Industrial Relations in New Zealand: Legal and Political Analysis

This report provides a comprehensive overview of industrial relations in New Zealand, examining the historical development, political influences, and key legislation shaping the employment landscape. It delves into the evolution of employment relations, highlighting the roles of the Labour Party, trade unions, and significant events like the Great Strike of 1913. The report analyzes social and economic factors, including the impact of colonization and the establishment of the Reserve Bank. It explores theoretical perspectives such as the systems theory and Marxist approaches, along with the employer-employee relationship, covering statutory rights and responsibilities defined by the Employment Relations Act 2000 and other relevant statutes like the Holidays Act 2003 and Health and Safety at Work Act 2015. The report also examines mechanisms for collective and individual bargaining, direct action, good faith principles, and the roles of state institutions like the Employment Relations Authority and Labour Inspectors in resolving disputes and protecting employee rights. Overall, the report offers a detailed analysis of the legal and practical aspects of industrial relations in New Zealand.

Running head: INDUSTRIAL RELATIONS IN NEW ZEALAND
INDUSTRIAL RELATIONS IN NEW ZEALAND
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Part A
1. Development of Employment relations in New Zealand:
a) Political views and development:
New Zealand’s labour party is a left centred political party primarily focussed on left
wing ideologies. Employment relations in New Zealand have developed over the last century
based on the legislations enacted by the Labour Party (when in power) and in the present day
encompass a plethora of employee rights. Before the formation of the Labour Party in 1916
two bodies represented employee relations and employee grievances these were namely the
Socialist Party (1901) and the Independent Political Labour League (1905). These two bodies
consolidated their various factions later to form what is now known as the Labour Party
(Gustafson, 2013). The growth of trade unions in New Zealand predate the formation of the
Party and both bodies that preceded it. The development of employees rights through various
Trade Unions though can be traced to events such as the great strike of 1913 and the
waterfront dispute of 1951 (Nolan, 2014). The enactment of Industrial Conciliation and
Arbitration Act in 1894 was instrumental in providing a forum for reconciliation of employee
grievances and until 1973 continued to be the best possible recourse for employment
disputes. In 1973 the Third Labour Government enacted the Industrial Relations Act, 1973
which superseded the Industrial Conciliation and Arbitration Act, 1894 (Seifert, 2013).
b) Social and Economic Factors:
The first recorded settlers in New Zealand were the maori who settled these around
1000 years ago. With the passage of time Europeans branched out trade routes with New
Zealand the first being James Cook an English explorer who was the first to map New
Zealand’s coastline to ensure regular trade in 1769 (Ward, 2015). By 1840 New South Wales
was established and New Zealand had become a British Penal Colony. Once colonized

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employment relations were invariably more authoritarian. The world wars subsequently lead
to uncertain economic conditions and though New Zealand. However it was during this
period that the first Labour Government came into existence and brought in social reforms to
industrial relations (Vowles, 2013). Another important economical development was
financial independence from its colonial masters which came in the form of the establishment
of a Reserve Bank in 1934 (Singleton, 2013). Post the world wars and New Zealand’s official
independence in 1947, it retained its trade relationships with Britain. With the growing
popularity of the Labour Party, the National Party was formed through the consolidation of
the Reform Party and the United Party, this would be the Labour Party’s primary competitor
and would lead to the defeat of the first Labour Government in 1949 (Holt, 2013). This was
mainly due to post war economic and social restraints which appeared to be due to the
incompetence of the administration. However, after the First World War there was a global
socio-economic crisis and it cannot be attributed to any one government’s incompetence.
c) Ideologies and theories of the time:
Industrial relations or employment relations is primarily interdisciplinary in nature.
This fact makes it particularly difficult to devise uniform theories which would define and
regulate industrial relations. Resultantly, theoretical pluralism guides the theoretical
perspective in employment relations. The systems theory was the first comprehensive look at
theory formulation for industrial relations. This was developed by John Dunlop and was
termed the Industrial Relationship System (Dunlop & Segrave, 2016). This defined industrial
relations as an “analytical subsystem” of industrial societies. This however had limitations to
the extent that it underplayed the role of change and conflict in the system and equated it to
an economical system’s logic. The Marxist approach cannot be ignored when discussing
industrial relations. The Marxist approach aimed at defining relationships between the
capitalists and labour markets and providing better working conditions for the labouring

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employees. This gained immense momentum through the 19th and 20th century and brought in
positive changed globally to industrial relations. In New Zealand, trade unions and industrial
action prevalent since the enactment of the Trade Unions Act, 1878 but it wasn’t until 1973
that a substantial labour legislation would come into force (Rudman, 2013). There were
various shifts in theoretical backing based on the government in power and the policies they
sought to implement. It was originally based on a union-dominated model but eventually
evolved into a more socialist movement through the years (Kelsey, 2015). From the advent of
the 20th century the Labour Party’s main aim has been to ensure equal employment rights and
opportunities which are based on democratic socialist ideals.
Part B
Employer-employee relationship
1. Statutory rights and responsibilities of both parties:
Statutory law is a primary source of law in New Zealand and various legislations have been
enacted to ensure fair and equal employment opportunities and favourable working
conditions for the labour force. The Employment Relations Act, 2000 is the regulatory statute
for industrial relations (Selwyn & Emir, 2014). The duties and responsibilities of the
employers are derived essentially from common law principles and thus they include the
following obligations:
 Payment to employee.
 Providing a safe work environment.
 Prohibition of discrimination.
 To provide written employment contracts to employees.
The rights and responsibilities of the employees are embodied within Parts 6-9 of the Act.
These include:

