union [NDU] until a 2011 union
merger).
Comparative research is useful in that it produces dynamic and contextualised understandings(Hyman, 2001; Frege & Kelly, 2003; Baccaro, Hamann & Turner, 2003) in order to advanceIR knowledge. Further, comparing a single industry in two countries with similar historicalpatterns of IR development allows for a focus on issues other than national culture, giving
more analytical depth than a one-country study (Kaine & Ravenswood, 2013). Australia andNZ have strong potential for comparative research because of similarities in regulatory and*

Associate Prof. Janis Bailey. Email address: j.bailey@griffith.edu.au. Postal address: Department of
Employment Relations and Human Resources, Griffith Business School (Gold Coast Campus). Griffith
University QLD 4222 AUSTRALIA.
**
Dr. Robin Price, Senior Lecturer, Department of Management, QUT Business School.
***
Associate Prof. Amanda Pyman, Department of Management, Monash University, Caulfield Campus.
****
Prof. Jane Parker, School of Management, Massey University.

1New Zealand Journal of Employment Relations, 40(1): 1-18
cultural environments (Markey, 2011), as neighbouring Pacific economies, although there arealso marked differences.
Our research questions are three-fold: What are the two unions’ strategies with respect tobargaining and campaigning, and relationships with employers? What are the outcomes interms of benefits for members? And within a comparative framework that foregrounds thenature of union power, how are strategies and outcomes to be understood? The overall
contribution of this research is in demonstrating that, in the wider context of low-paid andunstable employment in retail, and the resultant shifting of risk to employees, the degree of
employees’ relative power and control is all-important (Kalleberg, 2009). We show that while
retail unions can take very different strategic paths, power, and how it is deployed, is
important and that institutional environments are still a major factor affecting outcomes, with
implications for both theory and practice.
The paper is organised so that the first section examines the international literature on retailtrade unionism, and overviews of union power. The second section describes the retailindustry and the politico-industrial contexts of both the two countries. In the third section, we
report our findings on the similarities and differences in union strategy and outcomes.
Analytical tools from the literature on power are used to examine these findings in the fourth
section, paying particular attention to issues of union ideology and outcomes, such ascollective bargaining coverage, relative wages and union density.

Retail union research and the power vacuum
While there is a developing body of literature on retail unionism, studies fail to grapple with
the nature of union power in the industry. However, recent developments in this area provide
a conceptual framework to analyse retail union power.
Retail union literature
Retail employees form about 10 per cent of the workforce in most post-industrial economies,
and are the paradigmatic low-paid workforce (Carré, Tilly, van Klavereen & Voss-Dahm,
2010). Studies of retail union strategy have been undertaken in the US and Canada (Coulter,
2013; Ikeler, 2011; Phillips, 2012), the UK (Parker & Rees, 2013), Europe (Dribbusch, 2005;
Gajewska & Niesyto, 2009; Geppert et al., 2014; Mrozowicki, 2014; Mrozowicki, Roosalu &Senčar, 2013), China (He & Xie, 2011), and Central America (Tilly & Galván [2006] withrespect to Mexico). There is some literature on Australian retail unionism (Lynch, Price,
Pyman & Bailey, 2011; Balnave & Mortimer, 2005; Mortimer 2001a; b; Price, Bailey &Pyman, 2014), but none available on NZ. Comparative studies on retail unions in othercountries are starting to emerge (Geppert et al., 2014; Mrozowicki, 2014; Mrozowicki et al.,2013). While extant work is wide-ranging and useful, much of it implicitly recognising thelimitations of union power in retail, this paper makes a unique contribution by explicitly
examining the power of two retail trade unions in a comparative context.
Conceptual approaches to union power
Pocock (2000: 2) observed some time ago that “agreement on a comprehensive detailed
theoretical model of union power does not exist”, despite the importance of considerations of
power to union renewal. Since Pocock’s observation, there have been several developments.
2

New Zealand Journal of Employment Relations, 40(1): 1-18
Two are key for our analysis. The first is Kelly (2011), who takes a broad-brush, fully
contextualised approach, highlighting five domains of union power. Three – markets,
institutions and the labour process – are largely ‘external’ to unions. Two – union resources
and mobilisation capacity – are largely internal and, thus, areas where union choices canmake a difference. The second approach is the work of Levesque, Murray and colleagues
who unpack Kelly’s concepts of ‘union resources’ and ‘mobilisation capacity’ in order toplace the focus on union agency and explain how unions use resources and mobilisation
capacity. According to Levesque and Murray (2010), union power resources comprise thequartet of: internal solidarity, network embeddedness (or external solidarity), narrative
resources (which frame union understandings and actions), and infrastructural resources(material and human). Yet, resources are insufficient, on their own, to exert power. Hence
Levesque and Murray (2010) offer the notion of strategic capabilities or ‘resourcefulness’:
the capacity and willingness of an institutional actor to put power resources to work.
Capability comprises: intermediating (including activating social networks, and both crossborder and localised alliances); framing (putting forward an agenda that may be used tojustify new practices and mobilise members and others); articulating (of different levels ofaction over time and space); and learning (the capacity to learn from change to alter future
events, rather than remaining “a prisoner of [one’s] own history” (Levesque & Murray, 2010:344). Figure 1 summarises the two approaches which guide our analysis.

Figure 1: Union power (adapted from Levesque and Murray, 2010)

Union power in retail
The nature of the retail workforce (largely young, feminised and part-time, with high relianceon contingent labour) and the industry (often high volume but low profit margins, andincreasingly governed by national and multinational chains) suggests that retail unions will
face challenges; but how do they attempt to exert power in the employment relationship? In
this article, we argue that it is only by combining the two approaches – the broader context
emphasised by Kelly (2011), and the internal choices of unions unpacked by Levesque andMurray (2010) – that a rounded picture of union power is made possible. Union power3

New Zealand Journal of Employment Relations, 40(1): 1-18
concerns the costs and sanctions that their members can impose on management, including
disruptions of service, the scarcity value of employees and their skills, and employees’
political influence (Batstone, 1988); and, of course, beyond the workplace, the role of thestate can be very important (ibid). We argue here that union ideology and the wider politicalcontext play a key factor in how power is operationalised, in line with Simms’ (2012)
contention that we need to understand how various union strategies are politicised (or not)when we examine union strategy. Ideology underpins choices about the use of resources,
alliance formation and mechanisms for framing the union message. The comparative elementof our paper brings into sharp relief how those aspects interact. As we will demonstrate, these
two unions present a distinctive contrast in ideology. However, our research shows that, asinteresting as the two unions’ differences in ideology are, and that these differences shapestrategy, ‘institutions matter’, and matter greatly.

Retail unions and their environments in Australia and NZRetail unions in Australia and NZ present considerable contrasts. The SDA is an ‘industry
union’, focussed almost entirely on retail,1 and is currently Australia’s largest union, with
230,000 members (Shop, Distributive and Allied Employees Association, 2014). FIRST
Union is a general union with 29,000 members, of whom 12,000 are in retail (FIRST Union,2014).2 The membership stronghold of both unions is in supermarkets (Australian Bureau of
Statistics, 2013; FIRST Union, 2014). This sub-sector is highly monopolistic. In NZ,
Woolworths Australia, operating mainly under the Countdown Brand, has 40 per cent of themarket, with Foodstuffs (operating under New World, Pak’n’Save and other brands) having
the rest (New Zealand Herald, 2012). However, Pak’n’Save is a heavily franchised operation,
meaning that FIRST Union has to negotiate many agreements. In Australia, retailers Coles
and Woolworths dominate the supermarket sector with nearly three-quarters of the market(Roy Morgan Research, 2014). In both countries, the retail labour force is feminised, youthfuland part-time, but engages to a greater extent in casual work in Australia than in NZ(Australian Workforce and Productivity Agency, 2014; Statistics NZ, 2013).
The broader IR context provides some interesting comparisons and contrasts. Australia andNZ have historically been characterised as ‘wage earners’ welfare states’ (Castles, 1985) withrelatively high minimum wages and, until the early 1990s, similar IR legislation (Wilson,
Spies-Butcher, Stebbing & St John, 2013). However, in NZ, the trend to neo-liberalism beganearlier and was more radical than in Australia, leading to marked differences in the twocountries’ contemporary IR systems (Barry & Wailes, 2004), such that, while union powerhas diminished somewhat in Australia (Peetz & Bailey, 2012), NZ unions’ power isconsiderably lower than it was before the Employment Contracts Act 1991 (McAndrew,
Edgar & Geare, 2011). Both countries have single-employer bargaining, but NZ now has nounderpinning system similar to Australia’s industry-focussed ‘modern awards’, which are ofparticular significance for low-paid Australian employees (and their unions) as a safety net
for collective bargaining. Further, Australia’s compulsory arbitration system continues,
although attenuated, including changes under the Fair Work Act 2009 that explicitly foster
single-employer collective bargaining (Creighton, 2011; Waring, Lewer & Burgess, 2008).
1

It also has membership in fast food2

Other FIRST Union coverage is in transport and logistics, wood, textiles/clothing/laundry/baking and, since2011, banking, insurance and finance.

4New Zealand Journal of Employment Relations, 40(1): 1-18
For these and other reasons, collective bargaining coverage across the workforce is muchhigher in Australia than in NZ (42 versus 13 per cent) (Australian Bureau of Statistics, 2013;
Blumenfeld, Ryall & Kiely, 2011). However, industrial action in Australia is more highly
constrained legislatively (McCrystal, 2009) than in NZ (Waring et al., 2008). Furthermore,both countries’ labour movements – including their retail unions – have suffered membership
decline in the past generation, from around 40 per cent a generation ago in both countries, to20.1 per cent in NZ, and 18.0 per cent in Australia (Companies Office [NZ], 2013; Australian
Bureau of Statistics, 2013). Unions in both Australia and NZ, like those in other Anglophonecountries (Gall & Fiorito, 2012), are highly concerned about this decline, focussing on a
range of revitalisation strategies, including more effective organising and alliance-building(Parker, 2011; Peetz & Bailey, 2012).

Research method
To explore the strategic choices of the two unions using the lens of union power, we draw
upon semi-structured interviews with union officials and organisers. The data that theseinterviews produced form part of a larger international, comparative study of union strategy
in the retail industry in Australia, NZ and the UK. The method chosen responds to views thatthe limited research that truly evaluates union strategies across nations is generally at thebroader level of the union movement rather than about particular unions (Baccaro et al.,
2003; Bamber, Lansbury & Wailes, 2011; Frege & Kelly, 2003 Hyman, 2001). In contrast,
in-depth, qualitative comparative analysis of union strategy is sparse, with extant researchtending to focus on quantitative variables, such as union density or industrial action, or on
explanations of different union structures and types (Hyman, 2001). This study contributes tofilling that gap.
In this article, we report only on the Australian and NZ data. In Australia, interviews andfocus groups were held from 2009-2012 with a total of 12 SDA officials and 19 SDA
organisers at different levels and in various geographical locations. Some SDA state branches
requested we hold focus groups rather than interviews with organisers, which may haveplaced some constraints on interviewees’ capacity to express opinions that diverged fromunion policy. In NZ, interviews were conducted in 2011 with two officials and five organisersfrom two of the three regional areas of FIRST Union. In contrast to the SDA, FIRST Union
consented to individual interviews across the board, with the retail secretary admitting there
would be divergences of opinion, often from younger and newer organisers (as indeed was
the case). All interviews and focus group discussions were digitally recorded and transcribed.
The data were coded using NVivo, based on key themes that emerged from theinterviews/discussions and the extant literature.

FIRST Union and the SDA compared
Key elements of union strategy are bargaining and campaigning (including organisingstrategies) and relationships with employers. An area of interest that emerged from the data
was union ideology. In any consideration of union power, it is also necessary to evaluate
outcomes. These issues are canvassed in this section.

5

New Zealand Journal of Employment Relations, 40(1): 1-18
Bargaining and campaigning
The two unions diverge markedly in their bargaining and campaigning strategies. FIRST
Union unequivocally calls itself a ‘campaigning union’, whereas the SDA pursues a
traditional ‘business unionism’ approach identified in previous studies (Balnave & Mortimer,
2005; Mortimer 2001a; b). FIRST Union invariably campaigns vigorously, recruiting thenbargaining, although it chooses targets and conducts only a few campaigns at any one time.
For instance, a significant achievement was winning access to The Warehouse, NZ’s largest
department store retailer in 2010. The union had to attract and organise employees who hadjoined the company-established ‘Warehouse People’s Union’, and then negotiate a collective
employment agreement with the employer (FIRST Union retail secretary, 2011). In the past
few years, the retailers Bunnings, Briscoes and Rebel Sports have been in the union’s ‘firingline’. A key recent issue has been the protection of employees’ ‘contracted hours’ at retailers,such as Countdown, and opposing 90-day probationary clauses and reduced youth wages(FIRST Union, 2013a; b).
Quite differently, the SDA relies heavily on developing good relationships with senior HR
managers, and will not engage in bargaining without firm ‘in principle’ agreement from theorganisations with which they are negotiating (SDA state official, 2011). Bargaining withnational retail chains is carried out by senior national SDA officials, including the National
Secretary. Where companies are state-based, state union leaders undertake the task. Further,
the SDA’s bargaining tactics do not rely on recruiting widely in the first instance. Indeed, a‘bargain first, recruit later’ strategy is generally adopted, and a negotiated agreement is then‘rolled out’ in the company as a recruiting tool. As a state official (2011) described in thecontext of Coles:
We really do try to make the most of these roll-outs. I’m very disappointed that we’ve[only] signed up 330 people in Coles over the roll-out period. That for us is underperformance.
Furthermore, gaining a first agreement may take considerable time. Only after several yearsof effort did the SDA recently sign its first agreement with the European retailer Aldi
(Workplace Express, 2013). A long-serving official argued that collective bargaining “createda strengthening of relationships and … really opened or educated a lot of companies that theyneed to be involved” (SDA state official, 2009).
As noted, FIRST Union bargains much more aggressively than the SDA. Distinctive‘repertoires of contention’ (Tilly, 1995) – various protest-related tools and actions available
to a movement or organisation – are a notable part of FIRST Union’s strategy, and choosing
highly visible retail store targets is a favoured tactic. As a FIRST Union national official(2011) explained:
Always the ones on the road to the airport ... I put a lot of resources into those shops
because they’re high publicity. Every MP is going up and down the bloody country
every day, going up and down ... it’s easy to get on the news.
Indicative of conflictual employment relations in retail, the union was involved, along with
the Engineering, Printing and Manufacturing Union, in the high profile 2006 Progressive
Enterprises dispute. Union members in the company’s distribution centres were locked out
after strike action. A bruising experience for both sides, the dispute contributed to a6

New Zealand Journal of Employment Relations, 40(1): 1-18
considerable loss of market share for the company, a situation from which it has taken
several years to recover. Five target shops were identified in this dispute. These shops had to
be on main roads or “if it had to be in a mall, it had to be a mall that had good street frontagethat was close by where the supermarket was” (FIRST Union national official, 2011).
Another related, contentious strategy was used in respect to the department store, Farmers:
Farmers … have been the promoters of the Christmas Parade forever; and on
one of their shops downtown they have a big Santa that used to blink and used
to have a rather naughty finger. So we were in bargaining with them; and weheld a ‘Skinny Santa’ parade the week before the Christmas parade ... and webussed Farmers workers in from all over the place ... That was a lot of fun(FIRST Union national official, 2011).
Strategies continue to be ‘in your face’, with a recent dispute involving Pak’n’Save
stores involving poverty groups, shopping centre car park banners referring to‘Pak’n’Slaves’, and the outing of a large blow-up rat (FIRST Union, 2103b) which isused regularly by the union.
To speak of ‘repertoires of contention’ with respect to the SDA is a non sequitur. The SDA
shuns militancy, confrontational behaviour and, indeed, media attention. In sum, FIRST
Union is a ‘campaigning’ union that bargains whereas the SDA is a bargaining union thatrarely campaigns – at least in the adversarial sense of the NZ union.
Relationships with employers
The discussion of bargaining and campaigning indicates that the two unions have very
different approaches to employers. FIRST Union, consistent with its militant approach andleft-of-centre frame that emphasises struggle, is tentative about developing good relationships
with employers and wary of their implications. An exception illustrates the rule. The
debilitating Progressive dispute mentioned above (Progressive is owned by the Australiancompany Woolworths) led to conscious decisions by both the employer and FIRST Union todevelop a less conflictual relationship, although FIRST Union still exhibits antagonistic
dealings with other employers. A FIRST National official invoked the metaphor of ‘boxingand dancing’ (Huzzard, Gregory & Scott, 2004) to describe her ambivalence about a morecooperative relationship with Progressive Enterprises:
Our members are loving it ... but sometimes it feels a bit too close for comfort ...
[but] our members interests are best served with us dancing with Progressive ...
From time to time, we’re sometimes standing on each other’s toes, but it’s comeout of having given each other a bloody nose.
For the SDA, good relationships with employers are the desirable norm. The importance ofrelationships with state and national HR managers with respect to bargaining cascades down
to the store level:
Our good organisers will have good relationships with managers, to the point
where often a manager will ring the union, and say, ‘I’ve got a problem withsuch and such an employee. What do I do about it?’ And the organiser willoften assist the manager in dealing with the employee, and maybe even talk to

7New Zealand Journal of Employment Relations, 40(1): 1-18
the employee that they need to do this differently, or that better, or whatever(SDA national official, 2011).
Both unions service their members, but FIRST Union places more reliance on delegates toprovide a ‘first line’ of servicing than does the SDA. As one organiser put it, “I say to[members at] a site, you and your delegate are the key. You can get answers, you can get
problems resolved, whereas I’m out and about doing what I need to do” (FIRST Union
regional organiser, 2011).
As has been argued elsewhere (Price et al., 2014), the SDA has developed with many major
Australian retailers sets of collaborative relationships that are relatively more stable andenduring – although more low-key – than the more ambitious and legislatively supported
forms of partnership found in countries such as the UK (e.g., Brown & Oxenbridge, 2004).
Collaboration, SDA-style, is built on interpersonal connections between union officials,
organisers and company managers, which strongly underpin the union’s approach tobargaining and to servicing, as described above. In contrast, FIRST Union is reluctant toengage in such relationships. For the SDA, good relationships with employers are a strategicachievement; for FIRST Union, they are largely seen as a liability.
Ideology
A key theme that arose from the interviews was the stark contrast in the politics of the twounions. The SDA has its origins in Australia’s strong Irish, working-class history, and isaligned with the right wing of the Australian Labor Party (ALP) (McCann, 1994; Warhurst,
2008). The broader context of this is the influence of ALP factions which, as Leigh (2000:
427) argues, are “more structured than … any other social democratic party in the Westernworld”. Unions are integral to these factions. The SDA continues to lobby parliamentarians to
adopt conservative positions on conscience votes regarding issues, such as abortion and gay
marriage (Warhurst, 2008). The publicity associated with the recent election of the former
West Australian SDA Secretary to Federal parliament highlighted some of the tensions
inherent in the SDA’s conservative social stance; in this case, related to the SDA’s position
with respect to sexual diversity (Burrell, 2014). The SDA exerts political influence in various
ways: as a large voting bloc within both the ALP and in union peak bodies, such as theAustralian Council of Trade Unions (ACTU), and via ex-SDA officials who enter parliament– like the former WA Secretary. The ACTU, whose largest affiliate is the SDA, played aremarkable role in the 2005-2007 Your Rights at Work campaign against IR legislation
passed by an earlier, highly neo-liberal government. This involved a major centralised media
campaign to gain support – and votes for the ALP – from non-unionists as well as union
members (Muir, 2008), involving a reframing of the IR debate at the time and leading to achange of government and a re-emphasis on collective bargaining. In similar fashion, the
SDA has exerted influence over IR reforms put in place by the 2007-2012 ALP government,
particularly the Fair Work Act 2009. In short, the SDA has long been known for its moderate‘business unionism’ approach (McCann, 1994; Game & Pringle, 1983) which, as thisresearch shows, continues to this day. Recruitment and servicing were recurring themes for
SDA officials:
We do put a big emphasis on recruitment; it’s something that keeps us strong, makes
sure we grow, we’re out there obviously, people are protected, all of that. So that is a
big focus for us, but the servicing part is also … it’s hard to say that it is 50/50, I

8

New Zealand Journal of Employment Relations, 40(1): 1-18
would say probably recruitment is the bigger focus, but at the same time servicing
can’t slip because of that (SDA state organiser, 2011).
The sentiments in the following quote about the conservative, non-militant nature of the SDA
membership were echoed many times in interviews with officials:… bargaining power is very much dependent upon having a decent presence inthe first place ... well, I don’t think anyone would accuse us as being militant.
We get criticised by that in some circles. I don’t really care. I don’t think ourmembers particularly want militancy. I don’t think 17 year old people who …
sign up to become members of the SDA particularly want to be going out on a
strike six months later (SDA state secretary, 2011).
A major aspect of the union’s strategy is to maintain a bargaining regime favourable to its
members via legislation when the ALP is in power.
In contrast, FIRST Union leaders’ political affiliations tend toward the socialist Left, withsome ex-officials having previously held parliamentary positions and exerted significant
influence over the public policy agenda, but the union is not affiliated with the Labour Party.
Moreover, the union’s campaigning history, discussed above, indicates that this union iswilling to ‘upset’ employers, very much in contrast to the SDA. The small union UNITE, set
up some years ago by a team which included the current FIRST Union retail secretary, as a‘ginger group’ union to represent low-paid workers (particularly in fast food and hospitality
but potentially extending into retail) provides an alternative viewpoint that challenges the
stance of mainstream unions like FIRST and is a potential rival should FIRST Union’s
members be unhappy with their union. In addition, there is robust divergence of opinion in
FIRST Union between more senior officials and organisers, with senior officials taking a leftof-centre political and campaigning stance, yet some organisers are openly critical of what
they see as the union’s insufficiently militant approach. A younger organiser was critical of
FIRST Union’s strategy and resource deployment, parodying the union’s own selfidentification and observing with irony:
We are a struggle-based union, not an organising union; we’re struggling to be aunion. Oh no, that’s not right!
While this range of views creates tensions, nevertheless the differences of opinions andapproaches in FIRST are seen as a source of strength rather than disunity, and staff are open
about discussing them.
Outcomes
However, IR outcomes indicate that, despite the NZ unions’ wider range of innovative
strategies and broader repertoire of contention, the superior institutional arrangements inAustralia provide better coverage for retail employees. In Australia, collective agreements
apply to 43 per cent of the whole workforce, and 37 per cent of retail (Peetz & Price, 2007;
Blumenfeld et al., 2011), while in NZ, overall collective bargaining coverage is only 13 percent and, despite the efforts of FIRST Union, retail has a mere five per cent (ibid). Minimum
wages in the sector also differ. In NZ, in 2011, the minimum adult rate in food retail was$NZ554, about six per cent above the then statutory minimum wage (ibid). Australia’s
minimum wage in retail and the floor for collective bargaining in the industry, as set out in9

New Zealand Journal of Employment Relations, 40(1): 1-18
the General Retail Award, is currently $AU666.10 – around 10 per cent above the minimum
wage. Thus, the legislative environment and the ‘floor’ of working conditions in Australia are
key elements of employee protection.
As noted, the unions differ in size. In a positive vein, the NZ union has managed to reverse
haemorrhaging retail union membership, increasing it (albeit from a low base) by more than70 per cent (from 6,800 to 12,000) over the six years 2007-2013 (FIRST Union, 2014); an
outcome that reflects a more rigorous approach to campaigning and intensive recruitment in
preparation for bargaining.
A common theme in both unions – as is the case world-wide (e.g. Parker & Rees, 2013) – isthe importance of recruiting. High employee turnover in retail means that ‘recruiting simply
to stand still’ is a priority in both countries. Indeed, in Australia, the SDA needs to sign up
70,000 retail employees annually, or around 30 per cent of its membership, simply tomaintain aggregate numbers (Lynch et al., 2011).

