Out Of Control

How and why New Zealanders have come to be putting in longer hours at work….

by Harry Johnson

Back in 2007, Erling Rasmussen and John Burgess wrote a scholarly paper called “ Too Much Of a Good Thing : Longer Working Hours in Australia and New Zealand.” At the time, the authors found it ironic that in the centenary year of the 40 hour week movement in Australia, full-time hours were up to an average of 42 hours, and were increasing. Similar ironies could have been mentioned, in relation to the extra hours that New Zealanders are also working, given :

a. the great pride New Zealanders have had in Samuel Parnell claiming the 8 hour day in Wellington in 1840;

b. New Zealand’s ratification in 1938 of the International Labour Organisation’s 40 hour week convention;

c. the declaration by New Zealand’s most-loved Prime Minister in 1936 that further reductions below 40 hours would, without doubt, occur as technological progress continued (NZPD (246) 1936: 405) and finally

d. the registration of industrial awards during the 1930s with provisions for 37.5 and 38 hour working weeks (Awards).

Despite these historical landmarks, OECD figures show that New Zealanders and Australians are currently working longer hours than many of their OECD counterparts.

Reportedly, 13 per cent of workers in this country and 14 per cent of those across the Tasman are working “long” hours ( which the OECD defines as being more than 50 hours a week).That’s above the OECD average of 9 per cent and higher than Denmark (3 per cent), Canada (4 per cent), Britain (12 per cent) ,and the United States (11 per cent) The trend to longer working hours is expected to increase as more employees get smartphones and tablet devices, which potentially connect them to their jobs 24 hours a day.

Waikato University labour market expert, Dr William Cochrane, said that while the 40-hour work week still existed, there was a growing number of “overworked” people. “There’s an increasing number working in excess of 40 hours a week at both ends of the socio-economic spectrum – in both very high and very low-paid jobs.”

His colleague, organisational psychology professor Michael O’Driscoll, said that while most people were still contracted to work 40 hours, in reality that didn’t mean a thing. “A lot of people carry their work around with them because now they have the technology to work anywhere, anytime…”

The Rasmussen and Burgess paper can still help to focus our minds on how this situation emerged, and what the response to it should be. In their conclusion, they ask if the significant erosion of ‘norms and regulations governing and controlling working time patterns’ is ‘acceptable, and what are the alternatives?’

As part of their description, Rasmussen and Burgess cautiously spell out the structural reasons for the increasing hours of work that we now commonly experience. Namely, the demise of the award system and the shift towards enterprise and individual bargaining. Although the initial loosening of controls on hours of work actually goes back as far as the Factories and Commercial Premises Act of 1981, the key event here was the introduction of the Employment Contracts Act in 1991 which not only destroyed the traditional structures of bargaining, but also decimated trade unions.

The apparent necessity for destroying controls relating to hours is well documented in the speeches in Parliament during the years of Rogernomics and in the debates on the Employment Contracts Act. Rasmussen and Burgess sum this up succinctly : there was, they say, ‘a well orchestrated business case for greater working time flexibility that is linked to claims around international competitiveness and productivity’.

With employers dominating the setting of work conditions such as hours of work, they were also able to force the ‘reduced application’ of penalty rates and overtime rates which, when operating, create dis-incentives for employers to work staff after the agreed standard hours. Rasmussen and Burgess itemise the undesirable consequences of long working hours. These include physical and mental stress impacting on health and social relationships, home life, and health and safety. None of this is controversial. Nor is the fact that the Clark Labour-led Governments (1999-2008) introduced a number of regulations relating to employment that coincided with a halt in the increase in working hours. Reference is also made by Rasmussen and Burgess to ‘The notion of “a standard job”‘ involving ‘predictable and regular working hours, usually Monday to Friday, and during daylight hours.’ Guy Standing made a compelling case for the need for such work arrangements to enable workers to build and to enjoy secure and stable lives (2011).

