Interim Report - Report No 259, November 1988

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

1. 517. The New Zealand Employers' Federation (NZEF) presented a complaint of violations of freedom of association against the Government of New Zealand in a communication dated 20 October 1986. It supplied additional information in a letter of 12 January 1987.
2. 518. On two occasions, namely in letters dated 27 April and 13 October 1987, the Government announced that new legislation was in the process of being adopted and that a reply was being prepared. The Committee accordingly adjourned the case while awaiting the Government's comments (see 251st Report, paragraph 10, 253rd Report, paragraph 11 and 254th Report, paragraph 6, approved by the Governing Body in May and November 1987, and February 1988, respectively).
3. 519. The Government supplied its observations on the case in a communication dated 22 February 1988.
4. 520. New Zealand has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No 87)or the Right to Organise and Collective Bargaining Convention, 1949 (No 98).

A. The complainant's allegations

1. 521. In its communications of 20 October 1986 and 12 January 1987, the NZEF alleges government interference in the right of workers to establish and join organisations of their own choosing through amendments to the trade union registration system embodied in the Labour Relations Act, which had been promulgated on 27 May 1987.
2. 522. According to the complainant, the system of union registration in New Zealand, whereby unions which are registered under the Labour Relations Act have exclusive representation and negotiation rights, deprives workers of any effective choice of union and thereby constitutes a denial of freedom of association. It explains that a group of workers wishing to establish a new union must show that the group consists only of workers not covered by an existing agreement or award. Groups of workers seeking registration need not show that their members were engaged in any specified industry or related industries, but union coverage may be changed only through the Registrar of Unions' acceptance (which is appealable) of a definition presented by the groups seeking registration or by an existing union seeking to extend its coverage. The Act states that:
   • a) a union's coverage may be challenged by an existing union seeking to extend its membership coverage;
   • b) challenge by an existing union to a union's coverage shall be determined ultimately by independently conducted ballots of the workers involved;
   • c) coverage of unions with "provisional" registration (see below) is protected; and
   • d) in the case of a demarcation dispute, the Labour Court will decide which union, if any, has coverage. The complainant stresses, however, that the Act does not provide for a group of workers seeking registration to challenge the coverage of an existing union.
3. 523. According to the NZEF, under this new system, a precondition for registration or continued registration is that a society or union have at least 1,000 members (although "provisional" registration may be sought if the applicant group is likely to increase to 1,000 within two years). Such a requirement, given the preponderance of small and dispersed workplaces in New Zealand, would, in the NZEF's opinion, conflict sharply with the view expressed previously by the Freedom of Association Committee (Digest of Decisions, para. 256): The establishment of a trade union may be considerably hindered, or even rendered impossible, when legislation fixes the minimum number of members of a trade union at obviously too high a figure, as in this case, for example, where legislation requires that a union must have at least 50 founder members.
4. 524. The NZEF states that registration confers on a union the exclusive right to represent the workers it covers not only in award negotiations and other collective bargaining, but also in rights disputes arising during the currency of an award or collective agreement. Moreover, where for any reason, a worker is not a member of the union with coverage in respect of his or her occupation, personal grievance procedures under the Labour Relations Act are not available, these being restricted only to members of registered unions.
5. 525. According to the complainant, legislation making membership of registered unions effectively compulsory was reintroduced by an amendment to the Industrial Relations Act in 1985, which is now embodied in the 1987 Labour Relations Act. Registered unions had until the end of 1986 to determine - by means of a ballot of existing members - whether a union membership clause would be contained in each of the awards and collective agreements which the union had negotiated. An affirmative vote resulted in the insertion of a union membership clause for a three-year period and obliged all workers whose occupations were covered by union-negotiated documents to become members of the corresponding union. The effect of registration, reinforced by compulsory unionism, states the NZEF, is to force workers to commit themselves to groups with whose beliefs and ideals their own may well conflict. Effective right to choose a union does not exist, and this has been noted by the Union Membership Exemption Tribunal, a body set up by the 1985 Amendment Act and continued by the 1987 Act, which has stated that New Zealand industrial relations legislation virtually eliminates any right of choice of a union. Registration, involving as it does prior authorisation, makes any right to form an alternative organisation at best theoretical because it denies that organisation the right of representation. In the NZEF's opinion, obliging members of an alternative organisation to join and pay dues to the registered union merely underlines the impotence of the alternative body.
6. 526. The NZEF refers to past decisions of the Committee (see Digest of Decisions, para. 229) in support of its complaint: The Committee has suggested that the State should amend its legislation so as to make it clear that when a trade union already exists for the same employees as those whom a new union seeking registration is organising or is proposing to organise, or the fact that the existing union holds a bargaining certificate in respect of such class of employees, this cannot give rise to objections of sufficient substance to justify the Registrar in refusing to register the new union.

