In the last 20 years, there has been a shift in the importance of Unions in New Zealand. The introduction of the 1991 Employment Contracts Act and the following Employment Relations Act 2000 allowed employees and employers the freedom to negotiate in a Good Faith Bargaining environment without the involvement of the Government. And therefore the unions and collective agreements were no longer mandatory to guarantee good work conditions. This year, a big example of Employment Relations involving Union and employers disagreements is the AFFCO plants lockout.
Since February 2012, 1250 union members have been involved in 6 AFFCO plants lockouts due to disputes between New Zealand Meat Workers Union (NZMWU) and AFFCO. The disagreement finally ended in late May with an arrangement between the parties. This case study will use the Employment Relations theories to explain the relevance of the dispute between a fast growing company and the union trying to protect its member’s rights in the current employment environment.
Earlier this year the media spotlight turned to the dispute between AFFCO, a meat processing organisation and the New Zealand Meat Workers Union. It brought up a radical side of unionism that does not reflect the majority of Union activities in New Zealand. Who are the parties involved? And what is the conflict that caused grief to employees and employers really about? On one side of this dispute is AFFCO, a meat processing organization owned by the Talley’s family since 2001.
In 1936 a Yugoslav immigrant, Ivan Talijancich, opened a fish shop in Motueka and bought a boat to supply it. His sons, Peter and Michael, took over the business when he died in 1964. Since then the business has grown and the family is now worth $300 million and Talley’s Group owns: eight meat plants in New Zealand (AFFCO), four fish processing plants, vegetable farms, 53% majority of milk processor Open Country, Ice-cream factory in Motueka and the Rutherford Hotel in Nelson1.
On the other side of the dispute is the New Zealand Meat Workers Union. The NZMWU was created in 1971 in an attempt to form a National Union to support meat workers and related trades. In the 1990s, however, another union was formed in the North Island, the Meat and Related Trades Workers Union of Aotearoa (MUA), allowing workers the freedom to choose between the two different unions. In 2005 a decision was made to disband all the members from MUA to NZMWU forming one single union to represent meat workers over the entire country.
Since then sacrifices were made by its members through strikes and negotiations to achieve the good working conditions of today2. In February this year the meat processor AFFCO locked out more than 760 unionised employees in 5 of its North Island plants over a contract dispute3. Some unionised workers were kept in some strategic operational areas while the more radical union members were locked out. The union claimed that the lockout was illegal and it was an attempt by AFFCO to break the collectivism and reduce workers memberships, they accused the Talley’s family of being anti-unionism.
In March AFFCO announced that all the union members that were still engaged at work would get paid holidays over Easter as long as they did not participate on strikes planned by the union. The lockout continued over the Easter Holidays. After the holidays all the unionised workers that were still allowed in the plants, including workers from the other unaffected AFFCO plants went on a 5 day strike. In May 2012 the Employment Court put the dispute under investigation in an attempt to end the 3 month lockout.
The dispute finally ended late May when AFFCO and the New Zealand Meat Workers Union implemented a new collective agreement. Overall, the dispute over a new collective agreement lasted for 12 weeks with both parties unwilling to give up their power of negotiation. AFFCO had offered a pay rise of 4. 3 per cent over the following two years, but the union also wanted to protect its members from AFFCO’s efforts to implement new technology and flexibility in staffing levels. What later came to light, the New Zealand Meat Workers Union took AFFCO to the Employment Court over “illegal” random drug testing.
According to AFFCO the drug testing was a way to protect its employee’s safety while working in “sensitive areas” of the meat processing plant. They showed the media photos of drug paraphernalia found on site. The AFFCO lockout is not the only case of a breakdown of management of Employment Relations to be highlighted by the media this year. Another example is the Port of Auckland versus the Maritime Union that led to its members striking and causing shipment delays over the whole country.
Both of these cases show two different sides to the Conflict Theory Frame of Reference as described by Rasmussen, 20094. Each party has an opinion about how they work. In the case of AFFCO the Unitarism model is followed, and, in the other second case, the New Zealand Meat Workers Union follows the Radical model of the Conflict theory. The Unitarism model adopts the idea of all members of an organisation working towards its goals; therefore the conflict with the union upset the path of development. The workers are viewed as resources to the process and the management as the authority.