Therefore, we already have key information about the genesis of the increase in work time for full-time workers. This happened pursuant to the dis-empowerment of unions and the dismantling of regulatory controls on work hours by governments – a process completely in tune with the demands from business for flexibility to promote commercial competitiveness and increased profitability. The increase in hours has had negative consequences for workers – only briefly relieved by the regulatory initiatives by the Clark government, that saw a temporary cessation in the increase in hours.

Capitalism did not expire with this return to regulation and – moreover – there was no downturn in the economy until the finance sector imploded because of corrupt business behaviour and a lack of regulation in the finance sector, both here and overseas. A conclusion is already indicated by Rasmussen and Burgess. The interest of business strongly prevailed over the interest of workers during the 1980s and 90s and the negative consequences of this development – which still has not been eliminated – can only be countered (and controlled) by the restoration of union rights, and by supportive regulation.

It is no criticism of Rasmussen and Burgess to note their restraint and delicacy as they perhaps sought to influence policy makers who instinctively regard any return to labour regulation as anathema. It cannot hurt here, however, to add historical information and comment that reinforces the logic of a regulatory response.

In essence, New Zealand’s history of work-hour regulation underscores the facts: of the determination of business to brook no controls, or to resist controls as far as possible regardless of actual and possible abuse and overwork, and regardless of the social objectives of workers. In the absence of any willingness of business to self-regulate and prevent such abuse and overwork, and to allow the social objectives of workers, regulation has consistently needed to be imposed on business. Historically, the controls that have been applied have prioritised the elimination of long working hours – but they have never prescribed the work-time arrangements that may be required by businesses to reasonably function outside standard work hours.

Briefly, we might well start this reflection by disabusing ourselves of any notion that the Employment Contracts Act was not legislation enacted to provide pre-determined results. Human Geographer Richard Le Heron, in Changing Places: New Zealand in the Nineties, states that the deregulation of the post-Muldoon era followed ‘the precepts of largely untried principles of economic reform’ (Le Heron and Pawson: 22). At the very least, it would be wrong to consider the Employment Contracts Act and its industrial marginalisation of unions experimental. The enactment was merely a forceful return to the experience of the 19th century.

Ruth Richardson, the National Government’s Minister of Finance in the first half of the 1990s, has also claimed – with respect to her powerful advocacy in favour of the Act – that ‘For a hundred years nobody had really rethought our industrial relations’ (Russell: 227). In fact there had been, even in the 1980s, significant research on New Zealand industrial relations. Just two examples are the Labour Government’s Green Paper, Industrial Relations: A Framework for Review, which preceded the enactment of its Labour Relations Act in 1987, and posthumous publication of Jim Holt’s study, Compulsory Arbitration in New Zealand.

The National Party had been completely resistant in the late 1980s to any evidence emerging from the Labour Relations Act of collective bargaining outcomes that showed flexibility in working hours (e.g. NZPD (486) 1988: 2176; (500) 1989: 11826). If Richardson’s claim is true – at least with respect to the business community and the National Party – the only thinking behind the Employment Contracts Act was the traditional hard-wired views of voluntary unionism, and the need to enable business to dominate industrial relations. Mainly for the purposes of unrestricted flexibility of action and maximum profitability.

New Zealand got precisely what was intended, with entirely predictable results. As a result, we now have a period of experience going back two centuries that makes it clear why, in moving away from an unregulated industrial environment, the controls on full-time hours of work developed, and that the devices adopted were clearly fit for purpose, i.e. enforceable collective agreements and regulation. There is no intellectual mystery surrounding the emergence of these types of control – or why they were destroyed.