Analysis of union power in retail: a cross-Tasman comparison
In this section, we outline some general analytical points. We draw, first, on concepts from
Levesque and Murray (2012), making four key points: 1) FIRST Union has many fewer
infrastructural resources than the SDA, but a greater willingness to use what it has; 2) the
SDA has high network embeddedness in political terms, but FIRST has a greater tendency toalign with progressive social causes; 3) FIRST has higher internal solidarity than the SDA;
and 4) FIRST union has more varied narrative resources than the SDA. We, then, turn to alarger analysis of the two unions’ environments, guided by Kelly (2011). Our overallargument is that the contrast in the two unions’ modus operandi is usefully unpacked using
Levesque and Murray’s (2012) framework, but that Kelly’s (2011) model highlights criticalfactors that are responsible for successful outcomes. In particular, we argue that union
ideology is a neglected issue in much of the literature on union revitalisation. The value ofthe comparative approach used is that: first, we are able, via our choice of cases, to control
for markets and the labour process, which are similar in both countries; second, we are able,using Levesque and Murray (2012), to compare and contrast how union resources are used.
We return to Kelly (2011) to highlight the way in which IR institutions ultimately shapeoutcomes.
With respect to the effects of markets (labour and product) and the labour process, there islittle to distinguish the two unions’ environments. The only notable contrast is that FIRST
Union, with coverage of transport employees, has control of the entire supply chain, which
increases its bargaining leverage and therefore power in relation to employers.
Resources and their mobilisation
With respect to resources, the SDA has much larger infrastructural resources than FIRST
Union, notably sheer membership size, which increases the union’s internal resources andbolsters its institutional security. Even with a mere 23 per cent density in its largest
stronghold of supermarkets, and the challenges of ‘recruiting to stand still’, the SDA isAustralia’s largest union. In contrast, FIRST Union is figuratively a ‘small union on the edge’in a small country. The SDA does not, however, generally mobilise its large infrastructural
resources, in contrast to targeted FIRST Union campaigns that involve industrial action,
10

New Zealand Journal of Employment Relations, 40(1): 1-18
mobilisation of public opinion and attacks on retail brands. In other words, the SDA does not,in general, use the strategic capabilities that come from size. We expand below on theseissues.
Network embeddedness
Network embeddedness differs in scope and type between the two unions, with the Australianunion having considerable power as a result of its political relationships. Both countries are
currently under conservative governments; NZ in the third term of such a government which
gained power in 2008; and Australia in the first term of a government elected in 2012. While
political forces may deplete the institutional supports of NZ unions in the near future,including those for ‘good faith bargaining’ (Department of Labour [NZ], 2013; Parker,
Nemani, Arrowsmith & Bhowmick, 2012), this may lead to further mobilisation, given thecapacity of FIRST Union to deploy a variety of collective action frames. Given its relative
newness, Australia’s conservative government has not had sufficient opportunity to
implement IR changes and is, in any case, wary of wholesale amendments, given IR changes
are a key element of why it lost power in 2007 (Muir, 2012). However, it may well be that its
second term sees a focus on IR change. In addition, in Australia, the ALP government (20072012) strengthened collective bargaining provisions and largely retained awards, which, tosome extent, gives the Australian labour movement some capacity to withstand further
changes.
In terms of cultural and social links, FIRST Union enhances its network embeddedness with
race-based organising approaches to Māori and Pacific Island employees, while the SDA’s
civil society links focus on conservative associations linked to the Catholic church, such as
the Australian Family Association. Thus, FIRST Union’s network embeddedness, withrespect to social movements, is linked to more ‘progressive’ causes based on race and class,whereas the SDA’s has traction via conservative religious bodies and, thus, only with a small
proportion of the population. However, the SDA’s political embeddedness, while of lesspractical value during periods of non-ALP government such as at the present, holds back thetide of IR legislative change.
Internal solidarity and narrative resources
Following from the discussion of ideology and apparent in the distinctive bargaining andcampaigning strategies of the two unions, both internal solidarity and narrative resources arehigher in FIRST Union than in the SDA. Clearly, FIRST Union has a strongly militant,campaigning, ‘struggle-based’ approach. This is partly as a result of its ideology, whichmight be called a ‘varieties of Marxism’ approach focussed on social justice for employees,
and partly as a result of history. FIRST Union has a set of collective action frames and acoherent narrative that develops collective identities by mobilising shared senses ofgrievances amongst employees. Notably, it mostly concludes one-year agreements with
employers. While a resource-intensive strategy, this gives the union a reason, indeed animperative, for being in workplaces in a more intensively ‘organised’ way than the SDA.
FIRST Union’s framing of its narrative resources allows union militants to challenge
hegemonic ideas (in the sense of Lukes’ [2005] ‘third dimension’ of power) and to pursue
strategies that rely on mobilising members’ sense of injustice. As noted by social movement
theorists, pursuing new repertoires of contention can in turn shape collective frames ofreferences that lead to enlarged repertoires (Tarrow, 2011), and thus lead to a ‘virtuous path’11New Zealand Journal of Employment Relations, 40(1): 1-18
of finding common cause and hence a shared political frame between leaders, activists andmembers (Upchurch, Croucher & Flynn, 2012).
In contrast, the collective action frame of the SDA privileges patient and persistent advances,
based on a ‘bread and butter’ discourse of maintaining members’ pay and conditions (seeLevesque & Murray, 2012). This discourse draws on official and organiser agency, but to amuch lesser extent than FIRST Union on member agency, thus diminishing internal
solidarity. The SDA’s ‘bargain first, recruit later’ strategy, while appearing counter-intuitive,
makes sense within the context of Australia’s IR laws and their relatively high support for(decentralised) collective bargaining, reducing ‘risk’ for the union. However, this strategy deemphasises member agency at the workplace level and means that explicit class-based
narratives are not deployed.
The ideological dimensions of retail union power
At one level, the SDA’s approach is consistent with arguments (e.g., Heery, 2009) that theparticular problems of contingent and low-paid labour require an ‘upscaling’ in union
representation. Hence, the broad capacity of the Australian union movement, with a single
and representative national peak union body, to engage in agenda-setting, articulating,learning and intermediating, helps unions such as the SDA to advance ‘bigger picture’ issues.
Yet, such a capacity shifts class-based struggles – to the extent that they exist in Australia’s
neo-liberal social democracy – from the industrial to the political arena and reduces the needfor ‘cultures of solidarity’ which, as recently demonstrated (Simms & Dean, 2014), can leadto the mobilisation of perceived ‘non militant’ groups. ‘Up-scaling’ means, however, thatwhen the ALP is in opposition, union political agency is considerably weakened.
Interestingly, both unions have largely rejected the ‘organising model’ but for very different
reasons: for FIRST Union, this is mainly because the model is depoliticised (see Simms,2012), and for the SDA, it is because grassroots activism would challenge strong centralised
control of union strategy in which key elements are long incumbency by senior officials,‘recruiting to stand still’ and a focus on servicing by full-time staff rather than organising instore.
Both unions have some capacity to resist; via sheer numbers in the case of the SDA, strong
density in certain strategic areas, such as large supermarkets for both unions, and FIRST
Union’s narrative resources and its willingness to deploy a varied repertoire of contention.
However, the key question is not ‘how much’ power a union has, but rather under what
conditions capacity is likely to be activated and turned into collective action in some form
(Kelly, 2011). The neo-liberal context provides major challenges for retail unions covering
service employees, many of whom are in highly contingent work arrangements and haverelatively weak labour market attachment. This is particularly so in NZ, where deregulation
has been quicker and more radical than in Australia. In a small-scale setting like NZ, a‘thinner’ regulatory framework (Parker, 2011) is felt more acutely. It is the institutional
support for the employment relationship that is all-important, as illustrated by the muchgreater capacity of Australia’s laws – at the moment – to protect the low-paid, in contrast to
NZ’s laws. However, both unions are weaker than their counterparts in most parts of western
Europe; evidenced, for example, by comparative bargaining densities (Kelly, 2011). Thisemphasises the general point that the single-employer bargaining frameworks which haveemerged in recent decades in Australia and NZ have reduced union power.

12

New Zealand Journal of Employment Relations, 40(1): 1-18

Conclusions
A suggestion for future academic inquiry is to obtain the views of members in relation tounion strategy as the two contrasting cases presented in this paper, like much of the literatureon union strategy, does not take a member perspective into account.
Framing our analysis with reference to Kelly’s (2011) and Levesque and Murray’s (2010)
models of union power, this study has identified and reinforced the importance ofinstitutional frameworks in shaping union strategy and power. We have also demonstrated
that an explicit focus on union ideology enhances scholars’ understanding of union strategy,
in line with Simms’ (2012) argument that this dimension is key (but ignored by dominant
union approaches to organising, and by much of the literature on union strategy and power).
Returning to Figure 1, ideology clearly shapes unions’ power resources and capabilities(when and how it activates resources). This insight contributes to the theoretical literature on
union power by emphasising that conceptual models need to explicitly consider union
ideology.
Following its ideological leanings, FIRST Union uses more aggressive strategies (e.g., via
workplace organising arrangements and bargaining tactics) than the SDA. The SDA’s moreconciliatory approach takes place in the Australian insitutional setting, which has taken a lessradical deregulatory path than NZ’s. However, despite the well-articulated, strongly militant,struggle-based, mobilising frame, the NZ union labours for traction in a highly unfavourable
neo-liberal IR regime, which has fostered anti-union strategies on the part of employers postEmployment Contracts Act. Likely changes to NZ’s Employment Relations Act 2000,
including around the duty of good faith not requiring a collective agreement to be concluded,
may well intensify this imbalance. In a relatively more benign – for the moment – IRenvironment in Australia, a prototypical ‘business unionism’ approach appears to serve theinstitutional interests of the Australian union in its specific context, but at the expense ofmobilisational capacity, solidarity and employee voice, limiting the union’s power resources
and strategic capabilities in the longer term.

References
Australian Bureau of Statistics (2013), Employee Earnings, Benefits and Trade Union
Membership, Australia. (Catalogue 6310.00) Canberra: Author
Australian Workforce and Productivity Agency (2014). Retail Workforce Study. Canberra:
AuthorBaccaro, L., Hamann, K., & Turner, L. (2003). The Politics of Labour Movement
Revitalization: The Need for a Revitalized Perspective. European Journal of Industrial
Relations, 9(1): 119-133
Balnave, N., & Mortimer, D. (2005). Union Security in Retailing: Legislative Intervention orCollective Agreement. International Journal of Employment Studies, 13(1): 81-105.

13

New Zealand Journal of Employment Relations, 40(1): 1-18
Bamber, G.J., Lansbury, R., & Wailes, N. (eds) (2011). International and Comparative
Employment Relations: Globalisation and Change (5th ed), London, Sage; Sydney, Allen &Unwin.
Barry, M., & Wailes, N. (2004), Contrasting Systems? 100 Years of Arbitration in Australia
and New Zealand. Journal of Industrial Relations, 46(4): 430-447.
Batstone, E. (1988). The Frontier of Control. D. In Gallie (ed.), Employment in Britain(pp.218-247). Oxford: Blackwell
Blumenfeld, S., Ryall, S., & Kiely, P. (2011), Employment Agreements: Bargaining Trends
and Employment Law Update 2010/2011, Wellington, Industrial Relations Centre, Victoria
University of Wellington.
Brown, W., & Oxenbridge, S. (2004). The Development of Co-operative Employer/Trade
Union Relationships in Britain. Industrielle Beziehungen, 11(1/2): 143-158.
Burrell, A. (2014, March 29). Brown Paper Bag Keeps Union Boss Joe Bullock in power.
The
Australian.
Retrievedfrom
http://www.theaustralian.com.au/subscribe/news/1/index.html?sourceCode=TAWEB_WRE1
70_a&mode=premium&dest=http://www.theaustralian.com.au/national-affairs/statepolitics/brown-paper-bag-keeps-union-boss-joe-bullock-in-power/story-e6frgczx1226868217107?memtype=anonymous
Carré, F., Tilly, F., van Klaveren, M., & Voss-Dahm, D. (2010), Retail Jobs in Comparative
Perspective. In J. Gautie, & J. Schmitt (eds), Low-Wage Work in the Wealthy World (pp.211268). New York: Russell Sage Foundation.
Castles, F. (1985). The Working Class and Welfare: Reflections on the Political Developmentof the Welfare State in Australia and New Zealand, 1890-1980. Wellington and Sydney:
Allen & Unwin.
Companies Office (New Zealand) (2013). Union Membership Return Report 2013 (March),
Wellington: NZ Department of Labour.
Coulter, K. (2013). Raising Retail: Organizing Retail Workers in Canada and the UnitedStates. Labor Studies Journal, 38(1): 47-65.
Creighton, B. (2011). A Retreat from Individualism? The Fair Work Act 2009 and the Recollectivisation of Australian Labour Law. Industrial Law Journal, 40(2): 116-145.
Department of Labour (NZ). (2013). Summary of proposed changes in Employment Relations
Amendment
Bill.
Retrievedfrom
http://www.dol.govt.nz/er/services/law/legislationreviews/summary-changes-employmentrelations-amendment-bill-2013.pdf
Dølvik, J., & Waddington, J. (2004). Organizing Marketized Services: Are Trade Unions Up
to the Job? Economic and Industrial Democracy, 25(9): 9-40

14

New Zealand Journal of Employment Relations, 40(1): 1-18
Dribbusch, H. (2005). Trade Union Organising in Private Sector Services: Findings from the
British, Dutch and German Retail Industries. (WSI-Discussion paper No. 136, April).
Düsseldorf: WSI, Hans-Böckler-Stiftung.
FIRST Union (2013a). Difficult
November/December: 3.

Bargaining in

RetailChains.

Union Express,

FIRST Union (2013b), No More Pak’n’Slaves, Union Express, July: 11.
FIRST
Union
(2014).
http://www.firstunion.org.nz/my_industry/retail.

Retail.

Retrievedfrom:Frege, C., & Kelly, J. (2003). Union Revitalization Strategies in Comparative Perspective.
European Journal of Industrial Relations, 9(1): 7-24.
Gall, G., & Fiorito, J. (2012). Union Commitment and Activism in Britain and the UnitedStates: Searching for Synthesis and Synergy for Renewal. British Journal of Industrial
Relations, 50(2):189-213.
Game, A. and Pringle, R. (1983). Gender at Work. Sydney: Allen & Unwin.
Gajewska, K.K., & Niesyto, J. (2009). Organising Campaigns as ‘Revitaliser’ for Trade
Unions? The Example of the Lidl Campaign. Industrial Relations Journal, 40(2): 156-171.
Geppert, M., Williams, K., Wortmann, M., Czarzasty, J., Kağniciolğlu, D., Köhler, H.-D.,
Royle, T., Rückert, Y., & Uçkan, B. (2014, forthcoming). Industrial Relations in European
Hypermarkets: Home and Host Country Influences. European Journal of Industrial
Relations, 20(3): doi: 10.1177/0959680113519186.
He, B., & Xie, Y. (2011). Wal-Mart’s Trade Union in China. Economic and Industrial
Democracy, 33(3): 421-440.
Heery, E. (2009). Trade Unions and Contingent Labour: Scale and Method. Cambridge
Journal of Regions, Economy and Society, 2(3): 429-442.
Huzzard T., Gregory, D., & Scott, R. (2004). Strategic Unionism and Partnership: Boxing or
Dancing? Basingstoke: Palgrave MacMillan.
Hyman, R. (2001). Trade Union Research and Cross-national Comparison. European Journalof Industrial Relations, 7(2): 203-232
Ikeler, P. (2011). Organizing Retail: Ideas for Labor’s Ongoing Challenge, Working USA:The Journal of Labor and Society. 14(Sept): 367-392.
Kaine, S., & Ravenswood, K. (2013), Working in Residential Aged Care: A Trans-Tasman
Comparison. New Zealand Journal of Employment Relations, 38(2): 33-46.
Kalleberg, A. (2009). Precarious Work, Insecure Workers: Employment Relations inTransition. American Sociological Review, 74(1): 1-22

15

New Zealand Journal of Employment Relations, 40(1): 1-18
Kelly, J. (2011). Theories of Collective Action and Union Power. In A. Wilkinson, G. Gall &R. Hurd (eds), International Handbook on Labour Unions: Responses to Neo-liberalism(pp.13-29). Cheltenham: Edward Elgar
Leigh, A. (2000). Factions and Fractions: A Case Study of Power Politics in the Australian
Labor Party. Australian Journal of Political Science, 35(3): 427-448.
Levesque, C., & Murray, G. (2010). Understanding Union Power: Resources and Capabilities
for Renewing Union Capacity, Transfer: European Review of Labour and Research, 16(3):333-350.
Levesque, C., & Murray, G. (2012). Renewing Union Narrative Resources: How Union
Capabilities Make a Difference. British Journal of Industrial Relations, 51(4): 777-796.
Lukes, S. (2005). Power: A Radical View (2nd ed.). Basingstoke: Palgrave Macmillan.
Lynch, S., Price, R., Pyman, A., & Bailey, J. (2011). Representing and Organizing RetailWorkers: A Comparative Study of the UK and Australia. In I. Grugulis & O. Bozkurt, O.
(eds), Retail Work (pp.277-296). Basingstoke: Palgrave Macmillan
McAndrew, I., Edgar, F., & Geare, A. (2011), The Impact of Employer Ascendancy on
Collective Bargaining Style: A Review of the New Zealand Experience. Economic andIndustrial Democracy, 34(1): 45-68.
McCann, R. (1994). Shop Till You Drop. Refractory Girl, 47/48: 63-65.
McCrystal, S. (2009). A New Consensus: The Coalition, the ALP and the Regulation ofIndustrial Action. In A. Forsyth, & A. Stewart (eds), Fair Work: The New Workplace Laws
and the Work Choices Legacy (pp.141-63). Sydney: Federation Press
Markey, R. (2011). Historical Perspective and Trans-Tasman Currents in Industrial Relations.
Labour and Industry, 21(3): 645-660.
Mortimer, D. (2001a). Trade Union and Management Strategy: A Case Study of Compulsory
Unionism. Employment Relations Record, 1(2): 81-97.
Mortimer, D. (2001b). Management Employment Relations Strategy: The Case of Retailing.
International Employment Relations Review, 7(1): 81-93.
Mrozowicki, A. (2014, forthcoming). Varieties of Trade Union Organizing in Central andEastern Europe: A Comparison of the Retail and Automotive Sectors. European Journal ofIndustrial Relations, doi 10.1177/0959680113519314.
Mrozowicki, A., Roosalu, T., & Senčar, T. (2013). Precarious Work in the Retail Sector in
Estonia, Poland and Slovenia: Trade Union Responses in a Time of Crisis. Transfer:
European Journal of Labour and Research, 19(2): 267-278.
Muir, K. (2008). Worth Fighting For: Inside the Your Rights at Work Campaign. Sydney:
UNSW Press.

16

New Zealand Journal of Employment Relations, 40(1): 1-18
New Zealand Herald (2012, March 1), Woolworths Wins Market Share in Supermarket Wars
withCountdown
Rebrand.
Retrievedfrom
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10789101
Parker, J. (2011). Reaching out for Strength Within? ‘Social Movement Unionism’ in a Small
Country Setting. Industrial Relations Journal, 42(4): 392-403.
Parker, C., & Rees, J. (2013), Membership Growth at a Time of Union Decline: Usdaw,
Organizing and Leadership. Transfer: European Review of Labour and Research, 19(4): 521538.
Parker, J., Nemani, M., Arrowsmith, J., & Bhowmick, S. (2012). Contemporary Collective
Regulation and Working Women in New Zealand. Journal of Industrial Relations, 54(2):221-237
Peetz, D., & Bailey, J. (2012), Dancing Alone: The Australian Union Movement over Three
Decades. Journal of Industrial Relations, 54(4): 525-541.
Peetz, D., & R. Price (2007). Profile of the Retail and Hospitality Industries. (Report).
[August] Melbourne: Office of the Victorian Workplace Rights Advocate.
Phillips, L. (2012). A Renegade Union: Organizing in the Service and Distributive Industries.
Some Lessons From the Past, Working USA: The Journal of Labor and Society, 15(2): 177195.
Pocock, B. (2000). Union Power: The Significance of Culture and Competence of the Theory
and Practice of Union Renewal in Australia. Paper given at Sociological Sites/Sights, TASA
Conference, Flinders University, Adelaide, 6-8 December.
Price, R., Bailey, J., & Pyman, A. (2014). Varieties of Collaboration: The Case of anAustralian Retail Union. International Journal of Human Resource Management, 25(6): 748761.
Roy Morgan Research (2014, February 12). Market Share Narrows Between Coles andWoolworths,
While
ALDI
Makes
Important
Gains.
Retrievedfrom
http://www.roymorgan.com/findings/5427-market-share-narrows-between-coles-woolworthswhile-aldi-makes-gains-201402120013
Shop, Distributive and Allied Employees’ Association (2014). Welcome to SDA National.
Retrieved from http://www.sda.org.au/
Simms, M. (2012). Imagined Solidarities: Where is Class in Union Organising? Capital andClass, 36(1): 97-115.
Simms, M., & Dean, D. (2014, forthcoming). Mobilising Contingent Workers: An Analysis
of Two Successful Cases, Economic and Industrial Democracy, published online 7 January,
doi 10.1177/0143831X13501000.

17

New Zealand Journal of Employment Relations, 40(1): 1-18
Statistics NZ (2013) Household Labour Force Survey: December 2012 quarter. Retrieved
from
http://www.stats.govt.nz/browse_for_stats/income-andwork/employment_and_unemployment/HouseholdLabourForceSurvey_HOTPDec12qtr.aspx
Tarrow, S. (2011). Power in Movement: Social Movement and Contentious Politics (3rd ed.)New York: Cambridge University Press.
Tilly, C. (1995). Contentious Repertoires in Great Britain, 1758-1834. In M. Traugott (ed.)
Repertoires and Cycles of Collective Action (pp.15-42). Durham, NC: Duke University Press
Tilly, C., & Carré, F. (2011), Endnote: Retail work – Perceptions and Reality. In I. Grugulis& O. Bozkurt (eds), Retail Work (pp.297-306). Basingstoke: Palgrave Macmillan
Tilly, C., & Galván, J.L.A. (2006). Lousy Jobs, Invisible Unions: The Mexican Retail Sector
in the Age of Globalization. International Labor and Working-Class History, 70(Fall): 61-85.
Upchurch. M., Croucher, R., & Flynn, M. (2012). Political Congruence and Trade Union
Renewal. Work, Employment and Society, 26(5): 857-868.
Warhurst, J. (2008). Catholics in Federal Parliament: Politics, Perception and Self-image.
Australian Quarterly, 80(1): 16-23.
Waring, P., Lewer, J., & Burgess, J. (2008). Comparing Patterns of Re-regulation of Labourin Three Liberal Market Economies. Paper given at 29th Conference of the International
Working Party on Labour Market Segmentation, 8-1-September, Porto, Spain. Retrieved
from http://www.fep.up.pt/conferences/iwplms/
Wilson, S., Spies-Butcher, B., Stebbing, A., & St John, S. (2013). Wage-Earners’ Welfare
After Economic Reform: Refurbishing, Retrenching or Hollowing Out Social Protection inAustralia and New Zealand. Social Policy and Administration, 47(6): 623-646.
Workplace Express (2013, June 19). FWC Satisfied with ALDI Undertakings. Retrieved fromhttp://www.workplaceexpress.com.au/nl06_news_selected.php?act=2&stream=1&selkey=50
735&hlc=2&hlw=aldi&s_keyword=aldi&s_searchfrom_date=1009803600&s_searchto_date=1396270740&s_pagesize=20&s_word_match=2&s_articles=1&stream=1#F

18

New Zealand Journal of Employment Relations, 40(1): 19-34

Work-family enrichment, collectivism,
outcomes: a study of New Zealand Māori

andworkplacecultural

DAVID BROUGHAM* JARROD HAAR** and MAREE ROCHE***
Although the work-family enrichment literature is well established, it lacks an indigenous focus. The
present study explored workplace cultural attitudes amongst 172 Māori employees. Work-familyenrichment was significantly related to workplace-cultural-wellbeing, while family-work enrichment
was significantly related to workplace-cultural-satisfaction. Collectivism was tested as a potential
moderator. The interaction effects show that respondents with low levels of family-work enrichment
and high collectivism benefited most, reporting the highest levels of workplace-cultural-wellbeing.
Furthermore, respondents with high collectivism reported significantly higher workplace-culturalsatisfaction, irrespective of enrichment. Overall, the benefits of work and family can enhance cultural
outcomes in the workplace.
Keywords: work-family enrichment, workplace cultural values, collectivism, Māori.

Introduction
Cultural values and beliefs are recognised as playing a significant role in the work-family interface(Spector et al., 2007); however, work-family enrichment literature lacks a focus on indigenous
cultures and outcomes. While there is a growing body of literature on Māori language, history,
culture and health in New Zealand (King, 2003; Ministry of Social Development, 2008), there is alack of empirical exploration of tikanga Māori (Māori customs and beliefs) in the New Zealand
workplace (Haar & Brougham, 2011; 2013). The contributions Māori and culture make to the New
Zealand workforce deserve greater investigation.
Data from the Ministry of Social Development (2008) revealed that Māori reported the lowest levelsof work-life balance compared to the majority of New Zealanders. It is unknown whether these lowlevels of work-life balance are due to a lack of support in the workplace for Māori culture and/or theaspirations of Māori employees. The purpose of this study is to examine the effects that enrichmentfrom work and family roles have on cultural attitudes of Māori in the workplace. The theoretical lensof work-family enrichment is appropriate given that the family unit is paramount for Māori (Durie,
1997; Haar, Roche, & Taylor, 2011).
Māori employees with higher work-family and family-work enrichment are expected to hold morepositive attitudes towards Māori culture in their workplace. Two cultural outcomes are tested,building on a recently established measure of workplace-cultural-wellbeing, which is defined “ashow indigenous employees feel about the way their cultural values and beliefs are accepted in theworkplace” (Haar & Brougham, 2013: 877). An additional predictor, workplace-cultural-satisfaction(Haar & Brougham, 2011), was added, which is concerned with the satisfaction Māori have withhow culture is portrayed and respected in the workplace. This is important given the recent inclusion
literature that promotes the importance of ethnically different individuals feeling a sense of**

Dr. David Brougham, Lecturer, School of Management, Massey, University Palmerston North Campus, New ZealandProf. Jarrod Haar, Professor in Management, and Director of the Centre of Maori Business Research, Massey
University, Albany Campus, New Zealand***Dr Maree Roche, Senior Lecturer, School of Psychology, University of Waikato, New Zealand*19

New Zealand Journal of Employment Relations, 40(1): 19-34
belongingness and uniqueness within the workplace (Shore, Randel, Chung, Dean, Ehrhart & Singh,2011). Employees that feel included are highly likely to have improved job and well-being outcomes,
which in turn can benefit both employee and employer (Mor Barak , Findler, & Wind, 2001; Findler,
Wind, & Mor Barak, 2007; Nishii, 2012).
Culture in broad terms is defined by Triandis (2001) as something that “has worked” (p.908) in thepast and, as a result of its success, has been transmitted to future generations. Van Emmerik,
Gardner, Wendt & Fischer (2010) suggested that “culture shapes the values and norms of its
members; these values are shared and transmitted from one generation to another through social
learning processes of modeling and observation” (p. 333). In the case of Māori, whanaungatanga,
whānau (discussed below), and speaking Te Reo Māori (language) could offer an insight into cultural
attitudes in the workplace. This aligns with Triandis (2001), who discussed the importance of norms,
values, customs, beliefs and language within one’s culture and cultural identity. These descriptions
around culture align with the present study’s focus. Furthermore, whanaungatanga and whanau alsoalign strongly with Hofstede’s (1994) summary of collectivism.
This paper makes three significant contributions: (1) for the first time, work-family enrichment is
examined in an indigenous employee population; and (2) it tests and finds support for enrichment
positively influencing outcomes associated with cultural values and beliefs in the workplace. Finally,(3) it shows that the collectivistic orientation of Māori is active in the workplace and can have amoderating effect on the relationships between enrichment and cultural-based outcomes. Each ofthese points illustrates the need for researchers to consider culturally aligned orientations such ascollectivism.

Work-family enrichment
Over the last 25 years, work-family studies have focussed on conflict and the negative interference ofan individual’s work and family roles (Greenhaus & Powell, 2006). Many researchers have identified
the need to establish a more positive side to the work-family interface (Haar & Bardoel, 2008), as
work-family enrichment is found to be a strong predictor of many employee outcomes (Carlson,
Hunter, Ferguson & Whitten, 2014; Tang, Siu & Cheung, 2014).
Work-family enrichment is based on the concept that work and family roles provide individuals withresources (such as increased skills, income or material resources), perspectives, flexibility, esteem,
and other benefits (such as psychological and physical social-capital) that can assist the individual toperform better in other life domains (Carlson, Kacmar, Wayne & Grzywacz, 2006; Greenhaus &Powell, 2006). Greenhaus and Powell (2006) defined work-family enrichment and family-work
enrichment “as the extent to which experiences in one role improve the quality of life in the otherrole” (p. 73). Rothbard (2001) suggested that “role commitments provide benefits to individuals
rather than draining them” (p. 656). Thus, enrichment occurs when resources increased in role A
promote improved individual performance in role B (Greenhaus & Powell, 2006). Enrichment is alsobi-directional, meaning it can occur in one domain and cross over to the other; i.e., work-to-family orfamily-to-work.
Enrichment theory states that improved performance can occur through either an instrumental path oran affective path (Greenhaus & Powell, 2006). Under the instrumental path, different types ofresources, such as skills, abilities, self-esteem and values, are directly transferred from role A to role
B (Greenhaus & Powell, 2006); for example, employees may learn conflict resolution skills inworkplace training and then use these abilities to resolve conflicts more effectively with family
members (Carlson et al., 2006). Furthermore, Carlson et al. (2006) suggested that this can occur in
20

New Zealand Journal of Employment Relations, 40(1): 19-34
the opposite direction, as parents with greater patience for children relate more positively with coworkers and others in their work environments. Greenhaus and Powell (2006) also proposed theaffective path, where affect, emotions or moods are carried over from one role to another. This has
been demonstrated by Rothbard (2001), who found that attentiveness in one domain was indirectly
associated with improved engagement in another domain through positive affect. Thus, an employee
who leaves work in a positive mood is more likely to be positive and happier with family members athome (Carlson et al., 2006).
Work-family and family-work enrichment have been found to have positive effects on employee
outcomes, such as organisational commitment, turnover intentions, engagement, job satisfaction, andwell-being (Haar & Bardoel, 2008; Carlson et al, 2014). Consequently, Greenhaus and Powell (2006)
state “the advantages of pursuing multiple roles are likely to outweigh the disadvantages” (p. 72).
Despite the growth of work-family enrichment research, there has been no exploration of indigenous
culture in the workplace. We argue that enrichment may be a beneficial influence on cultural
outcomes. This is because Māori (in general) have a significantly different view of family
relationships, due to their collectivistic orientation, compared to the New Zealand European majority(Hook, 2007).
Examples of these different views centre around the idea of whānau and whanaungatanga, whichhave a significant effect on the work-family interface. Durie (1997) suggested that whānau is morethan just extended family; it is “based on a common whakapapa (descent from a shared ancestor),
and within which certain responsibilities and obligations are maintained” (p.1). Whanaungatanga “isthe process by which whānau ties and responsibilities are strengthened” (p.2). Overall, it is expectedthat Māori have a stronger focus on family (Haar et al., 2011) and may gain significant benefits fromthese broader social connections and whānau support, which includes support in times of crisis,being in a sharing environment, access to financial and economic resources, a broader education andguidance, and a stronger cultural identity (Durie, 1997).
As such, we hypothesised that Māori with higher enrichment will report higher levels of workplacecultural-wellbeing and workplace-cultural-satisfaction. This leads to our first set of Hypotheses.
Hypothesis 1: Work-family enrichment will be positively associated with workplace-culturalwellbeing.
Hypothesis 2: Work-family enrichment will be positively associated with workplace-culturalsatisfaction.

