Senior Associate Raymond Wheeler shares his insights into what makes relational based bargaining an important strategic approach for both employers and employees and working with unions.

Relational Based Bargaining: Using Good Faith as a Strategic Advantage  

The Nature of Bargaining

Bargaining is not won by clauses alone, nor by coverage, budgets, rosters, hours of work and many other exchanges, or who can hold the strongest position for the longest. The key point is that bargaining is about people, trust, credibility, and the ability of parties with different interests to reach an outcome they can live with and implement.

Employers are rightly focused on sustainability, operational flexibility, responsible management, and securing long-term employment.

Unions and members are equally focused on relevance, certainty, protection, influence, and improving terms and conditions.

There are and will be times where expectations will not align and tensions will occur between the parties due to the inherently diametrically opposing views.

Good Faith an Obligation or a Strategy?

The Employment Relations Act establishes obligations around good faith. It requires parties to engage openly, be responsive and communicative, and avoid misleading or deceiving one another.

Effective bargaining with the strongest outcomes are often achieved through the quality of relationship and the credibility built throughout the process.

This is where relationship based bargaining and good faith become more than legal obligations – good faith serves as a strategic tool when used effectively.

Using good faith strategically, bargaining shifts from defending fixed positions to understanding the interests behind them and enabling practical options to be properly explored.

An example is when an employer’s operational requires flexibility clauses. The business rationale (interest) may be maintaining customer service levels or adapting to changing demand.

Likewise, employees may resist change not because they oppose flexibility but because they seek certainty and predictability.

Understanding interests does not mean an agreement is guaranteed, but often creates more options than positional bargaining alone.

Relationship based bargaining also recognises a key reality that the parties still have to work together to when bargaining ends. An agreement reached through an acrimonious bargain can create long term damage that outweighs any short-term gains.

It doesn’t mean avoiding difficult conversations or abandoning  commercial mandates as employers remain entitled to maintain positions and unions are entitled to advocate strongly.

Good faith does not require agreement – it requires engagement. A significant but often underestimated benefit of a relationship-based approach is its ability to build credibility to support more constructive engagement between the parties.

Credibility is built when

• information is shared appropriately and early.
• business rationales are explained clearly.
• questions are answered directly.
• commitments are honoured and followed through.
• feedback is genuinely considered.

Credibility is often lost when

• outcomes appear predetermined.
• information is selectively presented.
• consultation becomes procedural (and how many times have we heard the phrase “it is just a tick box exercise”) rather than meaningful.
• parties negotiate publicly then avoid constructive discussion privately.

A misconception is that bargaining strength comes from withholding information. In practice, withholding information can create suspicion and entrench positions. Strategic transparency can improve decision-making and reduce unnecessary disputes. However, it does not require disclosure of everything; it means providing enough information to support informed participation and achieve a pragmatic outcome.  

The Quality of the Process

There will be times when expectations do not align. Commercial realities, affordability, operational requirements, and workforce expectations will not always point in the same direction and invariably that is where the tension is. At this point, the quality of the process becomes critical.

Parties are more likely to accept outcomes they may not fully agree with when they consider the process to have been fair, their views to have been genuinely heard, and the reasons for the outcome to have been properly explained. Even where there is disagreement with another party’s position, a fair and transparent process can reduce unnecessary escalation, preserve working relationships, and maintain trust between the parties.

Relationship Doesn’t Mean Friendships

Importantly, relationship-based bargaining should not be mistaken for passivity or capitulation. Constructive bargaining can still be firm and disciplined, while remaining respectful and good faith focused.

A strategic approach to bargaining may involve

• explaining business constraints with supporting information early.
• testing assumptions rather than defending positions.
• separating people from issues, even when there are egos to navigate around.
• looking for multiple pathways to achieve outcomes.
• keeping discussions future-focused by looking beyond settlement to how the agreement will be implemented and sustained.

Good faith should not be seen as limiting bargaining strategy. Used effectively, it is a practical and valuable tool in any bargaining team’s toolkit. The real question is whether parties treat good faith as a compliance exercise, or recognise its practical value as part of effective bargaining strategy.