The Industrial Conciliation and Arbitration Act 1894
was a piece of industrial relations legislation passed by the Parliament of New Zealand
The Parliament of New Zealand consists of the Queen of New Zealand and the New Zealand House of Representatives and, until 1951, the New Zealand Legislative Council. The House of Representatives is often referred to as "Parliament".The House of Representatives usually consists of 120 Members of...
in 1894. Enacted by the First Liberal Government of New Zealand
The First Liberal Government of New Zealand was the first responsible government in New Zealand politics organised along party lines. The Government formed following the founding of the Liberal Party and took office on the 24 January 1891, and governed New Zealand for over 21 years until 10 July...
, it was the world's first compulsory system of state arbitration. It gave legal recognition to unions and enabled them to take disputes to a Conciliation Board, consisting of members elected by employers and workers. If the Board's decision was unsatisfactory to either side, an appeal could be made to the Arbitration Court, consisting of a Supreme Court
The High Court of New Zealand is a superior court of New Zealand. It was established in 1841 and known as the Supreme Court of New Zealand until 1980....
judge and two assessors, one elected by employers' associations and another by unions. The 1966 Encyclopaedia of New Zealand
An Encyclopaedia of New Zealand was an official encyclopedia about New Zealand, published by the New Zealand Government in 1966. The editor was Dr Alexander Hare McLintock, the parliamentary historian, who was assisted by two others. The encyclopedia included articles written by 359 other authors...
stated that: "After some 70 years of operation, the industrial conciliation and arbitration system has become a firmly accepted – perhaps even a traditional – way of determining minimum wage rates and handling industrial disputes. It has been subject to many criticisms from time to time, and occasionally to heavier sectional attacks, but no suggestion for its abolition has ever succeeded in gaining any significant measure of support from the employers' and workers' organisations... or from the community generally." The Act remained in force until 1973, but the essential structure it established was current until the Fourth National Government
The Fourth National Government of New Zealand was the government of New Zealand from 2 November 1990 to 27 November 1999. Following in the footsteps of the previous Labour government, the fourth National government embarked on an extensive programme of spending cuts...
introduced the Employment Contracts Act 1991
Prelude to Arbitration
The process by which the Act came into being needs study in its own right. It is based on a scheme devised by a South Australian politician, C.C. Kingston.
Workings of the Act
Registration of unions under the Act was voluntary, and unions could choose to remain outside the Act and negotiate directly with employers. If a union registered it was bound to comply with the rulings of the Arbitration Court and could not, for example, strike against terms laid down by it. As a result, in the early twentieth century, some militant and/or strong unions chose not to register. However most unions and their members benefitted from the Act, as few had the power to directly negotiate terms better than those laid down by the Court. The Act forbade the registration of unions where one already existed in the same industry and area. This prevented competition among unions. The Court was also able to make 'awards' which bound all employers and workers in a particular industry, and set down minimum conditions and rates of pay, although organisations not party to the original award could apply for a complete or partial exemption from the award.
The First Labour Government
The First Labour Government of New Zealand was the government of New Zealand from 1935 to 1949. It set the tone of New Zealand's economic and welfare policies until the 1980s, establishing a welfare state, a system of Keynesian economic management, and high levels of state intervention...
's 1936 amendment had two major provisions: the 40 hour week and compulsory unionism. Awards could not require more than 40 hours work a week, not counting overtime, and this was to be arranged, where possible, so that no part of the working week fell on a Saturday. Exemptions could be made if a 40 hour week was impractical, but this rarely occurred. The amendment also made it illegal to employ a worker who was not a member of a union bound by the relevant award or agreement for that industry.
The 1961 amendment, passed by the Second National Government
The Second National Government of New Zealand was the government of New Zealand from 1960 to 1972. It was a conservative government which sought mainly to preserve the economic prosperity and general stability of the early 1960s...
abolished compulsory unionism. However membership continued to be compulsory when unions and employers agreed that it should be, or if 50% of relevant workers voted for compulsory unionism in their industry. Even in cases where compulsory unionism did not remain in force, employers were still required to prefer union members if they were equally qualified to non-union workers. Hence the amendment had little practical impact.