Moderating effects of collectivism
Since the 1980s, individualism and collectivism (I/C) has been shown to be a powerful moderator of
employee outcomes (Hofstede, 1980; Ramamoorthy & Flood, 2002) and received the “lion’s share ofattention as a predictor of cultural variation” (Brewer & Chen, 2007: 133). While I/C has typically
been used to study the cultural variations between countries, they have recently been used to focus on
cultures within countries (Cohen, 2007).
Hofstede (1994) suggested that, with respect to family, individualistic societies tend to focus on the‘I’, whereas collectivistic societies focus on the ‘we’. These different values have implications in theworkplace; for example, Hofstede (1994) argued that employees in individualistic societies might beviewed as resources where “task prevails over relationship”, whereas collectivistic peoples see
people as members of their group where “relationship prevails over task” (p. 3). These ideas reflect
21

New Zealand Journal of Employment Relations, 40(1): 19-34
statements from Hook (2007), who stressed the importance of “relationality, collectivity, reciprocity,and connectivity” (p.4) for Māori, whereas New Zealand Europeans value “autonomy, freedom, selfinterest, entitlement, competition” (p.4). Overall, Hook (2007) illustrates the clear difference
between Māori and New Zealand Europeans and their alignment with Hofstede’s (1980) I/C
dimensions.
Similarly, Haar et al. (2011) provided insight into the complexity of Māori families, as well as thedemands they put on their members, and how these might override the pressures of work. In general,
Māori are considered to be ‘collectivistic’, and, as such, we suggest that the value of cultural identity,
values, and beliefs in the workplace will be higher for Māori, who characterise themselves as morecollectivistic. As such, the positive influence of enrichment on cultural outcomes is likely to be more
powerful for more collectivistic Māori and contribute more significantly to their cultural outcomes.
Several studies have focussed on the work-family interface with respect to national culture and I/C(Yang, Chen, Choi, & Zou, 2000; Spector et al., 2007). However, while these studies have supported
a moderating effect with I/C, they have only focussed on work-family conflict, neglecting thepotential beneficial effects of enrichment. Nevertheless, these studies still offer valuable insights as
to how work and family interact with I/C: for example, employees from collectivistic countries are
said to place higher emphasis on work than on leisure (Spector et al., 2007). This is seen by theemployee’s family as being a sacrifice for the good of the group, as the employee is therefore able toprovide more financial resources to immediate and extended family (Spector et al., 2007).
There are clear differences between I/C countries with respect to work, family, and job outcomes.
However, it is only recently that researchers have acknowledged the vast cultural differences withincountries (Cohen, 2007). Māori are a collectivistic people working within a predominately
individualistic country (Hook, 2007). Given that collectivistic employees are likely to have different
views from individualistic employees, we test the moderating effect of collectivism within our
sample of Māori employees. We suggest that the influence of work-family and family-work
enrichment will be enhanced regarding workplace cultural outcomes for those Māori who seethemselves as more collectivistic. This would indicate closer cultural alignment leading to higher
work-family enrichment influencing workplace cultural outcomes (workplace-cultural-wellbeing andworkplace-cultural-satisfaction). This leads to our last set of Hypotheses.
Hypothesis 3: Collectivism will moderate the relationship between work-family enrichment andworkplace-cultural-wellbeing with respondents high on collectivism reporting greater workplacecultural-wellbeing when enrichment is high.
Hypothesis 4: Collectivism will moderate the relationship between work-family enrichment andworkplace-cultural-satisfaction with respondents high on collectivism reporting greater workplacecultural-satisfaction when enrichment is high.

MethodSample and Procedure
Data was collected from 14 New Zealand organisations in the same regional location. This locationand the associated organisations were selected because of the high population of Māori employees.
Surveys were hand delivered by one of the researchers and collected from a secure drop box by thesame researcher. CEOs or Senior Managers sent all employees a notice or email about the research,encouraging Māori employees to participate.
22

New Zealand Journal of Employment Relations, 40(1): 19-34
From a total of 300 Māori employees, we received 172 responses, resulting in an overall response
rate of 57.3 per cent. The average participant was 39.1 years old (SD=12 years), a parent (77 percent), married (73 per cent), and male (53 per cent). Respondents worked an average of 38.4 hours
per week (SD=6.9 hours) and had job tenure of 3.9 years (SD=3.3 years), with 18 per cent holding ahigh-school qualification, 39 per cent a technical college qualification, 34 per cent a university
degree, and 9 per cent a postgraduate qualification.

MeasuresCriterion Variables
Workplace cultural factors were assessed using five items. Four items came from the workplacecultural-wellbeing measure by Haar and Brougham (2013). The present study added an additional
item to explore and broaden the construct and to help distinguish between workplace-culturalwellbeing and workplace-cultural-satisfaction (based on Haar & Brougham, 2011). The five items
were coded 1=strongly disagree, 5=strongly agree, and we tested the factor structure using
exploratory factor analysis (principal components, varimax rotation) since this was an extension on
the existing measure. The items used, factor analysis outcomes, and reliabilities are shown in Table
1. From the five items, two factors did emerge that supported the existing workplace-culturalwellbeing measure and a distinct measure for workplace-cultural-satisfaction.
Table 1. Exploratory Factor Analysis for Workplace Cultural Values
Coded (1) =strongly disagree, (5) =strongly agree

Factor Loadings
WorkplaceCultural-Wellbeing

I find real enjoyment in Māori culture in my workplace
I feel satisfied about my organisation’s understanding of Māori
culture in my workplace
I am happy being Māori in my workplace
I am enthusiastic about Māori culture in my workplace
In most ways, I am satisfied with how Māori culture is portrayedand respected in my workplace

.970
.964

WorkplaceCulturalSatisfaction
.040
.016

.609
.603
-.011

.463
.488
.930

Eigenvalues%age variance
Number of items in measures
Cronbach’s Alpha

2.606
52.1%
4-items
.83

1.319
26.4%
1-item--Overall, two factors emerged: workplace-cultural-wellbeing (α=.83) and workplace-culturalsatisfaction. Although a single-item measure is less than ideal due to psychometric issues, we
retained this measure because it related specifically to satisfaction, which has been utilised in theworkplace literature. For example, Wanous, Reichers, and Hudy (1997) suggested that measuring job
satisfaction with a single-item measure was a commonly accepted practice. Their meta-analysis
highlighted the suitability of single-item measures. They also stated that single-item measures “aremore robust than the scale measures of overall job satisfaction” (p.250). Furthermore, the23New Zealand Journal of Employment Relations, 40(1): 19-34
effectiveness of a single-item satisfaction measure has been confirmed by Nagy (2002), who statedthat “single-item measures may be easier and take less time to complete, may be less expensive, may
contain more face validity, and may be more flexible than multiple-item scales measuring facet
satisfaction” (p. 77).
Predictor Variables
Work-family enrichment and family-work enrichment were measured using six items by Carlson etal. (2006), coded 1=strongly disagree, 5=strongly agree. We included a single item from each of thethree enrichment dimensions – development, affect, and capital/efficiency – to limit the size of thesurvey. The three work-family enrichment (affect) items followed the stem “my involvement inwork…” with a sample item “Puts me in a good mood and this helps me be a better family member”,
and the family-work enrichment items followed the stem “my involvement in family…” with asample item “Helps me to gain knowledge and this helps me be a better worker”. To confirm theseparate dimensions, an exploratory factor analysis (principal components, varimax rotation) was run
and two factors emerged that matched the dimensions of work-family enrichment(eigenvalues=2.245, accounting for 37.4 per cent of the variance, α=.79) and family-work
enrichment (eigenvalues=2.134, accounting for 35.6 per cent of the variance, α=.83).
Moderating Variable
Collectivism was measured using five items by Clugston, Howell, and Dorfman (2000), coded
1=strongly disagree, 5=strongly agree. This measure focussed on collectivism and individualism at
the individual level, and a sample items is “Group welfare is more important than individual
rewards”. An exploratory factor analysis (principal components, varimax rotation) was run and asingle factor was confirmed (eigenvalues=2.267, accounting for 45.3 per cent of the variance, α=.66).
Control Variables
A number of demographic variables were controlled for: gender (1=female, 0=male), hours worked(total per week including overtime), marital status (1=married/de-facto, 0=single), and education(1=high school, 2=community college, 3=Bachelor’s degree, 4=postgraduate qualification). We also
controlled for language and tribal identity to explore the potential effects this might have on our
cultural value factors: speak Te Reo (1=yes, 0=no), which relates to speaking the Māori language,
and know tribal affiliations (1=yes, 0=no), which relates to understanding one’s cultural identity andpast.
Analysis
Hierarchical regression analysis was used to analyse the data, with workplace-cultural-wellbeing andworkplace-cultural-satisfaction as the criteria variables. Control variables (gender, hours worked,
marital status, education, speak Te Reo, and know tribal affiliations) were entered in Step 1. Workfamily enrichment and family-work enrichment were entered in Step 2 as predictor variables. To test
for moderation, collectivism was entered in Step 3, and Step 4 held the two-way interactions (workfamily enrichment multiplied by collectivism, family-work enrichment multiplied by collectivism),with variables centred as per Aiken and West’s (1991) recommendations.

Results
Descriptive statistics for all the study variables are shown in Table 2.
24

New Zealand Journal of Employment Relations, 40(1): 19-34

Table 2. Descriptive Statistics and Correlations
Variables

M

SD

1

2

3

4

5

6

7

1. Hours Worked
2. Education
3. Work-Family Enrichment
4. Family-Work Enrichment
5. Collectivism
6. Workplace-Cultural-Wellbeing
7. Workplace-Cultural-Satisfaction

38.4
2.3
3.4
3.5
3.3
3.5
4.1

6.9
.87
.82
.88
.68
.83
.96

-.13
-.17*
.04
-.06
-.11
.03

-.01
.01
-.09
.13
.05

-.43**
.62**
.43**
.18*

-.58**.26**.53**-.36**.34**-.25**--

N=172, *p< .05, **p< .0125

New Zealand Journal of Employment Relations, 40(1): 19-34
A pair-sampled t-test found a significant difference between the two workplace cultural dimensions(t=-7.075, p<.001), indicating greater levels of workplace-cultural-satisfaction than workplacecultural-wellbeing. Furthermore, these dimensions are only significantly correlated at a moderatelevel (r=.25, p<.01), indicating significant differences in their dimensionality. Table 2 also showsthat all variables are significantly correlated with each other (at p<.05).
Results of the hierarchical regressions for Hypotheses 1 to 4 are shown in Tables 3 and 4.
Table 3. Regression Coefficients for Workplace-Cultural-Wellbeing
Variables

Models with Workplace-Cultural-Wellbeing
Step 1

Step 2

Step 3

Step 4Controls

Predictors

Moderator

Interactions

Gender

.15

.10

.12

.11

Hours Worked

-.10

-.06

-.06

-.06

Marital Status

-.00

.01

.00

.04

Education

.13

.12

.14

.13

Speak Te Reo

-.10

-.08

-.08

-.10

Tribal Affiliations Known

.05

.06

.06

.08

.34***

.26**

.16†

.10

.03

.00

.19*

.16†

Work-Family Enrichment(WFE)
Family-Work Enrichment(FWE)

Collectivism

WFE x Collectivism.00

FWE x Collectivism-.23*

R2 change.06.15***

.02†

.03*

.06

.21

.23

.26

Adjusted R2

.03

.17

.18

.21

F Statistic

1.649

4.924***

4.781***

4.624***

Total R2

†p< .1, *p< .05, **p< .01, ***p< .001. Standardised regression coefficients, all significance tests
were single-tailed.

26New Zealand Journal of Employment Relations, 40(1): 19-34
Table 4. Regression Coefficients for Workplace-Cultural-Satisfaction
Variables

Models with Workplace-Cultural-Satisfaction
Step 1
Controls

Step 2
Predictors

Step 3Moderator

Step 4
Interactions

Gender

-.10

-.10

-.09

-.11

Hours Worked

.02

.01

.01

-.01

Marital Status

.01

.06

.06

.05

Education

.06

.06

.07

.08

Speak Te Reo

.08

.08

.08

.08

Tribal Affiliations Known

-.23*

-.19*

-.20*

-.20*

Work-Family Enrichment
(WFE)

.05

-.00

-.01

Family-Work Enrichment(FWE).52***.48***.49***.11.11

Collectivism

WFE x Collectivism.22*

FWE x Collectivism-.22*

R2 change.05.29***.01.02†

Total R2

.05

.34

.35

.37

Adjusted R2

.01

.31

.31

.32

F Statistic

1.336

9.412***

8.541***

7.587***

27

New Zealand Journal of Employment Relations, 40(1): 19-34
Direct Effects
Table 3 shows that work-family enrichment is significantly associated with workplace-culturalwellbeing (ß=.34, p<.001), while family-work enrichment was not. From the R2 Change figures in
Step 2, we see work-family and family-work enrichment account for a sizable 15 per cent of the total
variance for workplace-cultural-wellbeing (p<.001). This provides support for Hypothesis 1. Table 4shows that family-work enrichment is significantly associated with workplace-cultural-satisfaction(ß=.52, p<.001), while work-family enrichment is not (ß=.05). From the R2 Change figures in Step 2,enrichment is shown to account for a very sizable 29 per cent of the total variance for workplacecultural-satisfaction (p<.001), which also provides support for Hypothesis 2.
Interaction Effects
Table 3 shows that collectivism had a significant interaction effect between family-work enrichment
and workplace-cultural-wellbeing (ß=-.23, p<.05), accounting for an additional 3 per cent (p<.1) of
the variance, providing support for Hypothesis 3. Table 4 shows that collectivism had significant
interaction effects between work-family enrichment and workplace-cultural-satisfaction (ß=.22,
p<.05), as did family-work enrichment (ß=-.22, p<.05). Together, these interactions accounted for an
additional 2 per cent (p<.1) of the variance. These findings provide support for Hypothesis 4. To
facilitate interpretation of the significant moderator effects, the interactions are presented in Figures
1 to 3.

WORK CULTURAL WELLBEING

Figure 1. Interaction Plot of Family-Work Enrichment and Collectivism with WorkplaceCultural-Wellbeing as Dependent Variable

4.2

4.0
3.8

Collectivism High

3.6
3.4

Collectivism Low

3.2
3.0
FWE Low

FWE High28

New Zealand Journal of Employment Relations, 40(1): 19-34
Figure 2. Interaction Plot of Work-Family Enrichment and Collectivism with WorkplaceCultural-Satisfaction as Dependent Variable

WORKPLACE CULTURALSATISFACTION

4.8
4.6

Collectivism High

4.4
Collectivism Low

4.2

4.0
3.8
WFE Low

WFE High

Figure 3. Interaction Plot of Family-Work Enrichment and Collectivism with WorkplaceCultural-Satisfaction as Dependent Variable

4.7

Collectivism HighWORKPLACE CULTURALSATISFACTION

4.5
4.3

Collectivism Low

4.1
3.9
3.7

3.5
3.3
FWE Low

FWE High

Plotting the interaction terms (Figure 1) illustrates that when family-work enrichment is low,
respondents with high collectivism report significantly higher workplace-cultural-wellbeing thanthose with low collectivism. However, when family-work enrichment is high, these differences
become negligible, with respondents having low collectivism and reporting increased workplacecultural-wellbeing at levels similar to those with high collectivism who reported a drop in wellbeing.
29

New Zealand Journal of Employment Relations, 40(1): 19-34
As hypothesised, the effectiveness of high collectivism does not improve the influence of highenrichment.
Despite the mixed effects of Figure 1, the next two plotted interactions do support the hypothesised
effect. The interaction terms in Figure 2 illustrate that when work-family enrichment is low,
respondents with high collectivism report significantly higher workplace-cultural-satisfaction thanthose with low collectivism. When work-family enrichment is high, these differences narrowslightly, with a slight reduction in workplace-cultural-satisfaction from respondents with highcollectivism and a slight increase from those with low collectivism. Overall, the levels of workplacecultural-satisfaction are still significantly different and advantageous for respondents with highcollectivism, supporting the benefit of high collectivism with enrichment.
Finally, plotting the interaction terms (Figure 3) illustrates that when family-work enrichment is low,
respondents with high collectivism report significantly higher workplace-cultural-satisfaction thanthose with low collectivism. When work-family enrichment is high, all respondents report significant
increases in workplace-cultural-satisfaction, with respondents with high collectivism still reporting
significantly higher levels of workplace-cultural-satisfaction than those with low collectivism. This
directly supports the hypothesised effect of high collectivism on high enrichment.
The overall strength of the models were significant for workplace-cultural-wellbeing (R2=.26,
F=4.624, p<.001) and workplace-cultural-satisfaction (R2=.37, F=7.587, p<.001). Finally, thevariance inflation factors (VIF) were examined for evidence of multicollinearity. Experts suggest
multicollinearity can be detected when the VIF values equal 10 or higher (Ryan, 1997). However, all
the scores for the regressions were below 2.8, indicating little evidence of multicollinearity unduly
influencing the regression estimates.

Discussion
The present study tested the influence of work-family enrichment on workplace cultural outcomeswith a sample of Māori employees. Collectivism was also taken into account as a moderator becauseof the significance of and alignment with the collective in Māori culture (Hook, 2007), and due to thedifferences found between I/C populations in previous studies, including within-country research(Cohen, 2007). The present study focussed on cultural outcomes because of the importance of
cultural identity for Māori. Two factors were found that related to workplace-cultural-wellbeing andworkplace-cultural-satisfaction – as such, work-family and family-work enrichment were found to
influence cultural outcomes differently. Importantly, both models showed that enrichment accounted
for sizeable amounts of variance, with a significant 29 per cent of the variance towards workplacecultural-satisfaction and 15 per cent of the variance towards workplace-cultural-wellbeing. Workfamily enrichment has been linked positively to job and non-job outcomes (Carlson et al., 2014), andthe present study adds cultural outcomes from the workplace to the list of enrichment benefits.
Furthermore, for indigenous workers, the enrichment gained from work and family roles caninfluence workplace-cultural-satisfaction and well-being, highlighting the importance of such roles
on workplace cultural outcomes. This aligns with Haar and Brougham (2011), who found that
cultural satisfaction at work influenced employee loyalty that, in turn, influenced organisational
citizenship behaviours.
In addition to the direct effects, we tested the moderating effects of collectivism on enrichment andfound mixed support. It appears that alignment with a strong cultural orientation towards
collectivism in the workplace has benefits for indigenous employees, although this was especially so
30New Zealand Journal of Employment Relations, 40(1): 19-34
at low levels of family-work enrichment towards workplace-cultural-wellbeing. Collectivism wasbeneficial at all levels of both work-family and family-work enrichment with regards to satisfaction,with those who reported high collectivism reporting higher workplace-cultural-satisfaction at alllevels of enrichment. In the context of this study’s sample, the average level of collectivism was only
slightly above average (M=3.3 on a 1-5 scale), indicating that Māori employees in this sample are, on
average, only moderately interested in the collective over the individual in a workplace setting.
Given that this measure of collectivism (Clugston, Howell & Dorfman, 2000) is workplace specific,
perhaps the effects might be different using a more social (including non-work) cultural orientationof collectivism. Further research is needed to better understand these dynamics.
The interaction effects did suggest that indigenous workers who view themselves as being morecollectivistic are more likely to benefit from enrichment towards workplace cultural outcomes. Thisis likely because such employees’ cultural beliefs are more aligned towards the collective and, assuch, the positive effects of enrichment from work and family roles become increasingly beneficial.
This supports the assertion that cultural values supported by the workplace are important and valuedby Māori workers (Brougham & Haar, 2013). However, while three significant interaction effects
were found, these were typically more beneficial only at low levels of enrichment, encouraging
further study to tease out how the effectiveness of enrichment can be better understood.
The present study shows that there can be variations of collectivistic tendencies within acollectivistic ethnic group. Using the mean and standard deviation scores, our research shows that 95
per cent of the present population of Māori employees had a collectivistic score between 2.0 and 4.7(approximately), showing that there are some Māori who are highly collectivistic and some who aremuch more individualistic. This has implications for the cross-cultural research on I/C, especially as
New Zealand is classified as being more individualistic than collectivistic. Our findings indicate that,within our sample of indigenous employees in New Zealand, this classification might be too narrow.
Further research comparing Māori to New Zealand European employees would be beneficial.
Consequently, we encourage researchers to consider within-population differences regarding
collectivism and the potential effects on relationships.
This study suggests that organisations providing enriching jobs may expect to see higher levels of
workplace cultural outcomes for their Māori workers, which was also supported through enrichmentfrom the family role. Most Western countries (including New Zealand) typically have formal andinformal human resources policies that are ‘universal’ towards the Western worker. While New
Zealand legislation includes some policies targeting cultural elements, these are universally applied.
The universal nature of human resources policies may potentially be a flaw for organisations, as
studies have shown the importance of different human resources policies for workers withcollectivist or individualist cultures (Ramamoorthy & Carroll, 1998). There is a lack of specificpolicies targeting Māori culture in the workplace. It appears that enrichment from work and familyroles can influence the levels of workplace-cultural-satisfaction and workplace-cultural-wellbeing in
the workplace and, as such, it provides employers and employees with an area to target if they wish
to enhance these cultural outcomes.
Limitations
The present study drew its sample of respondents from only 14 New Zealand organisations(specifically, from a region with a high Māori population). As such, the qualifications and work
positions of respondents are not representative of the Māori population as a whole. These factors
limit the ability to generalise our findings to the wider Māori population. Future research should seek
to gather data from a wider range of workplaces throughout New Zealand. Common-method
31

New Zealand Journal of Employment Relations, 40(1): 19-34
variance is often a concern with this type of research. However, Evans (1985) asserted that commonmethod variance is less likely to occur in studies that test interaction effects. Another limitation thatmust be noted is the use of a single-item measure to capture workplace-cultural-satisfaction.
However, as noted in the methods, such an approach is likely to still be accurate (Wanous et al.,1997). Consequently, the present study should be viewed as exploratory.

Conclusion
The present study explores the importance of cultural understanding in a multicultural country, andprovides useful insights into the positive effects that work and family can have on cultural attitudes.
While the present study has limitations, it provides an avenue for future research in this area.
Understanding cultural differences and promoting the importance of these for employers is likely tohave significant positive effects on not only work-family related outcomes, but also job and wellbeing outcomes (Haar & Brougham, 2013). This exploratory study has illustrated the importance ofwork and family roles, as well as cultural factors, which was previously unexplored.

References
Aiken, L.G., & West, S.G. (1991). Multiple Regression: Testing and Interpreting Interactions.
Newbury Park, CA: Sage.
Brewer, B.M., & Chen, Y.R. (2007). Where (who) are collectives in collectivism? Toward
conceptual clarification of individualism and collectivism. Psychological Review, 114(1): 133-151.
Brougham, D., & Haar, J.M. (2013). Collectivism, cultural identity and employee mental health: A
study of New Zealand Māori. Social Indicators Research, doi 10.1007/s11205-012-0194-6
Carlson, D.S., Hunter, E.M., Ferguson, M., & Whitten, D. (2014). Work–family enrichment andsatisfaction mediating processes and relative impact of originating and receiving domains. Journal ofManagement, 40(3): 845-865.
Carlson, D.S., Kacmar, K.M., Wayne, J.H., & Grzywacz, J.G. (2006). Measuring the positive side of
the work-family interface: Development and validation of a work-family enrichment scale. Journalof Vocational Behavior, 68(1): 131-164.
Clugston, M., Howell, J.P., & Dorfman, P.W. (2000). Does cultural socialization predict multiple
bases and foci of commitment? Journal of Management, 26(1): 5-30.
Cohen, A. (2007). One nation, many cultures: A cross-cultural study of the relationship between
personal cultural values and commitment in the workplace to in-role performance and organizational
citizenship behavior. Cross-Cultural Research, 41(3): 273-300.
Durie, M. (1997). Whānau, Whanaungatanga and Healthy Māori Development. In P. Te Whāiti & M.
McCarthy (eds.), Mai i Rangiātea (pp.1-24). Auckland, New Zealand: Auckland University Press.

32New Zealand Journal of Employment Relations, 40(1): 19-34
Evans, M. (1985). A Monte Carlo study of the effects of correlated method variance in moderated
multiple regression analysis. Organizational Behavior and Human Decision Processes, 36(3): 305323.
Findler, L., Wind, L.H., & Mor Barak, M.E. (2007). The challenge of workforce management in a
global society: Modeling the relationship between diversity, inclusion, organizational culture, andemployee well-being, job satisfaction and organizational commitment. Administration in Social
Work, 31(3): 63-94.
Greenhaus, J.H., & Powell, G.N. (2006). When work and family are allies: A theory of work-familyenrichment. The Academy of Management Review, 31(1): 72-92.
Haar, J.M., & Bardoel, E.A. (2008). Positive spillover from the work-family interface: A study ofAustralian employees. Asia Pacific Journal of Human Resources, 46(3): 275-287.
Haar, J.M., & Brougham, D. (2011). Consequences of cultural satisfaction at work: A study of New
Zealand Maori. Asia Pacific Journal of Human Resources, 49(4): 461-475.
Haar, J.M., & Brougham, D. (2013). An indigenous model of career satisfaction: Exploring the roleof workplace cultural wellbeing. Social Indicators Research, 110(3): 873-890.
Haar, J. M., Roche, M., & Taylor, D. (2011). Work-family conflict and turnover intentions ofindigenous employees: The importance of the whanau/family for Maori. The International Journal of
Human Resource Management, 1-15. doi: 10.1080/09585192.2011.610344
Hofstede, G. H. (1980). Culture’s Consequences: International Differences in Work-Related Values.
Beverly Hills, CA: Sage Publications.
Hofstede, G. (1994). The business of international business is culture. International Business Review,
3(1): 1-14.
Hook, G. (2007). A future for Māori education part II: The reintegration of culture and education.
MAI Review, 1: 1-17.
King, M. (2003). The Penguin History Of New Zealand. Auckland, New Zealand: Penguin Books.
Ministry of Social Development. (2008). The Social Report 2008: te purongo oranga tangata 2008.
Wellington, New Zealand: Ministry of Social Development.
Mor Barak, M.E., Findler, L., & Wind, L.H. (2001). Diversity, inclusion, and commitment inorganizations: International empirical explorations. The Journal of Behavioral and Applied
Management, 2(2): 70-91.
Nagy, M. S. (2002). Using a single-item approach to measure facet job satisfaction. Journal of
Occupational and Organizational Psychology, 75(1): 77-86.
Nishii, L. (2012). The benefits of climate for inclusion for gender diverse groups. Academy ofManagement Journal, 57(3): 1754-1774

33

New Zealand Journal of Employment Relations, 40(1): 19-34
Ramamoorthy, N., & Carroll, S. (1998). Individualism/collectivism orientations and reactions toward
alternative human resource management practices. Human Relations, 51(5): 571-588.
Ramamoorthy, N., & Flood, P.C. (2002). Employee attitudes and behavioral intentions: A test of themain and moderating effects of individualism-collectivism orientations. Human Relations, 55(9):1071-1096.
Rothbard, N.P. (2001). Enriching or depleting? The dynamics of engagement in work and familyroles. Administrative Science Quarterly, 46(4): 655-684.
Ryan, T. (1997). Modern Regression Methods. New York NY: Wiley.
Shore, L. M., Randel, A.E., Chung, B.G., Dean, M.A., Ehrhart, K.E., & Singh, G. (2011). Inclusionand diversity in work groups: A review and model for future research. Journal of Management,
37(4): 1262-1289.
Siu, O., Lu, J., Brough, P., Lu, C., Bakker, A.B., & Kalliath, T. (2010). Role resources and workfamily enrichment: The role of work engagement. Journal Of Vocational Behavior, 77(3): 470-480.
Spector, P.E., Allen, T.D., Poelmans, S.A.Y., Lapierre, L.M., Cooper, C.L., O’Driscoll, M., et al.
(2007). Cross-national differences in relationships of work demands, job satisfaction, and turnover
intentions with work–family conflict. Personnel Psychology, 60(4): 805-835.
Tang, S.W., Siu, O., & Cheung, F. (2014). A study of work–family enrichment among chinese
employees: The mediating role between work support and job satisfaction. Applied Psychology,
63(1): 130-150.
Triandis, H.C. (2001). Individualism-collectivism and personality. Journal of Personality, 69(6):907-924.
Van Emmerik, H., Gardner, W.L., Wendt, H., & Fischer, D. (2010). Associations of culture andpersonality with McClelland’s motives: A cross-cultural study of managers in 24 countries. Group &Organization Management, 35(3): 329-367.
Wanous, J.P., Reichers, A.E., & Hudy, M.J. (1997). Overall job satisfaction: How good are singleitem measures? Journal of Applied Psychology, 82(2): 247-252.
Yang, N., Chen, C.C., Choi, J., & Zou, Y. (2000). Sources of work-family conflict: A Sino-US
comparison of the effects of work and family demands. Academy of Management Journal, 43(1):113-123.