B. The Government's reply

1. 527. In its communication dated 27 April 1987, the Government pointed out that the original Bill to change the industrial relations system had been open to considerable amendment during the various discussions leading to adoption. It stated at that time that it was expected that the legislation would come into force in June or July 1987 and it undertook to supply its comments thereon immediately thereafter.
2. 528. In its communication of 13 October 1987, the Government informed the Committee that the legislation which was the subject of this complaint (the Labour Relations Act) had come into force on 1 August 1987.
3. 529. In its letter of 22 February 1988, the Government states that the Government's objective in enacting this Act was to provide a means by which the trade union movement might form unions that were larger and more capable of providing the services and protections that workers need. The legislation provides the means for unions to move toward a more unified structure. At the same time, states the Government, the Labour Relations Act does not preclude or discourage the formation and operation of unions of the workers' choice.
4. 530. The Government explains that unions which operate through the labour relations system must register under the Labour Relations Act and it is this registration that the New Zealand Employers' Federation complains about. However, according to the Government, the Federation's description of registration is mistaken: registration is presented by the complainant as underpinning union existence or operation (or both), as guaranteeing bargaining rights and as providing special advantages; as well, it is suggested that unregistered unions are denied existence or the freedom to operate (either by law or by being disadvantaged), and that they are denied bargaining rights.
5. 531. The Government denies that registration has the legal or practical consequences that are alleged. It explains that registration as a union only denies other registered unions the right to represent the same workers. Registration as a union grants the right to bargain on behalf of the members, but only in the sense of excluding other registered unions from bargaining on behalf of the same workers. Registration as a union does not force recognition of the union by employers. Indeed, both registered and unregistered unions only gain the recognition that they can win from employers - neither is advantaged by the law in this respect. The Government stresses that an unregistered union is free to be formed by and represent whatever workers choose to be represented by it and an unregistered union has no minimum size or restricted membership. It may bargain with any employer of its members who will recognise it. Unregistered unions are lawful and trade union activities are not prescribed by law.
6. 532. The Government points out that since the Employers' Federation made its complaint, the Government has liberalised the industrial relations laws. This included the repeal of the Industrial Relations Act, 1973 (and several other Acts that were contrary to the Conventions and principles of the ILO, e.g. the Fishing Industry (Union Coverage) Act of 1979). The new legislation is the Labour Relations Act 1987 and, according to the Government, significant features of the complaint do not apply to the new legislation. For example, the new legislation does not make membership of registered unions effectively compulsory because it merely provides for workers to vote (including postal votes) to decide on compulsory membership or for the union to negotiate union security clauses into its collective agreements. The new legislation effectively continues the provisions of the Industrial Relations Amendment Act 1985, which the Committee on Freedom of Association approved with two criticisms upheld in Case No. 1334. Moreover, states the Government, the two aspects of the previous Act criticised by the Committee have been corrected by the new Act.
