Hooton on “good faith” industrial relations

November 1st, 2010 at 10:00 am by David Farrar

In the NBR (behind the paywall) wrote last week:

“Good faith” remains at the centre of New Zealand’s labour laws and, until now, has delivered relatively benign industrial relations.

The problem is that the Employment Relations Act’s authors couldn’t have anticipated a person such as Australian Media, Entertainment & Arts Alliance boss Simon Whipp.

Australian unions are overbearingly powerful and notoriously corrupt, with historic links to organised crime. It was to people with that cultural inheritance that New Zealand’s actor unionists turned – implausibly, they claim, simply because they wanted a chat with the New Zealand Screen Production and Development Association.

In fact, Mr Whipp then conspired with other union bosses in Australia, Canada, the US and the UK to arrange a global boycott of , which would have cost more than 2500 highly-skilled, highly-paid jobs and unravelled an industry worth more than New Zealand’s entire exports of beef, butter or cheese.

But the problem has been solved, or has it?

Good faith is meant to be a mutual obligation, requiring parties to interact constructively. It covers the whole relationship between employer and employee, not just formal bargaining, and includes not only current but intended employers and employees – including those working under commercial contracts who want to become employees. …

Not even in their fevered imaginations could it be considered good faith to conspire with militant union thugs across the English-speaking world to organise a global boycott of a vitally important project which already pays above industry averages – and all without even giving prior warning to the employer of their intention to do so.

Actors aren’t alone in making a mockery of “good faith.” Similar conduct is under way in secondary schools from the , a union with a history of communist connections. It has no intention of dealing in good faith with the Ministry of Education because its true objective is industrial havoc in election year. The primary teachers’ union will no doubt also find a pretext for havoc in 2011, probably over national standards – a policy which, like few others, has received overwhelming mandates from parents and voters. Other unions plan to sabotage the Rugby World Cup.

So good faith seems to be rather lacking from the unions, Hooton says.

The government may also need to consider whether the law around “good faith” should be reviewed in the light of union antics. The provisions imposing good faith obligations on unions as well as employers could be strengthened. Or perhaps employers could be able to apply to the courts to have organisations like Actors Equity and the teacher unions proscribed and the requirement to deal with them in good faith removed. Or perhaps “good faith” needs to go altogether.

That would be a shame – but it would be Ms Walsh, Ms Ward-Lealand, Ms Malcolm, Ms Kelly and Mr Whipp who would be responsible.

By coincidence (or maybe not) I also had a phone call on Friday, saying that the laws around good faith need to be reviewed as the unions make such a mockery around them. Is it possible Mr Hooton is flying a kite for certain people within National who want to see change in this area? If so, they have certainly been given an opportunity to do so by not just the , but also PPTA and .

Like Matthew, I think this would be a shame. I think good faith is important in the employment realm. But it does need to apply both ways, not one way.

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45 Responses to “Hooton on “good faith” industrial relations”

  1. mjwilknz (605 comments) says:

    I can’t understand why good faith ever needs to be proscribed in legislation. We live in a civil society! Why won’t good faith just happen naturally?

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  2. Vincent Haring (13 comments) says:

    There’s been a lot of talk about this around the party. John Key, Bill English and Kate Wilkinson decided to keep good faith leading in to the election, but that decision now looks like it was wrong.

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  3. Rick Rowling (813 comments) says:

    The tragedy for the left in the Hobbit fiasco is that, because they never manned up and said “yep, the pre-emptive boycott was a mistake, and then we c*cked up the communication afterwards”, we might have some meaningful discussion of the issues around the horrible negotiation that followed.

    But they didn’t, so we didn’t.

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  4. Viking2 (11,471 comments) says:

    Why can’t we just lkearn from history and remove unions from the law and aLLOW PEOPLE TO DO WHAT THEY DO EVERY DAY IN ALL OTHER AREA’S OF THEIR LIFE. I.E. CARRY OUT NORMAL FUNCTIONS OF LIVING AND BEING EMPLOYED.