34

New Zealand Journal of Employment Relations, 40(1): 35-52

Quality of work environment and quitting intention: A dilemma
RAYMOND MARKEY*, KATHERINE RAVENSWOOD** and DON J. WEBBER***
Abstract
This study investigates the impact of the quality of the work environment (QWE) upon employees’
quitting intentions. A substantial body of research has analysed job satisfaction and a range of othersingle factors as antecedents of quitting. We examine the totality of the QWE as a determinant ofquitting intention, based on a small survey of New Zealand employees. The majority intending to quit
perceived their QWE as poor. The results also indicated that employees were more likely to leave ifthey are not a parent, do not receive sufficient important information, are stressed, and experience
reduced job satisfaction, but the impact of these factors is far greater in workplaces with a good
QWE. This exploratory analysis suggests that the factors shaping perceptions of QWE as a whole are
an important focus of policy to shape employees’ quitting intentions, and is highly suggestive of anarea for further research.
Keywords: job satisfaction, labour turnover, quality of work environment, quitting intentions, workstressIntroduction
This study investigates the impact on employees’ quitting intentions of the quality of the work
environment (QWE). It finds, as expected, that the probability of quitting is greater when theworkplace is perceived to be a bad place to work. Building on this general observation, the study
then investigates what aspects of the working environment characterise “good workplaces”, andwhich aspects contribute most to quitting intentions.
This research is important because it develops the concept of multiple, connected workplace
practices and its influence on quitting behaviour. There is a growing literature on the influence of the
QWE on turnover, and on quitting in particular. The role that certain attributes of the QWE have on
influencing employees’ quitting behaviour has received increasing attention in the academic
literature (see Boxall, Macky & Rasmussen, 2003; Cottini, Kato & Nielsen,, 2009; Delfgauw, 2007;
Hom, Roberson & Ellis, 2008; Scott, Bishop & Chen, 2003; Simons & Jankowski, 2008; Taplin &Winterton, 2007). However, this literature has focussed largely on individual employee or job
attributes rather than on the broader context of the work environment as a whole. Levels of stress andinformation about important decisions and changes, along with changes in the level of job
satisfaction, are all embedded in the literature as important contributory factors behind the quitting
decision. Our empirical results illustrate that these factors are important only if the QWE is perceived
to be good; if the QWE is perceived to be bad then they appear to have no significant influence. Thisparticular finding runs counter to concepts and norms established to this date, and suggests further
research is necessary.

*Centre for Workforce Futures, Macquarie University, NSW 2109 Australia Ph: +61 2 9850 7444
Email: ray.markey@mq.edu.au**
Department of Management, Auckland University of Technology, New Zealand***Department of Economics, University of West of England, UK

35

New Zealand Journal of Employment Relations, 40(1): 35-52
The remainder of this paper is organised as follows. The next section outlines the existing researchdefining QWE, and how this relates to a significant body of literature on employees’ quitting
intentions. The following sections describe the data set and outline the methodology employed.
Subsequently, the results obtained are presented and discussed and the article concludes with anassessment of the broader significance of these results.

Quality of the work environment: what is a good workplace?
The central concern of the QWE perspective is the wellbeing of employees. In contrast to theliterature on quitting, QWE does not focus on individual employee or job characteristics (Boxall etal., 2003; Cottini et al., 2009; Delfgauw, 2007; Hom et al., 2008; Scott, Gravelle, Simoens, Bojke &Sibbald, 2006; Simons & Jankowski, 2008; Taplin & Winterton, 2007) but, instead, is a concept thatencompasses the physical aspects, psycho-social and organisational surroundings of work (Busck,
Knudsen & Lind, 2010; Sell & Cleal, 2011). The QWE is a central concern of employees andemployers that has often been linked with productivity as well as with the wellbeing of employees,
notably in the High Performance Workplace (HPWP) approach to human resource management(Godard, 2004; Harley, Allen & Sargent, 2007; Macky & Boxall, 2007; 2008; Boxall & Macky2009). These connections have been a strong tradition in Scandinavian and socio-technical literature(Emery & Thorsrud, 1976; Gustavsen & Hunnius, 1981).
The QWE concept has its origins in Scandinavia where, since the 1970s “work environment” largely
replaced the narrower concept of “occupational health and safety,” which was associated mainly withphysical risks and hazards at work. Specifically, QWE encompasses the concept of the “psychosocial work environment,” which denotes how job demands and social structures and interactions in
the organisation influence the psychological wellbeing of employees, thus, allowing a broad
understanding of how people are affected by their employment, including experience of job
satisfaction and stress (Hvid & Hasle, 2003). Measures often used to capture QWE are those thatindicate aspects of employee participation in the workplace, such as how much control employees
have over their work, and include flexibility in how and when tasks are carried out (Wood & Wall,
2007; Gustaffson & Szebehely, 2009; Sell & Cleal, 2011), whether employees feel appreciated bymanagement (Boxall et al., 2003; Gustaffson & Szebely, 2009) and the amount of information about
decisions in the workplace that concern employees (Sell & Cleal, 2011). Psycho-social elements of
the work environment also include conflicts, threats or violence at the workplace (ibid) and workload
and the levels of stress experienced (ibid; Busck et al., 2010).

Antecedents of the quitting decision
There is a substantial literature that aims to understand and predict at what point an employee
decides to quit an organisation. This research has strongly linked concepts of job satisfaction andcommitment with quitting intentions (Smith, Oczkowski & Smith, 2011). March and Simon (1993)
relate an employee’s desire to participate in an organisation’s activities with their desire to leave anorganisation, connecting concepts of commitment with turnover. Lee, Mitchell, Sablynski, Burton &Holtom (2004) link quitting intentions with the degree of “embeddedness” of an employee in an
organisation; in other words, the strength and brittleness of connections and roles an employee haswith other people and activities within and outside of an organisation.
March and Simon (1993) establish some propositions that explain employees’ decisions to“withdraw” from organisations. These were based on a framework that supposes employees will
leave if they perceive that leaving is desirable when there are other satisfactory alternatives. An
36

New Zealand Journal of Employment Relations, 40(1): 35-52
employee’s level of job satisfaction (or dissatisfaction) relate directly to the “desirability” to leave.
According to March and Simon (1993), one factor that influences an employee’s job satisfaction is
the interaction between requirements at work and in other roles, now commonly referred to as either
work-life balance or work-life conflict. In addition to work and other role conflict, length of service
is proposed to be an influence on quitting decisions and is associated with increased specialisation inskill and knowledge, which diminish available alternatives (March & Simon, 1993).
Boxall et al.’s (2003) meta-analysis summarises some of the key findings in the literature andindicates that the degree of job security, job satisfaction, autonomy and responsibility, how much
employees felt appreciated by their employers, and how their employers cared for their wellbeing all
impact on quitting intentions. While job satisfaction has been largely referred to, as resulting fromworkplace and personal attributes, many of the measures of job satisfaction incorporate aspects thatreflect the quality of the work environment. For example, the Warr-Cooke scale of job satisfaction
includes measures, such as the ability to choose a method of work, the amount of responsibility,
recognition for work done and the variety in work (Scott et al., 2006).
Recently, scholars have broadened their perspective of turnover to include bundles of HRM practices
and their effects on job satisfaction, commitment and turnover (Alfes, Shantz, Truss & Soane, 2013;
Guchait & Cho, 2010; Smith et al., 2011). For example, Alfes et al. (2013) discuss the “engaged”
employee and links this with turnover intentions. They draw on social exchange theory to show that
employees will be more engaged when their work is meaningful, when they have connections withothers and when they feel valued and trusted by their employer. Alfes et al., (2013) find that engaged
employees are more likely to stay with an organisation but engaged employees who perceive they
have low organisational support were less likely to stay with the organisation.
Employee participation is also linked both with increased job satisfaction and decreased turnover.
For example, a work environment that allows participation in decision making has been shown toincrease job satisfaction (Scott et al., 2003), and greater involvement in care planning for nurses’
assistants has been linked with decreased turnover (Simons & Jankowksi, 2008). Conversely, lack ofopportunities for influence in the organisation and a lack of communication with management havebeen associated with increased quitting intentions (Simons & Jankowski, 2008). However, employee
participation may have differing effects on the intention to quit. For instance, Landau (2009) foundthat positive outcomes from voicing dissatisfaction decreased the intention to quit, whereas anegative outcome or no change in outcomes of voicing dissatisfaction increased intentions to quit.
Indeed, participation, in terms of strong information sharing, has been found to reduce the negative
effect of physical hazards on quitting behaviour (Cottini et al., 2009). The extent to which employees
believe that their organisation values their contribution and care about wellbeing also affect theintention to quit (Perryer, Jordan, Firn & Travaglione, 2010)
Where broader workplace conditions have been considered, there have been connections foundbetween general appreciation of employees and concern for their wellbeing (Mohamed, Taylor &Hassan, 2006), job satisfaction (incorporating aspects of hours of work, physical conditions andinfluence on method of work) and quitting behaviour (Boxall et al., 2003; Delfgauw, 2007; Scott etal., 2006). For example, van der Aa, Bloemer & Henseler (2012) found that higher perceived job
quality reduced employee turnover in customer contact centres. Elsewhere, adverse conditions(harm, hazard, uncertainty, emotional distress, lack of promotion and discrimination) have beenshown to have variable impacts on quitting (Bockerman & Ilmakunnas, 2009; Cottini et al., 2009).
Lack of training and promotion opportunities have a negative impact on satisfaction according to
Dickey, Watson & Zangelidis (2009).

37

New Zealand Journal of Employment Relations, 40(1): 35-52
These established antecedents of quitting behaviour could be categorised into participation, physicalworking conditions and psycho-social conditions. In their positive employee beneficial form, theseantecedents indicate a “good” workplace. Conversely, when reversed to their negative employee
adverse state, these same antecedents indicate a “bad” workplace. Although these antecedents
correspond to aspects of QWE, most studies do not consider them collectively and tend to focus on
individual or job attributes rather than QWE or organisational determinants (Reiche, 2009). Anotherimportant observation is that the established antecedents of quitting behaviour are mainly based on
employee perceptions of QWE, because of the need to identify employee motivations and theimportance of the psycho-social component of QWE, whereby perceptions create the reality of job
satisfaction, feeling appreciated by management, etc. It is conceivable, however, that the “reality” ofaspects of QWE, particularly in relation to physical working conditions, may be at variance with
employee perceptions because of the impact of a range of other variables.

Why quit even if QWE is perceived as good?
Why might employees who perceive they have a good quality of the work environment haveintentions to quit? There is little in the literature to suggest reasons for this. Some studies indicate a“shine” factor, particularly in terms of recruitment of minority groups into the workplace: “while
effective at bringing people into the organization, [these recruitment policies] may ironicallycontribute to high early turnover if they raise expectations for a positive diversity climate that is not
fulfilled” (McKay & Avery, 2005, cited in Hom et al., 2008: 25). These studies suggest that any
changes to QWE perceptions have greater impacts on quitting intentions when workplaces areperceived to be good relative to when workplaces are perceived to be bad. This is somewhat
corroborated by studies which indicate that HPWP approaches and some types of participation can
increase turnover when employees perceive workplace climates “in which compensation is merit
based, goals are clear, and relationships between management and employees are fostered” to bepaternalistic (Simons & Jankowski, 2008: 8).
The literature review above initially highlights a range of single factors that influence intentions toquit, often associated with changing levels of job satisfaction. Parts of the literature also emphasisesthat the totality of the QWE is an important factor in shaping quitting decisions. However, it is lessclear whether single factors are important influences on the quitting decision in themselves,
irrespective of whether the workplace is perceived to be a good working environment. It could bethat, as much of the literature assumes, single factors or groups of factors are the main determinantsof the quitting decision and that the QWE as a whole is less important. Alternatively, the totality of
the QWE is the main issue and single factors are simply reflections of a particular level of QWE.
This is an important issue as it questions whether the QWE is a necessary or a sufficient area ofattention for managers interested in the quitting decisions of their workers.
The remainder of this study starts to make inroads into this gap in the literature. It draws from asurvey of employees to identify whether the importance of employee-level factors vary depending onwhether they perceive their working environment to be good. Although the number of respondents inthe survey is not huge (N=118), the key contributions of this paper are to highlight this gap in theliterature and to begin to populate a new path for research that is designed to investigate further thequitting intentions of employees.

38New Zealand Journal of Employment Relations, 40(1): 35-52

MethodWe focus on three research questions:
1. What characterises a “good workplace environment” for employees?
2. What impact does the overall QWE have on employees” quitting intentions?
3. Do specific components of the QWE have a greater impact on quitting?
Data for this research were collected via an anonymous employee survey, aimed at investigating theinterrelationships between employee participation, the QWE, productivity, and quitting intentions.
The specific variables used in this study are presented in Table 1. The research design for the overall
project was a multi-method multiple case study approach targeting two case organisations in each of
the following four dominant industries in New Zealand: education, health, hotels and food
manufacturing.
Table 1: Variable description and Summary Statistics
Variable
Description
Dummy variable: 1 = Agree with statement ‘I often think of
Quit jobleaving my job’; 0 = otherwise
Dummy variable: 1 = Agree with statement that your workplace
Good place‘is a good place to work’; 0 = otherwise
ParentDummy variable: 1 = have children; 0 = otherwise
Dummy variable: 1 = Agree / Strongly agree with ‘I get
Info lacking information on important decisions, changes and future plans indue time’; 0 = otherwise
Satisfaction Dummy variable: 1 = Satisfaction with job increased in last 12
increased
months; 0 = otherwise
Satisfaction Dummy variable: 1 = Satisfaction with job decreased in last 12
decreased
months; 0 = otherwise
Dummy variable: 1 = Having ever felt threatened at work; 0 =Threatenedotherwise
Dummy variable: 1 = Always / Often feeling stressed; 0 =Stressedotherwise
Not
Dummy variable: 1 = Rarely / Never feeling stressed; 0 =stressedotherwise
Dummy variable: 1 = Agree / Strongly agree that ‘my work is
Appreciatedappreciated by management’; 0 = otherwise
Not
Dummy variable: 1 = Disagree / Strongly disagree that ‘my work
appreciated is appreciated by management’; 0 = otherwise

Mean

Min

Max

0.364

0

1

0.720

0

1

0.636

0

1

0.144

0

1

0.288

0

1

0.246

0

1

0.297

0

1

0.322

0

1

0.254

0

1

0.729

0

1

0.144

0

1

Note: N = 118. Respondents who provided the answer ‘not sure’ were omitted from the analyses.

Out of a total of 240 distributed survey questionnaires across eight workplaces nested within these fourindustries, a total of 133 questionnaires were returned; corresponding to a response rate of 55 per cent. Due toomitted responses to questions that are employed in this empirical work, the total number of usable
questionnaires here is 118. Hom, Caranikas-Walter, Prussia & Griffith (1992) point to small sample size as an
issue in establishing key findings across multiple studies in their meta-analysis. However, we characterise ourstudy as an exploratory analysis that points to new approaches and findings, suggestive of areas for further
research.

The use of a survey, of course, comes with some inherent bias in that the results come from selfreported data. Our survey is comprised of (non-managerial) employees only, and a suggestion for
future research is to verify perceptions of the work environment with comparable data gathered frommanagerial positions. While our study is exploratory, a strength of the data set is that it includes
39

New Zealand Journal of Employment Relations, 40(1): 35-52
respondents from four different industries, and we identified strong similarities across them. This
aids generalisability, especially should future research corroborate our innovative findings.
The survey asked respondents three types of questions. First, they were asked if they considered theirworkplace to be “a good place to work.” Second, they were asked how frequently they thought about
leaving their workplace. Third, they were asked a set of questions about their QWE, incorporating
the physical work environment, psycho-social work environment, and overall job satisfaction. The
physical work environment was represented by a survey question that asked respondents if they weresatisfied with the safety and comfort of their working conditions. The psycho-social aspect of thework environment was proxied by questions on workload and stress, whether the employee thought
they were appreciated by management, whether they received information on important decisions,changes and future plans in due time, what degree of influence they had over their job, and whether
they felt threatened at work. Regarding the final aspect of the QWE, overall job satisfaction,
respondents were asked whether their level of job satisfaction had increased or decreased recently.
Demographic information on the respondents was also collected. This included data on their age,gender, and parental status. The length of service for the worker in both the organisation and industry
were also gathered.
Table 2 presents a cross-tabulation of QWE with quitting intention. More specifically, it shows theextent of a relationship between the responses to questions about whether they had thought about
leaving their job and whether they perceive their work environment to be either good or bad.
Seventy-two per cent of respondents perceived that they work in a good environment and 64 per cent
had not thought about leaving their job. There are relatively few respondents who had not thought
about leaving their job but did perceive that they worked in a bad working environment (seven percent); similarly, those individuals who reported that they worked in a good environment and that they
had thought about leaving their job only accounted for 15 per cent of respondents. These descriptive
data give the first indication of a possible statistical relationship between perceptions of the work
environment and quitting intention.
Table 2: Relationship between Quitting Intention and Good or Bad QWE

Good QWE?
No
Intention
to quit?

Yes
Total

No
8
6.78%
23
21.19%
33
27.97%

Yes
67
56.78%
18
15.25%
85
72.03%

Total
75
63.56%
43
36.44%
118
100%

Theoretically, it is possible that the link between the perceived quality of the work environment andwhether the employee thinks about leaving their job may be a sequential process. Figure 1 presents atree diagram that presents the data along this line of thought. The first issue is whether the employee
perceives that the quality of the work environment is good. It can be seen that 72 per cent of the
respondents perceive that they work in a good environment; out of this 72 per cent sub-sample, 78
per cent of them have not thought about leaving their job. This branch of the tree ends with nearly 57
per cent of the overall sample; the end probabilities correspond directly with those presented in Table
2.

40

New Zealand Journal of Employment Relations, 40(1): 35-52
Figure 1: Sequential Process of Perceived QWE and Quitting Intentions

Is it a goodplace to work (Q46)?

Yes = 72.03 %Do you often thinkof leaving your job (Q47)?

15.25 %

Yes = 21.17 %C

No = 78.82 %D 56.78 %A

Yes = 75.76 %No = 27.97 %Finalprobabilities

E 21.19 %B

No = 24.24 %F 6.78 %Figure 1 also illustrates that, out of the 28 per cent of respondents who perceive that they work in abad working environment, nearly 76 per cent of them have thought about leaving their job. These
clear asymmetries are worthy of further investigation and, as such, these two sequential dichotomous
issues are the focus of the econometric analysis below. Of interest are the determinants of these two
dichotomous issues.
Descriptive statistics about the independent variables used in the upcoming econometric analysis arepresented in Table 1. It illustrates that 64 per cent of the respondents have children; only 14 per centof workers in the final sample agreed with the statement that they get information on important
decisions, changes and future plans in due time; 32 per cent are stressed at work; 25 per cent haveexperienced a reduction in their job satisfaction during the past 12 months; and 14 per cent believethat their work is not appreciated by their management.

41

New Zealand Journal of Employment Relations, 40(1): 35-52
Table 3: Perceived QWE and Quitting Intentions: Correlation coefficients of independent variables

Quit job
Good place
Satisfaction increased
Satisfaction decreased
ParentInfo lacking
Threatened
AppreciatedNot appreciatedStressed
Not stressed

Notes:***,**

Quit job

Good place

Satisfaction
increased

Satisfaction
decreased

ParentInfo lacking

Threatened

AppreciatedNotappreciatedStressedNot
stressed

1.000-0.509***-0.248***0.508***-0.232**0.442***
0.241***-0.410***0.241***
0.420***-0.199**–1.000
0.230**-0.434***0.117-0.497***-0.339***0.597***-0.605***-0.460***0.364***––
1.000-0.363***-0.101-0.261***-0.0440.220**-0.261***-0.0780.187**

–
–
–
1.000
-0.0990.495***
0.233**-0.449***0.495***
0.365***-0.288***

–
–
–
–
1.000
-0.091-0.202**0.093-0.040-0.307***
0.078

–
–
–
–
–
1.000
0.103
-0.618***0.656***
0.337***-0.240

–
–
–
–
–
–
1.000
-0.1050.262***
0.307***-0.294***

–
–
–
–
–
–
–
1.000
-0.673***-0.314***0.269***

–
–
–
–
–
–
–
–
1.000
0.285***-0.240***

–
–
–
–
–
–
–
–
–
1.000
-0.402***

–
–
–
–
–
–
–
–
–
–
1.000

signifystatisticalsignificance

at

1%,

and

*

the

5%

and

10%

confidence

level,

respectively.

42

New Zealand Journal of Employment Relations, 40(1): 35-52
Table 3 presents the correlation coefficients for these variables, and they are in line with a priori
expectations. For instance, often thinking about leaving a job is positively correlated with a recent
decrease in job satisfaction, a feeling of lacking information on important decisions, and feelingthreatened, stressed and not appreciated by management. Unsurprisingly, the perception that thequality of the work environment is good is positively correlated with being appreciated, not being
stressed and experiencing a recent increase in job satisfaction.

Econometric approach
We adopt the formal model for estimating quitting probabilities according to Greene (2003). An
important issue in any stochastic modelling process is to identify what influences the dependent
variable. In our case, we have two dependent, albeit potentially sequential, variables to model. Let
y1i be a latent variable that denotes the probability that a worker is thinking about quitting, which isdependent on a range of motivators, X 1i . Also let y2 i be a latent variable that denotes the probability
that the worker perceives that they work in a good workplace environment, where this is also
dependent upon a range of factors, X 2i . The model is represented as follows:

y1i = b1 X 1i + e1i
y2i = b 2 X 2i + e 2 iwhere the values for y1i are observable and related to the following binary dependent variables, on
the basis of the following conditions:

Quiti = 0, if y1i £ 0

Quiti = 1, if y1i > 0
andGood Placei = 0, if y2i £ 0Good Placei = 1, if y2i > 0

where Quiti = 1 denotes that the worker is thinking about quitting their job, and Good Placei = 1
denotes that the worker feels that they work in a good working environment. The errors (e1i , e 2i ) are
assumed

to

have

the

standard

bivariatenormaldistribution,with E (e1i ) = 0 = E (e 2i ) ,V (e1i ) = 1 = V (e 2i ) and Cov(e1i , e 2i ) = r . Thus the worker’s quitting probability can be written as:
P(Quit )= P(Quiti = 1, Good Placei = 1)
= P( X 1i < x1i , X 2i < x2i )x2 i x1i= ò ò f 2( z1i , z2i ; r )dz1i dz 2i-¥ -¥= F (b1 X 1i , b 2 X 2i ; r )where F denotes the bivariate standard normal distribution function with correlation coefficient r .
The bivariate probit model has full observability if Quiti and Good Placei are both observed interms of all their four possible combinations (i.e. “ Quiti = 0 , Good Placei = 1“, “ Quiti = 1,

Good Placei = 0 “, “ Quiti = 0 , Good Placei = 1“ and “ Quiti = 0 Good Placei = 0 “,); this is the case43New Zealand Journal of Employment Relations, 40(1): 35-52
in our study and full observability naturally leads to the most efficient estimates (Ashford & Sowden,
1970; Zellner & Lee, 1965).

Results
The results of seemingly unrelated bivariate probit estimations are presented in Table 4 and represent
the most parsimonious model. The econometric estimation controlled for possible differences acrossindustries through the application of a clustering algorithm to allow for greater similarity between
workers in the same industry and greater differences between workers in different industries.
Table 4: Quitting Intentions and Perceived QWE: Coefficient estimates in biprobit model
(1)
Quit

(2)
QWE

Constant-0.668

ParentInfo lacking
Satisfaction increased
Satisfaction remains the same
Satisfaction decreased
ThreatenedStressed
Neither stressed nor not stressed
Not stressed
Appreciated
Neither appreciated nor not appreciatedNot appreciated-0.477(0.175)***1.403(0.675)**-0.279(0.172)Control variable
0.931(0.388)**0.253(0.246)0.687(0.277)**N
Log pseudo likelihood
Rho118-79.908-0.789 (0.086)***

–
–
–
–
–

(0.313)**

–
–
–
–
–

0.719

(0.318)*

–
–
–
–
–

–
–
–
–
–

-0.737(0.389)*-0.661(0.168)***Control variable
6.972(0.216)***0.793(0.365)**Control variable-1.933(0.331)***

Notes: ***, ** and * represent statistical confidence at the 1%, 5% and 10% levels. Rho suggests strong negative
correlation between regressions (chi2(1)=22.091, p<0.000).

Table 4 presents two columns of results which correspond to the biprobit estimation. The firstcolumn corresponds to the dichotomous (i.e. yes/no) response to the statement that “I often think ofleaving my job.” These results are in line with a priori expectations that are ingrained in theliterature: those respondents who report that they are stressed at work and have experienced a recent
reduction in their level of job satisfaction are more likely to think about leaving their job. However,those respondents who are parents are less likely to think about leaving their job, as are those whohave recently experienced an increase in their level of job satisfaction.
The second column of results corresponds to the dichotomous response to the statement that they
perceive that their workplace “is a good place to work”. These results are also in line with a priori
expectations which were discussed above: perceiving that the workplace is a good place to work is
positively influenced by being appreciated by management and not being stressed, and negatively
influenced by being threatened or stressed at work and by not being appreciated by management.
44

New Zealand Journal of Employment Relations, 40(1): 35-52
Although there is nothing particularly new or surprising about these results, the important thing tonote from Table 4 is that there is strong negative correlation between these two sets of regressions, as
illustrated through the Rho coefficient and its respective statistical significance. Given the proposedsequential nature of these two issues, it is worth pursuing this line of thought and attempting to
identify whether the (direct or indirect) influence of the variables on the quitting regression varydepending on whether the quality of the work environment is perceived to be good. Accordingly, themarginal effects of the variables under the conditions that the QWE variable is equal to 1 and 0(zero) are presented in Table 5.
Table 5: Determinants of Quitting Intentions and Perceived QWE: Marginal effects(1)
Quit given
QWE = 1
ParentInfo lacking
Satisfaction increased
Satisfaction decreased
ThreatenedStressed
Not stressed-0.1840.515-0.104
0.361
0.082
0.254
0.166

(2)
Quit given
QWE = 0(0.071)***(0.193)***(0.063)*(0.142)**(0.098)(0.104)**(0.036)***-0.0050.007-0.0050.008-0.0050.002
0.199(0.011)(0.015)(0.011)(0.015)(0.016)(0.008)(108.06)

Notes: ***, ** and * represent statistical confidence at the 1%, 5% and 10% levels.

