Creating union rules

Requirements and recommendations regarding a union's rules

The following information is designed to help you to create a simple set of union rules. While pointing out the requirements of the Incorporated Societies Act 1908 (ISA) and the Employment Relations Act (ERA), this information does not represent legal advice. If you are unsure of the requirements for union rules, we recommend you seek independent legal advice.

Firstly, a union’s rules must be:

  • democratic
  • not unreasonable
  • not unfairly discriminatory or prejudicial
  • not contrary to law

They must also contain provisions for holding a secret ballot (ERA).

What union rules must, and may, include

Name

A union must have a name, ending with the word ‘Incorporated’ (ISA). The rules regarding names must comply with section 6 of the ISA (and the additional requirements of the ERA).

Objects

A union’s rules must define its purpose or ‘objects’. The rules:

  • should state all of the union’s objectives, in terms that satisfy both its current and longer-term intentions. (Please note: A union cannot legally undertake activities that fall outside its objects.)
  • must include an object, or a combination of objects, to promote members' collective employment interests (ERA)
  • may also include objects related to members non-employment interests, for example, providing scholarships for the education of member's children, running holiday homes, securing discount arrangements with retailers.

Powers

A union’s powers should define the actions it can take in administering itself. Its rules must:

  • clearly define what powers (if any) the union has to borrow money (ISA)
  • set out normal administrative, and any other powers, that the union may need to operate effectively.

Membership

A union’s rules must also define who may join it. Membership can be defined in one or more of the following ways:

  • employees in a particular occupation, for example, plumbers or cleaners
  • employees in particular industries or sectors, for example, the manufacturing, retail, or construction industries, or the government sector
  • Employees in a particular enterprise or workplace, for example, employees of Barry's Catering Ltd
  • a combination of these approaches
  • in other, more general terms.

Unions may have overlapping membership coverage. There is nothing in the ERA to prevent an employee joining more than one union.

Unions should be aware that there are close links between membership rules and union access rights, which means there may be confusion if membership rules are unclear.

Unions should also note that union members are automatically bound by collective agreements negotiated by the union. Some employees may not want the union to represent them for the purposes of collective bargaining. If so, unions should have another category of person (avoiding the word 'member') who can join the union for purposes other than collective bargaining.

The rules must:

  • define clearly who can become a member
  • set out how people can join the union (ISA)
  • set out how people cease to be members of the union (ISA) i.e. how members can resign, and how (and in what circumstances) they can be expelled.

Fees

Rules generally specify some means of fixing and collecting union fees.

Governance

The rules should set out the union's decision-making structures and processes.

Work

Rules must cover how meetings are called, how members (or their delegates) can participate in the meetings, how the meetings are conducted (chair, quorum, etc), and how voting takes place (ISA).

The rules must also contain provisions for holding a secret ballot (ERA).

Rule changes

The rules must specify how they may be amended, added to, or rescinded (ISA). This is generally done by all the members at an annual general meeting, or a special general meeting).

Making a change to your rules

Officers

The rules:

  • must specify how union ‘officers’ are elected (ISA)
  • state who the union's officers are, their roles, who may seek election to officer positions (often restricted to members), and when and how an officer can be removed from office.

The traditional union ‘secretary’ may be an elected ‘officer’ but is often an employee who is appointed by the executive committee.

Funds

The rules must also cover the control and investment of funds (ISA). They must set out:

  • who will receive monies, write receipts, open and operate bank accounts, pay bills, and write cheques
  • what investments are permitted.

Common seal

The ‘common seal’ is a stamp used on documents issued in the society's name, to show they are valid. The rules must set out who controls and uses the seal, and what the seal is used for (ISA).

Assets

The rules must state what will happen to any property of the union if the union is dissolved or liquidated (ISA).