One common starting point for this history is the arrival of Samuel Parnell in Wellington, in 1840. This is not sufficient however. Parnell and his fellow colonists brought with them influences from Britain that were also relevant. In brief, workers in the Britain they had departed were subject to gross exploitation and alienation in Britain’s emerging large-scale machine-powered industrial economy that had increasingly required synchronisation, dating from the second half of the eighteenth century. Those workers had not only worked under appalling conditions – especially in the growing industrial towns and cities – but had also suffered chronic unemployment and underemployment, at least partly associated with the enclosure of common land. Coupled with the gross inadequacies of the Poor Laws, this led to the profound experience and fear of destitution and starvation. The oversupplied labour market ensured that many were inadequately paid, thus contributing to the working of long hours, particularly in relation to piece work.

Statutes enacted in 1802 and 1819 ostensibly to control work hours failed because Parliament did not provide the funds necessary for their operation and enforcement. It is usual therefore to consider Robert Owen’s calls – first for a 10 hour day in 1810 and then an 8 hour day in 1817 – and his work at New Lanark, as the first substantive attempts to bring about real change. These were followed in 1831 (reflecting the inadequacy of attempting to obtain change without controls) by the initiation of the parliamentary ‘Short-Time Committees’, commonly associated with the work of Richard Oastler and Michael Sadler.

In particular, Oastler had written newspaper articles the previous year on ‘Yorkshire Slavery’ that had roused mass demonstrations. The committees provided a prime vehicle for the campaign for a 10 hour day which by stages eventually produced the enactment of the 1847 Factories Act. There is a useful description in Cornish and Clark’s Law and Society in England 1750-1950 of the opposition of the manufacturers to the preceding 1844 Factories Act, which limited the working day for women and children between 13 and 18 years of age to 12 hours. Cornish and Clark note that, prior to the statute, opposition from manufacturers to attempts to obtain legislation to control working hours had been principally based on the ‘sacred freedom’ of adults to contract.

By 1844, however, less was heard of “free agency”, and more on the effect that limited hours would have on wages, profits and the level of employment of those affected. Included here was the ‘notorious calculation’ raised in opposition in 1837 by Nassau Senior, a prominent classical economist, ‘purporting to demonstrate that profits could be made only in the last hour of an 11 1/2- hour day’. This was a view, Cornish and Clark also note, that had been ‘much … heard in the debates’. Underlying the concerns of the manufacturers was the expectation that once concessions were granted to women and children, increasing pressure would then be applied for the same concessions for men (Cornish and Clark: 306).

For completeness sake, but with brevity, the British unions successfully overcame employer opposition and eventually achieved a 9 hour standard day in the 1870s through a combination of direct negotiation coupled with some industrial action. They began a new campaign for the 8 hour day in the 1880s. A highlight of this latter campaign, and contributing to the growth of ‘new unionism, was the 1889 London dock strike, which included the demand for overtime rates to apply after 8 hours work. The arguments for change included the promotion of health and efficiency. But attempts to obtain regulatory support from Parliament failed. The standard 40 hour week was finally achieved in Britain only in the 1960s (Blyton: 17-22, 27; Marx: ch.10).

It is a consistent theme in New Zealand history that its European migrants came here with a view to building a better world. Parnell typifies this with his demand on arrival for the 8 hour day in accordance with Owen’s slogan of 8 hours’ work, 8 hours’ sleep and 8 hours for recreation. Hunter, his potential employer, wanted him to work ‘English hours’ but was forced to agree to Parnell’s requirements because there was a serious shortage of builders in the new settlement.

Hours in the settlement were increased in 1843, however, when the shortage of labour became a surplus. (Roth 1973: 3-5; New Zealand Journal; Wakefield). By the 1870s, there was some recognition of a need to move to regulation to strengthen the work-time position of workers. An Employment of Females Act was passed in 1873 as a ‘precautionary’ measure to prevent the erosion of the 8 hour day through factory employment of vulnerable women and children as cheap labour. The statute was based on similar legislation enacted in the Australian colony of Victoria. The New Zealand Bill elicited opposition and the reservation that it ‘would rather prevent the establishment of factories than protect the hands that might be employed’. James Bradshaw, a leading proponent of greater protection, believed the opposition to be governed by ‘too close a worship of Mammon’ (NZPD (15) 1873: 1303; (16) 1874: 321-24).