Table 5 displays the regression estimates of the determinants of quitting intentions having controlled
for the determinants of the quality of the work environment; this is tantamount to comparing routes
A to C with B to E on Figure 1. Most importantly, and the main result of this paper, these conditional
marginal effects of the variables influencing the probability of quitting do vary substantiallydepending on whether the respondent perceives that they work in a good working environment or
not. This means that the factors that contribute to thinking about leaving the job are sensitive toemployees’ overall assessment of the quality of their work environment. High stress levels, lack of
information on important decisions, and decreases in job satisfaction have a statistically significant
impact on employees’ intention to quit in workplaces perceived as being a good workplaceenvironment. Importantly, and the crux of this paper, these issues are not statistically significant in
influencing employees’ intention to quit if employees perceive that they work in a bad work
environment, which is most likely to be the case if they are stressed, threatened and not appreciatedby management.
Rather than simply reporting on the statistical significance of the variables’ marginal effects, it isimportant to emphasise the differences in magnitudes of the marginal effects. Several issues areworth emphasising. First, the influence of being stressed on the thought of leaving is substantiallygreater in a good workplace than in a bad workplace; it increases the probability of quitting by 25.4
per cent if employees work in a good workplace, compared with merely 0.02 per cent in a badworkplace. This strongly suggests that managers in workplaces with good QWE should reduce stresslevels to reduce quitting behaviour.
Interestingly, not being stressed has similar effects on the thought of leaving in good and badworkplaces. The effect of not being stressed on the probability of quitting is 20 per cent larger in abad workplace; it increases the probability of thinking about quitting by 16.6 per cent if employees
45

New Zealand Journal of Employment Relations, 40(1): 35-52
work in a good workplace, compared with 19.9 per cent in a bad workplace. (These figures suggestthat workers want some stress or challenge at work.)
Second, the effect of not receiving information about important decisions on the thought of quitting
is 76 times larger if employees are in a good workplace. It increases the probability that the worker
will think about quitting by 51.5 per cent if employees work in a good workplace, compared with 0.6
per cent in a bad workplace.
Third, the influence of changes in job satisfaction on the thought of leaving is 48 times greater in agood workplace for reductions, and 21 times greater for increases. Reductions in the level of job
satisfaction increase the probability of thinking about quitting by 36.1 per cent if employees work ina good workplace, compared with 0.8 per cent in a bad workplace. The effect of an increase in thelevel of job satisfaction on the thought of quitting is 21 times smaller if employees perceive theywork in a bad working environment; it decreases the probability of thinking about quitting by 10.4
per cent if employees work in a good working environment, compared with 0.5 per cent in a badworking environment. Satisfaction, therefore, is important but not the only influence on quitting
behaviour.
Finally, the effect of being a parent on the probability of thinking about quitting is 33 times larger if
employees are in a good workplace. Being a parent is associated with a decrease in the probability ofthinking about quitting by 18 per cent if employees work in a good (bad) workplace, compared with
0.5 per cent in a bad workplace. Hence, being a parent in a good working environments means
employees are very unlikely to quit.
Additional drivers of quitting intentions
The results presented above hold even once we have controlled for a range of socioeconomic
variables including age, gender, carer, job status, training, length of time in the industry, organisationand current job, and whether the respondent wanted to have more influence at their workplace. These
pseudo-stability test results are not included for brevity.
The data set also included six further questions that relate to QWE, and these variables were used to
conduct sensitivity analyses (see Table A1). Their inclusions in the model had no significant impacts
on the key results. First, three questions relating to influence on work organisation failed to elicit
statistically significant responses and did not affect the qualitative inference of the other results.
Second, feeling really tired from work did not affect the probability of thinking about quitting.
Third, working a significant degree of overtime lowered the probability of thinking about quitting;this was statistically significant and changed slightly the marginal effects of other variables. Thiscounter-intuitive result could be explained as employees feeling that they are more valued if theywork more overtime, in which case, this variable captures a similar issue as the feeling appreciatedvariable and inclusion of this extra variable may be confounding the model. Fourth, there was a,though, very small statistically significant marginal effect of satisfaction with the safety and comfort
of working conditions on the probability of thinking about quitting (0.009, p=0.07). On inspection,
this variable had the smallest marginal effect and its inclusion did not appear to bias the observed
marginal effects of the other variables on the probability of thinking about quitting. Analysis of alarger data set is encouraged to corroborate these findings.

46

New Zealand Journal of Employment Relations, 40(1): 35-52

Conclusion
This exploratory research shows three important findings. Firstly, it confirms the importance ofperceptions of the quality of the work environment in the quitting decision, particularly since somemore objective measures were not statistically significant as drivers (e.g. overtime, training).
Employees are significantly less likely to intend to quit their job if they perceive their working
environment to be good. The majority of employees who thought of leaving their job perceived theirworkplace to not be a good place to work. Good quality of the work environment was indicated bylow stress levels, feeling appreciated by management and not feeling threatened. This is consistent
with what is suggested by separate sources in the literature (Bockerman & Ilmakunnas, 2009; Boxall
et al., 2003; Cottini et al., 2009; Gustaffson & Szebely, 2009). Secondly, the research confirmed thatan employee is more likely to want to leave if they are not a parent, believe that they do not receive
enough important information in time, are stressed and experience a reduction in the level of job
satisfaction.
Thirdly, the impact of these factors on the desire to quit differs in magnitude depending on whether
the QWE is rated as being good or bad. In workplaces with a good QWE, the impact of high stresslevels, lack of information on important decisions, and decreases in satisfaction are much greater on
employees’ intention to quit. This finding is interesting, and there are few explanations for thisphenomenon in the extant literature because of the paucity of research on quitting decisions within
the framework of the QWE.
The results reported here could be compared to another study showing that employees who come to aworkplace because of a reputation of a “good employer” may be disappointed when they discoverpractice differs from policy or reputation (Hom et al., 2008). However, that study relates to turnoverin the first year of tenure, and our results suggest that length of tenure/service in the organisation has
no effect on the intention to quit. Furthermore, the study by Hom et al. (2008) does not account for
the impact of a lack of information on the quitting intentions of employees in a good workplace.
Landau’s (2009) explanation of the impact of the outcomes of employee voice provides a stronger
basis for our results, by linking employees’ expectations and experience. In this way, Landau
potentially explains why a workplace perceived as good might be more impacted by decreases in job
satisfaction, stress and lack of information from management, thus, contributing to dissatisfaction
and increased quitting intentions. We might call this a disappointment effect, whereby the highexpectations produced amongst employees by a workplace with good QWE leads to greater
disappointment because of decreases in job satisfaction, stress and lack of information frommanagement, and hence, to increased quitting intentions.
Conversely, the results indicate that if the QWE is considered bad by employees, then high levels ofstress, information on important decisions and job satisfaction decreases have less of an effect on
probability that the respondent will think about leaving. Low stress levels decrease the probability ofquitting bad workplaces only slightly more than in good workplaces. Elsewhere, it has beensuggested that employees feel resigned to staying and perceive that they have few other opportunities
in a poor quality work environment (Taplin & Winterton, 2007). This could imply that in aworkplace where employees already feel they are not appreciated by management suffer stress andfeel threatened at work, there is a concurrent sense of resignation and disempowerment manifested inlesser reaction to stress, negative changes in the QWE and lack of information about changes andother important issues. In other words, there is no dissonance, or disappointment effect as there
would be with a good QWE.
This paper contributes to the literature in a number of areas. First, it has corroborated earlier
evidence that an employee is more likely to feel that they work in a good place if they are47

New Zealand Journal of Employment Relations, 40(1): 35-52
appreciated, not threatened and not stressed (Bockerman & Ilmakunnas, 2009; Boxall et al., 2003;
Cottini et al., 2009; Gustafsson & Szebely, 2009). Secondly, it confirms that perceptions of a badwork environment have a negative impact on quitting behaviour. More importantly, it has shown thatthe effects on quitting of some key factors that are associated with the QWE are greater in aworkplace with good QWE. The factors with greater impact in workplaces with good QWE are highlevels of stress, decreased job satisfaction and not receiving information about important decisions.
On the other hand, the impact of not being stressed reduces the likelihood of quitting in all
workplaces.
Consequently, if the employee perceives that they work in a good work environment, then a businesscan dissuade them from thinking about quitting their job by ensuring that their level of job
satisfaction does not decrease, by continually providing the employee with information about
important decisions, changes and future plans in due time, and by ensuring that the employee is notoverly stressed with work issues. Organisations that wish to retain their quality workforce should
adopt a two-stage approach. They should focus initially on achieving a good QWE without highstress levels and with perceptions of appreciation by management and a lack of threats at work.
These prior interventions are essential to reduce later quitting intentions and should be implemented
before expending effort on adjusting factors that contribute to job satisfaction and increasing theprovision of information to employees of important decision making processes. Retaining low levelsof stress remain important in the second stage.
Larger samples are required to fully test the relationships between variables indicated here, and apanel of data could substantiate causation. Ideally, matching employee perceptions of QWE against
objective measures of QWE on the basis of paired organisation/employee surveys or case studies
would test the relationships between these variables further. However, this study is highly suggestiveof a new approach to research over the issue of quitting behaviour and highlights the need for further
research into “good” and “bad” workplaces, and their differential impact on quitting intentions.

References
Alfes, K., Shants, A.D., Truss, C., and Soane, E.C. (2013), The link between perceived humanresource management practices, engagement and employee behaviour: a moderated mediation
model. The International Journal of Human Resources Management, 24(2): 330-51.
Ashford, J.R., Snowden, R.R. (1970), Multivariate Probit Analysis. Biometrics, 26(3): 535-46.
Bockerman, P., Ilmakunnas, P. (2009), Job disamenities, job satisfaction, quit intentions, and actual
separations: Putting the pieces together. Industrial Relations, 48(1): 73-96.
Boxall, P., Macky, K., and Rasmussen, E. (2003), Labour turnover and retention in New Zealand: thecauses of consequences of leaving and staying with employers. Asia Pacific Journal of Human
Resources, 41(2): 196-214.
Boxall, P., and Macky, K. (2009), Research and theory on high-performance work systems:
Progressing the high-involvement stream. Human Resource Management Journal, 19(1): 3-23.
Busck, O., Knudsen, H., and Lind, J. (2010), The transformation of employee participation:
Consequences for the work environment. Economic and Industrial Democracy, 31(3): 285-307.
48

New Zealand Journal of Employment Relations, 40(1): 35-52

Cottini, E., Kato, T., and Nielsen, N.W. (2009), Adverse workplace condition, high-involvement
work practices and labor turnover: evidence from Danish linked employer-employee data
(Discussion Paper no.4587), Bonn, Germany, The Institute for the Study of Labor (IZA).
Delgaauw, J. (2007), Where to go? Workers’ reasons to quiet and intra- vs interindustry job mobility.
Applied Economics, 39(16): 2057-66.
Dickey, H., Watson, V., and Zangelidis, A. (2009), Job satisfaction and quit intentions of offshore
workers in the UK North Sea oil and gas industry (MPRA Paper no.18666), Retrieved fromhttp://mpra.ub.uni-muenchen.de/18666
Emery, F.E., and Thorsrud, E. (1976), Democracy at work, Leiden, Nijhoff.
Godard, J. (2004), A critical assessment of the high-performance paradigm. British Journal ofIndustrial Relations, 42(2): 349-78.
Greene, W.H. (2003), Econometric Analysis (5th ed.), London, Prentice Hall.
Guchati, P., and Cho, S. (2010), The impact of human resource management practices on intention toleave of employees in the service industry in India: the mediating role of organizational commitment.
The International Journal of Human Resource Management, 21(8): 1228-47.
Gustafsson, R.A., and Szebehely, M. (2009), Outsourcing of elder care services in Sweden: effects
on work environment and political legitimacy. In King, D. and Meagher, G. (eds.), Paid Care inAustralia. Politics, profits practices, Sydney, Sydney University Press, pp.81-112.
Gustavsen, B., and Hunnius, G., (1981), New patterns of work reform. The case of Norway, Oslo,
Oslo University Press.
Harley, B., Allen, B.C., and Sargent, L.D. (2007), High performance work systems and employee
experience of work in the service sector: The case of aged care. British Journal of Industrial
Relations, 45(3): 607-33.
Hom, P.W., Caranikas-Walker, F., Prussia, G.E., and Griffith, R.W. (1992), A meta-analyticalstructural equations analysis of a model of employee turnover. Journal of Applied Psychology, 77(6):890-909.
Hom, P., Roberson, P., and Ellis, A.D. (2008), Challenging conventional wisdom about who quits:
revelations from corporate America. Journal of Applied Pyschology, 93(1): 1-34.
Hvid, H., and Hasle, P. (2003), Human development and working life, Aldershot, Ashgate Publishing
Limited.

49

New Zealand Journal of Employment Relations, 40(1): 35-52
Landau, J. (2009), When employee voice is met by deaf ears. SAM Advanced Management Journal,
74(1): 4-12.
Lee, T.W., Mitchell, T.R., Sablynski, C.J., Burton, J.P., and Holtom, B.C. (2004), The effects of job
embeddedness on organizational citizenship, job performance, volitional absences and voluntary
turnover. The Academy of Management Journal, 47(5): 711-12.
Macky, K., and Boxall, P. (2007), The relationship between high-performance work practices andemployee attitudes: An investigation of additive and interaction effects. The International Journal of
Human Resource Management, 18(4): 537-67.
Macky, K., and Boxall, P. (2008), High-involvement work processes, work intensification andemployee wellbeing: A study of New Zealand worker experiences. Asia Pacific Journal of Human
Resources, 46(1): 38-55.
March, J.G., and Simon, H.A. (1993), Organizations (2nd ed.), Cambridge MA, Blackwell.
Mohamed, G., Taylor, S.G., and Hassan, A. (2006), Affective commitment and intent to quit: The
impact of work and non-work related issues. Journal of Managerial Issues, 18(4): 512-29.
Perryer, C., Jordan, C., Firns, I., and Travaglione. (2010), Predicting turnover intentions. Theinteractive effects of organizational commitment and perceived organisational support. Management
Research Review, 33(9): 911-23.
Reiche, S.B. (2009), To quit or not to quit: organizational determinants of voluntary turnover in
MNC subsidiaries in Singapore. The International Journal of Human Resource Management, 20(6):1362-80.
Scott, A., Gravelle, H., Simoens, S., Bojke, C., and Sibbald, B. (2006), Job satisfaction and quitting
intentions: A structural model of British general practitioners. British Journal of Industrial Relations,44(3): 519-40.
Scott, D., Bishop, J.W., and Chen, X. (2003), An examination of the relationship of employee
involvement with job satisfaction, employee cooperation, and intention to quit in U.S. invested
enterprise in China. The International Journal of Organizational Analysis, 11(1): 3-19.
Sell, L., and Cleal, B. (2011), Job satisfaction, work environment, and rewards: Motivational theory
revisited. Labour, 52(1): 1-23.
Simons, K.V., and Jankowski, T.B. (2008), Factors influencing nursing home social workers’
intentions to quit employment. Administration in Social Work, 32(1): 5-21.
Smith, A., Oczkowski, E., and Smith, C.S. (2011), To have and to hold: modelling the drivers of
employee turnover and skill retention in Australian organisations. The International Journal of
Human Resource Management, 22(2): 395-416.
50

New Zealand Journal of Employment Relations, 40(1): 35-52

Taplin, I.M., and Winterton, J. (2007), The importance of management style in labour retention.
International Journal of Sociology and Social Policy, 29(1/2): 5-18.
van der Aa, Z., Bloemer, J., and Henseler, J., (2012), Reducing employee turnover through customer
contact center job quality. The International Journal of Human Resource Management, 23(18):3925-41.
Wood, S.J., and Wall, T.D. (2007), Work enrichment and employee voice in human resource
management-performance studies. The International Journal of Human Resource Management,
18(7): 1335-72.
Zellner, A., and Lee, T.H. (1965), Joint Estimation of Relationships Involving Discrete Random
Variables, Econometrica, 33(2): 382-94.

51

New Zealand Journal of Employment Relations, 40(1): 35-52
Appendix: Table A1: Specific Questions Asked of Respondents
General QWE and quitting intention
Do you agree with the statement that your workplace “is a good place to work”?
Do you agree with the statement “I often think of leaving my job”?
Specific Quality of The Work Environment Questions
Do you have more work to do than you can accomplish in one shift?
How often have you felt stressed?
My work is appreciated by management
I get information on important decisions, changes and future plans in due time
Have you ever felt threatened at work?
Has your satisfaction with your job changed during the past 12 months?
Additional Drivers
Do you have significant influence on how much work you have to do?
I have significant influence on how my work is done
I should have more influence at my place of work
How often have you felt really tired from work?
Are you required to work overtime?
Are you satisfied with the safety and comfort of your working conditions?

52New Zealand Journal of Employment Relations, 40(1): 53-69

The skills productivity disconnect: Aotearoa New Zealand Industry
Training policy post 2008 election
GEMMA PIERCY* and BILL COCHRANE**
This article describes the key public policy changes in New Zealand industry training since theelection of the National-led government in 2008, including the main outcomes of the 2012
Industry Training Review which led to the creation of new policy in 2013 and 2014. This paper
briefly highlights: the depiction of Industry Training Organisations in the media as poor
performers in comparison to other sectors of the tertiary education system; the creation of policy
to performance manage these organisations 2009-2010; the review itself; the launch of New
Zealand Apprenticeships in 2013; and the Amendments to the Industry Training Act in 2014.
Based on the ways in which industry training has been represented and how their functions havebeen altered since 2008, we argue that the likely policy trajectory for industry training could be
one of two scenarios: one which resembles the benign neglect of the 1990s; or one whereindustry training is undermined through the continued withdrawal of government funding andsupport. Based on international research on the productivity skills connection, we conclude thatregardless of scenario, the post-2008 changes to industry training policy framework greatly
reduce the capacity of skill levels to augment productivity within the New Zealand economy.
Furthermore, we argue that the loss of the policy emphasis on and specific funding for
information collection, co-ordination and consensus making at the sector and industry levels
means that industry training has the potential to disconnect and, therefore, lessen its capacity tocontribute to social and economic outcomes.

Introduction
Productivity in Aotearoa New Zealand is well below the OECD average (McCann, 2009). In asimilar fashion to other nations, New Zealand has looked to skills acquisition as a potential
solution to improve productivity since the late 1980s (Ashton & Sung, 2011). Industry training
in particular has undergone a raft of policy changes over this time in order to improve New
Zealand’s international competitiveness and productivity levels (Cochrane, Law & Piercy, 2008;
Deeks, Parker & Ryan, 1994; Piercy, 1999; 2011, Rasmussen, 2009). However, these policychanges have not led to the anticipated growth in productivity (McCann, 2009). This has notbeen a problem solely in New Zealand. Since the early 2000s a number of changes have occurredin academic arguments regarding industry training and productivity policy (Thelen, 2006; Powell,2005). These new arguments have attempted to account for the failure of industry training policy
to effect long term positive impacts on productivity levels and international competitiveness.
The arguments focus on: the different types of institutional settings that are needed to create highskill societies; co-ordination failure associated with low skill equilibriums; and the policy*

Gemma Piercy, Labour Studies, University of Waikato, gemma@waikato.ac.nz
Bill Cochrane, Labour Studies, University of Waikato, billc@waikato.ac.nz**

53New Zealand Journal of Employment Relations, 40(1): 53-69
emphasis on counting qualification stocks pushing supply side solutions rather than demand oruse (Finegold & Soskice, 1988; Brown, 2001; Thelen, 2006; Warhurst & Finlay, 2012; Dalziel,
2012; Thompson & Smith, 2010). The solutions put forward as part of these arguments advocate
a more holistic approach to skill formation that examines the complex web of factors that
contribute to skill formation (Scottish Government Social Research, 2008). This includes
development of skill formation policy which emphasises a form of economic development which
can take account of and respond to regional and sector differences within and between industries.
By conceptualising skills development as a dynamic ecosystem that gathers information from all
relevant stakeholders at these levels can ensure that industry training can respond to dynamicchanges, including the different types of product markets. It also pushes policy makers toconsider solutions that seek to effect change in four areas of skill formation: development,
supply, demand and deployment (Anderson & Warhurst, 2012; Ashton & Sung, 2011; Buchanan
et al., 2001). Currently, the role of government tends to facilitate the development and supply ofskills through the Vocational Education and Training system (VET); an approach which isunderstandable because most VET systems are publically funded and organised. It is the neglectof the demand and deployment or utilisation of skills in policy formation that has created thedifferent types of coordination failure which have limited the capacity of skill formation tocontribute to productivity levels. Instead of policy development that maximises the skills,
productivity nexus policy has often created a disconnection between skills and productivity.
Warhurst and Findlay (2012) and Ashton and Sung (2011) argue that there is a role forgovernment not just in the development and supply, but in facilitating the engagement of all
relevant stakeholders in the provision of market information (demand and information
coordination); supporting small to medium sized businesses to develop their organisation’s
capacity to use training to create innovation and lead to productivity increases (deployment).
This second goal is particularly challenging because it involves intervention at the level of theworkplace, but lifting the skills of middle management, and supporting better decision-making at
the firm level will address the types of coordination failure that beset skill formation systems.
The purpose of this article is to outline the policy changes to industry training implemented since
the election of the National-led government in 2008, and to discuss the implications of thesereforms. In particular, the paper draws on the skill formation discussion articulated above toargue that the current policy direction is actively undermining the ability of industry training
policy to contribute to the growth of the New Zealand knowledge economy and society; a skills
productivity disconnect. The paper will first briefly outline the historical context of Aotearoa
New Zealand industry training policy. Second, the paper will critically discuss the post-2008
policy reforms including: (1) the depiction of Industry Training Organisations in the media as
poor performers in comparison to other sectors of the tertiary education system; (2) the creationof policy to performance manage these organisations in 2009-2010; (3) the Industry Training
Review (ITR); and (4) its outcomes which include the creation of New Zealand Apprenticeships
in 2014 and the Industry Training and Apprenticeships Amendment Act 2014. The third sectionof the paper considers the concepts in the policy approach to a high skills society (Brown, 2001;
Thompson & Smith, 2010) and the skill ecosystems approach (Finegold, 1999; Buchanan et al,2001) and the relationship between skills and productivity (Ashton & Sung, 2011; Harris &Harvey, 2008). The paper concludes by outlining the reasons why we think that the post-2008
policy reforms to industry training may not represent sufficient enough change in order to ensure

54

New Zealand Journal of Employment Relations, 40(1): 53-69
that skills development can lift productivity levels and contribute more proactively to the New
Zealand economy.

Industry Training in Aotearoa New ZealandIn the 1980s, New Zealand followed international trends in re-examining its apprenticeship andindustry training system driven by both social and economic arguments (Piercy, 1999; Murray,
2001: Brown, 2001; Raddon & Sung, 2005). The social arguments were based on the rhetoric oflifelong learning and the desire to extend access to industry training and higher education to
women and other minority groups, such as Māori. The economic arguments were driven byhuman capital theory and the need to adapt training systems to new technology, broader
workplace change and the growth of new occupations in the service sector. These arguments
have been maintained in international policy debates since this time period, however, theemphasis on what is meant by the social and economic arguments has changed. For example, thesocial focus is now on individuals investing in skills development in order to increase theiremployability; providing social inclusion via employment, thus the social goal is hampered whenunemployment levels are high (Brown, 2001; Ashton & Sung, 2011; Piercy, 2011). Furthermore,this change in policy emphasis has shifted the risk of investing in skills from the State
predominately to employees and to a lesser extent, employers (Thompson & Smith, 2010).
These arguments were put into practice in New Zealand through the Industry Training Act 1992.
This legislation facilitated the creation of a demand based system focussed on drawing out andresponding to employers’ needs. Industry Training Organisations (ITOs) were created and given
the tasks of developing qualifications and placing trainees in these qualifications throughworkplace assessment or a tertiary education organisation (TEO), such as a private training
establishment (PTE). Funding was allocated to ITOs on a contestable basis in order to create acompetitive market (Green, Hipkins, Williams & Murdoch, 2003). Market dynamics created an
ad hoc system with inconsistent provision across industries, leaving employers to deal withmultiple ITOs or none. Market failure became apparent by the end of the 1990s due to acute skill
shortages (Doyle, 1999; Cochrane et al., 2008).
In 1999, the New Zealand Labour Party campaigned on revitalising industry training andaddressing market failure. Once elected, the Labour-led government (1999-2008) grafted theModern Apprenticeships (MA) policy onto the existing ITO system with the addition of acoordinator role. Those receiving coordinator funding would help employers deal with thecomplexity of the industry training system and help apprentices by checking on their progress aminimum of three times a year. This scheme was designed to entice young people back into
industry training, and to provide support in order to mitigate some of the risks of employing
young people that employers experienced (Murray & Piercy, 2003; Dalziel, 2013). Increased
monitoring occurred to lift ITOs’ accountability for public investment and address the excessesof the market, such as the proliferation and inconsistent provision of ITOs across industries, butintervention was gentle (Piercy, 2005). An industry training review, conducted as part of a wider
review of Tertiary Education in 2000-2001, resulted in the renewal of social partnership between
unions, ITOs and the Industry Training Federation (a lobby group set up by ITOs in 1998 tosecure more funding) (Green et al, 2003). This partnership was driven by the strategy and55

New Zealand Journal of Employment Relations, 40(1): 53-69
leadership role for ITOs established by the 2003 amendments to the Industry Training Act andreinforced by other legislation also emphasising partnership and subsidiarity, such as the
Employment Relations Act 2000 and Health and Safety in Employment Act 2002 (Cochrane etal., 2008; Piercy, 2005; 2011; Batters, 2010). In 2008, the partners produced a Skills Action Plan
to deal with systemic issues within industry training, particularly the shortage of middle
management skills (Department of Labour, 2008), but it was not implemented as the Labour-led
government lost the 2008 election (Batters, 2010).

