The Air New Zealand Pilot's Society: A Case Study in 'New Unionism'
By Mike Beverland

Unions appear to have become somewhat irrelevant in the deregulated labour market. Although the recovering New Zealand economy has created 217,000 new jobs over the last five years, the evidence suggests that virtually none of these have been unionised. (1996: 496)

Declining unionisation can be attributed to a number of causes. Firstly, the collapse of collectivism worldwide has meant that the driving philosophy behind unionism has fallen into disrepute. This has led many unions to be out of touch with a new post-Employment Contracts Act workforce. Changes such as the information age or a movement to a service economy have meant that employment growth has occurred precisely in those areas that unions have traditionally found difficult to organise (Lingard 1996). Higher growth rates were found in industries experiencing large reductions in unionisation (Kasper 1996). Findings also indicate that contract bargaining outcomes become relatively less advantageous to the employees in proportion to the degree of collective coverage and union representation (Lingard 1996).

So far unions have been unable to gain new members in a growing economy. However, some sectors have been exceptions to the rule. In New Zealand the financial sector union, or Finsec, has gained members due to a strong strategic plan (Harbridge et al. 1995). Research conducted by Jackson (1994) found that Finsec was perceived as highly effective by both employers and membership. However the increase in numbers may be the result of a breakdown in trust between employees and employers in this sector. Others, such as the Air New Zealand Pilots Society (the subject of this paper), have taken a different approach that is more akin to that of a business than a traditional union.

Some unions have tried to prove their usefulness by providing information and services. Others have added value and gained membership. But as the declining coverage figures show, few have been successful. Perhaps the key to successful strategy lies in developing a renewed commitment to unionism. Deeks et al. (1994) argue that one of the weaknesses of unions was due to the lack of any need to sell union ideals when unionism was compulsory. This meant that the value attached to the union was relatively weak.

Aryee and Wong (1995) noted that the following factors had an influence on union satisfaction and commitment: union socialisation – the degree to which the union can pass on the values of the organisation; perceived influence in union decision making; workplace justice and fairness in procedures and grievance resolution. As a result they urged unions to pay more attention to how new union members are socialised, to expand communication channels and adopt a participatory leadership style. In cases where unionised and non-unionised employees receive the same benefits in terms and conditions, it may be the non-traditional benefits that increase union satisfaction and commitment.

This article presents a case study of a ‘new union’ – the Air New Zealand Pilots Society (ANZPS)¹ – that will offer some insights into the challenges and difficulties unions face today.

History of Pilots Society

The ANZPS was formed in 1991 following the failure of the traditional union, the New Zealand Airline Pilots Association (NZALPA), to negotiate a new award. The ANZPS split from NZALPA (after the passage of the Employment Contracts Act) and negotiated as a separate group from the traditional union. This caused some hostility from NZALPA members, which continues to this day. Those who join the ANZPS are seen by other pilots as taking a particular ideological position.

Another reason that the ANZPS formed was the change in market conditions. Air New Zealand had been privatised and was therefore no longer assured of its existence. The failure to come to an agreement over the operation of the new 747-400 meant the company had to lease these new planes to its competitors. A recent failed strike in Australia meant that there was a ready supply of pilots close by, and the worldwide downturn in the airline industry meant that demands for pay and conditions could no longer be made without being based on productivity. Five years on, global considerations still figure in the minds of the ANZPS when bargaining. While the airline industry is enjoying an upturn, competition has also increased, and the company’s profit has fallen due to the entry of new and larger Asian operators.

The ANZPS represents 160 pilots, out of approximately 400. The ANZPS is one of three union groups on the site, and represents the second largest pilot body. It has a standard incorporated society organisational structure, plus a contract management group (made up of 5-6 members) which deals with negotiations and any day-to-day issues. Representatives are not paid. The ANZPS is not a party to the collective employment contract (CEC) that it has negotiated, and it has no national or international links. The ANZPS limits its members to working pilots at the site.

In terms of bargaining outcomes, since 1991 the ANZPS has negotiated three contracts. It has negotiated productivity clauses that have resulted in increases of pay of as much as 22%. The ANZPS has developed an alternative disputes procedure, implemented an on-line rostering system, and negotiated new meal allowances, new maximum flying hours, and loss of license insurance. In comparison, other union groupings at the site have largely had to follow in the footsteps of the ANZPS, and in one case (NZALPA) have had to work harder but for less pay. Curiously, the ANZPS has been unable to increase membership, and any new intakes have been offset by retiring members.

Philosophical Approach

Deeks et al (1994) report that one weakness of unions in the past has been the adversarial approach which has emphasised conflict with the employer rather than co-operation. This was largely due to the influence of the idea that conflict between workers and management was a natural state of affairs, aided by an institutional system whose main preoccupation was to mediate or arbitrate conflict. At the airline site, the traditional union – NZALPA – had taken this conflict-oriented approach, and in many respects it still does.

