Dialogue: New ERA in labour relations begins well

Despite the hand-wringing which greeted its introduction, the Employment Relations Act has settled in relatively well, writes PAUL TREMEWAN*.

The Employment Relations Act is six months old. The world has not stopped, there have been no mass strikes and business is continuing. Well, that is the popular view, but is it right?

The passing of the act changed labour relations fundamentally.

Just like the Employment Contracts Act a decade previously, the act was designed to alter the perceived balance of power between employers and employees.

More importantly, it was designed to resurrect the seemingly moribund union movement. Under the previous legislation, the word union was never mentioned. There was reference only to a bargaining agent.

In the key provisions section of the Employment Relations Act, an interesting sentiment appears: "The object of this act is to build productive employment relationships through the promotion of mutual trust and confidence in all aspects of the employment environment and the employment relationship by acknowledging and addressing the inherent inequality of bargaining power in employment relationships."

In practice, this object has been hard to identify in the first six months. There has been no hand-wringing or supplication by employers during the bargaining process. The parties have just been getting on with their negotiations, with the odd exception - such as the dispute on the South Island wharves.

The legislation provided for the drafting of a code of good faith. There were grave concerns about what this would mean and how it would affect the workplace.

The code was produced after a protracted period of talks between unions and employers. It was launched and followed by a review of how it worked in practice. All this has done is add to negotiations.

Before bargaining starts, the parties are agreeing to a four- to five-page document covering such vital elements as who pays for the meeting rooms, who provides the scones, and an undertaking by each party that it will listen to and consider the claims of the other.

The legislation has given new meaning to second-tier bargaining - the bargaining covering the terms and conditions of employment.

A new issue has arisen from the concept of good faith, and the Employment Court recently ruled in the Coutts cars case that the requirement to act in good faith applies not only to collective bargaining but to the individual employment relationship.

Has the new law provided an environment where trade unions are flourishing? There have been 132 unions registered since the passing of the act, including the first one covering professional rugby players.

As yet, Margaret Wilson, the Minister of Labour, has not released the numbers of members of those unions.

The new law provides that a union may start negotiations with an employer if the union has two members as employees of that employer.

Only unions can collectively bargain, which means that groups of employees who were not union members in the past but wished to bargain collectively are now prevented from doing so.

Alternatively, some of these workers have formed their own unions.

The practice in the first six months has been that unions are furiously entering into all manner of collective agreements in an attempt to build membership (and, therefore, funds).

This pattern will change over the next year when unions have the critical mass of members required to fund the expansion of their activities. In the meantime, many employers are entering into collective bargaining without making too much of an issue about the question of whether they want or do not want a collective agreement.

Even if the employer does not wish to agree to a collective agreement, it is required to bargain in good faith - even if it is to just say "no, thanks" to the initiating union. Some employers are entering into collective agreements with tame or perceived easy-to-deal-with unions.

The age-old question of particular unions coexisting has once more been an obstacle to bargaining collectively or collaboratively. Old demarcations are still matters of contention between various unions.

In the report to the minister after the first six months of the act, some trends have already been identified.

The old Employment Tribunal continues to operate with a full workload, seemingly running alongside the new institutions, the Employment Relations Authority and the Mediation Service.

Since the passing of the act, the access to mediation has been simplified and this has opened the door for many employees to get speedy help to resolve employment relationship problems. This is part of the new structure under the act which is working better than expected and in a manner not always possible under the previous law.

There have been 2932 requests for assistance to the Mediation Service in the first six months. The removal of the prescribed forms and fees has helped all parties.

The Employment Relations Authority is still finding its way. There were 434 applications from October to March, but only 10 per cent were determined by the authority. It appears that parties are seeking alternatives to resolve disputes.

The authority has also had to contend with the problem of procedure. The parties' right to cross-examine a witness is still to be dealt with by the Employment Court.

The court is having to operate under the two regimes. It has dealt with five applications under the new law. Its workload will increase as that of the authority increases.

Parties dissatisfied with a determination of the authority can have the whole matter heard all over again in the Employment Court.

In future, this may have a major impact on the ability to resolve disputes quickly. After the initial period of the new jurisdictions, this has not happened, but inevitably will.

From a practitioner's viewpoint, it is apparent that the minister's wish for a decrease in legal intervention in industrial matters has not happened.

As with any new law, it has taken time to understand.

Most law firms with expertise in employment law are busy rewriting employment contracts, turning them into employment agreements and conducting client seminars pointing out the perceived intricacies and pitfalls of the act.

Apart from the legal profession having a field-day despite the minister's best intentions, employers and unions are getting on with conducting relationships to mutual benefit.

Bargaining is taking place, there have been few stoppages, and the industrial world has not reverted to the disruptive days of the 1970s. The parties have all been trying to make the act work.

Overall, the Minister of Labour has to be pleased with the first six months of a piece of legislation which caused so much angst and controversy when introduced.

* Paul Tremewan is a Auckland employment law and human resources consultant.