Post-2008 election reforms
While the Skills Action Plan and the Skill New Zealand partnership were abandoned following
the election of the National-led government in 2008, the industry training framework was
initially argued to be a key part of the government’s response to the global economic recession.
This was particularly true for under-25 year olds and the unemployed, a policy message madeclear at the Jobs summit in February 2009 and exemplified in the 2008 Tertiary Education
Strategy (Whitham, 2012). However, as 2009 progressed, a different discourse regarding
industry training began to emerge, and the policy settings began to be subject to further change(Batters, 2010; Whitham, 2012). For example, in 2009, the data collated by the funding body for
tertiary education, the Tertiary Education Commission (TEC), came under increased scrutiny anda number of discrepancies were found in trainee statistics collected from ITOs. It was pointed
out that some ITOs were claiming Standard Training Measurement (STM) funding for trainees
inappropriately: either for trainees who had ceased studying or for trainees enrolling in multiple
qualifications (Ministry of Education, 2011). The Ministry of Education also used aggregate
data to argue that completion rates of 35 per cent or less by trainees represent a poor return on
investment for government funding, relative to other parts of the Tertiary Education system andoverall (Mahoney, 2010).
In response to the criticism of ITO performance, the government made a number of changes toindustry training policy in 2010, which included the introduction of performance-linked funding
and minimum credit achievement requirements for trainees to maintain eligibility for funding.
Two other policy changes of significance were the clear signalling to ITOs that, instead of only
discussing merging, they must begin the process of merging, and the establishment of Trades
Academies in secondary schools, polytechnics and private training establishments. Dalziel(2013) argues that the Trades Academies have been an effective part of the new industry training
policy landscape, providing better linkages between young people and the industry training
system. The mergers between ITOs have also been favourably received. Throughout the 1990s,
there were as many as 50 ITOs (Piercy, 1999) and their numbers fell in the early 2000s to around
40 (Piercy, 2011). The mergers which occurred in 2013-2014 were designed to decrease thenumbers of ITOs which as of 2014 were down to 12. Many of these mergers are based on sector
and industry characteristics and have very large coverage, for example the Building andConstruction ITO and the Primary ITO. This kind of ITO has the capacity to provide sector andsub-sector leadership by capitalising on skills clusters. In contrast, other ITOs are either small,such as the NZ Marine Industry Training, or comprise coverage that speaks more to historical
relationships within the ITO system than industry characteristics for example Competenz and the
Skills ITO (http://www.itf.org.nz/itos/).
56

New Zealand Journal of Employment Relations, 40(1): 53-69

Another significant change was the removal of government funding for short limited credit
programmes, compliance and health and safety training (Ministry of Education, 2011). The
decision to remove this funding was based on the belief, reinforced by claims in academic
literature, that compliance based training is what employers are most likely to fund (Ashton,
Sung, Raddon & Riordan, 2008). It was also argued that short courses serve the needs of
employers rather than employees and, as such, the government should not be investing in limited
credit programmes (Ministry of Education, 2011).

Industry Training Review
The focus of the review was on the investment made by the government in Modern
Apprenticeship Coordinators and in the ITOs themselves, based on the issues identified by the
Ministry of Education and the policy changes put in place post-2009. The scope of the review
was to consider:






how industry training has developed in New Zealandinternational approaches to vocational education and training
the purpose of industry training, and the respective roles of government, employers
and employees in achieving the purpose
the strengths and weaknesses of different elements of industry training, including
developing relevant skills, funding, accountability mechanisms, and governancethe role of industry training within the wider vocational education and training system,
including Youth Guarantee provision (Ministry of Education, 2011: 3).

Government officials were asked to prepare four reports as part of this process: (1) the History ofindustry training; (2) Comparisons with industry training systems in other jurisdictions1; (3)Rationale for government investment in industry training; and (4) Performance of the industry
training system – data. The first two reports are available on the Ministry of Education’s
website. However, the latter two were never published. Instead, the review went forward into theconsultation phase, which consisted of two parts. The first consultation document: Industry
training review: Discussion Paper: Key roles in industry training systems called for submissions
concerning the industry training system and the roles of the government, ITOs and co-ordinators(Ministry of Education, 2012b). Further interviews and a survey were completed only with
employers as part of this process; the lack of unions further demonstrating the removal of social
partnership (Ministry of Education, 2012a).
This was followed by a second round of consultation in the following year on the Proposal to
improve the performance of the Government’s investment in industry training released in August2012 (Ministry of Education, 2012c). The outcomes of this submission process were put tocabinet in late 2012, and the key initiative of rebooting apprenticeships as ‘New ZealandApprenticeships’ was announced in January 2013 and launched in March 2013 (Ministry of
Education, 2013). The cabinet paper, released by the Minister in March 2013, detailed the1This report was held back until after the first phase of consultation.

57

New Zealand Journal of Employment Relations, 40(1): 53-69
outcomes of the Industry Training Review, including the policy changes for the industry training
sector, such as the reforms to Modern Apprenticeship and traineeships (Ministry of Education,2013). These reforms were then passed into legislation in April 2014 through amendments to theIndustry Training Act 1992, 2003 and the repeal of the Modern Apprenticeship Act 2000.
The main policy objectives of the Amendments are to:establish a comprehensive apprenticeship system that provides the same level of
support to all apprentices, regardless of age
focus ITOs on two key functions – setting skill standards for their industries andarranging training
clarify the functions and powers of the New Zealand Qualifications Authority(NZQA) in relation to ITOs
include criteria relating to quality assurance in the process by which the
responsible Minister recognises an organisation as an ITO (ITF, 2013).

New Zealand Apprenticeships
The first area of change was the creation of New Zealand Apprenticeships (NZA). This new
programme required that all level four qualifications regardless of industry categorisation (MAor traineeship) should be combined under the NZA scheme. This was to ensure that trainees
enrolled in these level four qualifications (NZA) would be provided with the coordinator funding
and functions received by trainees enrolled in Modern Apprenticeship, effectively increasing thefunding levels of traineeships. The intention of this change is to increase the completion rates ofindustry trainees based on the assumption that the coordinator support role is the reason why
modern apprentices have high levels of completion rates. However, the MA programme wasonly offered in certain industries, so it is difficult to tease out whether the higher completion
rates are the result of the pastoral care provided by coordinators, or the specific characteristics of
the industry. Another change is that the theoretical component of this type of training be
improved by stating that all level four qualifications must have at least 120 credits. This increasein the number of credits is to ensure that the apprenticeship system is more academically robust,
however, it also increases the threshold of criteria training qualifications need to meet in order toqualify for public funding.
In the cabinet paper, Associate Minister for Tertiary Education, Skills and Employment, Steven
Joyce, argued that the creation of NZA would be reinforced through an increased emphasis on
quality assurance for ITOs, building on the review and reduction of qualifications work
undertaken by NZQA (Ministry of Education, 2013). The aim of increasing the performance of
ITOs is to improve the current poor return on investment for the government and also contributeto the Building Better Public Services2 strategy of lifting the number of level four qualifications
attained by those who are under 25 years.

2

This is a reference group run out of the State Services Commission set up in mid 2011 to provide advice to thegovernment on state sector reform. In 2013, the work of this group was augmented by 10 targets which the state
sector must try and meet. Target 6 in relation to boosting skills and employment is: “Increase the proportion of 25
to 34-year-olds with advanced trade qualifications, diplomas and degrees (at level 4 or above)” (SSC, 2013).

58

New Zealand Journal of Employment Relations, 40(1): 53-69
Prior to the passing of the 2014 Act and as part of the introduction of NZA, the ‘ApprenticeshipRe-boot’ initiative was implemented in March 2013. This programme was designed to provide
an increased level of public funding for qualifications that meet the specifications of the New
Zealand apprenticeship programme. It also includes specific funding for apprenticeships inrelation to the trade-based needs of the Canterbury re-build. Further, in addition to the standard
training subsidy (STM), this initiative will provide scholarships of up to $1000 to eligible
apprentices for tools. The cabinet paper argued that these measures would meet the skills needs
for the Canterbury re-build; help individual apprentices deal with the private costs associatedwith apprenticeship training; and, most importantly, encourage more employers to takeapprentices on as employees. It is too soon to tell if the apprenticeship reboot has had a positive
impact, but in the parliamentary debates, the argument was made by National that it had led to anincrease in the uptake of apprenticeship training (House of Representatives, 2013).
The changes associated with NZA have great potential, especially the provision of pastoral care
to all those enrolled in industry training qualifications regardless of age. However, the loss oflimited credit programmes and the requirement to meet the criteria for 120 credits at level four inconjunction with the emphasis on under 25 year olds has the potential to shift the emphasis ofindustry training in New Zealand onto youth. This could recast industry training into a systemthat is about labour market entry or front-end training rather than up-skilling for those already inthe labour market. Thus, depending on how the programme is implemented, the capacity of theindustry training system to meet the needs of unqualified workers already in the labour market
will lessen. For example, retail, an industry dominated by women, is one of the few modern
apprenticeship training programmes that does not meet the threshold of level four or the 120
credit minimum and, as such, retail training programmes may not qualify to be included in NZA.
It should be noted that Dalziel (2013; 2014) argues the focus on youth access to industry training
is a strength of the reforms, and one that could be strengthened by improving the networking
capability of careers advisors at a regional level. His focus on the plight of youth not in
education, employment and training demonstrates that the government should not take theirpolicy focus away from the under 25s. However, nor should the potential numeracy and literacy
benefits to low skill workers associated with participation in even very short industry training
programmes be neglected (Cochrane et al., 2008).
The focus on completions embedded into the NZA and ITO performance includes a high risk
element for trainees, even if they do manage to end up in employment. Many industry trainees
get their first opportunity as adults to lift their literacy and numeracy levels in ways that haverelevance to them personally. However, if ITOs need to ensure that their trainees complete
credits each year, they are more likely to give opportunities to workers who they know arecapable of achieving industry standards easily. International evidence already suggests thatindustry training tends to go most often to those who have already received some training (Misko,2008). This potential inequity of access to training was highlighted as an issue in the review
documents, but it was not dealt with specifically in the proposed reforms.
The most serious consequence of the creation of NZA is the lack of flexibility embedded within
the policy, and the earlier policy changes that involved the removal of limited credit programmes
and compliance and health and safety training courses. This focus is likely to lead to an industry
59

New Zealand Journal of Employment Relations, 40(1): 53-69
training infrastructure that takes a one-size-fits-all approach. This kind of rigidity may wellprevent industry training from genuinely responding to different industry sectors’ uniquerequirements.
The role of ITOs and other government agencies
A key part of the legislative changes were focussed on increasing the performance andaccountability of ITOs, by setting clearer roles and expectations for them and, by doing so,
improves the coordination issues in the wider vocational education and training system. In
particular, the requirement for ITOs to focus on qualification completion rates was designed toaddress the weaknesses in the system. It also included provisions on the role of NZQA in thedevelopment of accreditation criteria and the maintenance of quality assurance, which includes
the right to impose sanctions (after several warnings) if ITOs should fail to meet accreditation
criteria. In line with the NZA, the changes also included placing the coordinator role within
ITOs, despite a number of submissions during the review process suggesting that ITOs were not
the best suited to provide this service (Ministry of Education, 2013). This concern isunderstandable given the variable size and coverage of the 12 merged ITOs in terms of thedifferent organisations’ capacities to provide pastoral care.
But the most significant of all the changes was the removal of the statutory leadership andstrategy role from ITOs. The cabinet paper stated that TEC and the Ministry of Business,
Innovation and Employment (MBIE) would step up and take on this role (Dalziel, 2013;
Ministry of Education, 2013). In the first reading of the Bill, Stephen Joyce also made the pointthat removing the role from ITOs would incentivise industry groups to take on the role (House ofRepresentative, 2013). Given cuts to the state sector, the capacity of MBIE and TEC to provide
specific industry-based information and build direct relationships with employers in order toprovide industry-based strategy is, at this stage, unclear. In addition, while it may be an
improvement for industry bodies to take greater responsibility in providing leadership aroundskill formation, this will only occur if such groups are given the capacity to deliver on this need.
The parliamentary debates in Committee were particularly fierce in relation to the removal of theleadership function, where numerous MPs repeated the statement that all those who made asubmission to the select committee had stated their opposition to this change in the role of ITOs.
This was highlighted as the most serious problem with the Bill by Labour, New Zealand Firstand the Greens when they withdrew their support at the third reading (House of Representatives,
2014b).
The other reason given for the withdrawal of support was the proposal to make a contestable
fund available for employers and private MA coordinators to access in order to provide training
within enterprises. All submitters to the select committee except Business NZ spoke out in
opposition to this policy (House of Representatives, 2014a). The Minister for Tertiary Education,
Skills and Employment, Steven Joyce, argued in the cabinet paper that this initiative, in part,
acknowledged the excellent work of some private modern apprenticeship coordinators as well as
employer complaints about difficulties associated with dealing with ITOs. The rationale given
for this move in the cabinet paper (Ministry of Education, 2013) and in the select committee(House of Representatives, 2014a) was the need to place further competitive pressures on ITOs.

60

New Zealand Journal of Employment Relations, 40(1): 53-69
This move to withdraw direct government funding and support for the development strategies forskill formation is a serious weakness of the reforms, and could very well lead to a disconnection
between industry and the training system. Our rationale for arguing that there will be a greater
likelihood of coordination failure issues is outlined in the following section.

Skill formation and productivity
Throughout the 2000s, industry training systems, internationally, have come under scrutiny inrelation to their ability to meet the skill needs of economies, increase productivity and to improvethe employability of citizens (Whitham, 2012; Piercy, 2011; Thelen, 2004; Ashton & Sung, 2011;
Warhurst & Findlay, 2012). Amongst theorists, a consensus arose that concentrating on theindustry training system alone was inadequate. Rather, a broader focus on the skills formation
system as a whole was required if questions such as “why was the promise of human capitaltheory not being realised?” were to be addressed and coordination failure be identified andresponded to (Buchanan et al, 2001; Thelen, 2004; Keep & Mayhew, 2010).
Finegold and Soskice (1988) provided insights into why some skill formation systems seemed tobe more successful than others when they classified different skill formation systems as being
high or low skill equilibriums. They used this model to argue that the United Kingdom’s skill
formation system was trapped in a low skill equilibrium, whilst Germany was in a high skill
equilibrium. This assertion stemmed from an analysis of the countries’ economies and systemsof capitalism, labour market dynamics, industrial relations frameworks, as well as the industry
training systems, demonstrating the need to focus not just on industry training but the institutions
by which it is framed (Finegold & Soskice, 1988; Thelen, 2004). Their analysis prompted anumber of studies into the characteristics and qualities of skills and, in particular, whatcharacterises a high skills approach to skill formation. The findings of this research are well
represented in Brown’s (2001) seven Cs of high skills. These are: Consensus, Competitive
Capacity; Capability; Co-ordination; Circulation; Co-operation; and Closure. These sevenelements speak to the attitudes and resources that countries need to develop and deploy if theywant to move to a model of high skills formation. ‘Consensus’ is the need to ensure that all
relevant stakeholders are consulted and involved in decision making regarding skills
development. Many societies which are viewed as having a high skills equilibrium provide
government funded but devolved decision making structures which involve unions, employer
groups and government (Powell, 2005; Brown, 2001). This form of subsidiarity allows for thedevelopment of ‘Co-operation’ between and within industry groups, something that does nottend to occur in market-based approaches that are predicated on the importance of competition(Ashton & Sung, 2011). Co-operation is required for effective skills development if it is to be of
the kind that provides workers with portable and relevant skills, an outcome that is vital, giventhat government funding is focussing on securing economic and social goals. This connects to‘Closure’ which is the use of skills formation in ensuring that social mobility is afforded to all by
ensuring that both the compulsory schooling sector and industry training operate on a
meritocratic basis. This approach will ensure that the social goals of inclusion and equality aredelivered on by the education system. Competitive capacity is about ensuring that those
involved in innovation have the skills and resources to capitalise on new developments. This is
not just about encouraging greater investment in research and development. It is about ensuring
61

New Zealand Journal of Employment Relations, 40(1): 53-69
that organisations can move swiftly to respond to and operationalise changes in technology orsystems. Capability is an important feature that connects to competitive capacity and it speaks toreconceptualising workers as lifelong learners. Consequently, the education and training systems
need to meet this need of promoting not content, but instead the capacity to learn and to provide
opportunities for workers to engage in upskilling throughout their lifetime. This requirement is
not to be taken lightly, as workers can become responsible for taking on the risk of ensuring theiremployability (Thompson & Smith, 2010). If ‘closure’ is also to be delivered on, the State must
play a leadership role in lifelong learning. The arguments on the concept of ‘co-ordination’highlight that market-based models tend to emphasise supply side issues, such as qualification
stocks and employability and that, instead, what is needed is better linkages between matchingsupply and demand for skills (Dalziel, 2014; Brown, 2001). Brown (2001) argues that the Stateis best placed to provide the kinds of leadership that will help establish what a country ‘needs’ interms of skill development by coordinating stakeholders and information gathering. Circulation
connects to this point, but refers to the diffusion of skill within and between industries andindividuals. This diffusion of skill is a requirement that will be delivered on if capability,
cooperation and coordination are addressed adequately within a skill formation system.
This wide-ranging and industry linked thinking about high skills development has been
operationalised to a greater extent by a concept developed by Finegold, and refined by the workof Buchanan et al (2001) called skill ecosystems. Skill ecosystems is a more expansive model ofskill needs within industries which encourages policy makers, employers, communities andindividuals to conceptualise skill needs in four different areas:“the development of skills
the supply of skills
the demand for skills
the deployment of skills” (Anderson & Warhurst, 2012: 117).

This slightly different way of thinking retained aspects of the skill equilibrium concept in termsof the emphasis on institutions, but the model emphasises not just “skills supply but also its
development, demand and use…[and] the system’s dynamism and continual evolution”(Anderson & Warhurst, 2012: 113, emphasis added). This model recognises that skill
development, demand and use are in a constant state of change, thus the skill formation system
also needs to capture this dynamism. The information networks required to identify, understandand respond to these changes are challenging to develop, but can provide great improvements tothe quality of training as well as to the quality of work (Windsor & Alcorso, 2008). Alongside
the dynamism, the skill ecosystem concept pushes out the understanding of coordination failure
beyond matching the supply and demand of skill. This allows for the development of approaches
that place equal emphasis on understanding business strategies, employment practices and job
design as well as industry training systems (Buchanan et al, 2001).
We argue that the current approach in New Zealand focusses on the ‘demand’ for skills through amarket approach and, to some extent, the ‘development’ through NZA, but the supply and, mostimportantly, the deployment of skills is not addressed specifically. Dalziel (2012) offers asolution to the supply issue by advocating better matches between the demand and supply oflabour through regionally based networks of careers advisors. This solution still does not deal
62

New Zealand Journal of Employment Relations, 40(1): 53-69
with the needs of deployment as it retains a focus on the VET system and does not address theissue of organisational development. Skills and economic development policy must be linked if
training is to augment productivity levels (ILO, 2008). The reason why New Zealand’s
productivity must be addressed, alongside industry training policy, is because the productivity of
its workforce is central to the country’s ability to improve living standards. As Krugman (1997:11) observes “Productivity isn’t everything, but in the long run it is almost everything. A
country’s ability to improve its standard of living over time depends almost entirely on its ability
to raise its output per worker”. For New Zealand, this bodes ill as its productivity performanceover the previous several decades has been poor, with the growth rate of GDP per hour worked
in the 2000s being amongst the lowest in the OECD. This is despite a prolonged period of
restructuring which, if conventional wisdom is to be believed, should have seen New Zealand’s
economy grow strongly (de Serres, Yashiro, & Boulhol, 2014).
Furthermore, we argue that Buchanan et al.’s (2001) addition of three levels of competencies(skills) is also very significant because it means that the skill formation system can be reconceptualised in relation to the need to develop, supply and deploy skills at a high, intermediate
and routine level. Ashton and Sung (2013) argue that productivity gains can only be secured if
senior management makes the right kinds of decisions for the sector and product markets, andthat, in turn, middle management have the skills to implement the new technology and training
systems. Managerial capacity is particularly challenging for SMEs, as such it is vital and theindustry training system can deliver skills development and deployment at all three levels.
This argument is based on the understanding that most industries have interconnected andinterlocking clusters of skills at the high, intermediate, and routine levels. For instance, while theaerospace industry requires advanced levels of skill in general, there is considerable
heterogeneity in skills levels within the industry more broadly with the range of occupations
being required; managers, engineers, technicians, machine operators, fabricators, assemblers,
support staff and general labourers/warehouse persons and so on (Kraemer-Mbula, 2009).
Moreover, many of these occupations perform similar activities in a number of different
industries (Christinger, Fowler & Kleit, 2012). Altering the skill formation system in order tocapture the benefits of clustering facilitates an industry/sector or regional approach to skills
demand and deployment that Ashton and Sung (2013) recommend to strengthen the skills
productivity connection. This kind of approach pushes policy makers to look beyond higher
education as a site for developing skills because, as Finegold (1999) and Buchanan et al. (2001)
argue, industry training systems are often not where the coordination issues are emerging from.
For example, investment in technology alone, or research and development alone, will notnecessarily deliver on productivity gains, in fact, it could lead to decreases in productivity.
Instead, companies need to ensure that managerial capacity, alongside technology/research anddevelopment and training are connected to deliver on specific product market needs (Ashton &Sung, 2013).

Conclusion
Some of the changes proposed could improve the provision of industry training. For example,
greater levels of accountability for the work of ITOs have been required since the development
63

New Zealand Journal of Employment Relations, 40(1): 53-69
of the model in the 1990s. As such, these measures could provide sufficient motivation for ITOs
to address the coordination issues that have plagued the system. The emphasis on completions
could also serve to improve the return on the government’s investment in industry training.
However, it is the provision of pastoral care to all workers enrolled in apprenticeship
qualifications through the extension of the coordinator role that is likely to provide the mostpositive outcomes. Providing additional support to apprentices could make a vast difference toolder workers choosing to take on apprenticeship training and for those already enrolled who arestruggling to complete.
We argue that, in terms of the connection between productivity and skills, the current reforms
provide little capacity for improving New Zealand’s economy. Leaving skills development tomarket dynamics will lead us back to the extensive coordination failure of the 1990s with skills
shortages, mis-matches and under-utilisation all likely to occur. Such failures do not rest on theadministrative inadequacies of a particular market-led regime alone, but rather speak to basic
weaknesses in an approach to skill formation that only focusses on the stocks of qualifications(Keep, 2006; Anderson & Warhurst, 2012). This is where skill ecosystems can provide the mostuse as this approach encourages policy development that allows differences to be identified at theregional, industry, sector and product market level. In the review documents and other Ministryof Education reports, a point made consistently is that the statistics in industry training in termsof participation numbers, participant type, and completions vary extensively across industry – apoint ignored in the Cabinet Paper and media items as the sector was damned as a whole by thenegative discourse. However, it is this issue of industry variation that is of the most serious
concern. This is because the reforms have moved forward on a “one-size-fits-all” approach
glossing over this significant issue of industry variation in terms of training needs, skill
acquisition, capacity for deployment and utilisation of skill. The work of the Skills Action Plan
developed in 2008 indicated that industry differences mattered and need to be taken into account.
If this is not considered, then it is likely that coordination issues will continue to be a problem.
Furthermore, we argue that these policy reforms do not address coordination problems that stemfrom the variation of skill needs between and within industry.
Providing such finely calibrated information can be achieved if all social partners are called tothe table because organisations like unions and ITOs, especially when they have high industry
coverage, are aware of the sectoral, sub-sectoral and product market related differences that need
to be taken into account (Raddon and Sung, 2005). Dalziel (2014), in his work on skill
ecosystems, also identifies another group who could provide additional insights, especially on
the supply side, which are careers advisors. As such, we argue strongly that if the industry
training system is to move forward towards achieving optimal conditions for skill development,
then social partnerships need to be strengthened again and more stakeholders introduced, such as
career advisors and educational institutions (Dalziel, 2014; Warhurst & Findlay, 2012).
The skills leadership role and the development of strategy, regardless of who completes the task,need to be funded by the State and industry partners to a level that will facilitate coordination
across sector bodies, ITOs, unions and educational institutions. Social dialogue or consensus is avital part of making skill formation systems more effective in developed economies (ILO, 2008;
Powell, 2005). This is particularly important for sectors with low employer engagement, such as
the service sector, because skills development and deployment is at the routine and intermediate64New Zealand Journal of Employment Relations, 40(1): 53-69
level, and not well connected to labour market mobility and remuneration. In these sectors,
government leadership is required because the sectors lack the capacity and drivers forengagement in skill formation. For example, sectors which have low skill needs are likely to belocked out of skill development attached to qualifications by the introduction of NZA. This isvery serious as it is workers in sectors with low skill needs that require the most assistance inimproving their employability and, thereby, their social inclusion. This potential exclusion
represents a waste of human potential and will keep a large proportion of the population locked
into low wage sectors. Thus, the social as well as the economic goals of skill formation are atstake if the skills productivity disconnect is not addressed. Policy makers need to consider
solutions that seek to effect change at four areas of skill formation: development, supply, demandand deployment. In order to do this, skill formation in New Zealand needs to bereconceptualised as policy process that can gather information from all relevant stakeholders inorder to ensure that industry training can respond to dynamic changes at a sector and sub-sector
level including the different types of product markets.

References
Anderson, P., & Warhurst, C. (2012). Lost in translation? Skills policy and the shift to skill
ecosystems. In T. Dolphin and T. Nash (eds.), Complex New World: Translating new economic
theory into public policy (pp. 109-120). London: Institute for Public Policy Research.
Ashton, D., & Sung, J. (2011). Skills in Focus. (Published by Skills development Scotland andtheScottishFunding
Council).
Retrievedfromhttps://www.skillsdevelopmentscotland.co.uk/media/117328/productivity%20and%20skills%20%20skills%20in%20focus%20paper.pdf
Ashton, D., Sung, J. Raddon, A., & Riordan, T. (2008). Challenging the myths about learningand training in small and medium sized enterprises: Implications for public policy Employment.
(Working Paper No. 1). Geneva: ILO.
Batters, T. (2010). New Zealand industry training policy in the 2008-2010environment. (Unpublished Master’s thesis). University of Waikato, Hamilton, New Zealand.
Brown, P. (2001). Skill formation in the 21st century. In P. Brown, A. Green & H. Lauder (eds.),
High skills: globalization, competitiveness and skill formation (pp. 1-55). Oxford: Oxford
University Press.
Buchanan, J., Schofield, K. Briggs, C. Considine, G. Hager, P. Hawke, G. Kitay, J. Meagher, G.
Macintyre, J. Mounier, A. and Ryan, S. (2001). Beyond flexibility: Skills and work in the future.
Sydney, Australia: NSW Board of Vocational Education and Training
Chrisinger, C.K., Fowler, C.S., & Kleit, R.G. (2012). Shared Skills: Occupation Clusters for
Poverty Alleviation and Economic Development in the US. Urban Studies, 49(15): 3403-3425.
doi:10.1177/0042098011433489

65

New Zealand Journal of Employment Relations, 40(1): 53-69
Cochrane, B., Law, M., & Piercy, G. (2008). Industry training organisations in changing times:
new research possibilities. New Zealand Journal of Employment Relations, 32(3): 40-56
Dalziel, P. (2012). Towards a New Zealand System of Skill Ecosystems. (EEL Research Report
No. 11). Lincoln University: Agribusiness and Economics Research Unit.
Dalziel, P. (2013). Education and skills. In M. Rashbrook (ed.), Inequality: A New ZealandCrisis (pp.184-194). Wellington: Bridget Williams Books.
Dalziel, P. (2014). Regional Skill Ecosystems to Assist Young People Making Education
Employment Linkages in Transition from School to Work. Lincoln University: Agribusiness andEconomics Research Unit.
Deeks, J, Parker, J., & Ryan, R. (1994). Industrial relations in New Zealand. Palmerston North:Dunmore Press.
Department of Labour. (2008). The New Zealand Skills Strategy: Action Plan 2008, Wellington:
Author.
de Serres, A., Yashiro, N., & Boulhol, H. (2014). An International Perspective on the New
Zealand Productivity Paradox (Working Paper No. 2014/1). Wellington, NZ: New Zealand
Productivity Commission.
Doyle, S. (1999). Workers’ organisations and private sector training: The New Zealand Councilof Trade Union’s strategy for a skilled workforce. Paper presented at ILO APSDEP Regional
Seminar, Chiba, Japan
Finegold, D. (1999). Creating Self-Sustaining, High-Skill Ecosystems. Oxford Review of
Economic Policy, 15(1): 60-81
Finegold, D., & Soskice, D. (1988). The Failure of Training in Britain: Analysis and Prescription.
Oxford Review of Economic Policy, 4(3): 21-53
Green, N., Hipkins, C., Williams, P., & Murdoch, C. (2003). A brief history of government
funding for industry training 1989-2002. Wellington, New Zealand: The Industry Training
Federation
Harris, P., & Harvey, P. (2008). The Skills-Productivity Nexus: Connecting Industry Training
and Business Performance. Wellington: The Department of Labour and the Industry Training
Federation. Retrieved from http://www.dol.govt.nz/PDFs/Skills-Productivity-Nexus.pdf
House of Representatives. (2013, November 5). Parliamentary Debates (Hansard) Industry andApprenticeships Amendment Bill – first reading. (Volume 694; Week 58). [HANSARD – debate].
Retrievedfrom
http://www.parliament.nz/ennz/pb/debates/debates/50HansD_20131105_00000036/industry-training-and-apprenticeshipsamendment-bill-%E2%80%94
66New Zealand Journal of Employment Relations, 40(1): 53-69

House of Representatives. (2014a, April 8). Parliamentary Debates (Hansard) Industry andApprenticeships Amendment Bill – in committee. (Volume 697; Week 69). [HANSARD –debate].
Retrievedfrom
http://www.parliament.nz/ennz/pb/debates/debates/50HansD_20140408_00000016/industry-training-and-apprenticeshipsamendment-bill-%E2%80%94
House of Representatives. (2014b, April 15). Parliamentary Debates (Hansard) Industry andApprenticeships Amendment Bill – third reading. (Volume 698; Week 70). [HANSARD –debate].
Retrievedfrom
http://www.parliament.nz/ennz/pb/debates/debates/50HansD_20140415_00000020/industry-training-and-apprenticeshipsamendment-bill-%E2%80%94
ILO (International Labour Organisation). (2008). Skills for improved productivity, employment
growth and development. (International Labour Conference, 97th Session, 2008) [Report V].
Geneva: ILO.
ITF. (November 2013).
Wellington: Author.