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  5. Rick Rowling (813 comments) says:

    No, Viking, we have to protect people from themselves.

    Clearly anyone without a BA in sociology is incapable of functioning independently.

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  6. Nookin (3,341 comments) says:

    mjwilknz
    Good question. Unfortunately, there is no general obligation to negotiate in good faith as a matter of law exception in the industrial arena. There have been a number of cases on this point. The concept of good faith in employment law goes beyond civility. It is an “all cards on the table”, constructive, communicative and responsive approach. Given the nature of the employment relationship, I would be concerned about fiddling with the good faith obligations. The one concern I do have is that employers are readily held accountable for decisions in bad faith. They face awards of compensation and sometimes penalties. Although there may have been cases where employees/unions have been accountable, they are not particularly thick on the ground.

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  7. slightlyrighty (2,475 comments) says:

    Good Faith, in the context of industrial relations, could be defined as….

    “The observance of honourable intent in business relations and the avoidance of any attempts to deceive in assuming and performing contractual obligations.”

    It is therefore incumbent on all parties to act with honour in these issues from the outset. When Kelly said she did not care if the Hobbit was filmed offshore, she failed that test. When Whipp came armed with a boycott as a first strike option, he failed that test. When Kelly called Jackson a spoiled brat, she failed that test. When Malcolm and Ward-Leeland said all they wanted to do was talk, given what had already occurred, they failed that test.

    In contrast, Key has acted honourably, and despite the bleatings of the left about “economic soveriegnty” and other newly spun concepts, has done well for New Zealand Industry.

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  8. JC (956 comments) says:

    Lets just review the unions in NZ for a moment.

    Union coverage extends to just 17.9% of the workforce and 56% are in the public sector.. it wont be a surprise to note that this sector has a majority of women (60%), particularly teachers and nurses.

    The big private unions are the transport operators and meatworkers with minnows like Unite having just 11,000 members.

    This mirrors what is happening in the US.. the unions have migrated to the public sector for their power and perks, and have an overwhelming desire to increase their numbers. Thats why one cannot accept at face value claims they are understaffed. When you look at Govt expenditure 2000-2010 you see it increased from around $34 billion to about $70 billion.. and now you know why.

    In the long term, we have to privatise these public sector unions, because they will eventually bring down every Western country with their sanctimonious demands for more money, better conditions and more staff to “look after (insert your favorite victim group here)”.

    Like the MPs, these groups must be made to fear us.. the common herd, or they most assuredly will continue to blackmail us.

    JC

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  9. emmess (1,428 comments) says:

    I saw a table the other day, it was American data but I’m sure the same applies here
    The average pay and benefits for a federal employee was US$120,000 but a private sector worker was $61,000
    No wonder the right is so fired up over there

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  10. Pauleastbay (5,035 comments) says:

    Excellent comment JC

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  11. BeaB (2,123 comments) says:

    Right on, JC.
    France, Greece, the UK – they should all be a terrible warning and we are so small we cannot so easily survive.
    The public service should not be the main and most generous employer in any First World country.

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  12. YesWeDid (1,048 comments) says:

    Should I teach my children how to clean chimneys now or wait until unions have been banned?

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  13. Psycho Milt (2,412 comments) says:

    So, Hooton’s evidence of bad faith bargaining from unions is one example from an Aussie union and his personal belief that the PPTA has plans to make the govt look bad in election year. I’m underwhelmed.

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  14. Brian Smaller (4,023 comments) says:

    BeaB – the public sector once was seen as a safe job that paid less. Now they get paid more and still are safe compared to private sector. When they do have redundancies, most are in the form of attrition.

    Do you remember that idiot Helen Kelley telling John Key and NZ a few years ago that if public sector workers didn’t get their pay rises they would leave and go to the private sector? Trouble is that most public service employees already make more and have more generous conditions than their private sector counterparts. What is the average annual leave for a worker in a government department after 1 year, 5 years or ten years?

