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Annual Conference Discussion Papers
17TH ANNUAL CONFERENCE 2005 - Discussion Paper No. 2
Bargaining Fee
The Employment Relations Amendment Act 2004 Part 6B introduced a “bargaining fee” to be paid by employees who are not union members but enjoy the conditions of a collective agreement negotiated by a union. It was a clause introduced into the legislation to discourage “free riders” who enjoy the conditions negotiated by unions but bear none of the cost.
At their meeting of 28 July 2005 the Association’s National Executive resolved
That the National Executive recommends to Annual Conference that
the Association seek a bargaining fee in accordance with Part 6B of
the Employment Relations Amendment Act 2004.
If the Conference accepts this recommendation it would mean that a bargaining fee clause would form part of the Association’s claim for the next national DHB collective agreement. It would also authorise the Association to pursue this strategy in other negotiations.
What is a Bargaining Fee?
The Act requires that a bargaining fee clause must be:
- agreed between the employer and the union as a clause to go into a collective agreement
- agreed to in a secret ballot which must be held before the agreement comes into force and is conducted by the employer and the union.
The ballot is voted on by employees who do the work in the coverage clause of the agreement (both members and non-members of the union).
A majority of the employers’ employees who are entitled to vote must vote in favour of the bargaining fee for it to come into effect. In the case of a MECA this would mean a vote taken of the employees of each employer party which would be binding on the employees of each employer.
If those voting, vote in favour of the bargaining fee clause, the employer must then notify the non-members that their terms and conditions will be as set out in the agreement including the bargaining fee clause unless they opt out. Any employee who does not want to pay the bargaining fee has to notify the employer of that within a specified time and will remain on their existing terms and conditions until they agree with the employer to vary them in an individual negotiation.
Employees who remain non-members of the union and have not voted to opt out will then have the amount of the agreed bargaining fee (which cannot be more than the union fee) deducted from their wages either as a lump sum or as a periodic payment and paid to the union.
RDA and NZNO Bargaining Fee
Both the Resident Doctors’ Association (RDA) and
The RDA clause reads
“46.0 Bargaining Fee
46.1 All employees employed by an employer party who:
(i) are not members of the NZRDA and
(ii) perform the work that comes within the coverage clause of this MECA, and
(iii) whose terms and conditions of employment comprise those specified in this
MECA, shall pay a bargaining fee to the NZRDA. The fee shall be paid
annually at the commencement of this MECA and thereafter on the
anniversary of its commencement until its expiry. The annual bargaining
fee shall be paid as a lump sum equivalent to the annual membership fee
of the NZRDA.”
The NZNO clause reads:
“38.00 Bargaining Fee
It is agreed that a bargaining fee shall be applied to those employees whose work is covered by this Agreement but who are not members of the NZNO and who are not members of another union, and who do not otherwise opt out of this clause, in accordance with the Employment Relations Amendment Act 2004 (S.69P and following).
38.1 For the purposes of this clause:
(a) the “bargaining fee” shall be an amount of $12 per fortnight for registered
nurses and registered midwives, $10 per fortnight for enrolled nurses,
registered obstetric nurses, and $7 per fortnight for Karitane nurses, health
care assistants and hospital aides;
(b) The “specified period” is the period of 14 days prior to the date the
Agreement comes into force (1 April 2005);
(c) An “affected employee” is one
(i) whose work is covered by the coverage clause of this Agreement and
(ii) whose terms and conditions of employment comprise or include the
terms and conditions of employment specified in this Agreement and
(iii) who is not a member of the union and
(iv) who is not a member of another union and
(v) who has not opted out.
(d) An “employee who has opted out” is one who would otherwise be an
affected employee but who has notified the employer by the end of the
specified period that she/he does not wish to pay the bargaining fee, and
whose terms and conditions of employment remain the same until such
time as varied by agreement with the employer.
38.2 The employer shall at the end of the specified period deduct the bargaining fee
from the wages of each affected employee and remit it to the union in the same
manner in which union subscriptions are deducted and remitted to the union.
38.3 Nothing in this clause applies to new employees, that is, those who are employed
after this Agreement has come into force.
38.4 This clause shall expire on 31 December 2006 which is the expiry date of this
Agreement.”
Looking at the two provisions the NZNO approach of regular deductions appears more suited to a stable workforce whereas the RDA provision suits a more mobile workforce.
The NZNO has reported that the principal effect has been to recruit non-members to the union in order that they can enjoy the other benefits of membership. (Though they have noticed, anecdotally, a drop off in these members since then).
Possible Benefits for the Association
The latest membership report (21 September 2005) suggests that the Association has 2,600 members at DHBs out of a potential 2,811. Figures for potential members are likely to be less accurate than the membership figures. It is also unknown as to what non-members earn. In some cases they might not have joined because of very small appointments and thus may be earning less than $58,000 from DHB employment. Nevertheless it is possible this means the clause has the potential to gain the Association the equivalent of more than $128,000.
Members have also felt that it is unfair for a non-member to have the benefits of membership without making any contribution towards earning them.
It is not clear what the DHB practice is for “pass on” of the SMO MECA. Some appear to have acted to pass on the MECA to non-members immediately, some do not and some don’t back date. Inevitably we find people, who join the Association later, who were overlooked for pass on either as a matter of policy or as an oversight.
Negotiating a bargaining fee as part of the next MECA would ensure that non-members would have to choose between joining, paying the fee and getting the conditions or having a separate negotiation.
It may be viewed as coercive by non-members. In response it is clear that they can elect not to pay and have a separate negotiation.
Even with the payment of the fee these non-members would not be entitled to the Association’s service for enforcement or for resolution of employment problems. However, a close reading of the MECA would be needed to see how some of the empowerment clauses would impact on non-members and therefore on the Association’s position in DHB decision making. Dealing with some agreements reached under MECA clauses (locum arrangements for instance) or departmental agreements could be problematic.
Members would be relieved of the knowledge that they were paying to improve the conditions of those who chose not to join.
A potential problem would be that the ballot has to be held before the collective agreement comes into force which would require the Association to have regard to the extent of back dating or to make the bargaining fee the first item or among the first items to be agreed on.
Recommendation
That Annual Conference resolves that the Association seek a bargaining fee in
accordance with Part 6B of the Employment Relations Act.
Angela Belich
ASSISTANT EXECUTIVE DIRECTOR