Report in which the committee requests to be kept informed of development - Report No 265, June 1989

Case No 1385 (New Zealand) - Complaint date: 20-OCT-86 - Closed

1. 260. The Committee has already examined this case and presented an interim report to the Governing Body in November 1988, which was approved at the 241st Session of the Governing Body (see 259th Report, paras. 517 to 552). The Government sent further observations on the case in a communication dated 14 February 1989.
2. 261. New Zealand has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) nor the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. Previous examination of the case

1. 262. When it examined this case in November 1988, the Committee observed that the New Zealand Employers' Federation (NZEF) objected to changes in the system of union registration contained in the new Labour Relations Act, which came into force on 1 August 1987. The NZEF alleged that the granting of broad exclusive rights to unions by registration eliminated the workers' free choice of a union and that the continuance of what amounted to compulsory union membership provisions likewise undermined the workers' freedom to choose an organisation to represent them. The complainant also alleged that the excessively high minimum membership requirement (1,000 members) hindered the creation of trade unions.
2. 263. The Committee noted the Government's denial of these allegations of government interference in the workers' free choice of a union to represent them. In particular the Government argued that choice existed because an unregistered union could be freely set up and represent whatever workers chose to be represented by it; unregistered unions were lawful and trade union activities by them, such as collective bargaining, were not proscribed by law. As for the 1,000 members registration requirement, the Government explained that this only applied to bodies wishing, voluntarily, to be registered under the Act, and that it was in line with the Act's objectives against a background of organisational fragmentation, namely to promote effective and efficient registered unions. As regards the important advantages granted to a union which obtained registration under the new Act (a statutory right to strike when negotiating an agreement; the right to register collective agreements enforceable through the Labour Court; the right to ballot members or negotiate with the employer on the question of compulsory union membership), the Government pointed out that this type of exclusive bargaining agent situation could be altered by union members after balloting.
3. 264. The Governing Body, in the light of the Committee's conclusions, approved the following recommendations:
   • a) The Committee considers that the registration system set up by the 1987 Labour Relations Act which accords exclusive negotiation rights to registered unions would not be incompatible with the principles of freedom of association provided that the registration is based on objective and predetermined criteria.
   • b) The Committee nevertheless considers that the Act's 1,000 members minimum membership requirement might be liable to deprive workers in bargaining units covering a limited number of workers of the right to form organisations capable of fully exercising their activities, contrary to the principles of freedom of association. The Committee therefore requests the Government to indicate whether the Governor-General has made use of the power afforded to him under section 6(2) of the Act to specify another number of minimum members for the registration of a union.
   • c) The Committee notes that the legislation in force under which registered unions are granted certain exclusive rights respects the criteria set by the ILO's supervisory bodies as regards determination of organisations to have exclusive status, but is nevertheless aware that the formation of other unions could be seriously hindered in so far as the workers' choice would be limited and they would be inclined to join organisations benefiting from broader rights. It therefore requests the Government to supply information on developments in the number of unregistered unions and the type of activities they carry out.
   • d) The Committee also requests the Government to indicate whether section 218 of the Act allows a non-exempted worker belonging to an unregistered union to have access to the Labour Court - for example, in a case of unjustified dismissal - and, if not, to specify the alternative remedies available to such a worker.