Industry training and apprenticeship reform Bill. Real skills 56.

Keep, E. (2006). Market Failure in Skills. SSDA Catalyst, Iss 1.
Keep, E., & K. Mayhew. 2010. Moving Beyond Skills as a Social and Economic Panacea? Work,
Employment and Society 24(3): 565-577
Kraemer-Mbula, E. (2009). Aerospace. In A. Kraak (ed.). Sectors and Skills : The Need for
Policy Alignment, (pp. 45-63). Cape Town S.A: HSRC Press. Retrieved
from http://www.hsrcpress.ac.za/product.php?productid=2256&cat=7&page=3&freedownload=1
Krugman, P.R. (1997). The age of diminished expectations: US economic policy in the 1990s.
Cambridge, MA: MIT press.
McCann, P. (209). Economic geography, globalisation and New Zealand’s productivity paradox.
New Zealand Economic Papers, 43(3): 279-314
Mahoney, P. (2010). Comparing Modern Apprenticeships and industry training. Learners in
tertiary education series). Wellington: Ministry of Education. Retrieved fromhttp://www.educationcounts.govt.nz/__data/assets/pdf_file/0006/79431/Comparing_Modern_Ap
prenticeships_27072010c.pdf
Ministry of Education (July 2011). Terms of Reference: review of industry training. Retrieved
from
http://www.minedu.govt.nz/~/media/MinEdu/Files/EducationSectors/TertiaryEducation/PolicyA
ndStrategy/IndustryTraining/ReviewOfIndustryTrainingTORJuly2011.pdf

67

New Zealand Journal of Employment Relations, 40(1): 53-69
Ministry of Education. (2012a). Employer interview and survey results. Retrieved fromhttp://www.minedu.govt.nz/~/media/MinEdu/Files/EducationSectors/TertiaryEducation/PolicyA
ndStrategy/IndustryTraining/ResultsOfEmployerInterviewsSurvey.pdf
Ministry of Education. (2012b). Industry training review: Summary of Submissions Received on
the Discussion Paper: Key roles in industry training systems. Retrieved fromhttp://www.minedu.govt.nz/~/media/MinEdu/Files/EducationSectors/TertiaryEducation/PolicyA
ndStrategy/IndustryTraining/SubmissionsSummary.pdf
Ministry of Education. (2012c). Industry Training Review: Summary of Submissions received on
the Consultation Document – Proposal to improve the performance of the Government’s
investmentinindustry
training.
Retrievedfrom
http://www.minedu.govt.nz/~/media/MinEdu/Files/EducationSectors/TertiaryEducation/PolicyA
ndStrategy/IndustryTraining/IndustryTrainingConsultationDocumentAugust20129August.pdf
Ministry of Education (2013). Final Decisions - Industry Training Cabinet Paper. Retrieved
from
http://www.minedu.govt.nz/NZEducation/EducationPolicies/TertiaryEducation/PolicyAndStrate
gy/ReviewIndustryTraining/FinalDecisionsIndustryTrainingCabPaper.aspx
Misko, J. (2008). Combining formal, non-formal and informal learning for workforce
development. Adelaide: National Council for Vocational Education Research.
Murray, N. (2001). A History of apprenticeship in New Zealand. (Unpublished Masters Thesis).
Lincoln University, Christchurch, New Zealand
Murray, N., & Piercy, G. (2003). Learning from the master? A comparison of ‘Modern
Apprenticeships’ in Britain and New Zealand. Paper presented at 5th International Conference
Researching Policy and Practice in Vocational Education and Training, University of Greenwich,
London.
Piercy, G. (1999). Strategy and vision: The influence of the AMWU on the NZEU 1987-1992 withrespect to education and training reforms. (Unpublished Master’s Thesis). University ofWaikato, Hamilton, New Zealand
Piercy, G. (2005). Riding the knowledge wave: an examination of policy implemented by the
Labour led coalition Government focussed on work-based learning. Paper presented at 4thInternational Conference on Researching Work and Learning, OVAL Research, UTS: Sydney.
Piercy, G. (2011). Access and Equity in Aotearoa/New Zealand: increasing participation via
policy and practice. In S. Jackson (ed.), Innovations in lifelong learning: Critical perspectives on
diversity, participation and vocational learning (pp.167-186). London: Routledge.
Powell, M. (2005). Skill formation and globalisation. Aldershot, England: Ashgate Publishing.

68New Zealand Journal of Employment Relations, 40(1): 53-69
Raddon, A., & Sung, J. (2005). The role of employers in sectoral skills development:international approaches. Paper presented at 4th International Conference on Research Work andLearning. OVAL Research, UTS: Sydney.
Rasmussen, E. (2009). Employment Relations in New Zealand. Auckland: Pearson.
Scottish Government Social Research. (2008). Skills utilisation literature review. Edinburgh:
Education Analytical Services, Lifelong Learning Research: Author
SSC (State Services Commission. (2013). Better public services: boosting skills and employment.
Retrieved from http://www.ssc.govt.nz/bps-boosting-skills-employment
Thelen, K. (2004). How institutions evolve: the political economy of skills in Germany, Britain,
the United States, and Japan. Cambridge: Cambridge University Press.
Thompson, P., & Smith, C. (2010). Debating labour process theory and the sociology of work. In
P. Thompson and C. Smith (eds.), Working life: Renewing labour process analysis (pp.11-28).
Basingstoke, UK: Palgrave Macmillian.
Warhurst, C., & Findlay, P. (2012). More effective skills utilisation: Shifting the terrain of skills
policy in Scotland. (SKOPE Research Paper No. 107). University of Sydney; University ofStrathclyde.
Whitham, M. (2012). “It’s about community” – Finding Local Solutions to Local Problems:
Exploring Responses to the Social Problem of Youth Unemployment. (Unpublished Master’s
thesis). University of Waikato, Hamilton, New Zealand.
Windsor, K., & Alcorso, C. (2008). Skills in Context: A Guide to the Skill Ecosystem Approachto Workforce Development. Sydney: NSW Department of Education and Training.

69

New Zealand Journal of Employment Relations, 40(1): 70-86

New Zealand’s Employment Law Agenda 2014:
Collective Bargaining and Unions in an Election Year
STEPHEN BLUMENFELD*This paper considers changes made to the ERA (ERA) 2000 since the election of a National-led
Government in 2008 as well as the recently proposed changes to New Zealand’s employment legislation.
Analysis of the impact or likely impact of those changes is offered in light of the original object of the
Act: “to build productive employment relationships through the promotion of good faith in all aspects ofthe employment environment and of the employment relationship”. This paper considers, further to this,that any advancement towards balancing of relative bargaining power between employers andemployees represents an improvement in employment relations. This is to suggest that any assessment of
the changes made over the previous six years to New Zealand’s legislative regime for regulatingcollective bargaining, as well as those statutory amendments to the country’s employment legislation
proposed by the current Government, should focus on the question of whether those changes haveresulted – or and will result, as the case may be – in genuine improvements to collective bargaining andemployment relations more generally.

Introduction
As enshrined in the Employment Contracts Act (ECA) 1991, the National Party’s industrial relations
policy following the 1990 general election in New Zealand resulted in the total abandonment ofcompulsory unionism and removal of the monopoly in wage bargaining that trade unions had enjoyed inmost sectors for nearly a century (Geare, 2001). This, in turn, precipitated a sharp decline in union
membership and density as well as in the share of the country’s workforce represented in collective
bargaining. It is ironic, therefore, that collective bargaining did not become an effective mode of
determining wages, hours and working conditions in New Zealand until enactment of the ECA. Rather,for most of the last century, the predominant system for determining wages and conditions of work inthis country was one of conciliated and, if required, arbitrated bargaining for awards, and that systemremained essentially intact until 1991 (Dannin, 1997).
Since that time, New Zealand employment relations system has progressed from one which provided
virtually no protections for trade unions and in particular collective bargaining, to a system that now
relies on the duty of good faith to protect and promote collective bargaining (Davenport & Brown,2002). Under its core conventions, collective bargaining is recognised by the International Labour
Organisation (ILO) as an effective tool to protect those in weak bargaining positions. It is also
acknowledged internationally as a means of overcoming any power imbalance between employers andemployees which may result in unjust employment terms and conditions. An essential component foreffective collective bargaining, therefore, is that the representative bodies on both sides have relatively
equal bargaining power. This typically necessitates appropriate legislative support to enhance thebargaining power of the weaker party (Goldberg, Sander & Rogers, 1992).

*

Dr Stephen Blumenfeld is the Director of Centre for Labour, Employment and Work, Victoria University, Wellington.
Contact: stephen.blumenfeld@vuw.ac.nz

70New Zealand Journal of Employment Relations, 40(1): 70-86
With this purpose in mind, both key pieces of employment legislation enacted in New Zealand in thepast quarter century were, in large measure, intended to enhance the relative bargaining power of either
the employer party, in the case of the ECA, or the employee party, with enactment in October 2000 of
the ERA. Often, the means by which these opposing policy goals is effected is either by making it easieror more difficult for trade unions to organise workers, depending on where those setting the policy
believe the balance of power in collective bargaining falls. In this context, legislation enacted to amend
those statutes in that period has, likewise, frequently been aimed at giving greater influence to one partyor the other (Blumenfeld, 2010).

Freedom of Association and the Right to Collective Bargaining Under the ERA
Freedom of association and the right to organise, as enshrined in the ILO’s core conventions on thosematters, form the conditio sine qua non for effective collective bargaining to take place. The viability ofcollective bargaining as an institution rests on the existence of a process of representing groups ofworkers who share a common interest in its outcomes (Blanpain & Colucci, 2004). To that end, in nearly
all industrialised and developing countries, trade unions fulfil this role by negotiating their members’
terms and conditions of employment. Nonetheless, if collective bargaining is to have a meaningful
impact on those terms and conditions, its ‘reach’ or influence must extend to a significant proportion of
the workforce. For this to happen, both parties to collective bargaining – unions and employers – must
be free to exercise the right to form and join representative organisations of their own choosing (Traxler,
1998).
Yet, notwithstanding that the law surrounding ‘good faith’ in collective bargaining was placed as thecentrepiece of the country’s employment relations system, the employment law reforms undertaken
following election of a Labour-Alliance coalition overnment in November 1999 did little to change
either the form or extent of collective bargaining in New Zealand (Anderson, 2010). Those reforms, as
enshrined in the original ERA, were aimed at augmenting trade union recognition and power by
restoring unions’ pre-ECA monopoly rights to bargain collectively and regulating the behaviour of theparties in collective bargaining. In this regard, the ERA introduced a number of changes to New
Zealand’s law regulating bargaining, including:









requiring ‘good faith’ bargaining;extending coverage to all union members falling within the coverage clause of a collective
employment agreement(CEA);
enhancing access rights for unions to workplaces;
limiting ‘direct dealing’ and communication with employees during bargaining;
restricting strike-breaking by employers;
extending the right to strike to secure a multi-employer collective agreement;
allowing unions a 20-day advantage when initiating bargaining of an existing CEA; andextending terms and condition up to 12 months during renegotiation of an expired CEA.

Early in its second term, the Labour Government initiated further legislative reforms aimed at bolstering
support for ‘good faith’ bargaining by placing restrictions on employers’ ability to ‘pass on’ terms andconditions determined through collective bargaining, as well as imposing specific requirements on
employers during restructurings. Legislation enacted in December 2004 made ‘passing on’ terms andconditions agreed in collective bargaining to employees covered under individual employment
71New Zealand Journal of Employment Relations, 40(1): 70-86
agreements with the same employer unlawful if done where the employer’s intention is to undermine theunion’s effort to achieve a collective agreement. In addition, new rules were imposed on employers
restructuring of their business where the restructure involves ‘vulnerable workers’ and mandate that all
employment agreements – collective or individual – contain an employment protection provision.
Amendments to the ERA which were enacted in 2004 also augment the ‘good faith’ requirements byrequiring parties involved in bargaining to conclude a collective agreement in the absence of a genuine
reason not to do so, notwithstanding any deadlock over particular matters. At the same time, theEmployment Relations Authority was empowered, upon referral from either party, to ‘facilitate’bargaining where bargaining has reached an impasse. As part of this process, the Authority was also
granted the power to make recommendations about the bargaining process and to stipulate provisions
that must be included in the new collective agreement. This implies that, where a serious and sustained
breach of the duty of good faith has occurred, the Authority now has jurisdiction to determine and fix
provisions of the CEA.

Holidays Act Amendments Under National
Notwithstanding its promise during the run up to the 2008 general election that it would not make any
significant change to New Zealand’s employment laws during its first term, changes were made to theby the National to the Holidays Act 2003, in particular, during that time. These changes include
allowing employees to negotiate the transfer of a public holiday to another day, allowing employees totake a week’s pay in lieu of their fourth week entitlement to annual leave under the Act, and doubling
the penalties for employers who breach the Act. Changes under the Holidays Amendment Act 2010 also
allow employers to require proof of sickness or injury from first day of illness or injury, albeit at theemployer’s expense.
With respect to employer policies ruling out transferring a public holiday to another day, an employer
may now adopt a policy that the whole or part of its business will not enter into an agreement to transfer
a public holiday. Employees now also have the option, upon agreement with their employer, to cash intheir fourth week of annual leave, an entitlement extended to all employees under the previous
government, hence allowing employees to take three weeks’ holiday and be paid for the fourth whilestill working. The maximum penalties for non-compliance with the Holidays Act increased from $5,000
to $10,000 if the employer is an individual, and from $10,000 to $20,000 if the employer is a company
or other body corporate. These changes all took effect on 01 April 2011.
Additionally, for work on public holidays, alternative holidays, sick leave and bereavement leave an
employee is now entitled to be paid either their ‘relevant daily pay’ or ‘average daily pay’. An employer
may now use the latter where it is not possible or practicable to determine relevant daily pay, or where
the employee’s daily payment varies within the pay period in which the holiday or leave falls. In
addition, the calculation of average daily pay has also changed, from the average of the four calendar
weeks before the end of the pay period immediately before the calculation is made, to an average overthe 52 calendar weeks before the calculation is made. As of 1 April 2011, where an employer andemployee cannot agree on what day the alternative holiday should be taken, employers now have thefinal say, on a reasonable basis, as to when an alternative holiday is taken. Employers will be able togive employees 14 days’ notice of when they require them to take the alternative holiday.

72New Zealand Journal of Employment Relations, 40(1): 70-86
In spite of these changes made in its first term to the Holidays Act, along with its coalition partner Act,
National did not support a private member’s bill introduced by Labour MP David Clark to ‘Mondayise’
Waitangi day and ANZAC day during its second term. Nevertheless, in April last year, the Holidays(Full Recognition of Waitangi Day and Anzac Day) Amendment Bill narrowly passed its third readingby 61 votes to 60, with the effect that, if either Waitangi Day or Anzac Day should fall on a Saturday or
Sunday, for those employees who would not work otherwise work on that day, the public holiday mustbe treated as falling on the following Monday. While the Transport and Industrial Relations SelectCommittee, which had a National party majority, had recommended that the Bill not be passed, theLabour and Green select committee members released minority views in support of the legislation,
which will not have any practical effect until 2015, with that year being the next time either Waitangi
Day or ANZAC Day will fall on a weekend.

90-day Trial Periods Legislation
Also in its first term, John Key’s National-led Government introduced 90-day grievance-free trial
periods. Under the changes enacted under the Employment Relations Amendment Act 2008, workers
employed in New Zealand by small and medium enterprises of fewer than 20 workers are permitted tohire workers on a grievance-free trial basis without the right of appeal against unfair dismissal in first 90
days, regardless of the reason for the dismissal. In fact, no reason need be provided by the employer forthe dismissal. The 2008 Act also repealed the right of an employee to bring a personal grievance if theemployee is treated on a different basis as a result of being a member of Kiwisaver. Two years later,
under changes enacted in the Employment Relations Amendment Act 2010, the 90-day trial period
provisions were extended to include all employers, in particular those with 20 or more employees. As aconsequence, all employers in New Zealand are now entitled to include a 90-day trial period in a new
employee’s employment agreement.

Changes to Collective Bargaining Under National
Under the Government’s package of proposed reforms, employers would be permitted to opt out ofmulti-employer bargaining at the beginning of the bargaining process, if they elect to do so. Specifically,
the Employment Relations Amendment Bill 2013 provides that, where an employer is an intended party
to such an agreement and has received a notice initiating bargaining for that agreement, the employer
may opt out of bargaining by giving a written opt-out notice to all other intended parties identified in thenotice initiating bargaining not later than 10 days following receipt of that notice. The notice would takeeffect on the date this notice is given, whereupon the employer is no longer a party to bargaining for thecollective agreement and ceases to have any further obligations under the ERA.
National also has proposed equalising the timeframes in which the parties have to initiate bargaining,making it more difficult for unions to determine the form and scope of collective bargaining. In
addition, National intends to remove employees’ automatic entitlement to meal and refreshment breaks,
although the legislation would still require the employer to offer compensatory measures. If theemployer and employee cannot agree on those measures in terms of other breaks, though, the employer
will maintain the right to unilaterally decide what compensatory measures will be provided.

73

New Zealand Journal of Employment Relations, 40(1): 70-86
Another Labour-backed private member’s bill, the Parental Leave and Employment Protection (SixMonths’ Paid Leave) Amendment Bill, extending paid parental leave from 14 to 26 weeks, wassuccessfully blocked by National from passing in this Parliament, with National holding Peter Dunne’s
proxy on procedural matters. Both the Maori Party and United Future MP Peter Dunne, who usually
vote with National, had previously supported the Bill, introduced by Labour MP Sue Moroney. Finance
Minister Bill English had indicated that, had the bill passed, the Government would have used its special
financial veto power to stop it becoming law. Despite this, earlier this year, the Government’s Budget
included extending parental leave from the current 14 to 18 weeks, and the Government has recently
released a discussion document on its proposal to make paid leave available to non-parent carers andparents in casual or new jobs, along with more flexibility around unpaid leave.
The changes proposed in the collective bargaining regime by the current Government in its most recent
Employment Relations Amendment Bill, which is currently stalled in Parliament and unlikely to beacted upon until after the general election in September, are aimed at removing what it contends aresome of the obstacles employers presently face when engaged in collective bargaining. In particular, theGovernment proposes a return to the original position in the ERA where the duty of good faith does not
require the parties to conclude a collective agreement. The Act currently provides that the duty of goodfaith requires a union and an employer bargaining for a collective agreement to conclude a collective
agreement, unless there is a genuine reason, based on reasonable grounds, not to. The 2013 bill provides
that the duty of good faith does not require those parties in those circumstances to enter into a collective
agreement or to agree on any matter for inclusion in a collective agreement.
In proposing this change to the country’s employment laws, the Government has highlighted what it
perceives are the destabilising effects of the requirement to conclude bargaining. It is perhaps ironic,
therefore, that the requirement to settle was given greater emphasis a decade ago – albeit under aLabour-led Government – when the Act was amended at the end of 2004 an effort to further promote thevirtues of ‘good faith’ employment relationships. The Employment Relations Amendment Act (No 2),
which came into effect on 1 December 2004, more than four years after the initial enactment of the
ERA, offered greater legislative support for collective bargaining by requiring that:

employers not discourage employees from participation in collective bargaining or from being
covered by a CEA;
employers and unions who are deadlocked on a specific issue must continue bargaining on otherissues; andcollective bargaining must lead to a CEA unless there are ‘genuine reasons’ not to; these reasonsmust be based on ‘reasonable grounds’.1

The ERA was also amended at that time to prevent employers from automatically passing oncollectively-bargained terms and conditions to employees who are not part of the collective bargaining
process or covered by the CEA. This particularly includes non-union employees whose work falls under
the coverage clause of that agreement. A breach of good faith can occur, though, only if the employer
has deliberately sought to undermine the bargaining process or the CEA. As such, most employers
negotiate, ex post collective bargaining, very similar if not the same terms and conditions with their nonunion employees. Through emphasising the application of the ‘good faith’ requirement to individual
1

Grounds that are not reasonable include opposition or objection in principle to collective bargaining or
agreements, or disagreement about the inclusion of a bargaining fee clause in a CEA.

74

New Zealand Journal of Employment Relations, 40(1): 70-86
agreements, the 2004 amendments require that those agreements be based on ‘genuine’ individual
bargaining.
Under the Government’s proposed changes to New Zealand’s collective bargaining regime, theEmployment Relations Authority would be empowered, in certain circumstances, to declare thatcollective bargaining has ended. Currently, the law requires that that the parties conclude a process ofcollective bargaining, unless there is ‘a genuine reason, based on reasonable grounds’ not to. This iswhat prevented the employer in the long-running dispute at the Ports of Auckland from declaring all its
workers jobs redundant and effectively sacking striking dock workers at the Port. This change, though,will afford employers the right throw in the towel at any point during bargaining at which they are
frustrated in their efforts to reach agreement with a union, and the union and its members will have norecourse. Equally, employers will be able use the threat of contracting out the jobs of striking workers tocompel agreement on their terms.
National contends that this law change would result in less protracted interest disputes, as bargaining
will simply be declared to be at an end in such situations. Under this proposal, either party bargaining
for a collective agreement may apply to the Employment Relations Authority for a determination as towhether the bargaining has concluded. The Authority may then make such a determination if it issatisfied that the parties have attempted to resolve all issues in dispute by way of mediation and, whereapplicable, facilitation under the Act, that that those attempts have failed, and that further attempts areunlikely to be successful.
When called upon to make such a determination, the Authority may make a declaration that bargaining
has concluded or that bargaining has not concluded, in which case it may make a recommendation to theparties as to the process they should follow to resolve the difficulties. Where the Authority determinesthat the bargaining has concluded, none of the parties to the bargaining may initiate further bargaining
earlier than 60 days after the date of the declaration, unless the other parties agree to this. Where theAuthority determines that bargaining has not concluded, none of the parties may make anotherapplication for such a determination from the Authority, until the recommended process has been
followed or until 60 days after the Authority’s determination unless the other parties agree.
The Employment Relations Amendment Bill 2013 would effectively remove the wording in the Act
which prevents employers from refusing to engage in collective bargain, preferring instead to place allof their employees on individual employment agreements. If enacted, these changes will significantly
impact collective bargaining, as it implies employers can engage instead in ‘surface bargaining’, astrategy in collective bargaining in which one of the parties merely goes through the motions ofbargaining, with no intention of reaching an agreement. Further to this, where bargaining is deemed tohave ended, the expired collective agreement is likewise deemed to be no longer in effect, the union
cannot reinitiate bargaining for at least 60 days, and the employer can place all of its employees on
individual agreements and restructure its business, as the good faith bargaining rules no longer apply.

Workplace Access and Union Delegate Rights
The 2010 reforms to the ERA also reduced rights of union to access workplaces in order to meet eitherwith their current members or with prospective members. These changes imply that employers canrefuse a union access to the workplace, at least for a period of time. Union representatives now must ask
for the employer’s consent before entering a workplace, and the employer must respond by the75New Zealand Journal of Employment Relations, 40(1): 70-86
following working day. If denied access, the union representative must be given written reasons no later
than the following working day. An employer who fails to respond to an access request within two
working days is taken to have given their consent, though, and penalties can be imposed if consent isunreasonably withheld or written reasons for withholding consent are not provided.
Other legislative reforms under National during its first term impacted workers and employment
relations in New Zealand. Among the more controversial changes, the Employment Relations (Film
Production Work) Amendment Act 2010 effectively removes the right of those working in the film
industry to query whether their contract is in fact a contract of service and the worker technically an
employee, rather than a contractor under a contract for service. As a consequence of this legislation,
workers in New Zealand’s film industry have less protection than workers in other industries, who arestill able to challenge their employment status on the grounds that, despite the wording of their contractsuggesting the contrary, they are in fact an employee and have the rights and entitlements which flowfrom that, including entitlement to be paid at least the statutory minimum wage and holiday pay inaccordance with the Holidays Act.

