Employment Relations in New Zealand

This essay discusses the decline of collective bargaining in New Zealand and the rise of individual bargaining. It explores the reasons behind this shift, including changes in public policies and employee perception. The essay also discusses the legislation and policies supporting collective bargaining and the impact of these measures on the system. The Fair Pay Agreement is introduced as a potential solution to increase collective bargaining in New Zealand.

Running head: EMPLOYMENT RELATIONS IN NEW ZEALAND
Employment Relations in New Zealand
Name of the Student
Name of the University
Author Note

1EMPLOYMENT RELATIONS IN NEW ZEALAND
Introduction
Collective bargaining is the system which is applied in the case of negotiation
regarding joint employment agreements. It has meant stated that any successful collective
bargaining could help in improving workplace productivity by establishing a healthy
relationship between employee and the employer through the union members. However, in
New Zealand, though the majority of the people including the Government and the
stakeholders support collective bargaining in the workplace, the collective agreement has not
been able to increase in New Zealand (Grimshaw, Bosch & Rubery, 2014). Though the
majority of the people of New Zealand supports collective bargaining in the workplace, but
still with the changes in the public policies individual business tends to increase. Although
many legislation and rules are in support of the collective Government under the
Employment Relations Act 2000, still current Government could not be able to rise in New
Zealand. The thesis statement is that for several years the legislation and the Government are
in support of the collective Government in New Zealand, but still, it has not increased in New
Zealand.
Discussion
In the present days, the gradual shift from the collectivism bargaining to individual
bargaining in New Zealand has led to incremental changes in the relationship between the
employer and the employee. Though the majority of the people of New Zealand supports
collective bargaining in the workplace, but still with the changes in the public policies
individual bargaining tends to increase. As a result, there has been a rise in the personal
business to improve the own right of the employee. The New Zealand Employment Relation

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Act, 2000 (ERA), provides a clear structure and system for negotiation between the
employee and the unions, so that by joining hands together and through talks they can enter
into collective agreements (Rasmussen & Greenwood, 2014). Whereas, individual, collective
bargaining also comes under within this act, where employees can directly negotiate with
their employers and enter into cooperative agreements. With much support from the
legislation and Government, collective bargaining in New Zealand could not be able to
increase much because of specific reasons. First, the individual employee and the employer
rights have become profound that means employee does not want to include any third party
such as the labour unions to address their grievances to the employer. In the opinion of
McCrystal (2016), employees think the best way to solve their problems is through direct
communication with the employer through individual bargaining. This had put influence on
the perception of employee and the employer, which has resulted in shifting from
collectivism bargaining to individual bargaining. As opined by Visser (2016), the
comprehensive rights of the employees cut across the New-Zealand experiment during the
year 1984, when the Government and the Labour Union encouraged the free market model
and deregulation within the country. In that case, employees were not provided with their
fundamental rights, and thus this had lead to the individualistic bargaining in New Zealand.
One of the primary reasons that have not lead to the increase of collective agreement in New
Zealand is that although the Employment Relation Act 2000 supports the collective
bargaining and unionism. But then in the recent days, the coverage and benefits of the
collective bargaining had declined that lead to the increase in individual bargaining in the
modern days.
It is important to be noted that most of the private sector organizations in New
Zealand do not support collective bargaining, as the private sector industries have a negative
perception and confusion regarding collective bargaining. Moreover, the inability and the

