The union renaissance of 2022 will continue through 2023 and beyond if economic pressures aren’t properly handled

Firefighters, nurses, manufacturers, journalists, port workers and justice staff were among those that took industrial action in 2022 and fair pay action by teachers, supermarket workers and bus drivers is already expected to kick off in 2023.

Is this a true renaissance of union activity or is the media just paying more attention?

“A bit of both is the honest answer”, says Council of Trade Unions economist Craig Renney.

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“There was certainly greater visibility of union action and industrial relations in 2022.”

He said some of the action stemmed from essential workers who had put themselves in harm’s way through the pandemic and felt they weren’t necessarily getting the rewards for having done so.

The official figures on strike/work stoppage activity for 2022 haven’t been released yet. 2019 was by far the largest year for strikes since 2005 with 53,752 employees striking for a combined 142,651 days.

Compare that to 2021, where just 310 employees went on strike for a combined total of 420 days.

BusinessNZ employment relations policy manager Paul MacKay said there had been a definite uptick in union activity last year, “In the state sector this has been driven by pan-government wage deals and across the board by high inflation.”

MacKay expected this to continue into this year and for as long as there was a significant gap between the Labour Cost Index (LCI) and Consumer Price Index (CPI).

CPI tracks inflation and the LCI tracks changes in salary and wage rates, essentially meaning increases in pay not meeting or exceeding the growing cost of living will continue to be met with industrial action as any pay rise not in line with inflation is effectively a pay cut.

Renney said to date, average wage increases had outstripped inflation, but the real questions were whether that would continue to be the case and whether or not those wage increases were evenly distributed.

“If those wage increases go to those who can exercise market power, i.e., those with higher levels of skills or qualifications or those whose work is in demand, then that’s not necessarily the same thing as everyone being able to get wage rises that match cost of living.”

The predicted rise in unemployment figures could also be a factor as employee power lessens.

Fair Pay agreements passed into law in October meaning sector-wide agreements can be negotiated if either 1000 workers or 10 percent of a workforce submit signatures to the Ministry of Business, Innovation and Employment. 

Once an agreement is figured out, half of the industry’s workers and employers will need to give it the thumbs up.

The National and ACT parties plan to rip up the law if they come into power later this year but some have already taken up the opportunity.

On the last business day before the Christmas break, First Union announced both bus drivers and supermarket workers had gone through the signature process.

First Union general secretary Dennis Maga said the union had campaigned on the idea of a ‘Big Fix’ last year, supporting members to seek ambitious wage settlements to correct the historical underpayment of workers in essential industries including supermarkets and public transport.

“There was a labour shortage in 2023 but this was exacerbated by a historic wage shortage in New Zealand. Facing a cost-of-living crisis, workers were united in demanding more from employers.”

As far as fair pay agreements go, Maga said employers who benefitted from the status quo would continue to object to fair pay agreements, while others were embracing the transparency and stability they brought to industries.

“It will be interesting to see if the National Party really do intend to campaign for election on the promise of making workers’ lives worse by committing to abolishing FPAs – it will be deeply unpopular to everyone except their donors.”

Previous wins

Notable industrial action last year included Fire and Emergency New Zealand settling a year and half dispute, lifting pay by as much as 24 percent and providing for better working conditions including early cancer screening.

An employment court battle eventually won by Tauranga Port worker George Lye over unfair availability requirements led to a collective employment agreement with his employer, stevedore contractor ISO, which improved availability/rostering improvements and improved compensation.

This was followed by Ports of Auckland moving all of its stevedores to a 40-hour salaried income in December and commitment to work with the Maritime Union to implement a new rostering system this year.

Council of Trade Unions economist Craig Renney. Photo: Supplied

Ports of Auckland chief executive Roger Gray said the business was cognizant of the partnership role it had with unions and being more proactive had allowed it some industrial stability for the next few years.

“There are going to be some challenges around inflation and around the country potentially going into recession, so settling industrially gives us a good foothold to work together collectively which is really important to us.

“Moving with the unions to design a roster that gives them flexibility and the ability to have some certainty to plan their lives is a big step forward and goes to show that we want to build partnerships with our unions rather than having the adversarial approach that previous management across the port sector have probably had for some time.”

Another major win was an employment court ruling that four Uber drivers were employees rather than self-employed contractors and should be subject to the protections of employment law.

First Union plans to continue working on the wider gig economy and the misclassification of contractors in 2023, including calling for rideshare drivers to claim backpay and holiday pay.

Overseas comparison

New Zealand is lesser known for union activity than its counterparts such as England and Australia.

MacKay said there wasn’t necessarily less union activity here by the numbers, but that it was less economically disruptive than action seen in other countries.

An example of this can be seen with long-running port worker strikes in Australia, even identified as a significant risk to New Zealand’s supply chain.

Renney said union density in Europe and the UK was much higher than in New Zealand and industrial relations were not handled as calmly as they are here, leading to more strikes. “The question still remains, is New Zealand just a calmer place or are we just a little bit further down the bell curve, and give it a few months and that’s where we’ll get to?

“That will hinge upon to what extent employees feel like they’re being asked to bear the costs of the current inflation or if they can see some improvement in their wages that allows them to at least stand still.”

Declining by around half since the employment contracts act was introduced in the early 1990s, New Zealand’s union membership has seen a slight uptick or a levelling off in the past several years.

The Council of Trade Unions currently has 320,000 affiliated members unevenly distributed sector to sector, with publicly funded roles such as nurses and teachers having far higher union participation than the private sector, with union penetration into construction sitting at around 2 percent, something the unions want to change.

Andrew Bevin is an Auckland-based business reporter who covers major industries, markets, regulation, aged care and fisheries.

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