The Government could not have spoken more quietly this week when it announced it would make a significant change to employment law. It intends to amend the meaning of "good faith" bargaining to make it clear it does not bind either side to a collective agreement.

The need for this became abundantly clear during the Auckland waterfront dispute this summer. The port company wanted to put the work out to competitive contract and the Maritime Union wanted to renew its collective agreement. The union held out, knowing the law as it stands would say the company was therefore not bargaining in good faith.

"Good faith" in its ordinary meaning implies that parties in negotiation agree on the relationship they want and will try to bargain the precise terms. When one side wants to change the relationship at the expiry of the contract, it seems unfair that "good faith" should bind it to the status quo.

Surprisingly, the response from the Labour Party and the unions so far has been as subdued as the Government's announcement. Employment law has been the basic dividing line of New Zealand politics for a century. The Labour Party traces its origins to the failure of maritime and mining strikes in 1912-1913, after which unions looked instead to law and arbitration for workers' protection.


Militancy resurfaced briefly after the first Labour Government lost power, but the 1951 waterfront lockout ensured arbitration would prevail for another 40 years.

That era ended in 1991, when the Employment Contracts Act brought industrial bargaining into line with an economy that no longer protected employers from competition. Unions lost exclusive bargaining rights and members, and came to rely more heavily than ever on rulings of the Employment Court.

The last Labour Government introduced the phrase "good faith" to bargaining under its Employment Relations Act and the court has interpreted it to mean each side must work towards the collective agreement.

The Government says it will simply restore the original meaning of Labour's act, which might explain the absence of an outcry as yet, but it may be that under David Shearer Labour is better at picking its battles.

When it reflects on the Ports of Auckland case it might find issues of fairness on both sides. Business must have the right to decide whether to directly employ staff for work or offer the job to contractors. But if the business or its contractors opt to employ people, it owes them reasonable security.

Some owners and operators of small business these days seem not to realise the implicit deal underlying the right to profit from another's labour. One side takes a greater risk and reaps the greater reward when the business prospers, the other side trades profit for a more secure income. Too often people are being hired on a "casual" basis that means they are sent home without pay on days when there is not enough to do.

Employing people is a heavy responsibility. Good employers provide their staff with greater security than their own. Labour's next mission in employment law could be to legislate that employers who want to share their risk by docking pay on slow days will be obliged to give employees a fair share of the profits in good times.

In the quest for fair employment law, there will always be work to do.