The measure was insufficient to cope with the impact of the Long Depression from the late 1870s to the 1890s. Expressions of concern that Old World conditions had arrived in the colony increased. A government report in 1885 revealed various examples of long hours (AJHR 1885: H.-20, 4). Controls were resisted on the basis of the need for ‘freedom of contract’ and to avoid ‘any unnecessary interference with the relations existing between employers and employed’, and that the ‘business of the Legislature’ was to create employment not restrict it (NZPD (52) 1885: 95-6). In the late 1880s, the issue of hardship was further highlighted in Dunedin by Rutherford Waddell. The concerns developed into a national campaign which led to the 1890 Sweating Commission.

From its sittings, the Commission concluded that: the existing factory legislation was inadequate; children as young as 10 were being employed; some workers were working excessive hours; unions made it difficult for employers to replace adult workers with youths; and unions also protected hours of work. The Commission disagreed on the level of hardship, but agreed on the need to establish boards of conciliation and arbitration and to enact new factories legislation (AJHR 1890: H.-5). At the same time, British new unionism and similar matters were well reported in New Zealand (Holt: 19).

It seemed therefore that, while the Old World was going forward, the New World had been going backwards. ‘The shocked response’ to the Sweating Commission report was, according to Michael King, a factor in the election of the Liberal Government in 1890 (King: 237). It also provided the impetus for regulation, but this was not easy to complete. Responsibility for the work was shouldered by William Pember Reeves and he was strongly supported by unionists who sought legislation to advance labour interests in the wake of the major industrial defeat of the Maritime Strike. Against him, Reeves faced business interests, well represented in the appointed Legislative Council – the then-upper house of the New Zealand Parliament – which had the power of veto over lower house Bills. As for the potentially influential farming lobby, this group generally saw Reeves’ work as primarily an urban matter and took a largely dis-interested position (Holt: 25).

There were two strands to the Liberals legislation. The first involved the Industrial Conciliation and Arbitration Act, which enabled unions to overcome the refusal of employers to recognise their right to represent workers and allowed them to engage in bargaining with the certainty of producing registered industrial awards. The principal, and angry, objection was that that the legislation interfered in the essential, direct relationship between employer and worker (NZPD (81) 1893: 505). The legislation was only able to proceed to enactment after four years, following the Liberals’ threat to make new appointments to stack the Council.

The second strand comprised specific legislation to cover factories and also shops and offices. In arguing for the shops and offices legislation, Reeves noted, with the obvious intent of stroking the majority into agreement, that most shop owners supported controls on working hours. They wanted to be ‘generous’, but they needed protection from ‘a very few’ shop owners who could and would defeat the general provision of fair working conditions. The few threatened to undercut the many through the relative reduction of their labour costs. Without legislation, the great majority of fair employers would find themselves ‘helpless before the iron law of competition’. In enacting the factories legislation, the Liberals, and of course Reeves, were accused of seeking ‘to cripple and ruin manufacturers’ (NZPD (71) 1891: 150-1).

Jim Holt chronicles the development, amidst considerable disagreement and conflict, of the first 40 years of the arbitration system. Despite the challenges, Reeves’s work was one of significant success and many workers received the protection of 8 hour day and 40 hour week provisions through the gradual extension of industrial awards. Coverage of the awards increased from just under 18,000 workers in 1900 to over 100,000 by the mid-1920s. The Great Depression and the emasculation of the arbitration system by the conservative Coalition Government (1931-35) temporarily halted progress.