B. The Government's further observations

1. 265. In a communication dated 14 February 1989, the Government states that, as regards the number and activities of unregistered bodies in New Zealand, given that such unions are unregistered, it does not have information to supply to the Committee as to their number and the activities which they carry out. There are, however, a number of agreements registered under the Labour Relations Act negotiated by unions which are currently registered but who have fewer than 1,000 members. The Government states that it is possible that such unions may decide to operate outside of the Labour Relations Act once their registration has been cancelled. It explains in this connection that unions have a year from the time their annual return indicates that membership is less than 1,000 to increase their membership to the 1,000 minimum or to amalgamate with another union. By mid-1989 most unions will have to have 1,000 members (other than those new unions with provisional registration) or have their registration cancelled. At this point, however, it is uncertain how many unions which lose their registration will operate outside of the Act.
2. 266. The Government also notes that the Committee expressed concern as to whether non-exempted workers belonging to a non-registered union have access under the Act to the Labour Court, and asked the Government to specify the alternative remedies available to such a worker. In reply to this, the Government states that enforcement of contracts for employment in New Zealand is through a dual system. The Labour Relations Act provides enforcement procedures for the contracts of those who are unionised, that is, approximately two-thirds of the workforce. For those who are not unionised or who belong to unregistered unions, contracts can be enforced through contract law in the civil courts.
3. 267. Although the Labour Relations Act does not allow access to the Labour Court for non-exempted workers belonging to an unregistered union, the Government explains that state-funded mediation is available to assist in resolving disputes between employers and unregistered unions, and contracts entered into by unregistered unions and employers are enforceable, but through contract law in the civil courts rather than through the Labour Court.
4. 268. In relation to the 1,000 minimum membership requirement, the Government recalls that registration under the Labour Relations Act is not obligatory and that groups of workers which are not able, or do not want, to comply with this requirement can still be formed. As regards the Committee's concern over this figure, however, the Government states that this requirement for union registration is an essential component of the Government's policy designed to encourage the development of effective and efficient unions.
5. 269. It acknowledges that section 6(2) of the Labour Relations Act gives power to the Governor-General to specify another number of minimum members for the registration of a union and is intended to apply to all unions, and not to any specified union or class of workers. Formal requests to the Government for the 1,000 minimum to be lowered can be made and will be considered by the Government. The Government states that as yet section 6(2) has not been invoked.
6. 270. Lastly, the Government points out that the Labour Relations Act attempts to provide a framework through which unions can develop to provide more effectively and efficiently the services their members need. The Government has also aimed to ensure that workers may form and join unions of their choice. This is secured by allowing union coverage to be altered, if members so desire, through democratic processes, and by allowing unregistered unions the freedom to form, operate and bargain should they wish to do so.