The head of the ANZPS, who had previously been involved with NZALPA, has noted that NZALPA believes the company is an adversary and it could not conceive of ever coming to a win-win scenario. All that it could see was that if the company won something the pilots had lost. This resulted in a legalistic approach to employment negotiations and often led to strikes. The ANZPS has taken a different approach, which can be reflected in the way it negotiates.

Philosophically the ANZPS is more influenced by Ayn Rand than Karl Marx or socialism. Its view is that the company’s interest and the employee’s interest are in harmony, and that efficiency for the company is the only way to gain pay increases in the future. The resulting approach in negotiations has been to focus on mutual problem solving rather than on concession bargaining. The approach the ANZPS uses to negotiate is set out by Fisher and Ury (1991). They argue that a framework for negotiation should use the following strategies:

 1. Separate the people from the problem.
 2. Focus on interests, not positions.
 3. Invent options for mutual gain.
 4. Insist on using objective criteria.

The ANZPS has found this method useful for solving problems with the company, and makes Fry and Ury’s book available to all members who wish to become involved with the negotiation process.

Another philosophical departure is to focus on the individual as opposed to the collective. The ANZPS sees no contradiction between this stance and having a CEC. Take for example the issue of productivity pay. This pay is calculated on what each individual pilot actually does, meaning that you get rewarded for the work you do, and not that of others. NZALPA has taken an averaging approach, whereby members receive an average of the overtime hours worked. This has resulted in some NZALPA pilots working harder, but without the compensation of an ANZPS member; this is a clear incentive to try to minimise the number of overtime hours you can do and rely on other pilots to do the work. It has also resulted in a lot of resentment from NZALPA pilots, and has put pressure on the NZALPA hierarchy to change the system.

The rejection of the strike weapon is another change from traditional unionism. The ANZPS sees the strike weapon as an admission of failure. It rejects collective force as a useful tool and argues that good ideas will win out in the end. (The ANZPS notes that this may not be a useful approach with an unscrupulous employer.) The ANZPS has also rejected any contractual role with the company. This means that the union itself cannot call a strike, or try to gain an injunction. If a member wishes to seek an injunction, then they have to do so on their own. There are good legal reasons for doing this: when seeking an injunction you must give the court an undertaking to cover any damages that the other party may incur should you lose the case. This has resulted in NZALPA pilots having to pay out for lost injunctions regardless of whether they supported the union’s position.

Commitment Strategies

The level of overall satisfaction and calculative commitment within the ANZPS is generally high.² Members are impressed by the results of bargaining. Communication is ensured by a home page on the Internet, regular faxes to members without computer access, and an electronic bulletin board that allows pilots to post questions and information. The society also canvasses its members before formulating policy and bargaining positions, reflecting the open nature of the leadership. A participative leadership style is a mainstay of the ANZPS strategy, largely because of negative experiences by many members under the previous union regime. It also wants to encourage a level of individual responsibility by pointing pilots in the right direction when they want information, rather than overloading them with endless amounts of information they may not want.

Apart from loss of license insurance, the ANZPS offers little in the way of other benefits and relies on low fees plus good results to increase calculative commitment. Despite this success, membership has not increased. It is paradoxical that, despite its belief that better ideas will win out, the society has up until recently been reluctant to market its successes. Currently it has a brochure out, but this is not part of a general strategy to increase membership – it is simply the initiative of an individual pilot.³ Initially the ANZPS was reluctant to market its case because of a desire to ultimately return to a changed NZALPA. This change did not eventuate, and the ANZPS now accepts that it is unlikely the two groups will ever merge. The lack of interest in marketing can be explained by many reasons, but ultimately it suggests a failure of the society to understand how ideas work.

Socialisation is another problem for the ANZPS. NZALPA presents the ANZPS as a group of selfish individuals who ‘sold their mates down the river.’ The ANZPS disputes this, but it does have a problem with identity. It is largely anti-NZALPA. But what does it really stand for? I have pointed to some philosophical influences, but these are not made clear. Ultimately the ANZPS will need to develop an identity and express it in a mission statement. Another alternative is to find whether its members really care much about an identity when the bargaining results are good. Aryee and Wong (1995) are not clear whether affective commitment is more important than calculative commitment, and the falling numbers of union coverage internationally indicates that perhaps calculative commitment is the main reason for joining. However it should not be difficult to translate the implied values of the ANZPS’s approach into an express statement of strategic intent.

Future Challenges

The biggest problem facing the pilots society is the failure to translate bargaining success into increased membership. While this is due in part to a failure to market its successes, this is not the full reason. Firstly, joining the ANZPS is seen as taking a definite philosophical position. NZALPA members who join the ANZPS are in effect blacklisted; they are called scabs, and life can be miserable on the flight deck when you have an NZALPA captain and an ANZPS first officer.

