Council of Trade Unions

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Many countries are experiencing a decline in union membership and some observers question whether unions are still needed given their diminished role in collective bargaining in recent years. In spite of these trends, though, the New Zealand Council of Trade Unions (CTU) continues to protect the interests of more than a third of a million union workers and actively campaigns against political initiatives that may damage their membership. To determine the CTU's status, this paper provides a review of the relevant literature to determine when the organisation was established, its membership, funding sources, its stance on political initiatives, and the view of the world it is attempting to promote. A discussion of some other organisations that are involved in similar work, the CTU's strongest opponents and other relevant information is also provided. An analysis of the CTU's business ethics and their application to the work of the CTU and other similar organisations around the world and an assessment of whether there is still a place for trade unions in the New Zealand workplace are followed by a summary of the research and important findings in the conclusion.



Today, the CTU is an internationally recognised central trade union centre in New Zealand that is funded in large part by the 40 affiliated unions it represents with between 330,000 (Conway, 2005) and 350,000 members (New Zealand Council of Trade Unions, 2008). The organization also receives funds from the New Zealand government from time to time for various training initiatives (Foley, 2004). The history of the CTU began with the establishment of the Federation of Labour (FOL) in 1937 in an effort to provide a centralized, collective voice for the workers of New Zealand (Franks, 2007). According to labour historian and the Communications & Research Officer at the Council of Trade Unions from 1994 to 1999, Peter Franks (2007), by the 1980s, “The FOL started to shed some of its conservatism. Important debates about equal pay, the Vietnam War and apartheid took place at its conferences. Demands for better representation of women and Maori were first argued and advanced within the FOL. All of this was important in achieving the recognition of diversity that is part of the CTU today”. Following a period of economic instability and the growing need for improved labour-management relations, a new centralized union organisation was proposed in 1982 and, in response, the CTU was established in 1987 (Franks, 2007).


The CTU's annual submissions seeking an increase in the minimum wage have regularly called for clearer definitions of its purpose, development of explicit criteria for setting it, and a formal process of consultation over the application of the criteria. Their 1998 submission suggested three reference points:

1. “The level of the unemployment benefit, because workers should not be worse off after taking waged employment;
2. Some stable relationship to the average wage to stop the low paid getting left too far behind; and,
3. With regard to the level of minimum rates in collective agreements so that the minimum wage can be a factor in eliminating 'low pay ghettoes' from the labour market.

The minimum wage, they argued should not be seen as a primary wage fixing instrument, but rather as a safety net protection against exploitation for those who do not have conditions of employment determined through a (fair) process of collective bargaining, and who do not have the personal leverage (skills etc.) to secure an adequate employment contract” (Figart, 2004, p. 145).

More recently, in response to the New Zealand government's support of the Kyoto Protocol to the UN Framework Convention on Climate Change, “the New Zealand Council of Trade Unions has generally supported a sustainable development framework” (Yang, 2004); however, the CTU has also emphasized that “there must be a ‘ ‘just transition' ‘ [in place] for workers, their families and their communities when there were sound environmental reasons for phasing out certain types of production or economic activity” (Yang, 2004).

As to equal pay for equal work and the issue of gender in employment, the New Zealand Council of Trade Unions expressed their dissatisfaction with a number of the initiatives taken in New Zealand concerning gender discrimination and the CTU has supported the need to move beyond the enterprise level, and even to extend comparisons to overcome the gap between the public and private sectors in cases where direct comparisons could not be made within one sector (Cruz, Potobsky & Swepston, 1999, p. 251). According to these authors, “New Zealand Council of Trade Unions complained that all the measures being taken by the Government to eliminate discrimination were too little and too slow” (Cruz et al., 1999, p. 288).

A study by Winchester (2006) notes that prior to 2001, New Zealand's only free trade agreement (FTA) was the Australia New Zealand Closer Economic Relations (CER) Agreement which was enacted in 1983. More recently, though, the New Zealand government has been aggressively seeking to promote additional free trade agreements, a trend that is disturbing to the leadership of the CTU for various reasons, but primarily due to the adverse impact that reduced or abolished tariffs will have on the country's workers. According to Winchester, New Zealand has established free trade deal with Singapore and has begun free trade negotiations with China, Hong Kong, Malaysia, Thailand, Chile, as well as the Association of South East Asian Nations (ASEAN). The Ministry of Foreign Affairs and Trade emphasizes that New Zealand's rationale for seeking to establish these types of free trade agreements is actually to ensure access to markets for the country's exporters and to promote the process of multilateral trade liberalization (Winchester, 2006).

As a indication of the organization's continuing relevancy in a changing world (discussed further below), Winchester points out that a major issue that has been identified by a number of observers, but particularly the New Zealand Council of Trade Unions, concerns the trade negotiations between New Zealand and China, as well as the liberalization of trade in general and the potential adverse effect these initiatives will have on New Zealand workers who are employed in the textiles, clothing and footwear (TCF) sector. In this regard, Winchester (2006) reports that, “Downward pressure on the wage paid to unskilled labour employed in the TCF sector presents a dilemma for policy makers as these workers are typically in the lower tail of the income distribution”.