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  15. mjwilknz (605 comments) says:

    Nookin, if employees readily have other options, why on earth would they both negotiating with anyone who acted in bad faith? If employees don’t have other options, which I admit will be a concern at times, is a legislated requirement for employers to act in good faith really going to matter? Won’t requiring good faith negotiations do little more than just play into the hands of unions?

    That is, can you please tell me more about why you “would be concerned about fiddling with the good faith obligations”?

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  16. Brian Smaller (4,023 comments) says:

    Should I teach my children how to clean chimneys now or wait until unions have been banned?

    I hav enot been a member of a union since 1988 and my life has been better for it. I have negotiated every relationship I have had with different employers in that time to mutual satisfaction. Still haven’t been issued with my chimney cleaning brush and been ordered to have my kids report for duty.

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  17. tvb (4,421 comments) says:

    But we have a way of dealing with the unions and that is give people the default option of being an independent contractor, though payee/gst compliance issues need to be tidied up if independent Contractors become more prevalent.

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  18. david (2,557 comments) says:

    YWD, if they are still small enough, tie a rope to their ankle and use them as a pull-through. Nice little earner on the weekends and you can do it as an independant contractor with all the perks that status entails.

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  19. BeaB (2,123 comments) says:

    I used to teach alongside PPTA members who talked grandly about how much more they could earn in the private sector, the sub-text being their noble self-sacrifice in staying teaching. They are still in the staffroom. Long holidays, short days, classroom autonomy, sports and pet days etc are too good to give up and, when it all gets a bit tiring, there’s always a worksheet to dish out or a day off coming up.
    And the good, dedicated teachers worked hard, rightly enjoyed the perks and are worth every dollar we pay them. In fact, I would double their pay.

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  20. Rick Rowling (813 comments) says:

    Should I teach my children how to clean chimneys now or wait until unions have been banned?

    No. Teach them the value of gaining skills, a work ethic & entrepreneurship.

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  21. MT_Tinman (3,186 comments) says:

    YWD, train them now.

    At least they may become useful members of society.

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  22. slightlyrighty (2,475 comments) says:

    YWD’s comment about chimney sweeps is indicative of the relevance of the union movement.

    They live in the past, fighting past battles against the sort of employer that is far less likely to exist now than in victorian england.

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  23. tvb (4,421 comments) says:

    Instead of being chimney sweeps there are first class burglars run by the gangs

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  24. Ford Anglia (23 comments) says:

    YesWeDid – sorry old china, you can’t teach your children to clean chimneys. Socialist bed wetters are in the process of banning open fires. Something to do with the irrational and condescending “we know best” attitude that infests our law makers. Chimneys will not need cleaning.

    It’s a bit short sighted to put your children in a chimney sweeping career path. I am sure they are capable of greater heights, despite your mindset that limits their potential (are you a Teacher by chance?). Suggest you encourage your children to create a job or business that empowers them and makes them wealthy. Given your constant glass half-empty rhetoric, I think it will be incredibly hard work for you. But you must try. Won’t you think of your Children?

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  25. Pauleastbay (5,035 comments) says:

    I love being a sole trader/ contractor.

    The only problem will be if it becomes too prevalent the IRD will get involved as there aint no PAYE etc. And I can imagine them getting very nervous if 50% of the work force actually started working for themselves . Imagine that , working for yourself, !!!!!!!!!!!!!!!!!!

    There’s provisional ( which is a crime) but at least you get some control over your money contracting

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  26. DJP6-25 (1,387 comments) says:

    This would be a good issue for ACT to get some traction on. The Hobbit affair is a crisis that should not be wasted. After all, they’ve made student unions voluntary. Time for a new ECA which removes unions from the picture. Rodney, are you listening? The objective is of course to de fund, and de fang the left.

    cheers

    David Prosser

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  27. bc (1,367 comments) says:

    Wow, Hooten is in full rant mode – but like all rants, the facts get totally ignored.

    The PPTA has been acting in good faith. When the government said they had an alternative offer which would be quote “worthwhile”, the PPTA suspended industrial action at very short notice – the government’s offer being made at the last minute.
    Now the new offer (if you can call it that) was for most teachers worse than their previous one!
    So if anyone is acting in bad faith it is the government by coming up with a cynical offer that they knew full well would not be accepted.

