Strikes and Lockouts

June 19th, 2013 at 12:00 pm by David Farrar

As reported last week, has a bill which will remove the prohibition on temporary labour during a strike or lockout.

Now I don’t have a problem with employers being able to use temporary labour to remain operating during a strike. Without that ability, a union can cripple an employer.

However I do have a concern over the possibility than an employer would lock out current staff, and use temps to force them onto a new contract.

Personally I dislike both strikes and lockouts. I think it is incredibly hard to have a harmonious workplace if either side resorts to the ultimate action of a strike or lockout. I am happy to say I may even dislike lockouts a little bit more, as I don’t like employers trying to force current staff onto a new contract. A shift from a current contract should be one that is mutually agreed to.

There’s even part of me that wonders if employers should have the ability to do a lockout? But as unions have the right to strike, I guess you need an equivalent power for an employer.

But how often do we have strikes and lockouts?

The average numbers of strikes every year since 1986 has been 66. The average number of lockouts is 2. So very very few employers ever resort to a lockout, as it should be.

The average hides the dramatic change over time as this graph shows.

Stoppages

 

You can see the impact of the Employment Contracts Act in 1991. It brought to an end the era of three strikes a week. The 4th Labour Government say 176 strikes a year. 4th National Government saw it drop to 52. 5th Labour Government was 35 average and the first term of 5th National was just 19 a year, or one every three weeks or so. It’s good we have fewer strikes that in the past, but just a few years ago there were 60 in one year under Labour.

Anyway the number of lockouts is extremely low. For the last decade an average of only one a year. So any claims of employers locking staff out should be read in that context.

However if the bill gets through a first reading, and makes it to select committee a possible option to be considered is to remove the prohibition on temporary labour for strikes, but not for lockouts? I’d be interested to hear debate on the pros and cons of that.

To my mind, that could be a good compromise as it would discourage both strikes and lockouts. If an employer can use temporary staff, then a union is less likely to resort to a strike, which is good. Strikes should be a last resort. Once you’ve had a strike it is very difficult to have a trusting employment relationship.

However if you allow employers to use temporary labour for lockouts, that could encourage some employers (not many I am sure) to do a lockout – and I view that as undesirable also.

So repealing the ban on temporary labour for strikes, but not lockouts, would seem to be a good compromise.

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13 Responses to “Strikes and Lockouts”

  1. XavierG (34 comments) says:

    I’m afraid your interpretation of this graph is somewhat spurious, David. Your statement:

    “You can see the impact of the Employment Contracts Act in 1991 It brought to an end the era of three strikes a week”

    is clearly incorrect. There is a substantial drop off in the number of strikes in the immediate five years preceding the introduction of the ECA, a continuation of this trend into 1991 and then a significant upturn in the following 5 years – followed by clear volatility in the numbers around an average slow trend downwards.

    How you interpret the ECA as having a negative effect on strikes beggars belief, particularly for a numbers man such as yourself.

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  2. nickb (3,686 comments) says:

    However I do have a concern over the possibility than an employer would lock out current staff, and use temps to force them onto a new contract.

    As a “classical liberal” you really believe in this?

    Surely a classical liberal would believe in the free market and if people do not want to work, support the right of an employer to hire new staff?

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  3. anonymouse (710 comments) says:

    I think this is probably all a bit moot, as P Dunne said this morning that he will vote against this bill ( presumably at the first reading)….
    with only National and ACT likely to support it, it will die fairly quickly

    http://www.stuff.co.nz/national/politics/8814712/Dunne-against-strike-breaking-bill

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  4. RRM (9,834 comments) says:

    That’s a pretty bright red tie Dunne’s wearing… is all this his idea of “warning” to the right that he could swing the other way?

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  5. berend (1,705 comments) says:

    Do we have data on where these strikes and locksouts happen? Aren’t they all government? So the drop in strikes is simply because many companies are no longer government owned.

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  6. Nigel Kearney (984 comments) says:

    There is definitely a need for lockouts as a response to a rolling strike. If 20% of staff strike on Monday, another 20% on Tuesday etc, then workers only give up 20% of their income while the employer may lose all or most of their production because they cannot operate without a full complement of staff.

