Bargaining in good faith in the New Zealand labour market: rhetoric or reality?


University of British Columbia

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Master of Laws - LLM




New Zealand presently operates a "free market" system of employment and labour relations in which there are no prescribed or mandatory bargaining procedures. When this system was introduced by the Employment Contracts Act 1991 (the "ECA" ) it represented a dramatic departure from the previous system of state regulated collective bargaining, conciliation and arbitration: a system that had existed in New Zealand for almost a century. Although this change in approach was supported by free market advocates, it also generated considerable international and domestic criticism. In response to that criticism, a number of New Zealand politicians stated in 1996 that they would consider imposing on employers and employees a statutory duty to bargain in good faith. However, since the end of 1996, very little has occurred in respect of this issue. Indeed, it now appears that the current New Zealand Government may have abandoned this proposal altogether. If this is, in fact, the Government's decision, it ought to be viewed with concern, for it has been made without the benefit of informed debate. Little, if any, substantive consideration has been given to whether such a duty ought to be introduced, and if so, the form it might take and impact it might have. If an informed decision is to be made to enact a duty of this nature, or not, as the case may be, its merits must be the subject of further debate. This thesis will endeavour to contribute to that debate by examining how one approach to the duty to bargain in good faith, that which applies in British Columbia, Canada, might operate in New Zealand. This examination will consist of six chapters. The first will contextualise the New Zealand arguments on whether a duty of this nature ought to be introduced into the ECA. Chapter two will then examine the duty to bargain in good faith as it applies in British Columbia industrial relations. Chapter three will take that duty, and examine the extent to which it is currently replicated in New Zealand. It will be concluded that little of the substance of this duty is to be found in the law which presently governs the New Zealand labour market. Chapter four will assess the costs of introducing a duty of this nature into the ECA, particularly in terms of reduced efficiency and freedom. Chapter five will identify a number of specific issues that will require resolution if the duty is to operate effectively in New Zealand, and the terms of a suggested statutory amendment will be proffered. It will be concluded in chapter six that introducing a duty to bargain in good faith, akin to that which applies in British Columbia, would benefit New Zealand employers, employees and society as a whole. Further, it will be argued that such a duty must be introduced if labour bargaining in New Zealand is to occur in any meaningful way for most employees. And finally, it will be suggested that if this duty is to be introduced effectively, legislative amendment will be required. For these reasons, it will be asserted that the New Zealand Government ought to revisit the issue of introducing into the ECA a statutory duty to bargain in good faith.


Good faith (Law); Collective bargaining -- New Zealand.

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