7. 533. The Government explains this point further by specifying that unions seeking registration must no longer be in a specified "industry", i.e. unions may now organise to represent workers in any industry or industries, or occupations, or a mixture of both. The test of whether or not the workers might conveniently belong to an already existing registered union has been repealed. Moreover, the Government stresses that the 18-month imposition of compulsory membership which drew criticism in the previous case has ended, and the new Act does not impose compulsory membership by law for any period at all.
8. 534. The Government claims that the NZEF's selective citations from the Digest of Decisions are erroneous because the factual and legislative situations currently applying to New Zealand are not the same as those quoted in the Digest. For example, the Government states that a situation allowing only one organisation to exist in the area in which a worker carries out his or her occupation had previously existed under the Fishing Industry (Union Coverage) Act and the Agricultural Workers Act, but these offensive provisions in them have been repealed by the new Act. In addition, the Government repeats that non-registration under the current Act does not make a union unlawful or deny it freedom to organise and bargain.
9. 535. In explaining the registration provisions of the new Act in detail, the Government points out that the Incorporated Societies Act and the Trade Union Act exist to enable unregistered unions to gain full legal personality and to enable workers - even if covered by a registered union - to form and join a society. The benefits which registration endows upon a union are:
   • a)the right to strike when legitimately negotiating an agreement;
   • b)the right to register collective agreements which may later be enforced with the Labour Court; and
   • c)the right to ballot members or negotiate with the employer on the question of compulsory membership. (However, the Government adds that it is possible for both registered and unregistered unions to strike provided the act does not constitute an economic tort in common law.) It points out that registration may be denied if some of the members of the applicant body are bound by a registered collective agreement negotiated by a registered union. It adds 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.
10. 536. As regards the 1,000 members requirement, the Government stresses that this only applies to registered unions and is in line with the objective of the Act, namely to promote effective and efficient registered unions. It claims that for many years the trade union movement has been hampered by organisational fragmentation, a situation which can be significantly addressed by the formation of larger unions which will have the resources, personnel and strength to provide the services, expertise and leadership for effective and efficient unions. Such a development is urgently needed in New Zealand and the minimum membership provision is designed to promote that process. Nonetheless, the Government respects the right of workers to work outside the labour relations system in unregistered unions of their choice, to which no minimum membership requirements are applied. The Government states that it will not impose a trade union monopoly or a unitary structure on the trade union movement. A system is merely provided whereby workers may promote unity in the union movement through registration and working under the system established by the Labour Relations Act. It adds that "provisional" registration for any group of less than 1,000 members is exactly the same as registration, except that the membership of a provisionally registered union is protected from "poaching" for two years. After two years those without a 1,000 members are unable to proceed to full registration, but may continue as an unregistered union.

