Passing on

The vexatious issue of passing on raised its head again in 2012 and early 2013 with the 3 Auckland DHBs, Canterbury and most recently Waikato passing on the terms and conditions NZRDA secured for members, to nonmembers.

So what is “passing on”? This refers to employers who “pass on” terms and conditions negotiated by a union, to nonunion employees, without any negotiation having occurred. In explanation, nonunion staff are employed on individual employment agreements (IEAs), the negotiation of which is between that employee and their employer. They have the same right to negotiate and the same process applies as for collective bargaining in that one party (usually the employee) initiates bargaining, which is “normally” followed by tabling of claims, negotiation, genuine consideration of the party’s positions, responses and counterclaims etc, until a settlement is reached.

In Auckland, Canterbury and Waikato, the DHBs simply offered the same terms and conditions as NZRDA had negotiated; without any expectation having been expressed by the employee, and without any negotiation. Indeed had someone sought to negotiate something different, we suspect the employer would have turned them down!

When we say the “same” terms and conditions, in the case of Canterbury and Waikato, this included backdating the 2% pay rise members have enjoyed since September 2012 as a lump sum (although this was “variable passing on” as the money was averaged, so those on higher salaries got less and those on lower salaries got more!).

In their defense, the employer’s state that passing on is:
1. in the interests of fairness referring to “…policy requires pay to be fair and equitable”; and
2. Not a union issue as IEAs apply to nonunion members, and
3. to assist with administrative pressures; specifically that IEAs make it administratively difficult for managers and payroll.

On the Union front, passing on is seen as undermining; a deliberate action by the employer to encourage non-union membership on the basis that “they get the same anyway so why pay union fees”. Passing on by the employer is a significant irritant to union members who personally see their employer’s actions as an attempt to tip the balance of power that collective activity seeks to achieve i.e. it is seen as an attack on them.

In reply to the “fair and equitable” position, union members believe passing on is anything but “fair and equitable”. They pay, morally and financially for the negotiation of terms and conditions. Non-union members have a choice; they can participate if they wish and are specifically notified within 10 days of bargaining being initiated to allow this to occur. Furthermore, on settlement of the collective, the opportunity to join the union is also often provided, giving the non-union members another chance. Their choice is influenced by the employer’s intention (track record) to pass on regardless. In this scenario it is the union members, and we note the majority of the employees, who feel they have been treated unfairly.

The Bargaining Fee arrangement could assist with this area of conflict as non-union members who wish to enjoy the benefits negotiated by the union, can pay a fee for the privilege. At least under this regime the “they get it for free” issue and that the benefit is union negotiated, is acknowledged. However more recently DHBs have been resisting the inclusion of bargaining fees, articulated as being largely on the basis of administrative hassle. This occurs even where the union offers to manage the process (in conjunction with the employer providing oversight). Where the employer declines a bargaining fee and then proceeds to passing on, the arguments around undermining as the primary intention are amplified.

As for equity, the employer’s commitment to this concept is somewhat “convenient” and dare we say transient. Providing improved terms and conditions to individual’s riding above the collective agreement is not uncommon when it suits! Having said that individuals are entitled to negotiate their own IEAs; it is the employer’s regime of passing on that minimizes this option.

On the issue of “what employers do with IEAs being none of the union’s business”, a number of points:

1. The initiation of IEA negotiation let alone passing on of specifically union negotiated terms and conditions, comes rarely from the IEA non-union member but is instigated by the DHBs.
2. The terms and conditions being offered are those negotiated by the union. Little if any room for genuine individual negotiation exists or is sought by the employer.
3. Passing on of union member’s negotiated terms and conditions to the minority has a negative impact for the majority of (union) employees.

If the employers were in the process of de novo negotiating individually with non-union members and not from the basis of offering up front union negotiated terms and conditions, then the “union interest” in such would be limited. However in light of what actually happens, employer initiation and use of union negotiated terms and conditions / impact on unions, unions we argue do have a legitimate interest.

On the administrative issues surrounding payroll, we have some sympathy, if only because making life easier for payroll makes life better for us all!! On terms of employment such as different break provisions for instance we can appreciate there may be some rostering issues. However we do not believe that with computer systems set up as they are today, the tracking of IEAs as far as salaries is concerned is that difficult.

When it comes to the additional process of paying a lump sum payment however, the administrative argument falls apart, imposing as it does more administrative work.

Finally whilst not mentioned above, there is the cost issue. $420K for ADHB alone in an environment where we are constantly petitioned to do more with less and save;save;save. The employer’s credibility, or perhaps more kindly put focus, has to be questioned at such times.

This matter has been raised with the employers and is the subject of ongoing discussion. It is also the subject of pending legal action, which we shall report on in future newsletters.