The Evolution of Collective Enterprise Bargaining in New Zealand

Abstract

There is an international trend towards labour market deregulation. In New Zealand this process, through the 1991 Employment Contracts Act, has attracted particular interest because of the speed and scope with which it was implemented. New Zealand moved from a system of centralised, collective bargaining to enterprise-level bargaining. However, it would be inaccurate to view the years prior to the 1991 legislation as static. The highly regulated system of bargaining was fragmenting as early as the 1950s. A significant degree of decentralised bargaining took place outside the official system. Attempts to reregulate and recentralise the system in the 1970s were unsuccessful and enterprise bargaining continued to grow. Until the late 1980s this was invariably supported by the safety net of the collectively negotiated awards. Legislation in 1987 forced unions to choose, at each workplace, between awards or enterprise bargaining. This attempt at reform failed as existing union support for enterprise bargaining evaporated. The 1991 Employment Contracts Act removed the freedom to choose and enterprise bargaining grew at the expense of collective bargaining. Enterprise bargaining before the 1990s was significantly different from that post-1991. Previously enterprise bargaining was associated with an improvement in the terms and conditions of employment. Post-1991 enterprise bargaining more often represented a reduction in employment conditions.