C. The Committee's conclusions

1. 537. The Committee observes that this case involves objections by the NZEF to the 1987 Labour Relations Act on the grounds that the granting of certain exclusive rights to unions by registration eliminates the workers' free choice of a union and that the continuance of what amounts to compulsory union membership provisions likewise undermines the workers' freedom to choose an organisation to represent them. The complainant also alleges that the excessively high minimum membership requirement (1,000 members) hinders the creation of trade unions.
2. 538. As regards the minimum membership requirement, the Committee notes the Government's reasons for adopting such a provision and the fact that the 1,000-member requirement only applies to groups of workers seeking registration. The Committee observes that section 6 of the Act reads as follows: 6. (1) Subject to the provisions of this Act, any group (whether a society or not) of workers may be registered under this Act as a union. (2) Subject to the provisions of this Act, no group shall be registered as a union under this Act unless it will at the time of registration consist of at least 1,000 members (being workers) or such other number of members as is from time to time specified by the Governor-General by Order in Council for the purposes of this subsection. It also observes that where the Registrar refuses an application for the registration of any group as a union, that group may appeal to the Labour Court against the decision (section 16 of the Act).
3. 539. In examining what would appear to be at first sight a very high minimum membership number requirement, the Committee has kept in mind the underlying principle of the New Zealand industrial relations system, namely that registration of workers' organisations under the new Act is optional. Moreover, it notes, as the Government points out in its reply, that groups of workers which are not able, or do not want, to comply with the Act's 1,000-member requirement can still be formed. However, the Committee must also give due consideration to the situation of a workers' organisation which wants to be registered under the new Act (and benefit from the advantages which flow therefrom) and yet, because it cannot muster 1,000 members, is thus restricted in its objectives and activities. In such circumstances it could not carry out all the activities which it wished. For example, if their main objective was the negotiation of binding agreements, such unregistered unions would not enjoy one of the principal advantages of registration, namely the right to have their collective agreements registered for enforcement through the Labour Court.
4. 540. In the Committee's opinion, the difficulty in gathering together 1,000 members could be considerable in bargaining units covering a small number of workers. Such workers might therefore be liable to be deprived of the right to form organisations capable of fully exercising their activities, contrary to the principles of freedom of association. Consequently, the Committee 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.
5. 541. As regards the alleged denial of a worker's free choice of unions, the Committee notes that certain important advantages are granted to unions which choose to register under the Labour Relations Act. In such situations, the position of the ILO supervisory bodies has been not to criticise systems under which the most representative union enjoys preferential or exclusive bargaining rights, on condition that decisions concerning representativity are based on precise, objective and pre-established criteria (See 202nd Report, Case No. 949 (Malta), para. 278). More specifically, the Committee has indicated in the past that it is not necessarily incompatible with Convention No. 87 to accord negotiating privileges to the most representative unions if a number of safeguards are provided including:
   • a)certification is to be made by an independent body;
   • b)the representative organisations are to be chosen by a majority vote of the employees in the units concerned;
   • c)the right exists for 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 exists for an organisation other than the certificated organisations to demand a new election after a fixed period, often 12 months, has elapsed since the previous election (222nd Report, Case No. 1163 (Cyprus), para. 313 and 251st Report, Case No. 1250 (Belgium), para. 71).
6. 542. In the present case, the Committee considers that the purpose of registration is clearly set out in section 7 of the Labour Relations Act, which reads as follows: 7. (1) Registration as a union gives that union -
   • a) exclusive coverage of the workers covered by the union's membership rule;
   • b) exclusive rights to negotiate on behalf of those workers;
   • c) access to compulsory conciliation procedures for the negotiation of awards;
   • d) ability to negotiate awards that have effect beyond the original parties to them;
   • e) ability to negotiate awards and agreements that are enforceable;
   • f) access to procedures for resolving disputes of interest and disputes of rights and personal grievances;
   • g) access to the Labour Court and the Arbitration Commission in accordance with the procedures provided under this Act.
7. 543. In addition, a registered union's exclusive status can be challenged by existing unions which claim to have parallel coverage of the workers involved before the Labour Court; in a challenge by an existing union to a registered union's coverage an independent ballot of involved workers is required; and the Labour Court is to decide demarcation disputes (sections 16 and 98 of the Act). The objectivity of the authority assisting in such questions of challenges to a registered union's coverage is ensured by section 104 of the Act, which states that "Every union coverage ballot shall be conducted by the Registrar of Unions, or by some person being an employee of the Department of Labour designated by the Registrar of Unions ...". Extensive provisions are also made to settle disputed ballots (sections 111 to 120).
8. 544. The Committee therefore 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.
