The Minister of Labour, Margaret Wilson, recently released a Labour Department analysis relating to the operation of the Employment Relations Act after its first nine months in force. The Minister states that in summary, the Act appears to be working well. In particular, it appears to be achieving some of its main objectives; dispute resolution is primarily occurring at a fast, low-cost, and low-level basis, and union membership has increased rapidly. The inflationary wage rises and increases in work stoppages, which were predicted to be inevitable outcomes of the Act by opponents to the Act have not eventuated according to the Department's statistics (traversed more fully below).

Labour Department Info-line
The Labour Department info-line received 165,000 inquiries during the past nine months. Although this is nearly a 10% rise on the previous year, the Minister says that the fact that the increase in calls is so small shows that there is good understanding of the Act. The increase in calls mainly occurred during the first few months that the Act was in force and has now levelled off again.

In addition to this, the majority of calls to the info-line (30%) are about holidays and related entitlements, which are not dealt with by the Act. This represents no real change in the breakdown of calls to the info-line before and after the Act came into force. A report from the advisory group of union and employer representatives reviewing the Holidays Act 1981 is expected back soon, and is dealt with more fully in our e-bulletin of June 2001 (back copies available on request).

Labour Inspectorate
The Labour Inspectorate received 1,352 complaints in the past nine months, a similar number to the complaints received in the previous nine months. The breakdown of the types of complaint suggests that there has been no real change in this area either. As with the info-line, the majority of complaints (77%) were about breaches of the Holidays Act. The remainder of the complaints related largely to the adult minimum wage and the Wages Protection Act.

The Labour Inspectorate has taken a proactive role in ensuring minimum code compliance, holding talks in schools, and visiting restaurants, fruit growers, and the forestry industry.

Mediation Services
The Mediation Services received more than 4,700 requests for assistance in the past nine months. A breakdown of the type of requests for assistance is:
- Personal grievances 55.7%
- Wage recovery 8.6%
- Bargaining and good faith 7.1%
- Redundancy 4.7%
- Dispute 4.6%
- Individual Agreement 4.6%
- Disciplinary problems 3.2%
- Minimum code 2.1%
- Employees - definition 0.4%
- Strikes and Lockouts 0.4%
- Unions 0.3%
- Misc. 0.3%
- Other 7.9%

The majority of requests for assistance are completed within six weeks ('completion' includes withdrawal and requests which do not proceed). The remainder of the requests for assistance from Mediation Services are almost all completed within 12 weeks.

Marginally over fifty-three percent of claims settle at mediation. The majority of the remaining claims are withdrawn, transferred or do not proceed. Only 14% are recorded as 'not settling' at mediation. The option to have a mediator impose a decision under s150 of the Act has only been taken up in 0.4% of cases.

As with the Labour Inspectorate, mediators are participating in seminars, talks, or visits (492 to be precise) regarding the Mediation Services available and the Act more generally.

Outcomes of mediation
Outcomes varied widely - reinstatement was the outcome in 110 cases, 1,168 recorded a non-monetary aspect (apology, reference, promise of changed behaviour) and the vast majority (3,042) included a monetary component.

The Employment Relations Authority
The Employment Relations Authority has received 892 applications prior to June 2001, of which 495 have been completed (as above, 'completion' includes 26% of the 892 applications resulting in determinations, a further 24% being referred to mediation, and the majority of 41% being withdrawn).

Employment Court
The Employment Court received 46 applications. 62.5% of these were de novo challenges to decisions of the Authority, of which 50% were seeking de novo hearings on the entire matter. Nine applications have resulted in judgments and ten have been withdrawn. Twenty-seven applications are still outstanding.

Union Membership and Registration
A further aim of the Act was to 'recognise the role of unions in promoting their members' collective employment interests'. At the end of June 2001, 139 unions were registered and union membership totalled 319,660 (22.1% of wage and salary earners, or 17.1% of the entire workforce). This represents an increase of 17,255 or 5.7% since 1999.

Notably, the new registrations have been primarily enterprise-based unions with their coverage being limited to a single workplace.

Bargaining Outcomes
One hundred and eighty-seven collective agreements have been filed with the Employment Relations Service. Unions that existed before the enactment of the new Act negotiated 178 of those. Annualised base wage rates have not moved significantly, despite predictions to the contrary, moving from 1.9% in June 2000 to 2% in June 2001. For the period January 2001 to June 2001, 17% of employees in 76% of contracts/ agreements have had an increase in their base wage rates, most commonly between 2% and 4%. This compares with 85% of employees over the whole of 2000 and 78% of employees in 1999.

Work stoppages
There were 13 work stoppages between October 2000 and March 2001. Anecdotal evidence suggests that a number of stoppages have been averted through mediation although no figures have been released. Comparative figures for the previous year were not released.

Conclusion
The Employment Relationship Act is based on the premise that there is an inherent inequality of power and influence between the employer and the employee. Stated aims of the Act include the promotion of collective bargaining, promotion of mediation as the primary dispute resolution tool, and reduction of the need for judicial intervention in the employment relationship. These goals appear to have been achieved in the first nine months of the operation of the Act.

This article is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this article.

Copyright Phillips Fox, 2001

Web site: Phillips Fox

Author - Johanna Drayton, Senior Associate: johanna.drayton@phillipsfox.com