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The employment contracts act: Common law and uncommon economics

By Roger Bowden

Abstract

The New Zealand Employment Contracts Act 1991 is regarded internationally as a pathbreaking exercise in labour contracting, but internally is often perceived as contrary to prevailing community ideas about job security and tenure. Common law, as provisionally established by recent Employment Court rulings on fixed-term contracts, has rekindled debate about the relationship between case law and statutory law, and, through this window, the economic role of regulatory and judicial bodies in the labour market. This paper is a contribution to the analytical framework of this debate. It is cast in terms of the definition and assignment of property rights, the role of equity and bargaining power, and the relationship of these to economic efficiency. After considering more or less bilateral aspects of contract compliance, construction and completion, a possible assignment of rights in the case of fixed-term appointments is established, and issues of stakeholder identification, asymmetric bargaining power, and equity are considered. The paper concludes with some suggestions for an industrial relations framework under a revised Act.

DOI identifier: 10.1080/00779959709544266
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