The extension of award coverage resumed, however, with the election of the first Labour Government and the restoration of the arbitration system in 1935, coupled with the introduction of compulsory unionism the following year. As a result, the number covered by industrial awards jumped to a quarter of a million (Roth 1973: 169-70; Blyton: 26; NZPD (245) 1936: 82; (246) 1936: 519). The extensions were supported by periodic changes in the factories and the shops and offices statutes. At the same time, the government allowed lesser controls for some groups, such as farm workers, where the need for general time flexibility was seen as an obvious necessity (Martin: 202-03; Holt: 24-5, 49, 87-88; NZPD (332) 1962: 2426-27, 2433).

In summary : our experience of an absence or inadequate control of hours in the nineteenth century was substantial. Workers were overworked, even cruelly. Regardless, this was justified at the time by employers and by their political and economist representatives as being, in effect, the unavoidable collateral damage for the achievement of allegedly greater economic goods. There was no inclination to self-regulate, or to attempt to stop overwork where it was occurring. The resistance of business was unremitting.

A key strategy from employers in trying prevent controls was to seek to marginalise unions – and those governments sympathetic to controls – by insisting that their activities prevented the operation of the natural contractual rights of individual employers and employees to directly negotiate their own conditions. Going back to the British experience of the 1844 Factories Act, which prevented work over twelve hours, Marx noted a sarcastic report by one of the government inspectors on the first year of enforcement of the legislation : ‘No instances have come to my knowledge of adult women having expressed any regret at their rights [to freely contract] being thus far interfered with’ (Marx: 394).

The facts of the imbalance of power between the individual employer and individual employee were as obvious then as they are now. Besides such matters as unequal resources and market position, the individual relationship is founded on principles of duty and obedience that can only be mitigated in negotiation by collective representation. Regardless, the argument that the activity of unions militated against the interests of individual workers was still central to the precipitate repeal by Bolger National Government (1990-1999) of the Labour Relations Act in 1991 and its replacement by the Employment Contracts Act, and it remains part of the thinking of the current National Government (e.g. NZPD (614) 2003: 1054-56).

Historically, employers who abused and overworked workers had to be stopped – and this was only achieved by social reformers working through Parliament, and by unions through collective negotiations and direct action. It is also apparent that the controls that were instituted were for the most part not rigid. There were restrictions that categorically prevented women and children working for more than 12 and then 10 hours a day – for example – but in effect the most important mechanism employed by the unions was pricing (which of course spoke the language of business): i.e. the setting of overtime rates to progressively dis-incentivise (rather than prohibit) the lengthening of work hours.

Like the traditionally higher rates for casual workers that were also formerly common, overtime rates encouraged employers to manage work with a view to the social, physical, and mental needs of workers, but did not prevent the use of exceptional arrangements where or when required by special circumstances. Further, the controls were, as Reeves pointed out, directed at the few employers who overworked staff and in doing so placed competitive pressure on rival employers that inevitably contributed to a general ‘race to the bottom’ in terms of the terms and conditions of work for workers.

As above, Rasmussen and Burgess describe what occurred subsequently – with the enactment of the Employment Contracts Act – including the return of concerns over long working hours. We may add that stronger unions should be able to challenge the transfer of workers from wages to salaries and the enlargement of salaried jobs, which are modern innovations also driving workers to increase their hours of work.

In complex political environments, it is hard to determine the precise thinking of the community on all but a relatively few, often overarching, matters. But the media as one proxy of the public mood occasionally highlights and criticises the increasing work hours. Historically, we can also see how community attitudes in this country did largely come to reject long working hours, and accepted and enjoyed the benefit of industrial and statutory controls that controlled these adverse outcomes.

The need for renewed controls is clear. These will need the involvement of government and unions. Our history shows that effective control can be achieved through (a) collective bargaining and (b) robust regulation supported by effective enforcement. We might add as a final comment that we should also consider related variations in those other countries that have embraced and operate progressive industrial relations models, which may help us to improve the functioning of our traditional controls. With his background in European industrial relations, Professor Rasmussen himself is well placed to authoritatively contribute to the specifics of this last issue.