Changes to the Rules Pertaining to Industrial Action
Under National MP Tau Henare’s member’s bill on secret ballots for strikes, the Employment Relations(Secret Ballots for Strikes) Amendment Act 2012, which took effect on 15 May 2013, all proposed
strikes must be voted upon with a majority of members of the union potentially affected by the strikevoting in favour of the proposed industrial action before that action is considered lawful. This change tothe legislation governing strikes, which does not apply to strikes that relate to health and safety issues,requires union rules to provide for secret ballots for any strike. Where a union’s rules do not provide a
process for holding a secret ballot, transitional provisions require a union to amend their rules no later 14
May 2014.
Despite this change to the legislation governing a union’s conduct when considering recommending
strike activity, it has long been the case that most trade unions in New Zealand have imposed uponthemselves these same requirements on strike ballots of their members. Yet, while most unions have notneeded to change their rules as a consequence of this change to the ERA, the passing of a law requiring
unions to conduct a secret ballot of their members before going on strike points to yet another exampleof the Government attempting to gain greater control over union affairs. Further to this, this change to
the Act does not impose a similar restriction on company boards or employer associations in a lockout.
National also supported a National MP Jami-Lee Ross’s private member’s bill, the Employment
Relations (Continuity of Labour) Bill, which would allow employers to bring in other workers who do
not normally do that work when there is a strike. The purpose of this bill was to repeal Section 97 of the
ERA, which currently prevents the use of volunteers, contractors, or other casual employees by an
employer during a strike or lockout. While unions would maintain the ability to strike, if this bill had
passed, the law change would have given employers the ability to replace striking workers temporarily
and maintain business continuity during a work stoppage. Its impact would have been to weaken
bargaining strength of workers and reduce the effectiveness of strikes. The bill was, nevertheless, voted
down by Parliament by the narrowest of margins, 61 to 60, at its first reading in November last year.
Despite failure of the Employment Relations (Continuity of Labour) Bill, as part of its package of
proposed changes to the ERA under the Employment Relations Amendment Bill 2013, National76

New Zealand Journal of Employment Relations, 40(1): 70-86
continues to support changes to strike notice requirements. At present, the ERA places strict noticerequirements on unions representing workers in essential industries, such as hospitals. The
Government’s proposed change in this regard would impose a requirement on unions in all industries toprovide written notice of their intention to strike and further written notice if they decide to withdraw thenotice. This would apply to all forms of industrial action by unions, regardless of duration or form.
National has also proposed allowing for partial pay reductions where employees have engaged in partial
strike action, such as work-to-rule or work slowdowns. It remains unclear, though, how employers might
determine any pay reduction. Currently, employers typically make this assessment on a ‘time-lost’ basis,but this is feasible only where some or all employees wholly withdraw their labour services, as in thecase of ‘rolling’ strikes, a partial strike tactic employed in the past across the education sector, including
at several ITPs and universities. The impact of this proposed change will depend on whether any suchpay reduction is measured purely on a ‘time lost’ basis or whether employers are somehow able to takeaccount of the ‘quality’ of the work not performed. To the extent to which employers are able to do this,the new rules pertaining to industrial action could potentially be used to hinder work-to-rule efforts orother situations where employees are able to structure their work so as to cause maximum disturbancefor minimum time off.
National’s proposed change implies that an employer would be able to deduct an estimated amount of
pay where workers are still working but refuse to do any part of their normal work, for example when
workers have decided as a form of lawful strike action during collective bargaining that they would not
answer phones for a period. The union could challenge the rate of deduction through a legal process.
However, the employer could instead opt for a standard deduction of 10 per cent. This will obviously
discourage workers from taking even limited strike action. The employer, however, can suspend striking
workers or lock them out. Hence, this proposed change, if enacted, would add another sanction toemployers arsenal of economic actions they have available to impose in a strike situation.

Proposed Changes to Part 6A
Another area where change has been proposed is in Part 6A of the ERA, under which ‘vulnerable
workers’ have the right to elect to transfer to a new employer on their same terms and conditions of
employment in sale-of-business or contracting situations. At present, although a new employer isrequired to take on the old employer’s annual and sick leave liability, the Act is silent with regard which
employer, the predecessor or successor, should bear any cost involved in the transfer. Previously, theHigh Court had ruled that a predecessor employer bears the onus of paying the cost of these accrued
liabilities, and it is likely that the change process established under these administrative amendments toPart 6A will comply with this ruling. The Government’s proposed changes also will impose arequirement that the predecessor employer provide individual employee information, including any
operative employment agreement and PAYE records, to the successor employer, as well as arequirement that employees must transfer to a new employer within five working days. Additional
penalties and compliance orders for non-compliance with Part 6A will also apply.
In addition to these other proposed changes to the requirements under Part 6A, the most significant
change proposed in this regard is an exemption for successor employers employing fewer than 20
employees from the provisions of Part 6A. On the face of it, this change in the legislation appears tobenefit small and medium size businesses, which will now face lower compliance costs, hence giving
those employers an advantage in tender situations. A likely unintended consequence of this change,
77New Zealand Journal of Employment Relations, 40(1): 70-86
however, would be to encourage larger employers to franchise, as there appears to be nothing in the newlegislation which would stop larger contracting firms from forming small or medium-sized subsidiaries
in an effort effectively to skirt the law. Therefore, while additional penalties and compliance orders for
non-compliance with Part 6A will also be introduced as part of this package of legislative changes, forthe most vulnerable of workers in New Zealand, this one change may effectively remove any protection
they may have gained when Part 6A was first introduced into the legislation in 2004.
Other changes to the Act proposed by National are ostensibly intended to clarify that employers candirectly communicate with employees during collective bargaining and can include details of any
settlement offer. Under Section 4 of the ERA, which concerns good faith employment relations, anemployer may communicate with employees during collective bargaining, provided the requirement thatthe parties deal with each other in good faith is observed. These include that the employer recognises
the role and authority of its employees’ chosen union representative, that it does not attempt to bargain
directly or indirectly with those employees, and that it does nothing to undermine the bargaining or theauthority of the union or its representative. In these respects, any communication by the employer must
be consistent with the employer’s overriding duty of good faith under the ERA. Despite thisrequirement, an employer is permitted to provide employees with factual material about the bargaining
such as the employer’s proposals for the collective agreement.

Removal of Protection for New Workers
A further change proposed by the Government in its stalled Employment Relations Act amendments isremoval of the ‘30-day rule’, which requires non-union members to be employed under the terms andconditions of any collective agreement in force which covers their work for the first 30 days of theiremployment. Currently, under s 62 of the ERA, a new employee appointed to a position covered by a
CEA has two options, depending on their union membership status. On the one hand, if the employee isa member of a union that is party to the CEA and that agreement covers the position in which theemployee is employed, the employee is bound by the CEA. Alternatively, where the employee is not amember of a relevant union, for the first 30 days they are employed on an individual agreement withterms and conditions identical to those found in the collective. Only at the expiry of this 30-day period,and providing the employee does not subsequently become a union member, can the new employee’s
terms and conditions be varied without regard to the terms of the collective agreement.2
Notwithstanding this status quo, repeal of the 30-day rule for new employees will allow employers
covered by a collective agreement to employ new non-union employees on individual terms andconditions, offered by the employer and accepted by the employee, at the onset of employment. Thischange will force a new worker to choose straight away whether to join the union and be covered by thecollective or to agree to the employer’s terms and conditions under an individual employment
agreement, hence making them vulnerable to pressure from the employer to accept a worse offer. All
any non-union employee needs do in order to gain access to the terms and conditions of any collective
agreement covering their work, though, is simply join the union that negotiated that agreement. Hence,
there remains little incentive for employers to alter terms and conditions negotiated with their unionised
2

By contrast, the ECA did not require that existing collective employment contracts be extended to cover new
employees. The matter of extension was yet another issue over which the parties to a collective contract could
negotiate (Foster, Murrie & Laird, 2009).

78

New Zealand Journal of Employment Relations, 40(1): 70-86
employees’ union representatives when determining what terms and conditions to offer to their nonunion employees or, in particular, those who are newly hired.

Flexible Working Conditions
Cabinet has also approved, as part of these changes to New Zealand’s employment laws, extension to all
employees of the right to request, from their first day on the job, flexible working arrangements forwork/life balance reasons – such as shortened days, working from home, job sharing and compacted
weeks. Previous to now, this entitlement was limited to those with caregiving responsibilities. The
primary drawback to this proposed change is, therefore, that workers with caregiving responsibilities
will henceforth have to compete for this benefit along with all other employees desiring greater worklife balance. Given that employers are under no obligation to grant any request made under thislegislation as it currently stands, this change will obviously render it less likely that those whom the law
was originally intended to help will in fact get that assistance. Changes to the process that employees
must follow when making a flexible working request have also been proposed, including a reduced onemonth period within which employers must make a decision on any request.
The legislation, if enacted, will also provide employers with more flexibility in determining rest andmeal breaks. If the employer and employee cannot agree upon when a rest or meal break is to be taken
or for how long, the employer may specify times and durations that best suit the employer’s operational
environment or resource needs. Rest and meal breaks need not be provided if the employer andemployee can agree on compensatory measures or if the employer cannot reasonably provide breakperiods, given the nature of the employee’s work. Nevertheless, where rest and meal breaks are notprovided, reasonable compensatory measures must be available, such as time off work.

Individual Terms and Conditions and Due Process
If an employer and employee have entered into an individual employment agreement or have bargainedfor individual terms and conditions, the employer must keep a signed copy of the agreement or of thecurrent terms and conditions under which the employee is working. If the employee has given theemployee a copy of an intended agreement, the employer must keep a copy even if the employee has not
signed it, or has not agreed to any of its terms and conditions. (‘Intended agreement’ also includes partof an intended agreement.) The employer must not treat an intended agreement as the employee’s
employment agreement if the employee has not signed it or agreed to any of its terms and conditions. In
such cases, the employee’s terms and conditions will be governed by common law. This particularprovision came into force on 1 July 2011. An employee who asks for a copy of either a signed orunsigned intended agreement (or of any signed or unsigned terms and conditions) must be given a copy
‘as soon as is reasonably practicable’. Failure to comply can result in an action brought by a labour
inspector and a penalty imposed by the Authority. Before bringing an action, the labour inspector must
give the employer seven days to remedy the breach.
The due process requirements of dismissal have also steadily eroded under National Government. The
2011 amendments to the ERA, which ostensibly add clarification of the process requirements, set out
factors the Employment Relations Authority or Court must consider in unjustifiable dismissal cases. In
particular, the range of reasons an employer could use to justifiably dismiss a worker was broadened by79New Zealand Journal of Employment Relations, 40(1): 70-86
changing the test of justification from what a reasonable employer ‘would’ have done to what areasonable employer ‘could’ have done. The specific areas that must be considered in weighing up if thetest of justification has been met are:






whether having regard to the resources available to the employer, the employer sufficiently
investigated the allegations against the employee before dismissing or taking action against theemployee;
whether the employer raised the concerns that the employer had with the employee before
dismissing or taking action against the employee;
whether the employer gave the employee a reasonable opportunity to respond to the employer’s
concerns before dismissing or taking action against the employee;
whether the employer genuinely considered the employee’s explanation (if any) in relation to
the allegations against the employee before dismissing or taking action against the employee;and,any other factors the Authority or Court considers appropriate.

Other factors that may be considered are likely to include issues such as advising the employee of theirright to representation and indicating how seriously the employer views the matter. Importantly,
amendments to the good faith disclosure of information provisions in National’s package of reforms
mean employers will be able to withhold evaluative material that formed the basis of an employer’s
decision to dismiss the employee, either on the grounds of redundancy or for any other cause. To thisend, the new legislation would effectively overturn the Employment Court’s 2011 decision in ViceChancellor of Massey University v Wrigley, in which two employees of Massey University and membersof the TEU were determined to have the right to access confidential information during a restructuring.

Changes to the Minimum Wage and Minimum Wage Review Process Under
National
With regard to the statutory minimum wage, in its first term, the fifth National Government increased
this from $12.00 to $13.00 an hour, and to $14.25 an hour in its second term, which amounts to an
average annual increase in the nominal minimum employers in New Zealand must pay employees of 3.1
per cent, far short Helen Clark’s Government’s nominal 7.9 per cent average annual increase in the adultminimum wage. In 2012, Cabinet also agreed to adopt a cyclical process for the review of the minimum
wage rate. The process comprises a comprehensive review to be completed every fourth year, with astreamlined process in the intervening three years focussing on fewer key factors and with limited
formal consultation. Under this streamlined process, the issues under consideration each year will belimited to cost of living and effect on employment, and equity considerations may be made only every
fourth year.
Furthermore, with enactment of the Minimum Wage (Starting-out Wage) Amendment Act 2013, which
took effect on 01 April 2013, National reduced the minimum wage for workers aged 16 to 19 to 80 per
cent of the adult rate. For those of either 16 or 17 years of age, this applies for any six month period
from when they start a job. For those aged 18 or 19 years who have been on a benefit continuously for atleast six months prior to commencing employment, this alternative minimum wage applies for a periodof six months. The implication of this is that an 18-year-old who had previously worked for two years
but was then on a benefit for six months can be paid 80 percent of the minimum that a new worker of 18
80

New Zealand Journal of Employment Relations, 40(1): 70-86
years of age with no experience can be paid.

An Assessment of National’s Proposed Changes on Collective Bargaining
In general, the changes to the collective bargaining regime approved by Cabinet last year aim to remove
provisions crucial to unions and union security in New Zealand. In particular, the Government intends
to remove the ‘good faith’ requirement that the parties to collective bargaining conclude a collective
agreement. In ‘certain circumstances’, the Employment Relations Authority will be empowered todeclare collective bargaining has ended. What ‘circumstances’ in which the Authority will elect tointercede is anyone’s guess, although negotiations that extend beyond 12 months – a seemingly growing
phenomenon in New Zealand – would seem to be what the Government most desires to curtail with thischange. Yet, despite National’s proposed changes to the wording of the Section 4, because directcommunication with employees was never prohibited under the Act, it is unlikely those changes will
have any real impact on collective bargaining or on either party’s conduct and communications duringcollective bargaining.
Another change proposed by the current Government will undermine the ERA’s support for multiemployer bargaining, such as the Nurses’ multi-employer collective agreement (MECA), which covers
all District Health Boards. The Government contends its proposal to allow employers to opt out of
MECA bargaining is intended to expedite the time devoted to bargaining with unwilling employer
parties. Nevertheless, by allowing employers to opt out of multi-employer collective bargaining,bargaining in the public sector, where most multi-employer bargaining currently takes place, will likely
be impacted. In addition, this change would remove the right of union members to strike to secure a
multi-employer collective agreement, marking a return to the position under the ECA. This, of course,
is a double-edged sword: unions will no longer have – if they ever did – the ability to compel employers
into MECAs to which they have no desire to be party, but neither will employers be able to compel
unions into undesirable multiparty bargaining arrangements.
Yet, despite the fact that unions have had this right, experience has proven that it is nigh impossible forunions to compel intransigent employers to agree to a bargaining process which would lead to a MECA,
let alone engage in multi-employer bargaining beyond those initial meeting of the parties. Achieving
such agreements is ultimately dependent upon the wilful acquiescence of all parties to the proposed
multiparty bargaining structure (Foster et al., 2009).
In addition, National’s proposal to change the strike notice requirements would allow a period of timefor employers to influence the work environment to avert the impact of industrial action and make pay
deductions from the onset of industrial action. As it would apply to unions in all industries, the purposeof this change does not appear to relate to public interest, as does the current strike notice requirements
applied to union representing workers in essential service. Also, despite that penalties are now in place
for unreasonable denial of a union access to a workplace, the 2010 amendments to the Act also removed
reinstatement as a primary remedy for dismissal. This renders union delegates and activists vulnerable todismissal, as the employer is less likely to be required to reinstate the worker, even if the dismissal isdetermined to have been unjustified. In sum, the intent of these legislative changes appears to be toplace further limits on unions’ ability to operate effectively in the workplace, hence weakening unions’power during collective bargaining.

81New Zealand Journal of Employment Relations, 40(1): 70-86
Despite National and Act rejecting the Holidays (Full Recognition of Waitangi Day and Anzac Day)
Amendment Bill and the Prime Minister’s unsuccessful effort to pressure coalition partner Peter Dunne
into changing his vote, the Government elected not to exercise its financial veto to stop the bill. The
significance of this with respect to proposals from National to amend New Zealand’s employment lawsis that the Government’s other coalition partners, United Future and the Maori Party, supported thislegislation. Furthermore, the Government’s proposals regarding extending paid parental leave
entitlements have no doubt been influenced by the fact that opinion polls indicate strong support forfamily-friendly policies from the voting electorate, and this being an election year.
The desire to avoid a perception that it is anti-worker has also likely influenced the Government’s
support for other measures which, on their face, might appear antithetical or counter to its neo-liberalpolitical philosophy. In particular, despite its lack of support for most legislative measures to extend
statutory entitlements for workers, National has introduced changes on foreign charter vessels (FCV),
health and safety and migrant worker rights during its second term. For example, while no legislation
has been enacted yet, as a result of a ministerial inquiry into the treatment of crew aboard South Korean
fishing boats working New Zealand waters, the Government has declared its intention to end the use of
FCVs, which will now be required to reflag to New Zealand and follow New Zealand’s employment
laws. Furthermore, in the aftermath of the Pike River disaster, National is proposing to place anincreased onus on employers in matters related to health and safety, including a duty on directors, chief
executives and others in governance roles to be pro-active in health and safety, with significant liability
if this duty is not met.
Perhaps the biggest threat to union security under changes to the collective bargaining regime approved
by Cabinet in May 2013 but still awaiting enactment more than a year later is the proposed removal ofthe ‘30-day rule’, which requires that non-union workers be employed, for their first 30 days of theiremployment, under the same terms and conditions as those in any collective agreement covering theirwork. Currently, a new worker in a workplace hired to perform work which is covered by a collective
employment agreement is automatically employed on the basis of that collective agreement for their first
30 days of employment. This is intended to protect newly hired workers from being offered inferior
terms and conditions to those enjoyed by all others doing that work for the employer. Yet, under thechanges proposed by National, employers will be able to employ workers who are not union members
on individual terms and conditions offered by the employer and accepted by the employee, from day one
on the job.
Furthermore, despite the fact that there would still appear to be a clear disincentive to employers,offering worse terms and conditions under individual agreements to new employees, this change willundoubtedly make it easier for employers to undermine the collective agreement and employ casuals on
lower rates. To that end, the Cabinet briefing paper to the Minister of Labour from the Cabinet
Economic Growth and Infrastructure Committee notes:
Repealing the 30-day rule will provide employers with more flexibility on what they are able tooffer new employees as their starting terms and conditions of employment. It will enable
employers to offer individual terms and conditions that are less than those in the collective
agreement.
Further to this, in the long run, this will undermine all workers’ terms and conditions, including those
covered by the collective. This change, in addition to the others National proposes aimed at limiting the82New Zealand Journal of Employment Relations, 40(1): 70-86
power of unions in collective bargaining, will no doubt discourage workers from getting involved incollective bargaining and from being part of the union.
Moreover, this change will likely have a negative impact on union membership of more vulnerable
workers, in particular, as new workers will be employed on terms that are inconsistent with thecollective agreement and may fear adverse consequences if they, then, opt to join the union and,
therefore, the collective agreement. In addition, workers on 90-day trial periods may be hesitant to join
the union and, thereby, the collective agreement, given that their employment may be terminated during
the first 90 days for any or no reason at all. As it currently stands, though, those fears are likely allayed
to a large extent by the offering by the employer of terms and conditions that are identical to those under
the CEA. This was the primary intent of the 30-day rule when it was first enacted in October 2000, to
ensure that those vulnerabilities of new workers are not exploited. Furthermore, under theGovernment’s proposed changes, new employees will need to be made aware of any collective
agreement covering their work by someone other than their employer, as is presently the case.
As there is a significant imbalance of bargaining power in favour of the employer at the point of
accepting a new job, new workers may be compelled to agree to worse terms and conditions thanexisting workers. In this respect, the 30-day period, as it now applies, offers a significant protection for
new workers while they get information and experience in the workplace. As it currently stands, the
ERA effectively provides for the automatic extension of the terms and conditions of a collective
agreement to all new employees whose work falls under the coverage clause of that agreement,
regardless of the union status of those employees (the ‘free rider’ issue). Importantly, even after the
expiry of the initial 30-day period, individual employees who decide not to join the union will retain theterms of the collective as an individual agreement until variations are agreed. The individual employee
is, therefore, in a strong bargaining position, even if they do not join the union.

Labour’s Proposed Changes to New Zealand’s Employment Legislation
At its annual conference last year, the New Zealand Labour Party (NZLP) changed its constitution,
giving its affiliated unions a 20 per cent share of the vote for party leader, hence, underscoring theimportance of employment policy to its members and as an election issue. It was virtually inevitablethen that distinctions between Labour’s and National’s approach to employment law were prevalentduring the contest for leadership of the NZLP between David Cunliffe, Grant Robertson and Shane
Jones later in the year. Not surprisingly, all three pledged to roll back a number of National’s
employment law changes and highlighted specific changes they would make following a Labour Party
victory in the 2014 general election.
During the recent contest for leadership of the NZLP, David Cunliffe, the eventual victor in that contest,
highlighted some of the fundamental employment law changes he would make if he were the Prime
Minister following the next general election, which is set for this September. Labour has argued thelegislative changes enacted at the end of 2013 and initially set to take effect in 2014 will allow
employers to refuse to negotiate a collective agreement with their employees, pay new workers less than
the rate in the collective agreement, opt out of industry agreements in order to undercut their competitors
on wages, deny workers meal and rest breaks, reduce the wages and conditions of vulnerable workers,
such as cleaners when taking over a new contract, dock the pay of workers taking partial strike action,
impose more restrictions on the right to strike, and refuse to provide employees the information theyneed to challenge an unfair redundancy or dismissal.
83New Zealand Journal of Employment Relations, 40(1): 70-86

In October of last year, in his inaugural speech as party leader before delegates to the New ZealandCouncil of Trade Unions biennial conference in Wellington, the newly elected leader of the NZLP said
his party would focus on turning back the tide of ‘anti-worker’ legislation introduced under the National
Government. Labour MP David Cunliff promised to eliminate the ‘discriminatory’ youth wage, toconsider paying remissions on student loans to encourage selected professions into the regions, and toextend paid parental leave from 14 to 26 weeks in his first term. Labour has promised to up theminimum wage from $13.75 to $15.00 an hour, which would increase on an annual basis, andimplement the living wage of $18.40 an hour for the core public service. The Labour Party leader said
the scheme to ensure employers who paid a living wage were favoured when tendering for government
contracts would also be implemented as soon as possible. If elected, he hoped to extend paid parental
leave in the first term.
Among the recent changes to the ERA made by National which Labour has indicated it would reverse,
90-day grievance-free trial periods are the most prominent. Labour has also pledged to restore
reinstatement as a primary remedy for workers found to have been unjustifiably dismissed and to repeal
the changes affecting workers in New Zealand’s film industry as a consequence of the dispute arisingover production of the Hobbit films. All three candidates for the Labour Party leadership also pledged toraise the minimum wage to $15 an hour and pledged their support for a ‘living wage’, currently
reckoned to be $18.40 an hour, as a minimum for all government employees and contractors. Since thattime, Labour has declared its support for industry agreements between unions and employer
organisations, which would set a floor for employment standards across any industry in which such an
agreement had been reached.

Conclusions
The next New Zealand general election will be held Saturday, 20 September 2014, with the possibilityof further amendments to New Zealand’s employment laws being mooted in Parliament shortly
thereafter, depending on the outcome of that election. While it might seem surprising that employment
law would have salience as an election issue in New Zealand more than 14 years passed since the ERA
was first enacted, the regulation of employment relations in New Zealand has nevertheless been a
movable feast for nearly a quarter century now. When and if changes in the Employment Relations
Amendment Act 2013 are incorporated into the legislation, the ERA will have been amended and printed
in 25 versions since first being enacted in October 2000.
One of the objectives of the ERA 2000, as stipulated in Section 3, is the promotion of collective
bargaining as the preferred means of determining working conditions. A related objective of the Act is topromote observance in New Zealand of the principles underlying ILO 87 on Freedom of Association,
and Convention 98 on the Right to Organise and Bargain Collectively. These objectives were to beaccomplished primarily by means of the Act’s registration, access and bargaining provisions (Boxall,
2001). Despite these objectives, most of the reforms to New Zealand’s employment relations regime
enacted under the current National-led Coalition Government in its first two terms commencing in 2008,
as well as those reforms it proposes to enact either prior to or soon after the upcoming general election,
are effectively aimed at undermining these objectives of the ERA, as originally intended.
Furthermore, while legislation, in itself, rarely transforms the nature of specific employment
relationships, it can strongly influence the environment within which those relationships endure84

New Zealand Journal of Employment Relations, 40(1): 70-86(Traxler, 1998). Whether the goal to promote collective bargaining has yet been realised, let alone
whether the ERA is even capable of delivering such an outcome with its original framework, is still amatter for debate. What is clear, nonetheless, is that the a number of changes to New Zealand’s
employment legislation enacted since National formed the Government in November 2008 haverendered the prospect of promoting collective bargaining through that statutory enactment more remotethan ever, since the ERA was first enacted in October 2000.
It may, nevertheless, seem premature to be considering changes to the Act that might – and then again,might not – come into effect more than a year from now, especially in light of the fact that a number ofrecently enacted changes to New Zealand’s employment laws have yet to come into effect. NZLP,
though, has ensured that employment relations and the regulation of employment remain in the minds ofvoters throughout 2014. In particular, the constitutional change made at NZLP’s annual conference in2012 giving the Party’s affiliated unions 20 per cent of the vote for the Party’s leadership, underscores
the importance of employment rights to Labour’s overall political agenda, even several months out
before the next general election.
Further to this, less than a year out from the election, the National-led Government proposed amending
the legislation to provide greater flexibility for employers, including removing the requirement toconclude collective bargaining and saying when bargaining ends. Labour, on the other hand, is
proposing new industry standard agreements representing the minimum employment standards in aparticular industry, agreed between unions and employer organisations in that industry; to repeal manyof National’s amendments to the ERA, including 90-day probationary periods; to restore reinstatement
as a primary remedy for unjustifiably dismissed workers and to repeal the changes affecting film andtelevision workers as a consequence of the Hobbit crisis.
In general, changes to the collective bargaining regime approved by Cabinet aim to remove provisions
crucial to unions and union security in New Zealand. For one, the Government intends to remove the‘good faith’ requirement that the parties to collective bargaining conclude a collective agreement. In‘certain circumstances’, the Employment Relations Authority will be empowered to declare collective
bargaining has ended. What ‘circumstances’ in which the Authority will elect to intercede is anyone’s
guess, although negotiations that extend beyond 12 months would seem to be what the Government
most desires to curtail with this change.
Needless to say, however, there is genuine concern amongst all unions in New Zealand that collective
bargaining will simply be declared to be at an end if the employer and union reach a stalemate following
protracted negotiations. Although, given that the parties will still be required to bargain in good faithwith the intention of reaching an agreement, it is also hard to imagine any circumstance under which the
Authority would declare that bargaining had ceased. Therefore, a key conclusion of this analysis is thatlegislation enacted and proposed by National during its two terms are effectively aimed at re-balancing
rights within what is, more or less, the same decentralised wage-fixing framework as had existed under
the ECA 1991 (Geare, 2001).

85

New Zealand Journal of Employment Relations, 40(1): 70-86

References
Anderson, G. (2010). ‘The Sky Didn't Fall In’: An Emerging Consensus on the Shape of New Zealand
Labour Law? Journal of Labour Law, 23: 94-120
Blanpain, R., & Colucci, M. (2004). The globalization of labour standards: The soft law track. The
Hague: Kluwer Law International
Blumenfeld, S. (2010). Collective Bargaining in Erling Rasmussen (ed.). Employment Relationships:
Workers, Unions, and Employers in New Zealand (pp.40-55). Auckland: Auckland University Press
Boxall, P. (2001). Evaluating continuity and change in the ERA 2000. New Zealand Journal ofIndustrial Relations, 26(1): 27-44
Dannin, E. (1997). Working Free: The Origins and Impact of New Zealand’s Employment Contracts
Act. Auckland: Auckland University Press
Davenport G,. & Brown, J. (2002) Good Faith in Collective Bargaining. Wellington: LexisNexis
Butterworths
Foster, B., Murrie, J., & Laird, I. (2009). It takes two to tango: Evidence of a decline in institutional
industrial relations in New Zealand. Employee Relations, 31(5): 503-514
Geare, A. (2001). The Employment Contracts Act 1991-2000: A decade of change. New Zealand
Journal of Industrial Relations, 26(3): 287-306.
Goldberg, S., Sander, F., & Rogers, N. (1992) Dispute Resolution. Negotiation, Mediation, and Other
Processes. Boston: Little, Brown and Company.
Traxler, F. (1998). Collective bargaining in the OECD: developments, preconditions and effects.
European Journal of Industrial Relations, 4(2): 207-22686