OPINION LEADERS: An Irrelevant Act

The Employment Relations Act has legislated to make unions key part of the employment relationship – but what has it achieved in reality?

There are examples of successful partnerships between organisations and employee representatives in both the public and private sectors and across different industries. However it is also fair to say that many of these successes are the continuation of stories begun under the ERA’s predecessor – the Employment Contracts Act.

The strength and value of relationships is generally not something that can be regulated. The law may provide the boundaries and framework, but what the parties make of it is more testament to the calibre of the people involved, their attitudes and their commitment.
This applies equally to employers as well as unions and I don’t for minute suggest that employers get it right all the time or that they all do as much as they can to look after their people.

At the same time I cannot accept that registration with the Labour Department automatically confers partnership status on all unions or an ability to contribute in constructive manner.

For both parties that is status that must be earned.
The ERA has opened the door and provided better opportunity for unions to be involved – if for no other reason than employers are compelled to listen. The problem I see is that apart from those with established track records in this area, there is not lot being said that employers think is worth listening to.

The ones that get it wrong remain largely confined to negative role of complaining about the unfairness of employers or management and bemoaning problems in the workplace. Good managers are solution-orientated people who are not receptive to ritualistic attacks without logical, productive solution.

A game plan of attacking management is consistent with our culture of complaint and unions are only using the same tools used by every pressure group or political party. They can also rely on the fact that there will always be some employers who are incompetent and untrustworthy. This approach is likely to condemn these unions as minority players on the employment scene.

Another difficulty with union strategy of complaint is it makes the union an enemy of management and encourages strategies to limit union influence. Ironically, one of the best results of unionism is that the potential problems of an adversarial relationship are an incentive for management to act in way that removes any perception that union is needed. In other words, if employers are good employers then there is no need for union. The union needs the bad employers it complains about in order to justify its existence! As management practices continue to improve, the perceived need for union lessens.

Unions will become excluded from the high-performing companies and become associated solely with poor-performing companies – some say this is already the case. Not good marketing proposition for prospective members or for the knowledge economy.
Another problem with the complaint strategy is that it does not work well with small workforces. People know the employer personally, usually trust them and in any event are not prepared to openly criticise them. As New Zealand has many small businesses, unions automatically exclude themselves from large part of the market.

One factor supporting this is that union membership has increased only 5% since the ERA’s enactment and unions still only represent 21% of the salary and wage earner workforce.

I accept union membership sank under the old legislation, but despite the legislative advantages and preference conferred under the ERA, the vast majority of employees still choose not to involve union.

What appears to be becoming lost in today’s employment environment is that the overriding purpose of the Employment Relations Act is “to build productive employment relationships through the promotion of mutual trust and confidence”.

Employers have to respect the union’s right and obligation to point out faults. Unions need to embark on strategy of constructive criticism that supports management objectives as well as its members if they are to expand their influence.

In his valedictory to the Council of Trade Unions, retiring president Ken Douglas observed that despite the employer friendly Employment Contracts Act, the union movement was partly responsible for its own woes because it had failed to make itself relevant to workers.

The Employment Relations Act has reversed the industrial polarity, but the only ones still doing well are the ones that by and large always have and they’ve never needed law to build good productive relationship.

Mike Hanson is principal with the organisational performance consultancy, The Empower Group, formerly Greene Hanson.

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