AFFCO is a big privately owned company that is driven by competitiveness to achieve success. Being slowed down by negotiations over collective agreements with the union and being stopped to develop new technologies and systems to improve production and lower costs, AFFCO believed that the NZMWU were trouble makers expressing employee’s greed. This ideology was relevant to small, family owned companies in New Zealand where team work and loyalty to the group were for a long time valued above individual achievement (Rasmussen, 2009, p. 9).
However today, as Alan Fox suggested, a number of factors had conspired to make the unitary view inappropriate for analysing the realities of employment relations policy and practice (Fox, 1973, p. 192)5. These factors included urbanisation, the increasing size and complexity of work organisations, the weakening of traditional attitudes towards authority, the growing power of unions, and a greater personal assertiveness and striving for individual achievement and success (Rasmussen, 2009, p. 29).
Therefore, for a period of time between the 1960s to the 1980s the pluralist and radical models found more favour. The recent attitude of the New Zealand Meat Workers Union however, is described by Rasmussen 2009 as a radical model. This ideology assumes that there is no balance of power between employees and employers. It focuses on the social and class structures and on the attitudes and behaviours of the parties involved. The conflict between AFFCO and the New Zealand Meat Workers Union is a great example of this frame of reference.
Even when AFFCO agreed with a pay increase of 4. 3 per cent over 2 years, the NZMWU did not settle, they wanted more for their members under the assumption that the negotiating power was still in the meat processor’s hands. Both of these reactions seem somehow to be “prehistoric”. Since the 1990s a lot of the relationship between unions, employees and employers has changed. First, with the introduction of the Employment Contracts Act 1991 making unionism voluntary and giving employees the options of personal grievance procedures.
And then, with the following Employment Relations Act in 2000 that kept many key points from the previous act and added the promotion of collective bargaining and unionism (Rasmussen 2009 p. 102-103). With the introduction of the Employment Relations Act 2000, the legislative employment relations framework appears to be less controversial and surrounded by something of a consensus (Rasmussen 2009 p. 123). The main issue during collective bargaining in the last 20 years has been the communication between the parties involved, as reported by Leeanne Templer, 20116.
Therefore, the ERA also creates the environment for Good Faith Bargaining. The Good Faith Bargaining reinforces employment relationships based on trust and good faith. Now, by law, an understanding between employers and employees (with or without their unions) must be clear, respectful and with open exchange of information. As described by Rasmussen, 2009, Good faith collective bargaining requires at least the following things:
* That the parties have to agree on a bargaining process; * That the parties must meet each other; That they have to consider and respond to bargaining proposals; * That they must recognise and respect the bargaining authority of the other side and avoid undermining this authority; * That the parties will provide the necessary information to substantiate claims; * That they must take into account relevant good faith codes, the proportion of employees who are union members, and the circumstances of employer and union. As can be seen from the media coverage of the bargaining conflict between AFFCO and the New Zealand Meat Workers Union, it appears that a few of the GFB points were ignored.
For example, the introduction of the random drug testing was not communicated appropriately between the parties involved and the agreement on a bargaining process was then rejected. While the act introduces the Good Faith Bargaining, it also allows lawful strikes and lockouts. In this particular case, the legality of the AFFCO lockout is debatable. The Union argued that AFFCO’s owners, the Talley’s family, are using this action to undermine collective bargaining and to retaliate against the court actions bought by the NZMWU.
The New Zealand Meat Workers Union also felt that Talley’s wished to force its employees to relinquish their union memberships. The Employment Relations Act defines that strikes and lockouts are lawful if: * Thy are in support of a collective agreement; and * The employees concerned are not bound by a current collective agreement; and * The parties involved have already negotiated for at least 40 days; and * In the case of the essential services listed in the act, the notice requirement has been met.
Overall, the recent Employment Relations Act has achieved a safe guideline for employments issues negotiations between employees and employers. Conclusion (not quite finished yet) The Employment Relations in New Zealand is supported by legislative set of rules that can be used to resolve disputes between workers and their employers. These disputes can be in individual or collective actions as demonstrated by AFFCO and New Zealand Meat Workers Union’s 3 month conflicts. The long lasting dispute occurred because either AFFCO or NZMWU were willing to compromise its negotiation power.
Each one had their own frame of reference theories. AFFCO was defending its own rights as an organisation to have its goals followed by its employees. And NZMWU was purely defending their members against AFFCO’s process developments that would lead to staffing flexibility. Changes in the Employment Acts allowed the grievances of employees and employers to be negotiated between the involved parties without the government’s input. It also created a Good Faith Bargaining environment which reinforces employment relationships based on trust and good faith.