Communication With Employees During Bargaining
Christchurch City Council v Southern Local Government Officers
Union Inc [2007] NZCA 11
In a landmark decision last week, the Court of Appeal clarified the
extent to which employers are able to communicate with employees prior
to and during bargaining. Although the Court of Appeal dismissed
the Council's appeal, it noted that the Council’s future conduct
would not be “quite as constrained” as it would have been
under the Employment Court’s reasoning.
The Employment Court’s Decision
The Employment Court found that the Council had failed to comply with
its duty of good faith in communicating directly with employees who
were members of the union “on matters of bargaining”. It
also found that the restriction on communication relating to the bargaining
could apply even before the bargaining had commenced.
Issues Considered By The Court Of Appeal
The Court of Appeal noted that the Council was not really concerned
with the Employment Court’s specific findings with respect to
its communications. Rather, it and the union were principally
concerned about the Court’s view as to the limits on employers’ communicating
with their employees during the bargaining process. The Court
also heard from Business New Zealand as an intervener.
The Court addressed the following issues:
- To what extent does section 32(1)(d) Employment Relations Act (“ERA”)
prohibit the Council from communicating with its employees without
the union's consent?
- Is the test of whether a party has acted in bad faith subjective?
- Can section 32(1)(d) prohibit communications prior to the initiation
of bargaining?
The relevant parts of section 32(1)(d) provide that the duty of good
faith requires a union and an employer bargaining for a collective
agreement to:
- Recognise the role and authority of any person chosen by each to
be its representative or advocate;
- Not (whether directly or indirectly) bargain about matters relating
to terms and conditions of employment with persons whom the representative
or advocate are acting for, unless the union and employer agree otherwise;
and
- Not undermine or do anything that is likely to undermine the bargaining
or the authority of the other in the bargaining.
To what extent does section 32(1)(d) prohibit employers communicating
with its employees?
Following an analysis of the closest equivalent to section 32(1)(d)
in the Employment Contracts Act 1991, the Employment Relations Bill
and commentary from the Employment and Accident Insurance Legislation
Committee, the Court found the Employment Court's interpretation of
section 32(1)(d) was inconsistent with the committee's and minister's
views. Parliamentary intent was to prevent communications only
to the extent that they undermine or might undermine the bargaining
or the union's authority in the bargaining. The Employment Court's
interpretation suggested a general ban on communications between employer
and employees during bargaining.
The Court went on to find that section 32(1)(d) prohibited the Council
from communicating with its employees only in so far as:
- Communications amounted, directly or indirectly, to negotiation
with those employees about terms and conditions of employment, without
the union's consent (s32(1)(d)(ii)); or
- Communications undermined or were likely to undermine the bargaining
with the union or the union's authority in the bargaining (s32(1)(d)(iiii)).
Is the test of whether a party has acted in bad faith subjective?
On this second issue, the Court found that it was neither a wholly
objective or wholly subjective test. The Council had submitted
that, in respect of whether it had understood its actions would have
been a breach of the ERA, it was wrong for the Employment Court "to
assess objectively what it 'ought to' have known and should have focused
on what it did in fact understand". The Court did not agree
and instead agreed with the union's submission that "imputing
to the [Council] knowledge of the outcome and effect of a decision
delivered in the Employment Relations Authority proceedings, when it
was not only party to but indeed the initiator of those proceedings
was plain and simple common sense".
Can section 32(1)(d) prohibit communications prior to the
initiation of bargaining?
There was no dispute between the parties on the final issue of whether
section 32(1)(d) prohibited communications prior to the initiation
of bargaining. The Court agreed with the Council's submission
that the Employment Court had erred in its assertion that section 32(1)(d)
also captured communications that preceded the initiation of bargaining. The
Court found that bargaining must have been formally initiated for the
section 32(1) duties to come into force.
What Does This Decision Mean For Employers?
The Court’s decision should be a relief for employers not only
as it clarifies the law on communications during bargaining, but also
removes a blanket ban on communications from employers to their employees
during bargaining.
However, once bargaining has been initiated, employers should be aware
that they are not able to:
- Communicate, directly or indirectly, to negotiate with employees
(being members of the union) about their terms and conditions of
employment, without the union's consent; or
- Communicate in a manner that undermines or is likely to undermine
the bargaining with the union or the union's authority in the bargaining.
If you have any questions regarding this case, or if you require
any assistance with your collective bargaining, please do not hesitate
to contact us.
For more information, please contact:
Erin Davies
Partner
t: +64 9 979 2177
m:+64 29 622 2300
e: Erin Davies
Last updated: 22 February 2007
This article is intended to be brief in nature and should be used for information only. It should not be relied on as legal advice. |