    The right to strike does not imply that employers are required to suffer sufficient losses to make the strike effective. Any more than the right to free speech requires the ability to force other people to listen.

    It’s already quite a big advantage for workers to be able to unilaterally stop honouring the terms of their employment contract and the employer is not allowed to just tear the contract up. Plus, we have lots of small businesses in NZ so there is not the power disparity between unions and employers that exists elsewhere.

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  7. dime (9,856 comments) says:

    Great to see Jamie putting his vast experience in the private sector to good use.

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  8. Samuel Smith (276 comments) says:

    One of the most sensible and objective posts I’ve ever seen on Kiwiblog.

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  9. EmmaChisit (18 comments) says:

    Think you might find that the serious drop in strikes (according to the graph) would have been in response to the privatisation of a lot of gummint departments, by Roger Douglas after his election in 1984.

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  10. PaulL (5,971 comments) says:

    I think lockouts are sometimes a result of action by unions that falls just short of a strike.

    For example, in Australia the union was running a process where they declared they’d be having a stopwork meeting / going on strike on a particular day. Qantas would cancel flights to cater to it, then the union would cancel the strike. Result was lost revenue for Qantas (and a massive defection of business travellers) with no impact on pay for workers. No idea how the union thought it was to their advantage to drive the airline into the ground, but apparently that’s what they thought. Qantas eventually went with a lockout, which the unions never thought they had the balls to do. Result was that the industrial relations umpire “called in” the parties, and issued binding arbitration, which until then they’d been reluctant to do. They also made a finding that Qantas were entirely within their rights to do what they did.

    In that situation, I would have seen it as reasonable for Qantas to lockout the union, and to bring in temporary labour to replace them if they could do so. That would have allowed them to settle the dispute much earlier.

    The underlying problem here is the belief that wages are a one way street – they only go up, they never go down. There’s no way to make wages go down other than going bankrupt and then starting a new company with lower wages. GMH in Australia are about to learn this, and Ford already learned it and made the decision to shut down.

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  11. big bruv (13,725 comments) says:

    If the political whore Peter Dunne does not support this bill then I think Key should go after Dunne with everything he has. Dunne needs to be told that as a slut he will do what he is told when he is told.

    Oh..and Dime, glad to see you agree with me when it comes to the useless Jamie-Lee Ross.

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  12. Tempist (13 comments) says:

    The pre-1988 strike data excluded strike action in the state (central government) sector (except for the railways unions). The decline in strike action would be more marked if the analysis was broken down by sector.

    The decline in strikes is likely to be largely attributable to the declines in union membership – unions bargaining for fewer members ultimately means fewer strikes – so the Employment Contracts Act is part of any explanation insofar as it contributed to that trend (which is common to many other countries).

    With union membership as a proportion of all employees at below 10% in the private sector (and concentrated in a couple of areas), traditional industrial relations issues like strikes, collective bargaining regulation, etc are increasingly irrelevant to the majority of the productive economy. Not that you’d think that from the noise around proposed changes to the Employment Relations Act.

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  13. Pete George (23,476 comments) says:

    bb – John Key sounds very lukewarm on the bill, he said he’d support it to committee stage but it needed a lot od debate.

    And…

    Kim Campbell, chief executive of the Employers & Manufacturers Association, said the bill appeared to be a good idea ”at first flush”, but this did not take into account unintended consequences.

    “While its principles are worth exploring it could prove very divisive,” Campbell said.

    “New Zealand communities place a high value on fairness and the Bill could have consequences that would be considered unfair.

    “In spite of several high profile cases we have had 10 to 15 years of harmonious workplace relations and don’t want to jeopardise that. We need to look carefully at the implications of industrial action on essential industries such as the ports and hospitals, as well as on small businesses.”

    Campbell added that employers did not want employment law to change every time there was a change of Government.

    http://www.stuff.co.nz/business/industries/8797478/Employers-group-wary-of-strike-breaking-Bill

    Seems like Dunne is very much on the same page as the Employers & Manufacturers Association on the bill.

    Big risks with little likely to gain.

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