Courts deliver commonsense rulings for bargaining

Media release
20 February 2007

Courts deliver commonsense rulings for wage bargaining

Judgments received in two Court cases will provide more certainty and a more commonsense framework for employers undertaking wage bargaining, says Business NZ.

One case concerned an employer’s ability to communicate with employees during collective bargaining, and the other related to the alleged passing on of new wage rates, resulting from union bargaining, to non-union members.

Business NZ appeared as intervener in both cases because of their interest to employers generally.

1) In its judgment on Southern Local Government Officers Union v Christchurch City Council, the Court of Appeal said the previous Employment Court prohibition on all employer communications during collective bargaining in the absence of a bargaining agreement was incorrect and that factual communications during bargaining do not breach good faith.

2) In the National Distribution Union v General Distributors Ltd case, the Employment Court found the wage increase granted to non-union employees did not amount to the ‘passing on’ of union-won benefits, and the company had demonstrated that it had neither intended to undermine the collective agreement, nor had its actions had the effect of undermining it. The Court said General Distributors Ltd, the operator of Foodtown, Countdown and Woolworths supermarkets, had in fact behaved throughout “…with commendable cooperation and good faith.”

Business NZ Chief Executive Phil O’Reilly said the Employment Relations Act was unclear in many areas and it was unfortunate that companies were forced to defend themselves, at significant expense, against legal suits arising from that lack of clarity.

“It is however positive to have established that factual communications during bargaining do not breach good faith, and that ‘passing on’ claims cannot succeed in the context of good faith behaviour by companies. The Courts have provided welcome certainty in some difficult areas of law.”

ENDS

© Scoop Media