Many Police Association members felt like they had been disrespected more than once during the protracted 2023 constabulary pay round.

Just over a year after the collective employment agreement expired on June 30, 2023, the result of final offer arbitration (FOA) landed on the side of Police. The deal is not far off a Police pay offer that members described in March as “a kick in the guts”, and nearly the same as the one 75% of members overwhelmingly voted down later the next month.

While the outcome is not as paved in gold as the association hoped, neither was the long and winding path to a decision. In fact, many officers didn’t just see red at voting time. Some colourful language was sent the association’s way after an eleventh-hour revision of its submission to FOA.

Association president Chris Cahill says he fully acknowledges this was unpopular with members and that poor communications added to this angst.

“I also think it is really important for members to understand that changing our position after the FOA hearing is a normal and necessary practice when the arbitration system is final offer,” Chris says.

This was highlighted in the frequently asked questions when Police’s “best offer” was put to the vote in April.

“While it was a more substantive change compared with those in previous arbitrations, it was necessary to improve the chance of a favourable decision. While some members believe we are better to lose than concede anything and that it sends a message to Police, the board and the pay advisers had access to all the relevant information to make an informed decision that they felt was in the best interests of all members,” Chris says.

“As unpopular though it may be, we are strongly of the view that our role is to continually assess the merits of our case and act accordingly. If we had normal arbitration, where an arbitrator has the flexibility to issue a decision that’s somewhere between the parties, then you could argue the merits of your position and stick with it. But with FOA, you sometimes have to make the tough decision to revise down your position.

“We believe it is more appropriate to win smaller than lose bigger. That is why we made the decision to change. There was still a meaningful difference between our amended position and Police’s [slightly amended] position.

“Ultimately, we were unsuccessful, and our change did not achieve the outcome we wanted. We are disappointed that we lost and I encourage all members to read the arbitrator’s decision to understand some of the issues.”

Yea or nay to PSPA

The 2023 pay round kicked off nearly two years ago when Police approached the association asking if it wanted to be part of the Public Service Pay Adjustment – a Labour initiative to acknowledge the cost-of-living crisis and escalating inflation.

“We felt there was no harm in being involved in this and we opted in in October 2022,” Chris says. “We expected to receive an offer within a week or two. Unfortunately, we did not receive an offer until March 2023, well after many other unions had received theirs.”

The deal – a $4000 increase as of April 1, 2023, and a 3% increase a year later – was less than some other offers and was quickly deemed unacceptable. The association laid out what it thought should be added and waited for an upgrade.

“Originally, we were looking to have something from Police to put to members well before the collective expired on June 30,” Chris says. “I went around many committee AGMs last year saying we were expecting a revised offer within a week or two. Unfortunately, we didn’t receive that offer until September 2023.”

Chris says the key reason for the holdup was the Public Service Commission and Treasury failing to give Police the authority to make such an offer. When it finally arrived, Police employees accepted the new PSPA offer – a good thing, says Chris – while sworn officers rejected it.

“While far from perfect, I am pleased that the Police employees did accept the offer. It meant they got a pay rise from April 3, 2023 – before the collective expired on July 1 – and a second pay rise this year on April 1,” he says.

“I would be very concerned if they hadn't accepted this offer. Police employees would still be waiting to see the outcome of the constabulary FOA with no guarantee and, in fact, every likelihood the result would not be mirrored for them. If truth be told, with the current state of the Government's view of the public service, I suspect a significantly reduced offer would have been made.”

The road to nowhere

For constabulary, it was back to the negotiating table. Or so they thought. Unfortunately, Labour decided it was too close to the general election and walked away from the table – and, as we know, out of government.

Further delays until the Coalition Government was formed on November 27 and internal talks were held between it, the Public Service Commission, Treasury and Police meant it was not until early March 2024 that Police was able to present a revised offer to the association.

