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Salient. Victoria University Student Newspaper. Volume 36, Number 8. 19th April 1973

Militants more successful than Moderates

Militants more successful than Moderates

The turning point came in 1961, when the National Government abolished compulsory union membership. In retaliation, the Federation of Labour withdrew its endorsement of conciliation and arbitration and, as if to show the Government's foolishness in tampering with the arbitration law, Walsh, the Federation's president, henceforth made a point of bypassing the arbitration machinery. Encouraged by the Federation's example, direct bargaining with the employers spread quickly and it brought amazing results. A so-called "wage drift" developed which by 1965 exceeded 30%. In other words, average actual wages ("ruling rates") were 30% higher that year than the award rates laid down by the Arbitration Court. The militant unions, mostly in the Auckland area, benefitted most. "It must unfortunately be acknowledged", the N.Z. Employers' Federation told the Minister of Labour, "that militant unions have achieved greater results than have the unions which take a more moderate line". That was in May 1970, but the wage escalation continued and unions were able to gain increases of at least I 5% in the calendar year 1970, well in excess of rises in the cost of living.

In a desperate attempt to halt the spread of direct bargaining, the National Government introduced the Stabilisation of Remuneration Act and set up a new Remuneration Authority over and above the discredited Arbitration Cout. This was a holding operation pending the introduction of a new Industrial Relations Bill which was to restore the old compulsory arbitration set-up in a refurbished form and under a different name.