Written by David Doorey
A couple of years ago I posted an explainer on how a new law from New Zealand would operate in Canada. The law created a system of “sectoral collective bargaining”, which means essentially that collective bargaining would take place at the ‘sector’ level rather than at the level of an individual workplace. Sectoral bargaining is on the agenda of supporters of collective bargaining in North America, who see it as a possible solution to lagging collective agreement coverage in the U.S. and Canada, where private sector union density sits at 5% and 15%, respectively.
The full details of the New Zealand model can be read here. In my earlier post, I walked through how the model work in Canada if union(s) tried to obtain a sectoral agreement (what the NZ law calls a Fair Pay Agreement”) for Fast Food Workers in the City of Toronto. This was all hypothetical because there were no actual Fair Pay Agreements in New Zealand. But that changed this week when an application filed by First Union Incorporated was approved by the Ministry of Business, Innovation and Employment.
Here is the decision of the Ministry approving the first application for a Fair Pay Agreement in New Zealand, covering the Bus Transport Industry.
The Union submitted evidence that it had the support of 1132 employees in its targeted industry, which was the Bus Transportation Industry. The Ministry chose a random sample of those employees and verified the information submitted by the union, finding that the union had met the threshold of 1000 or more employees in the industry. Therefore, the application for a Fair Pay Agreement was approved for an industry unit covering bus drivers ‘interurban and rural’ and ‘urban’ route bus drivers. The occupational code for the workers (the ANZSCO code) was 731211 Bus Driver.
Now that the Union has initiated a Fair Pay Agreement, the process moves to next steps, which involves setting up sectoral bargaining. The employer side needs to figure out which employer association(s) will negotiate on behalf of employers. On the union side, other unions can now request to join the union bargaining side even though it was First Union that did the organizing. The sides have several months to form their bargaining parties, which is a problem for the workers because there is a very good chance the Labour Party that introduced the model will be voted out of office this fall. The leading opposition party has already promised to repeal the Fair Pay Agreement law if elected.
The next steps are described in this document. Ultimately, if a Fair Pay Agreement is negotiated it must then be put to a vote of the affected employees and employers in the Bus Driver industry. The law provides for binding arbitration in the event that no deal is reached or a tentative deal is voted down by one side or the other.
I have explained various potential models of sectoral bargaining that could be adopted in North America in this post.
I have serious doubts about whether there is a political climate open to introducing sectoral bargaining in low union density sectors in Canada. However, major labour relations law innovations are more likely if there are successful examples of alternative models working in practice. So we will keep an eye on whether the New Zealand Fair Pay Agreement law survives the upcoming election and if so whether this first application under the law results in a sectoral agreement.