“This offer, in our view, was worse than the PSPA offer,” Chris says. “It was not fully backdated to July 1 let alone to April 1 as the PSPA offer had been. We rejected this offer outright without even taking it to members to vote. One of the big items missing from this offer was paid overtime in any form. We made it clear that was a bottom line.”

The pay stoush hit the headlines, revealing in no uncertain terms that members felt “undervalued”, “insulted” and “taken advantage of”. A week later, an enhanced offer was promised, duly delivered, then sent packing by an overwhelming majority of members.

"The associaton's position was that members needed to be compensated for not only the impact of inflation but also recognising that policing had become much more demanding, a lot more complex, heavily scrutinised and considerably more dangerous.”

- Police Association, Te Aka Hāpai president Chris Cahill

 “This was a clear message to Police and to us that this offer was not acceptable,” says Chris. “We then proceeded to ‘winner takes all’ FOA.”

While hundreds of pages of submissions were put before arbitrator Vicki Campbell at the hearing on June 26 and 27, Chris believes the arguments probably rested on only a few points.

“From a Police side, it was that the offer exceeded actual and projected movements in the labour cost index from 2021 to the end of the term in its offer [July 1, 2026] and that it got close to the actual and projected consumer price index (CPI) for the same period. Police also argued it could not get further money from the Government to improve the offer and it would have to consider further staff reductions among Police employees if the arbitrator favoured the association’s position,” Chris says.

In May, Commissioner Andrew Coster announced 175 “corporate support” non-sworn jobs would be cut to satisfy the Government’s demand for $55 million in savings in the Budget.

“The association’s position was that members needed to be compensated for not only the impact of inflation [measured by CPI] but also recognising that policing had become much more demanding, a lot more complex, heavily scrutinised and considerably more dangerous.”

Revision rationale

Both parties called economists as expert witnesses during the FOA process. It was not out of the norm, but what was different, Chris says, is that the arbitrator asked the economists to set out an agreed set of facts and then identify what they disagreed on.

They agreed that the most appropriate benchmark to assess the respective offers was the CPI. They decided it was appropriate to consider it over a five-year period taking in the last collective through to the end of Police’s submitted term – so from July 1, 2021, to June 30, 2026.

Allowing for actual inflation and forecast inflation over this period, they put the CPI figure at 23.4%. The association's position was about 4.6% above this, Police was about 1.3% below.

“This significant piece of evidence, coupled with other material presented by Police asserting it did not have an attrition or a recruitment problem is what led to us making the decision to amend the association’s position,” Chris says.

“The board and the pay advisers all agreed that this was very detrimental to the association's position and that if we maintained this position, we would lose. As such, we decided to amend our position after the hearing. Many members were upset by this and I fully acknowledge our comms in relation to this were very poor. Sometimes when you are heavily involved in something, you don't look at it from a more remote standpoint.

“The arbitrator must choose one side or the other and that is why we amended our position. If we lost, we lose everything, as the arbitrator cannot make a decision that meets in the middle.”

Under Schedule 2 of the Policing Act, the specified criteria the arbitrator had to consider include:

• Recruitment and retention
• Fairness and equity
• Changes in content of jobs, skills, duties, responsibilities
• Changes in productivity
• Relativities within the agreement and between it and other agreements
• The special conditions applicable to employment in Police, including the prohibition on strikes
• Any other matters that the commissioner, service organisations or arbitrator considers relevant

Chris says the last point played a big part.

“Police added, as it is entitled to do under the Act, that its ability to pay coupled with the fiscal impact our position would have on its budget could lead to further Police employee redundancies. We believe this should not have been relevant or been able to override other criteria.”

In her determination on July 15, Vicki Campbell said: “In my assessment, the Police offer balances employee needs with organisational sustainability and economic factors. The service organisations comprehensive arguments regarding longterm welfare and systemic issues have been carefully considered, however, the Police offer is consistent with government policy and current economic conditions.”

That, says Chris, is the arbitration process.

“Winner takes all. Unfortunately, with choosing the Police position, the full Police position must be accepted.