This is not to say, of course, that the CTU is opposed to increased international commerce, but it is to say that there are two sides to these negotiations and the CTU is ensuring that the affected workers' voice is being heard. According to Peter Conway (2005), Secretary of the New Zealand Council of Trade Unions, “Unions generally support international trade. The CTU's union members in public services, education, the textile and clothing sector and manufacturing could see adverse consequences from trade agreements--but also those in the dairy and meat industries who may see improved job opportunities (but still have major concerns about the connection between trade agreements, food security, the dominance of multinationals, and many other issues, including labour standards)” .

To date, the CTU has been involved in recent years in numerous trade negotiations and related areas of work, including the following:”
1. The WTO in general including the GATT;
2. The New Zealand-Singapore closer economic partnership;
3. The proposed New Zealand-Hong Kong closer economic partnership;
4. The review of ANZCERTA (CER) between New Zealand and Australia;
5. Organisation for Economic Co-Operation and Development (OECD) guidelines on multinational enterprises, including support for a revitalised national contact point;
6. The Pacific three with New Zealand, Chile, and Singapore;
7. The proposed New Zealand-China free trade agreement;
8. The New Zealand-Malaysia free trade agreement;
9. Association of Southeast Asian Nations (ASEAN) plus;
10. The post-2005 Tariff Review;
11. Meetings on Asia Pacific Economic Cooperation (APEC) and supporting International Confederation of Free Trade Unions (ICFTU) calls for a union forum, participation of trade union representatives in APEC committees, working groups and ministerial meetings, establishment of regular contacts between the APLN and the APEC secretariat and inclusion of trade union representatives in the national consultative committees established by APEC members and in national delegations to APEC meetings; and,
12. PACER, PICTA including liaison with SPOCTU” (Conway, 2005).


The stated objectives of the CTU are to promote an equitable playing field for the workers of New Zealand that ensures they receive an honest day's pay for an honest day's work. To this end, the CTU has maintained that existing regulatory and policy arrangements should include a number of the elements of the extensive privatisation and deregulation of the 1980s and 1990s but should not represent a foundation for rigid commitments in international trade agreement negotiations (Conway, 2005). According to the CTU's secretary, “Labour's policy of a New Zealand content quota on radio and television could not be implemented because of prior GATT and CER commitments. The regulatory settings in (say) 2000 would not have contemplated the government becoming the major shareholder in Air New Zealand or buying back the railway tracks; so if they had been bound into the GATT, the government would not have been able to step back in” (Conway, 2005).

The CTU's official position on these issues is as follows: “

1. The CTU does not oppose international trade;
2. The CTU does not oppose all negotiations on preferential trade arrangements;
3. The CTU prefers a multilateral approach;
4. The CTU recognises that free trade agreements are a reality;
5. The CTU therefore focuses on specific issues in free trade agreements;
6. The CTU does not want the 1984-1999 deregulation of the New Zealand economy to be the baseline for trade rules on access;
7. The CTU wants to see more focus on alternative trade models;
8. The CTU wants to see trade within a sustainable development framework“ (Conway, 2005)

According to Conway, the CTU acknowledges that international trade is important to New Zealand's economy and its workers and support rules-based trade. Notwithstanding this recognition, though, the CTU also cites the terms of a number of existing rules such as manner in which the World Trade Organization negotiates trade rules, the inequalities of bargaining power, the inclusion and exclusion of certain issues, and the uneven enforcement of rules (Conway, 2005). Moreover, it is the position of the CTU that New Zealand's international trade and investment policies should be fuelled by and remains congruent with the country's economic and social development policies. In this regard, the CTU's secretary emphasizes that the CTU “is in favour of transparency and comprehensive cost-benefit analysis in relation to any proposed trade agreement. New Zealand's trade policy must protect the jobs that it seeks to create in its economic development strategy” (Conway, 2005).


Although the CTU represents approximately 80 percent of the unions active in New Zealand today, there are some other organisations operating in the country including the New Zealand Public Service Association (PSA), the Association of Staff in Tertiary Education (ASTE), Central Amalgamated Workers Union (CAWU) and the Corrections Association of New Zealand (CANZ) and several others (Union Plus, 2006).

The CTU's Strongest Opponents

Not surprisingly, the CTU's strongest opponents remain the management of the companies whose workers are represented by the council, but the organization has also been criticized by others for its stance concerning the Employment Contracts Act of 1991. For instance, according to Figart (2004, p. 142), “The New Zealand Council of Trade Unions was weakened by deunionization, and was criticized from the left for not having fought harder against the 1991 Employment Contracts Act (ECA) that did not even mention trade unions, subsuming them under bargaining agents and weakening their ability to recruit and represent members, by, for instance, calling a general strike”. According to Webb et al. (2002, p. 149), there were also some controversy resulting from union membership in the national Labour Party until very recently: “While their members provide a high proportion of Labour Party members and activists, their unions have never affiliated to the party. As in other similar parties, union affiliation was a source of internal party conflict in the New Zealand Labour Party up to the 1990s”.