This would be less of a problem if the ANZPS could use its bargaining outcomes as a competitive advantage. However, within the company, any non-NZALPA member can gain the ANZPS contract by automatic extension of collective wage settlements to non-union workers and third parties. This presents the problem of the free rider, whereby someone can gain all the contract benefits of the ANZPS without having to join. This rules out wage competition among workers, and may also result in the eventual disappearance of the ANZPS – which would not be in the long term interest of either the company or the non-member pilots.

The company itself has largely been unwilling to help the ANZPS in advertising. For example it will not allow the ANZPS to recruit new members when they first join the organisation, for fear of being seen as biased against other unions. This seems strange given the fact that it would be to the company’s benefit to have as many pilots on the ANZPS contract as it could. The ANZPS may need to put more pressure on the company to allow it to recruit members from new intakes, and to stop the automatic extension of the ANZPS CEC’s terms and conditions to non-members. It would have to be careful that new intakes could not undercut ANZPS members on a contract, but this would also act as a restraining device by the company on any future wage demands.

The ANZPS has also limited its membership to enterprise-based pilots. This gives it a clear focus, and removes the fear of factional infighting that can occur in NZALPA and other broad based unions. Because NZALPA is made up of pilots from several airlines, there may be cases where the bargaining outcome for one would be at the expense of the other. However, this focus makes it all the more crucial for the ANZPS to gain new members from within the company and from new intakes.

Lastly, the ANZPS could use its day-to-day relationship with the company to encourage new investment in aircraft and routes. The company’s competitive position is under pressure because of a failure to plan in the long term for growth. Any increase in demand is covered by the use of leased aircraft and crews from Britain. This causes annoyance among pilots, but is also the wrong strategy in a market that is growing. Although new planes are being ordered, they are only replacing ones that have been sold. The company itself needs to invest in a growth strategy, something that the ANZPS could encourage it to do.

Conclusion

Despite calls for unions to develop new strategies that focus on enterprise bargaining, little has really been done to develop viable growth strategies for the future. Too much emphasis has been placed on political action, with little or no result: for example, the failure of the union attack on congressional Republicans in the 1996 USA election, and the move of traditionally left wing parties such as the British Labour Party to distance themselves from the union movement. While unions may be able to gain members in plants with poor management, there is little evidence that they have done so.

In order to survive, unions must develop an enterprise culture that focuses on providing services to members. This will require the adoption of both business strategies and business philosophies. Unions need to keep in mind local and international economic conditions, but also need to market themselves and avoid the problems of free riders undermining their position in the organisation. Unions will need to focus increasingly on strategies that develop union commitment, both calculative and affective commitment. However, the crucial change is an ideological one. Unions will need to adopt policies in relation to their political role, members, technology, and business that are in many ways the opposite of their past approaches.

References

Aryee, S. and W.K. Wong 1995, ‘Factors Influencing the formation of union attitudes,’ New Zealand Journal of Industrial Relations 20(3): 267-285.

Deeks, J., J. Parker and R. Ryan 1994, Labour and Employment Relations in New Zealand, Longman Paul,  Auckland.

Fisher, R. and W. Ury 1991, Getting to Yes, Penguin, New York.

Harbridge, R., K. Hince and A. Honeybone 1995, ‘Unions and Union Membership In New Zealand: Annual Review for 1994,’ New Zealand Journal of Industrial Relations 20(2): 163-170.

Jackson, A. 1994, Trust and Employee Relations in Financial Retailing, unpublished Masters Thesis, University of Auckland.

Kasper, W. 1996, Free to Work, Centre for Independent Studies, Sydney.

Lingard, R. 1996, ‘The Impact of New Zealand’s Employment Contracts Act: A Preliminary Assessment,’ Agenda 3(4): 493-502.

Lingard, R. 1997, ‘Rejoinder,’ Agenda 4(1): 112-114.

Endnotes
1  This is the true name of the union, and authorisation has been gained to use this name in print.

2    Calculative commitment refers to the attachment members have to a union based on their assessment of their own self-interest; affective commitment, by contrast, is commitment based on their identification with the union and its objectives.

3   As of writing the ANZPS has gained new members from a minor advertising campaign. Most importantly, some are from areas that it has traditionally found it difficult to gain new members from – such as co-pilots, new pilots and second officers.

Mike Beverland is Lecturer in the Department of Applied Management, Unitec: Institute of Technology, Auckland. He would like to thank Captain David Allard, one of the founders and current deputy head of the Air New Zealand Pilots Society for all his help over the years. Any information contained within this article remains the responsibility of the author alone.

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