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  28. Gwilly (158 comments) says:

    Good faith and unions…you’ve got to be joking!

    Banning unions would be a good start. I fail to see their relevance in this day and age.

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  29. Maggie (672 comments) says:

    I wonder how many employment contracts Matthew Hooten has negotiated? Or Kate Wilkinson? Or any of the litany of union bashers who vent their spleen on this blog site?

    I once dealt with an industry organisation whose representatives would tell baldfaced lies during negotiations. They knew I knew they were lying, but couldn’t help themselves.

    On one occasion the union I led used a 3rd party expert as a witness, he was a former top civil servant. The employers sent a couple of their guys to this man pretending to be from the union and tried to gain information from him they were not entitled to have.

    This was way before the days of good faith bargaining.

    Some employers are just bastards and they need to be exposed. A good faith bargaining provision helps do that.

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  30. Maggie (672 comments) says:

    While we’re at it Gwilly, let’s ban law societies, Fed Farmers, the Society of Accountants and the National Party.

    I fail to see their relevance in this day and age.

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  31. Inventory2 (10,339 comments) says:

    Maggie said

    I once dealt with an industry organisation whose representatives would tell baldfaced lies during negotiations. They knew I knew they were lying, but couldn’t help themselves.

    Never heard a trade union called an “industry organisation” Maggie ;-)

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  32. lastmanstanding (1,297 comments) says:

    One way to fix the matter of good faith bargaining is to make it an offence for any individual on either side of the table to indulge in bad faith bargaining and impose penalties including jail time.

    Apply to both employers and Unions equally. Soon stop this nonsense. Use the same principles as with perjury. if that little creep Whipp and the thin lipped one Kelly had been facing a couple days in the slammer bet they wouldnt have carried on as they did.

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  33. bc (1,367 comments) says:

    I agree totally lastmanstanding, but then the government would have to arrest itself!

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  34. Nookin (3,341 comments) says:

    >[4APenalty for certain breaches of duty of good faith
    S4A
    A party to an employment relationship who fails to comply with the duty of good faith in section 4(1) is liable to a penalty under this Act if—
    (a)the failure was deliberate, serious, and sustained; or
    (b)the failure was intended to undermine—
    (i)bargaining for an individual employment agreement or a collective agreement; or
    (ii)an individual employment agreement or a collective agreement; or
    (iii)an employment relationship; or
    (c)the failure was a breach of section 59B or section 59C.]<

    S135
    135Recovery of penalties
    (1)Any action for the recovery of a penalty may be brought,—
    (a)in the case of a breach of an employment agreement, at the suit of any party to the employment agreement who is affected by the breach; or
    (b)in the case of a breach of this Act, at the suit of any person in relation to whom the breach is alleged to have taken place; or
    (c)if permitted in the particular penalty provision, by a Labour Inspector.
    (2)Every person who is liable to a penalty under this Act is liable,—
    (a)in the case of an individual, to a penalty not exceeding $5,000:
    (b)in the case of a company or other corporation, to a penalty not exceeding $10,000.

    Regretfully, there are "just bastards" among the ranks of employees as well as among the ranks of the employers. The sense of outrage occurs when "bastardly" behaviour involves an abuse of power.

    For the most part, employers are tarred with the bastard brush primarily because they are seen as having the most power. In the case of the hobbit, the union had and exercised powers of boycott which in turn led to the same sense of outrage and condemnation usually visited upon an abuse of the employer.

    It is simply an illustration of failure to negotiate in good faith. It also illustrates that failure to negotiate in good faith is not the exclusive domain of the employer.

    There is no doubt that industrial relations in New Zealand is plagued by positional approaches rather than the problem-solving approaches promoted by the Act. I am not altogether certain that I see this changing any time soon. I like the good faith approach. It is a shame that it is not universally embraced.