The extent to which the CTU's activities are deemed ethical or not likely relates to whether an individual's interests are being protected by their actions or harmed by them. The management of the affected companies, for instance, may consider the promotion of job rights and protections by the CTU as less than desirable, but it would appear that everything the organization seeks to accomplish is performed in an ethical fashion. For example, according to the CTU's Web site, “The goal of the New Zealand trade union movement is to improve the lives of working people and their families. The role of the CTU is to promote unionisation and collectivism through programmes of active campaigns” (New Zealand Council of Trade Unions, 2008c). Moreover, it would be hard to argue with the stated objectives of the CTU to provide a collective voice for the individual worker in a democratic fashion. In this regard, the preamble to the CTU constitution states: “The NZCTU exists to unite democratic Trade Unions, to enable them to consult and co-operate with each other for the common good, and to help achieve the agreed aims and objects of the NZCTU by acting in unison and in accordance with democratic majority decisions” (New Zealand Council of Trade Unions, 2008c).


The passage of the Employment Contracts Act 1991 (“the Act”) represented an important turning point in New Zealand's history and the role being played by the CTU today. For instance, the Act ended compulsory union membership in the private sector and prohibited any form of closed shop (Webb et al., 2002). According to Black's Law Dictionary (1991, p. 255), a closed shop exists “where workers must be members of a union as a condition of their employment”. In addition, the Act also reduced unions to the status of incorporated societies (Webb et al., 2002). In this regard, Webb, Farrell and Holliday (2002, p. 149) note that, “Union membership as a percentage of the workforce more than halved by the end of 1997, when estimated union density stood at 19.2 per cent, and the number of unions was much lower than the early 1980s”. Different industries experienced differing levels of membership loss in unions during this period. In this regard, Webb and his associates (2002, p. 149) add that, “Decline was only a little lower than average in the traditional manual or blue-collar unions which form the historic core of Labour union affiliation. Public sector white-collar unions survived best”. The net impact on the CTU has been a reduction in their membership rolls, but it is apparent that the organization remains relevant in an increasingly globalized marketplace where New Zealand workers may experience the loss of jobs or reductions in pay because of competitive from abroad.

With fewer members and voting delegates at party conferences, unions are now weaker in the party organization than ever before. It is unlikely that the percentage of union members affiliated to the party is much above 10 per cent of the much lower number of union members in the late 1990s. However, this lower level of affiliation of unions and their members to the party is probably more meaningful than in the past. Numbers are no longer swelled by involuntary members. Members of a union not wishing to be associated with the Labour Party are no longer counted as members for purposes of affiliation. In the late 1990s, the major part of Labour's union affiliate members came from two of the largest unions, the Service Workers (15,000 members), and the Engineering, Printing, and Manufacturing Union (40,000) (New Zealand Council of Trade Unions 1997). Despite fewer members, by the late 1990s unions had nevertheless re-established a key role in the Labour Party, most clearly indicated by an increase in the number of former union members and officials in Labour's parliamentary party (Webb et al., 2002, p. 419).

While New Zealand managed to avoid the same type of frequently violent labour-management confrontations that characterized the rise of unions in the United States in the early 20th century and the CTU emerged for some fundamentally different reasons, it is clear that the CTU still has a role to play in protecting the interests of its member workers in an increasingly globalized and competitive marketplace. The aforementioned example of the free trade agreements being negotiated with China and their impact on the country's textile workers is a good example of this type of ongoing need for a collective voice to represent individual workers in New Zealand. As the CTU's Web site emphasizes, “Unions exist for workers to support each other so that they don't have to face a problem, or negotiate improvements to their working conditions, on their own. When workers act together they have strength and safety in numbers and have a better chance of getting what they need at work and beyond” (New Zealand Council of Trade Unions, 2008). The CTU also represents a valuable coordinating organization for union workers in New Zealand. For example, Foley (2004) notes that, “In 2002 the New Zealand Council of Trade Unions (NZCTU) gained government funds to develop and run a series of one-day programs about the international clothing and footwear industry” (p. 256). Workers in the clothing and footwear industry were provided training to help them better discern how their specific jobs meshed with the overall industry in international terms, as well as an enhanced sense of the clout that international corporate-brand companies such as Nike or The Gap exerted on their jobs and similarly situated workers abroad (Foley, 2004).


The research showed that the New Zealand Council of Trade Unions was created in 1987 from its predecessor, the Federation of Labour, which was established in 1937 in order to provide a centralized, collective voice for the workers of New Zealand. The research also showed that today, the CTU consists of around 350,000 members representing approximately 40 unions competing in a number of industries in New Zealand, and is funded by its membership as well as receiving funds from time to time from the New Zealand government for various training initiatives. Although the CTU is not the only such trade council in New Zealand today, it does account for the lion's share of the union membership and it remains an important force in ensuring that the interests of New Zealand workers are taken into consideration by the government in its trade agreement negotiations with other countries and in educating the workers of New Zealand concerning their legal rights in the workplace.


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