Collective bargaining in the UK became far more decentralized during the
1970s and 1980s. In this period, many companies in the private sector left
sectoral agreements and, in the public sector, collective bargaining also
became more decentralized. In 1970, collective bargaining covered 70 per
cent of the workforce (Marchington, Waddington, and Timming 2011), but
by 2013 only 27 per cent of workers had their pay determined by collective
agreements, with 70 per cent of workplaces having pay set by management
(DBIS 2015b).
There is little government intervention in wage and employment negoti-
ations or arbitration. But the government does have an important role as the
major employer in the economy, with the public sector accounting for 25 per
cent of total employment. A national minimum wagefirst came into force in
the UK on 1 April 1999, and covers almost all workers above compulsory
school-leaving age. The rates of pay are based on the recommendations of
the Low Pay Commission (LPC), an independent body that recommends
increases in the national minimum wage. The LPC board consists of nine
members—three trade union representatives, three employers, and three
labour market experts. A different minimum wage rate applies to different
groups of workers, according to age. These groups are divided as those aged 22
and above, 18 to 21, and 16 to 17. The main rate for workers aged 21 and over
is currently (in 2015) set at £6.70 an hour. The development rate for 18– 20
year olds is £5.30 an hour, and the development rate for 16–17 year olds is
£3.87 an hour.
7.7.2New Zealand
New Zealand had an industrial relations system which was the nearest equiva-
lent to Australia’s compulsory arbitration and wagefixing, with the same
degree of state intervention and regulation. This had its origins in the Indus-
trial Conciliation and Arbitration Act 1894, designed mainly to prevent strikes
but also to encourage the organization of labour and working conditions in a
period of high unemployment and fears of workers having to undertake
‘sweatshop’labour (Le Rossignol and Stewart 1910). The Act remained the
basis of New Zealand industrial relations law until the 1980s.
As in Australia, labour market reform occurred under a Labour government
that enacted legislation to move New Zealand away from its highly centralized
system. The most significant was the Employment Relations Act of 1987,
which aimed to make bargaining the dominant form of determining wages
and conditions, and reduce the role of the state and abolish awards. A series of
legislation throughout the 1990s continued the trend to deregulation. Accord-
ing to Rasmussen and Lamm (2005), the transformation in New Zealand
industrial relations was profound. Now decentralized bargaining is the
Phil Lewis