A Call for Change in the Proposed Labour Bills

First Published: 2000-04-27

The following is a position paper presented to the Technical Committee of the Bahamas Employers Confederation and The Bahamas Chamber of Commerce on April 24th.

One view of the proposed Trade Union and Labour Relations and the Industrial Tribunal and Trade Disputes act dated April 2000 is that they are an extension of the socialist policies of the previous government to today-s private sector. It is the type of government intervention and control that was widely practiced by labour parties and social democrats around the world in the 1960s and 70s. While it may still have some political appeal it is an undesirable model for economic development… a fact now known and established.

The Example.

To demonstrate this it is useful to look at a single “before and after” example where the policy issues are crystal clear. New Zealand is such a case.

New Zealand of the early 1980s with its Labour Party Government was described as the most socialist country outside of the Communist Eastern Bloc with all of their economic deficiencies.

Before 1984 the labour relations system had several major features, some of which are comparable to those contained in the Trade Union Act.

  • The union registration process gave specific trade unions exclusive non-contestable rights to bargain in specific occupations and industries. In effect, the government gave the selected union a protected membership pool.
  • Once a union representation was certified the employer was required to enter contract negotiations.
  • Unions negotiated for members and nonmembers alike and registered collective agreements applied to all employees during the contract term, irrespective of union membership. Employers could not hire labour outside of the union contract.
  • Employees were obliged to join the appropriate union and failure to join was a prosecutable offense. Despite this, of the 720,000 workers under union contract in 1984, 610,000 were union members and 110,000 were not.
  • All labour disputes and grievances were settled through compulsory arbitration. This system was established in 1894, the first such system in the world, and provided a full century of experience.
  • Minimum wage and working conditions were set for each occupation and industry. The guiding principles were “comparative wage and distributive justice”.

Twenty years of economic stagnation and the loss of trade preferences in the UK market caused the country to adopt between 1984 and 1991 the most radical program of “market-orientated” basic reforms ever attempted in any developed country.

With respect to labour relations, the changes included —

  • Employers were not required to bargain collectively and employees were not required to join a union as a condition of employment.
  • The terms of a labour contract applied only to union members unless both parties agreed to its extension to non-members.
  • Parties were free to strike or lockout in connection with collective bargaining.
  • The Minister of Labour no longer maintained a union registry and “bargaining agents” were “recognized” by employers on the authorization of each employee.
  • Voluntary mediation and adjudication using an Employment Tribunal and Employment Court replaced the 100-year old compulsory system.
  • The Minister and Department of Labour were excluded from any role in industrial relations processes.

These radical changes were part of a comprehensive market-orientated program that was applied to all economic sectors… from privatization of the utilities to the simplification of tax and welfare systems and balanced budgets.

The results were truly spectacular. The economy that had grown at an average annual rate of 0.5% per year for 20 years prior to 1984 increased at 5-6% per annum in the 1990s. The unionized share of the labor force dropped from 76% in 1985 to 23% in 1994… from 683,006 members to 376,000. However, total employment grew from 892,800 in 1989 to 1.6 million in 1994, a 56% increase.

New Zealand is a good example because a Labour Party initiated its reforms. In addition, the stated objective of the Bahamian Trade Union Act… the promotion of a few strong unions and industry-wide collective bargaining… will create in the Bahamas the labour relations system that existed in New Zealand before its reforms.

The Call.

BECON and the Chamber should strongly recommend the following changes:

  1. An employer is not under any legal obligation to bargain with a trade union on a collective agreement.
  2. The employer is free to lockout employees in connection with contract negotiations if he determines that the negotiations have reached an impasse. A trade union has the comparable right to strike.
  3. Union membership is not a condition for employment.
  4. A collective agreement applies only to the parties to the contract and can be extended to non-parties only by specific provision in the contract.
  5. Union dues can be deducted from a worker-s salary only with his prior written consent.
  6. The mediation, conciliation and arbitration processes should be entirely voluntary.

Will the legacy of the FNM Government be the politically correct and economically failed formulas of the 60s and 70s? Or… will it take steps to meet the challenge of the very competitive global economy of today and tomorrow? The country must move forward… not backward… and only BECON and the Chamber can be the catalyst for such a change in policy direction.

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