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  35. Nookin (3,341 comments) says:

    mjwilknz
    I just noticed your 11.49 post.
    Most employment problems are capable of solution if they are nipped in the bud. It is when parties take a positional rather than problem-solving approach that we get polarisation and conflict.

    The good faith provisions of the Employment Relations Act encourage a problem-solving approach. The recent debacle with the Hobbit was quite the opposite. You ask whether the good faith obligations will simply play into the hands of the unions. I think the MEEA approach illustrates that failure to negotiate in good faith can backfire on both sides. Unfortunately, there will always be someone, on either side of what is regretfully, now, a divide who acts like a complete prick.

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  36. reid (16,454 comments) says:

    Some employers are just bastards and they need to be exposed. A good faith bargaining provision helps do that.

    I think the point is Maggie, few of us have never met such employers. The unions constantly talk as if almost every single if not every single employer, would be a bad employer if only the legislation gave them a chance to rip off the worker and turn them into virtual slaves.

    This is however counter to the reality that everyone I know who works encounters on a daily basis year after year after year.

    One understands of course the strong desire to demonstrate relevance to one’s membership and potential recruits, but a bit of truth now and then would not go amiss, and isn’t that what good faith is all about?

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  37. Caleb (479 comments) says:

    exactly, reid.

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  38. Maggie (672 comments) says:

    Of course IR publicity constantly focuses on wrong doing. Who wants to read a story headlined: ”
    Contract settled peacefully”?

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  39. Kimble (4,438 comments) says:

    IR publicity? You mean everything the Unions ever say about employers? What about what the racist says about people of another race? Is that just publicity too? The idea that employers are all bastards who will always screw over their employees is not “publicity”, it is an idea that defines the unions and Labour.

    90-probation periods were going to lead to hundreds and thousands of people being hired for 89 days, as heartless and greedy bosses sack them to avoid making them permanent. It never happened. We knew it wasnt going to happen. We could see the benefits of the policy and knew that the negatives your lot complained about were just fantasies.

    But you still did it. You still said that bosses would take every opportunity given to them to screw over workers. And you wonder what happened to your credibility, and why fewer and fewer people can be bothered listening to you.

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  40. bc (1,367 comments) says:

    Consider yourself fortunate reid, I have met such an employer. A real bully. A nasty, spiteful man. It was only through collective action with union assistance that the staff were (eventually) able to deal with him.
    Even though I’m sure such employers are a minority, as long as they exist, there will always be a need for unions.

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  41. reid (16,454 comments) says:

    “Even though I’m sure such employers are a minority, as long as they exist, there will always be a need for unions.”

    Yes and the proportion to which they actually in fact exist is the exact proportion to which unions are required.

    Now, where is that exact indisputable statistic?

    Disregarding of course the old “nothing is so vigorously defended as a vested interest disguised as an intellectual conviction” arguments, from either side?

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  42. Rich Prick (1,701 comments) says:

    Oh FFS, “good faith” is defined by the unions and applied by the unions. When they feel under stress every one else is in bad faith so ispo facto, they are always “good faith”. Why they weren’t stripped of all of their special privillges last week when we had the chance I will never know.

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  43. Rich Prick (1,701 comments) says:

    “Contract settled peacefully?”

    We all know that is union-speak for having your car vandalised by union thugs, or having a knife pulled on you by an “organaiser” while out running. Sorry union lady, your shit is just not welcome with this union victim. Kindly fuck off. Thanks.

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  44. Kimble (4,438 comments) says:

    “It was only through collective action with union assistance that the staff were (eventually) able to deal with him.”

    Wait, so it was only through Union action that he stopped having massive staff turnover which would have cost him a ton of money and might have eventually driven him out of business? Victory!

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  45. Maggie (672 comments) says:

    RP. you really are an unpleasant character. Another union hater because something happened to you, or maybe you dreamed it, in your dim dark past.

    Get over it. Get help. It’s not too late, even for you.

    Otherwise, fuck off.

    Thanks.

    Kimble, how do you know it didn’t happen. Clairvoyant, are you?

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