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unwillingness of the employees to adopt the collective bargaining also lead to the decrease in
the collective bargaining system in New Zealand. As per the recent report, it has been noted
that from the last fifteen years the density of the collective government has been drastically
decreased and the number of union members in New Zealand has resulted to 117 members in
the year 2016 (Bailey et al., 2015). New Zealand has always been recognized as a country
with the proper industrial relation that has provided shape to the collective government within
the country. To strengthen collective Government in New Zealand, the Government has
altered the legislation structure to bolster union members so that more employees join the
collective bargaining. As there were not many industries in the past, the collective bargaining
provided positive outcomes to the employees. However, after the increase in a large number
of private sectors in New Zealand, the policies of the collective government could not be able
to follow by the employees, and there was much confusion all around, and that did not tend to
increase the group bargaining. According to Cuyper, Witte & Isaksson (2017), the
Employment Contracts Act 1991 (ECA), also encouraged the implementation of the
individualism bargaining between the employee and the employment relationship at the cost
of collective bargaining, results in the declination of collective bargaining. As per the report,
the collective density rate in the private industries was only 50%, whereas, on the other hand,
there has been an increase in the individual density rate (McCrystal, 2016). The report
collected by the Industrial Relation Centre in Victoria University showed the decrease in the
union membership in the last fifteen years and accordingly stated that to increase collective
bargaining in New Zealand, it is essential to increase the number of members in the union
that could promise a positive future for collective bargaining. According to the data,
collective bargaining in the private sector of New Zealand covers only 12.6% and thus the
collective bargaining is focussed only on two sectors that include manufacturing sector and
the transport sector (Rasmussen, Foster & Farr, 2016). However, it is to be regarded that

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with the increase in the union membership, collective bargaining could not be able to increase
in New Zealand, though the legislations and other policies support collective Government
and have also increased by 15%. In New Zealand, although ERA promotes collective
bargaining, major city of the small enterprises did not show any signs of changing their
system to collective bargaining. However, the employees’ perception of collective bargaining
also affects the increase of collective bargaining in New Zealand. According to the
employees, collective bargaining hampers the decision making process within the workplace,
and it also affects company’s policies and rules. According to Freeman (2016), the Freeman
and Medoff’s piece of work stated that though collective bargaining focuses on the economic
and social benefits of the employers, then it has been found that the labour unions tend to
benefit the employees by reducing the revenue and profit of the organization.
Although there have been reports that majority of the people in New Zealand believes
that to promote collective bargaining in New Zealand, the trade unions members are
constantly changing their structure by improving their overall activities with the support of
the legislation to strengthen collective bargaining (Walpole, 2015). It is important to note that
the Government’s Fair Pay Agreement tends to alter the pay structure of the employees to
strengthen the union members and collective bargaining. According to Anderson (2017), the
Government is planning to implement changes in the fair structure that would be similar to
the structure of the national awards system. In the opinion of Scott (2014), the principle of
national award system, the terms and conditions remain set in such a way that will help in the
promotion of the collective bargaining in New Zealand. Therefore, to promote collective
bargaining in New Zealand, the legislation and the Government decided to prohibit strikes
of the union members and before that arbitration has been kept mandatory for the union
members to support collective bargaining. As per the report, during the year 1984, under the
fourth Labour Government, arbitration had been completely prohibited from the labour

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Government system that results in the decrease of the collective bargaining in the workplace
(Toomey, 2015). Therefore, to promote collective government, arbitration was being made
compulsory, and in cases related to negotiation, if the employees do not find any better
opportunities to settle, they could shift to individualistic bargaining. Employment Relations
Act 2000, has been introduced to support the collective bargaining has been regarded as “
good faith” but nothing has resulted in good faith as collective bargaining in the present day
could not able to increase in New Zealand. The good faith covers some basic rules such as
aim to focus on the bargaining behaviour of the employees, and also try to make certain
misleading demands and requirements as unlawful. Before this, it has also denoted that both
the agreements are open to the employees, but collective bargaining if executed properly will
tend to provide better success and opportunities to the employees (Scott, 2014). Although
Government and the legislations are trying hard to promote collective bargaining in New
Zealand and accordingly implemented significant changes in the policies and procedures,
then it could not increase the collective agreement in New Zealand.
Conclusion
From the above essay, it could be concluded that under the Employment Relations
Act 2000, Government of New Zealand tries to promote collective bargaining in the
workplace, but nothing has provided any positive outcomes. Majority of the employees
supports the individualistic negotiation under the Employment Contracts Act 1991. With the
decrease in the number of union membership in New Zealand, employees' attitude and
perception towards collective bargaining have also changed. Most important reason for the
reduction in collective bargaining in New Zealand is that individual agreements tend to
provide better control to the employees in respect to the terms and conditions of the
employees and employee could directly address their problems to the employer. However,

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The Government of New Zealand is introducing the useful measure to increase collective
bargaining such as it has added Fair Pay Agreement that would provide employees with equal
and fair pay for their job role.

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