9. 545. The supervisory bodies have also considered that the granting of exclusive rights to the most representative organisation should not mean that the existence of other unions to which certain involved workers might wish to belong is prohibited. Minority organisations should be permitted to carry out their activities and at least to have the right to speak on behalf of their members and to represent them. (See: Freedom of Association and Collective Bargaining, General Survey of the Committee of Experts on the Application of Conventions and Recommendations, 1983, para. 141.)
10. 546. An examination should therefore be made in the present case of the rights and activities which unregistered unions have and may exercise. In this respect, the Committee notes that an unregistered union is free to be formed and cover all the workers who wish to be represented by it. It can also negotiate on behalf of its members with any employer who recognises it, it being understood, however, that its collective agreements could not be registered. Moreover, an unregistered union, like registered ones, can, subject to certain reservations, call strikes. It consequently appears that there is no legislative provision prohibiting unregistered unions from functioning, albeit to a limited extent. The Committee, however, notes with concern the complainant's opinion that the right to form an alternative unregistered union is "at best theoretical".
11. 547. The Committee is 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 enjoying broader rights. Since it has no information before it on the practical application of the legislation, the Committee is unable to reach a decision as to the real posibilities available in practice to workers to form unregistered organisations or on their possibility to exercise activities to promote and defend their members' interests. The Committee therefore requests the Government to supply information on developments in the number of unregistered unions and the type of activities they carry out (in particular, conclusion of collective agreements).
12. 548. As regards the allegation that the provisions of the Act covering personal grievances are dependent on membership of a registered union the Committee notes that, indeed in some cases, access to such procedures is linked to membership of a registered union (sections 209 d)and 216(1)). On the other hand, it notes from a reading of the Act that direct access to the Labour Court is provided by section 218 when a worker considers that he has grounds for a personal grievance. This direct access is possible in four specified cases: when a worker is not a member of a registered union because he has been exempted from union membership under the exemption provisions of the Act; or when a worker, not being a member of a union has been subjected to duress by the employer in relation to union membership or non-membership; or when a worker, not being a member of a union has suffered discrimination because he was a member of a group which previously had requested registration; or when a worker belongs to a union but is not satisfied with the treatment of his case. The Committee requests the Government to indicate whether section 218 allows a non-exempted worker belonging to a non-registered 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.
13. 549. As regards the allegation that compulsory union membership denies the free choice by workers of an organisation, the Committee observes that the pertinent section of the Labour Relations Act reads as follows: 58. The object of this Part of this Act, in relation to union membership provisions, is to establish that -
    • a) while unions may provide for a wider membership, all persons working who fall within the coverage of a union membership rule have a right to join that union;
    • b) where an award or agreement contains a union membership clause any adult worker covered by that award or agreement must become a member within 14 days of being requested to do so by the union;
    • c) the insertion of a union membership clause can be negotiated by the parties to an award or agreement, but, if not settled by negotiation, the matter can be determined by a ballot of all workers bound by the award or agreement;
    • d) union membership ballots must be supervised by the Registrar of Unions;
    • e) exemption from union membership may be sought only on the grounds of conscience or other deeply held personal conviction. (Emphasis added.)
14. 550. The Committee notes that this provision basically continues the system which previously existed in New Zealand under other legislation and about which the NZEF has complained in the past (See 244th Report, Case No. 1334, paras. 78-123 approved by the Governing Body in May-June 1986). As pointed out by the Government in the present case, the main provisions criticised by the Committee on Freedom of Association in that previous complaint have been removed from the Labour Relations Act of 1987. For example, the imposition of compulsory union membership clauses for an 18-month period and the "conveniently belong" criterion do not appear in the new Act. The Committee accordingly bases its consideration of the current legislation on the reasoning applied to the earlier complaint, in particular on the decision of the ILO's supervisory bodies to leave it to "the practice and regulations of each State to decide whether it is appropriate to guarantee the right of workers not to join an occupational organisation or ... to authorise and, where necessary, regulate the use of union security clauses in practice" (See General Survey, 1983, p. 47, para. 142).
15. 551. The Committee also recalls the distinction made between union security clauses allowed by law and those imposed by law, only the latter of which appear to result in a trade union monopoly system contrary to the principles of freedom of association. Given the freedom for balloting and negotiating union membership clauses in the terms of section 58, the Committee considers that it has not been presented with information as would require it to change its earlier decision concerning the union security arrangements existing in New Zealand. It thus considers that there has been no violation of the principles of freedom of association in respect of this aspect of the current legislation.

The Committee's recommendations

1. 552. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve 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.