Story: Employer and business organisations

Page 3 – The Employers’ Federation

Employers organised once workers did. Faced with an increasing number of strikes in the early 1890s, the first employer associations began to meet. After the Industrial Conciliation and Arbitration Act (I. C. and A. Act) became law in 1894 these groups solidified and others formed. In 1902 a national Employers’ Federation was set up, to represent the view of local associations to central government.

Purpose

The employers’ associations dealt with the voluminous detail of industrial awards. They alerted members to and advised them on critical employment issues, represented them in industrial matters, and lobbied government on issues of concern.

At the centre of this activity were the I. C. and A. Act, the government and trade unions. The act and its amendments provided a framework within which employers and labour could decide wages and conditions, with the Arbitration Court acting as umpire.

Members

Employers, motivated by the need for representation at hearings of the Arbitration Court, joined their local association and through that the federation. Employer associations first formed and were largest in the South Island, where industry was then concentrated. By 1921 the Auckland Employers’ Association had become the largest, with 1,200 direct members and numerous others represented by affiliated associations. In the early 1990s the Auckland group had over 4,000 members.

Employers’ Federation and unions

The Employers’ Federation’s relationship with unions was sometimes antagonistic. This was particularly the case with militant groups, such as the first Federation of Labour (1909–13) or the Boilermakers’ Union later in the 20th century. Over decades of working within the framework created by the I. C. and A. Act, this antagonism came to be ritualistic rather than real.

Penny argument

Wage negotiations over an extra penny an hour for electricians took more than a year to resolve in the early 1930s. The employers’ association and the union went in and out of negotiation and conciliation, never quite agreeing. There was no urgency – the penny an hour was already being paid to most workers, but the union wanted it written into the award. Employers were reluctant, because their decision would affect other employers’ wage payments.

The I. C. and A. Act fostered the interdependence of employer and labour federations. The second Federation of Labour (1937–87), like the Employers’ Federation itself, was part of the machinery of industrial relations and to a certain extent of the government. The Employers’ Federation was comfortable with this known adversary. The federation’s commitment to the existing industrial relations system can be seen in its rejection of Minister of Labour Tom Shand’s 1962 suggestion that union membership be made voluntary.

Employers’ Federation and government

The relationship between the federation and the government varied over time. The federation was so dismayed by the pro-worker legislation passed after the election of the first Labour government (1935–49) that a grand alliance of all business and employer groups was considered.

But the relationship was not necessarily good when conservative parties were in power. During the 1950s the conservative National government and employers had a harmonious relationship. In the 1960s, another National government was often at odds with the Employers’ Federation. Tom Shand, minister of labour for most of the decade, sought to make changes to the industrial relations system which the Federation rejected; he in turn rejected their requests for assistance.

1980s and 1990s reforms

Economic reforms radically altered the position of the Employers’ Federation and associations. Moving away from intervention and centralisation of industrial relations processes, the reforms began in the 1980s and continued into the 1990s, and were introduced by both Labour- and National-led governments.

Employers found themselves in a new industrial landscape. By the later 1980s compulsory arbitration was virtually gone and enterprise bargaining (where a particular business negotiated with its workers) became possible. The federation, working with the newly formed Business Roundtable, began to actively campaign for further industrial relations reform. The National government’s Employment Contracts Act 1991 removed the last traces of the old order.

The Employers’ Federation was now dealing with individual contracts and decentralised wage bargaining. The work it had done for decades was transformed, and in the 1990s the member associations had no choice but to change.

New services were offered and existing ones expanded. Negotiation, training, legal representation, industrial information, wage surveys and marketing all became available on a user-pays basis.

How to cite this page:

Megan Cook. 'Employer and business organisations - The Employers’ Federation', Te Ara - the Encyclopedia of New Zealand, updated 13-Jul-12
URL: http://www.TeAra.govt.nz/en/employer-and-business-organisations/page-3