C. The Committee's conclusions

1. 271. The Committee regrets that the Government has been unable to supply information on the specific points concerning the key issue in this case, addressed to it when the Committee last examined the allegations. This lack of detail as to the situation in practice under the provisions of the 1987 Labour Relations Act can only leave the Committee in the same position as before in relation to the question: Does free choice of a union really exist in this particular system which favours registered organisations and gives them broad exclusive advantages over unregistered bodies?
2. 272. The Government has argued on two main fronts: namely, that the system is optional, so choice exists at that level; and, that once having opted for the system workers can, through democratic processes, choose to change union coverage. Unfortunately, the Government is not in a position to supply data as to the validity of its first argument (although the Committee observes the statement that "a number of agreements" have been concluded by unions which, although currently registered, may well lose that registration and decide to operate outside the Act). This confirms the Committee's earlier understanding that the formation of other unions outside the registration system could be seriously hindered in so far as workers would be inclined to join only those organisations enjoying broader rights.
3. 273. Indeed in one of its earliest cases (6th Report, Case No. 11 (Brazil), paras. 92 to 96), the Committee considered an optional system for "approval" of unions and questioned whether, simply because the approved unions enjoy, to the exclusion of other organisations, privileges of paramount importance in the defence of occupational interests, wage earners were not indirectly obliged to belong to the approved unions. It noted that the legislature in some countries - without any intention of discrimination - conferred on recognised unions, which were in fact the most representative, certain privileges in connection with the defence of occupational interests which only they were in a position to perform effectively; but it emphasised that the granting of such privileges should not be made subject to conditions of such a nature as to bring into question through their operation the fundamental guarantees of freedom of association.
4. 274. In view of the lack of evidence on the existence of other unregistered organisations, the Committee considers, in the case under review, that the conditions attached to the grant of registration do indirectly bring into question the workers' right to establish and join organisations of their own choosing since they unduly influence that choice.
5. 275. Neither does the Government go into any detail on the second type of choice available, namely the workers' right to change membership. In its earlier examination of the case the Committee had nevertheless noted (at paragraph 535 of its 259th Report) the Government's description that "workers who are dissatisfied with the registered union of which they are currently members may transfer their membership to another registered union. This transfer is done democratically after a ballot which must be won by a majority, while at the same time the union to which such workers wish to affiliate must ballot its members to verify that a majority will accept the new members".
6. 276. As the Committee pointed out before, the ILO supervisory bodies have recognised that many industrial relations systems have set up procedures for registering workers' organisations and for recognising the representative trade union (s)in collective bargaining. In many countries the legislation confers the exclusive right to bargain for a specific category of workers upon the organisation which represents a certain proportion or a relative or absolute majority of the workers, and whose representativity is generally determined either on the basis of the number of members (checking membership lists), or by secret ballot (checking number of votes). In this connection, the Committee of Experts has stated (General Survey, para. 295) that, where systems provide for the most representative trade union to have preferential or exclusive bargaining rights, it is important that the determination of the trade union in question should be based on objective and pre-established criteria, so as to avoid any opportunity for partiality or abuse.
7. 277. It bears repeating that it has been suggested by the present Committee in past cases that where national legislation provides for a procedure of registering or certifying unions as exclusive bargaining agents, certain safeguards should be attached, such as: a) the certification be made by an independent body; b) the representative organisation be chosen by a majority vote of the employees in the unit concerned; c) the right of an organisation which fails to secure a sufficiently large number of votes to ask for a new election after a stipulated period; d) the right of any organisation other than the certificated organisation to demand a new election after a reasonable period has elapsed. (See, for example, 109th Report, Case No. 533 (India), (para. 101.)
8. 278. In its previous examination of the present case, the Committee did not criticise the procedure under the 1987 Act whereby a registered union's exclusive status could be challenged before the Labour Court by other existing registered unions which claim to have parallel coverage of the workers involved (para. 543 of the 259th Report). No information has been brought to the Committee's attention showing that, in the almost two years' operation of this Act, this procedure has failed to secure their freedom to choose an organisation within the system to represent their interests. The Committee accordingly arrives at the same conclusion it came to earlier, namely that the registration system set up by the 1987 Labour Relations Act - which accords exclusive negotiating rights to registered unions - would not be incompatible with the principles of freedom of association so long as the registration is based on objective and predetermined criteria.
9. 279. As regards the second allegation in this case, namely that the 1,000 minimum membership requirement was excessive, the Committee notes the Government's reply that the flexibility to lower (or increase) this number by virtue of section 6(2) of the Act has not been invoked as yet, but that formal requests for a decrease will be considered by the Government if and when received. The Committee also takes note of the Government's repetition that this requirement is an essential component of its policy designed to encourage the development of effective and efficient unions.
10. 280. Given the Committee's conclusion set out above concerning the indirect pressure on workers to opt for the registration system established by the 1987 Act, and given the difficulty facing many geographical areas and small industries or enterprises in mustering 1,000 members, the Committee expresses its concern that workers in such situations might be liable to be deprived of the right to form organisations capable of fully exercising trade union activities. Such a case would be contrary to the principles of freedom of association. The Committee accordingly requests the Government to reconsider this very high minimum membership requirement with a view to reducing it to a reasonable limit or to allowing flexibility in its application. It asks the Government to keep it informed of any steps taken in this connection.
11. 281. As regards the last outstanding issue in this case, namely, whether the protective provisions of section 218 of the 1987 Act can be used by workers belonging to unregistered unions, the Committee notes the Government's reply clarifying that section 218 is not open to such workers. It also notes that the Government explains that adequate alternative remedies through the civil courts protect them.

The Committee's recommendations

• a) On the basis of the information provided to the Committee, it considers that the formation of other unions outside the registration system set up by the 1987 Labour Relations Act could be seriously hindered in so far as workers would be motivated to join only registered organisations since such organisations enjoy broader rights, and that the system thus indirectly brings into question the workers' right to establish and join organisations of their own choosing.
• b) The Committee is of the opinion that the 1,000 minimum membership requirement under the 1987 Act might be liable to deprive workers in small bargaining units or who are dispersed over wide geographical areas of the right to form organisations capable of fully exercising trade union activities, contrary to the principles of freedom of association.
• c) It consequently requests the Government to re-examine the system established under the 1987 Act in the light of the principles of freedom of association and the recommendations set out above and asks the Government to keep it informed of any steps taken in this connection.