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 Collective bargaining.
 Right to attain paid leaves.
 Right to legal industrial action.
New Zealand however has various other statutes that more specifically define rights
and responsibilities of employers and employees. These would invariably be in concurrence
with the provisions of the Employment Relations Act, 2000. The major rights defined by each
piece of legislation is as under:
Holidays Act, 2003: This legislation regulates the law relating to leaves of absence which
employers are duty bound to provide to their employees.
Wages Protection Act, 1983: Defines the circumstances under which wages maybe deducted
or withheld. This also regulates circumstances where the employer cannot make deductions
on the same basis.
Minimum Wages Act, 1983: This act is essential for industrial relations as it defines and
regulates the remuneration standards based on the hours of work demanded.
Parental leave and Employment Protection Act, 1987: Parental leaves are an essential for a
workforce, especially one that includes women. This act defines the structures of paid and
unpaid parental leaves and protects the employment status of those availing parental leaves.
Privacy Act, 1993: Defines the various kinds of information that maybe demanded by the
employer from his employee. It empowers them to collect, correct and store the information
and prescribes limitations to their right to do so.
Equal Pay Act, 1972: This is essentially a prohibition on wage discrepancies based on
discriminatory grounds. Thus all employees are assured equal pay for equal work.

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Health and Safety at Work Act, 2015: This is a relatively new piece of legislation it regulates
workplace safety measures to be taken by employers. This is especially relevant in cases of
work environments that comprise of occupational hazards.
Human Rights Act, 1993: This statute guarantees basic human rights to all employees. These
are relevant in labour law as they prohibit discrimination during recruitment processes thus
provide equal employment opportunities to all members of the workforce.
Protected Disclosures Act, 2000: This defines protective measures for employees who have
divulged information concerning their employers about their breach of duties or any such act
or omission which can be proceeded against.
2. Mechanisms for Collective and Individual Bargaining:
Part 5 of the Employment Relations Act, 2000 deals with provisions relating to
collective bargaining. Sections 40 and 41 define who may initiate bargaining and when
bargaining maybe initiated. The primary mechanism of collective bargaining is through
collective agreements. Sections 51 to 59 of the act deal with provisions relating to collective
agreements, these agreements help employees come to an agreeable solution based on their
demands (Pool, 2013). Individuals who’re employees have bargaining strength as well, Part
6AA of the act deals with flexible working and empowers employees with the right to
demand flexible working conditions. Part 9 of the act deals with enforcement of personal
grievances and by virtue of section 102 and employee has a right to legally pursue individual
personal grievances.
3. “Direct action” in Strikes and Lockouts and their legality:
Direct action refers to an act by a body (a union in term of labour law) to engage in
activities that lead to strikes and lockouts. This refers to a situation where the participants
engage in such an action without first intimating the employers. In light of the ERA, 2000

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strikes and lockouts are defined under Part 8 of the act. This requires a secret ballot vote to be
held first by virtue of section 82A of the act, the employees are also required to furnish a
notice before such an action (which is omitted in case of direct action) under section 86A and
86B. Section 86 deals with the forms of strikes and lockouts which are statutorily made
illegal. This provision makes strikes and lockouts initiated through direct action illegal and
the act provides penalties for the same.
4. “Good faith” and its effects on employment relationship:
All contracts are based on the concept of uberrima fides which translates into utmost
good faith. This implies that all parties to an agreement must enter into it with bona fide
intentions and must observe the terms of the contracts in true spirit of the agreements (Von
Bonde, 2013). Good faith is thus an essential of employment contracts as well. By virtue of
sections 4 and 4A under Part 1 of the act employers and employees are bound to observe the
employment contract with utmost good faith. A breach of this duty to observe good faith can
be legally pursued and finds statutory backing in section 4A.
5. State institutions and their role in employees rights and conflict resolution:
Section 144 and 144A of the act provide mediation and dispute resolution services
provided by the state. The Employment Relations Authority is the primary body for dispute
resolution in terms of labour law. The authority is established by virtue of the provisions of
section 156 of the act. Its duties and powers are defined in sections 160 and 161 and it gives
them jurisdiction of labour disputes. The employment court established under section 186 is
an adjudicating authority for industrial disputes. These ensure swift justice to employee
grievances that are properly represented before it.
6. Role of Labour Inspectors and their need in the legislation:

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Labour inspectors are fundamentally officers who provide assistance to employees
when pursuing an action against employers for rejecting or failing to reply to a request of the
employees that is within their rights. Labour officers are defined in section 69AAG and their
assistance maybe applied for by applying to the authority through the provisions of section
69AAI. The main aim of incorporating Labour Inspectors into the structural frame work is to
facilitate mediation. Mediation through Labour Inspectors are undertaken through the
provisions of section 69AAH. However there are limitations which are defined under section
69AAK, this section was inserted by section 5 of the Employment Relations (Flexible
Working Arrangements) Amendment Act 2007 (2007 No 105).

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Dunlop, J., & Segrave, M. (2016). The theory of wage determination. Springer.
Gustafson, B. (2013). Labour's path to political independence: Origins and establishment of
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University Press.
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strike and trans-Tasman biography. Journal of New Zealand Studies, (18), 118.
Pool, I. (2013). The New Zealand family from 1840: A demographic history. Auckland
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