* I am grateful for the helpful comments and assistance of Rosemary Mercer, Jen Wilson, and Marcus Henning.

Footnotes and suggested reading :

Blyton, Paul, Changes in Working Time, Croom Helm, Beckenham, 1985

Brodie, D., ‘Time and Work During Early American Industrialism’ in In Labor’s Cause, Oxford University Press, New York, 1993

Cornish, W.R. and Clark, G.de N, Law and Society in England, 1750-1950, Sweet and Maxwell, London, 1989

Davies, Paul and Freedland, Mark, Kahn-Freund’s Labour and the Law, Stevens, London, 1993

Engels, F., The Conditions of the Working Class in England in 1844, Oxford, 1999 (originally published 1845)

Henning, Jon and Wilson, Jen, ‘Essays on Wages Protection, the Minimum Wage, and Work Time’ (2009)

Hobsbawm, E.J, ‘Custom, Wages and Work-load in Nineteenth Century Industry’, in Labouring Men, Weidenfeld and Nicolson, London, 1964

Holt, J., Compulsory Arbitration in New Zealand, Auckland University Press, 1986

Industrial Relations: A Framework for Review, Government Printer, Wellington, 1985

King, Michael, The Penguin History of New Zealand, Penguin, 2012

Le Heron, Richard and Pawson, Eric, Changing Places: New Zealand in the Nineties, Longman Paul, Auckland, 1996

Martin, J., Holding the Balance, Canterbury University Press, Christchurch, 1996

Marx, Karl, Capital, Volume I, Penguin, 1976 (originally published 1867)

New Zealand Journal, 15 January 1841

NZPD (New Zealand Parliamentary Debates)

OECD (Organisation for Economic Co-operation and Development), ‘Average annual hours actually worked per worker’, OECD.Stat [accessed 5 February 2015]

Patmore, G., Australian Labour History, Longman, Melbourne, 1991.

Pelling, H., American Labor, University of Chicago Press, 1960

Pelling, H., A History of British Trade Unionism, Pelican, Harmondsworth, 1976

Price, R., Labour in British Society, London, 1986

Rasmussen, Erling, and Burgess, John, ‘Too much of a good thing: Longer working hours in Australia and New Zealand’, Proceedings of the AIRAANZ 21st Conference, 2007.

Rasmussen, E., McLaughlin, C. and Boxall, P. ‘A survey of employee experiences and attitudes in the New Zealand workplace, New Zealand Journal of Industrial Relations, 25(1), 2000

Rashbrooke, Max (ed.), Inequality: A New Zealand Crisis, Bridget Williams, Wellington, 2013

Rifkin, Jeremy, The End of Work, Tarcher Putman, New York, 1995

Roth, H. ‘Parnell, Samuel Duncan’, in Dictionary of New Zealand Biography, vol.2, Ministry for Culture and Heritage, Wellington, 1990

Roth, H.,Trade Unions in New Zealand, Reed, Wellington, 1973

Russell, Marcia, Revolution, Hodder Moa Beckett, Auckland, 1996

Salmond, J., New Zealand Labour’s Pioneering Days, Forward, Auckland, 1950

Salmond, J., ‘The Struggle for the Eight Hours’ System’, J.D.Salmond Papers, Misc. MS.257, n.d.

Sinclair, Keith. William Pember Reeves, Oxford, 1965

Spoonley, O., ‘Is non-standard work becoming standard’, New Zealand Journal of Industrial Relations, 29(3), 2004

Standing, Guy, The Precariat, Bloomsbeury, London, 2011

Standing, Guy, Work after Globalisation, Edward Elgar, Cheltenham, 2008

Thompson, E.P., The Making of the English Working Class, Penguin, 1991

Thompson, E.P., ‘Time, Work-Discipline, and Industrial Capitalism’, Past and Present, No 38, December 1967

Wakefield, William, to Secretary, New Zealand Company (8 March 1843) C.O. 208/1.