Second Thoughts: It speaks well for Jim Bolger that he now recognises, albeit very belatedly, that the Employment Contracts Act, one of the key pillars of the neoliberal order which his government consolidated, has contributed hugely to the growth of inequality in New Zealand .
JIM BOLGER’S IMPLIED CRITICISM of his own government’s
assault on organised labour is astonishing. The Employment Contracts Act 1991
ranks as one of the most extreme examples of anti-union legislation in post-war
history. Certainly, the equivalent statutes enacted in the USA, the UK, Canada
and Australia pale in comparison. From the legislation introduced by Jim
Bolger’s close friend and ally, Bill Birch, even the word “union” was excluded.
Nor should it be forgotten that Jim Bolger had “form” in the
union-busting business. As Minister of Labour in Rob Muldoon’s government he
had, in 1983, been responsible for legislating compulsory unionism out of
existence.
It was the catastrophic impact of Bolger’s legislation on
union membership numbers that made the Federation of Labour (FoL) so biddable
in the first flush of Rogernomics. New Zealand’s trade union leaders were
willing to swallow just about anything from the Fourth Labour Government – in
return for the restoration of compulsory union membership.
Labour obliged, but Stan Rodger, David Lange’s Minister of
Labour, let it be known that this would be the last time that the political
wing of the labour movement rode to the rescue of the industrial wing. The
union movement, Rodger sternly insisted, must learn to stand on its own feet
without the assistance of the unqualified preference clause.
To assist the unions, Rodger introduced the Labour Relations
Act. The new legislation, in an attempt to make the typical New Zealand trade
union bigger and better, mandated a membership base of 1,000, offered
assistance for union amalgamations and encouraged the evolution of industry
bargaining. Rodger also made it clear that the Labour Government expected the
public and private sector unions to come together in a single peak organisation
– the NZ Council of Trade Unions.
Rodger’s reforms sent a clear signal to Bolger and Birch
that a future National government’s industrial relations legislation would not
automatically be repealed by the next Labour government. They took this as a
green light for a root-and-branch reform of the New Zealand labour market. With
the assistance of the Business Roundtable, Birch and his advisers began
drafting the legislation that would become the Employment Relations Act 1991.
In his interview with RNZ’s Guyon Espiner, Bolger volunteers
the observation that the unions have become too weak. On the face of it, this
is an extremely odd observation. After all, Bolger was well-aware of what would
happen to union density in New Zealand the moment the prop of compulsory
membership was removed. The experience of 1983-84 was there for all to see. The
abolition of standard, occupation-wide contracts (known then as “awards”)
applicable to everyone employed to do the same work, was similarly guaranteed
to knock the stuffing out of the union movement. How could Bolger possibly
entertain the notion that the Employment Contracts Act would not, in very short
order, transform the union lions into lambs?
Possibly because the leadership of the NZCTU had reassured
him that the reformed union movement: bigger and better resourced than ever
before; was more than capable of weathering his storm.
I have been told by a former trade union leader that the
President of the CTU in 1991, Ken Douglas, was convinced that the changes
enshrined in the Employment Contracts Act would not cause a precipitate
collapse in union density, and that employers would be amenable to the
continuation of industry-wide bargaining and agreements. On the basis of
Bolger’s recent remarks, it seems likely that Douglas conveyed this confidence
to the newly-elected National Government. Certainly, it would explain why the
Bolger Government felt able to introduce legislative measures which, in other
jurisdictions (like France!) would have been met with massive resistance – up
to and including a General Strike.
It is, of course, a matter of history that Ken Douglas and
his allies in the public sector unions refused point-blank to support the
private sector unions’ call for massive resistance. Not even the outpouring of
tens-of-thousands of workers onto the streets in the early months of 1991 and
the passing of multiple rank-and-file resolutions in favour of a General
Strike, were enough to shake the opposition of Douglas and the public sector
union bosses. At a special executive meeting of the CTU on 18 April 1991, a
motion calling for a one day General Strike was defeated 190,910 to 250,122.
As things turned out, the grim misgivings of the rank-and-file
and the private sector union leaders proved to be correct, and Douglas’s belief
that the new, improved union movement could handle anything the Nats threw at
it was shown to be entirely unjustified. In just a few years union density (the
percentage of the workforce belonging to a trade union) fell by more than half.
The fate of private sector workers over the past
quarter-century has been especially hard. Union density in the private sector
has fallen from just under 50 percent in 1990 to less than 10 percent in 2017.
The cost, in terms of worsening working conditions and stagnant real wages, is
plain for all to see.
If they were, in fact, given, any reassurances from Douglas
concerning the unions’ long-term resilience have proved to be spectacularly
misconceived. Their expression would, however, provide some sort of explanation
as to why, twenty-six years on, the former National prime minister expresses
surprise that New Zealand’s trade unions have become so weak. At the time,
Bolger (who has always struck me as a fundamentally decent person) may have
consoled himself that the Employment Contracts Act’s bark would be worse than
its bite. It speaks well of the man that he now recognises that the signature
legislation of his premiership has contributed hugely to the growth of
inequality in New Zealand.
This essay was
originally posted on The Daily Blog
of Saturday, 22 April 2017.
