Chris Trotter says employment law reform changes leave Labour’s ideological nakedness covered, business lobbyists quietly satisfied & Winston Peters claiming credit

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Winston Peters by Jacky Carpenter.

By Chris Trotter*

On the face of it, New Zealand employers’ exaggerated concern regarding employment law reform is difficult to explain. In a country where only eight or nine workers out of every 100 employed in the private sector belongs to a trade union – what is there to worry about?

Indeed, if any employer should be worried it is the New Zealand State. Union density in the public sector is well clear of 30% – and rising. In the space of less than five years the membership of the Public Service Association has climbed from 50,000 to 70,000. Nurses have already struck successfully and teachers are striking. If anyone has cause to put the dampeners on trade unionism, it’s the Government.

And, in a way, they have, although, interestingly, not in the public sector, where it would give them some respite, but in the already nearly prostrate private sector, where mass strikes are a thing of the past and likely to remain so.

Never one to miss a trick, Winston Peters has claimed the credit for de-fanging the modest reform programme proposed by the Labour Party prior to the 2017 General Election. To be fair to Winston, he and his party possess considerably more class-consciousness on this issue than either the Labour or the Green caucuses.

Like the Social Credit Political League, which preceded NZ First in the provinces and whose electoral base Peters has made his own, the old populist realises that in small-town New Zealand it is very much a case of the small business owners and their extremely loyal workforces against the rest. Big Labour – like Big Business and Big Government – finds few friends on these worksites.

The changes to the legislation which Peters has claimed for NZ First are, however, much more likely to have been quietly suggested to his caucus by Business NZ’s and the Employers and Manufacturers Association’s lobbyists. They are so strategic, so forensically sophisticated, that it is difficult to envisage any party caucus coming up with them unaided.

So, what is it that the announced changes prevent? In the simplest terms: they are designed to prevent the trade union movement from enlarging itself beyond its current pitiful dimensions. Those behind the changes have asked themselves two crucial questions: 1) What rights must unions have to reach out and sign-up new – as opposed to existing – members? 2) What must unions achieve to make mass strike action a realistic proposition once again?

The answer to the first question can be answered in two ways. Either the trade unions could secure a law change requiring employers to sign-up workers on their behalf. Or, they could be given the right to enter any workplace at any time for the purposes of recruiting members.

The first option was, of course, the solution which prevailed in New Zealand from 1936 until 1983 – the age of “compulsory unionism”.

From the perspective of 2018, it is scarcely credible that a young school-leaver seeking a process-worker’s job on the floor of the nearest factory would be told by his prospective employer that to get the job he would first have to join the union with “coverage” of process-work. His pay and conditions would be those negotiated between the union and representatives of the industry’s many hundreds of employers. And that was that. If his employer was so inclined (and in the days of over-full employment in the 1960s and 70s many were so inclined) that worker could be paid more, but he could not be paid less.

This extraordinary state of affairs, and its vivid historical after-image, is the genesis of what might be called the ghost in the machinery of New Zealand employment law. Though 30 years have passed since the days when tens-of-thousands of workers went out on strike in support of their unions’ attempts to improve the pay and conditions clauses written into their “industrial awards”, the mere knowledge that such deeply challenging activities were possible – and actually happened – has assumed the status of a educative horror-story; the stuff of free-market capitalists’ nightmares; a state of affairs that must never be repeated.

And, of course, while Labour is peopled with the likes of Jacinda Ardern, Grant Robertson and Iain Lees-Galloway, it never will be. The next best thing, however, a universal right of union entry to the workplace, could have produced some equally frightening results.

Academic studies of trade unionism in New Zealand, even after the Employment Contracts Act (1991), indicated that the precipitate decline in union density was attributable very largely to the simple fact the most New Zealand workers had never been asked to join one. With the highly instructive exception of Matt McCarten’s “Unite” union, most of the private sector unions in New Zealand have devoted almost all their time and resources to servicing their existing memberships. What the Unite Union showed, however, was that if approached in the right way even the allegedly “unorganisable” workers of McDonalds and KFC could be unionised, strike, and win.

That path is now blocked. Without the employer’s permission it will remain illegal for a union organiser to enter a workplace to do more than service members already signed-up to, or in the process of negotiating, a collective contract.

Also blocked is the path towards drawing sufficient employers into a Multi-Employer Collective Agreement (MECA) to make mass strike action feasible. The proposed reforms would have prevented unwilling employers from opting-out of MECA negotiations. Under pressure, the Coalition Government has now agreed to permit employers to walk away from MECA negotiations providing they can show “reasonable grounds” for doing so. Any employment lawyer who cannot come up with such grounds isn’t worthy of his/her hire.

Small wonder, then, that Business NZ and the EMA have responded to the final version of the legislation with quiet satisfaction. Like well-positioned snipers, their lobbyists have taken out the most dangerous elements of the enemy’s army. What remains is enough to cover Labour’s ideological nakedness and will, sensibly, be left in place until a more congenial set of politicians inherit the Treasury Benches.

*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. His work may be found at He writes a fortnightly column for

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