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Court of Appeal of New Zealand |
Last Updated: 13 February 2014
IN THE COURT OF APPEAL OF NEW ZEALAND C.A.
145/95
BETWEEN THE NEW ZEALAND FIRE SERVICE COMMISSION a body
corporate pursuant to the Fire Service Act 1975 having its office at Willbank
House, 57 Willis Street, Wellington
Appellant
A N D GRAHAM JOHN IVAMY of
Wellington, Firefighter
First Respondent
AND BARRY KEVIN MURPHY of
Wellington, Fire Officer
Second Respondent
AND PETER BERNARD STEVENSON
of Wellington, Control Room
Third Respondent
AND NEW ZEALAND PROFESSIONAL FIREFIGHTERS UNION INCORPORATED, a duly incorporated company having its registered office at 176 Jackson
Street Petone and carrying on business as a trade union
Fourth Respondent
Coram: Cooke P. (5.12.95) Richardson J.
Gault J. Henry J. Thomas J.
Hearing: 5, 6, 7 and 12 December 1995
Counsel: D.R. Broadmore and P.A. McBride for Appellant
J.R. Parker and Anne O'Brien for Respondents
J.F. Timmins and Anne K. Knowles for New Zealand Employers
Federation
B.J Banks as Amicus Curiae
P.J. Bartlett for New Zealand Council of Trade Unions
J.R. Reid (appearing by leave)
Judgment: 24 April 1996
JUDGMENT OF LORD COOKE OF THORNDON
This is an appeal under the Employment Contracts Act 1991, s.135, from a judgment of Chief Judge Goddard in the Employment Court, delivered on 14 July
1995, granting an injunction against the New Zealand Fire Service Commission
at the suit of three members of the New Zealand Professional
Firefighters Union
and the Union itself. The appeal also extends to the part of the judgment
adjourning an assessment of damages,
but at the hearing in this Court that was
treated as a secondary issue and it will conveniently be dealt with separately
after considering
the main issue, which is the injunction.
This is another case of alleged breach by an employer of the duty imposed by s.12(2) of the Act to recognise in negotiations for an employment contract the authority of a negotiating representative. In Airways Corporation of New Zealand Ltd v. New Zealand Airline Pilots Association, which case is being decided contemporaneously, I have stressed that an appeal such as this is confined to points of law and have quoted the material passage from the leading case of Capital Coast Health Ltd v. New Zealand Medical Laboratory Workers Union [1996] 1 N.Z.L.R. 7,
18-19. What I have said on these matters in the Airways case may be
treated as incorporated by reference in the present judgment.
The basic facts of the present case are as follows. On 17 June 1994 the
Commission and parties including the Union entered into
agreed terms of
settlement. The material provisions are in clause 1 as follows:
Pursuant to the contractual relationship between it and its employees the New
Zealand Fire Service reserves the right to communicate
directly with its
employees over all matters relevant to the employment relationship.
However, for the purposes and duration of employment contract negotiations,
the New Zealand Fire Service acknowledges that the New
Zealand Professional
Firefighters Union is the bargaining agent of those of its members who
have given it appropriate authority
and undertakes, until the employment
contract is settled
(a) Not to negotiate or attempt to negotiate terms and conditions of
employment directly with members of the New Zealand Professional
Firefighters Union, or
(b) Not to communicate directly with individual employees or groups of employees who are members of the New Zealand Professional Firefighters Union, over their terms and conditions of employment;
so long as the Union remains their authorised bargaining agent. Except that:
(a) The New Zealand Fire Service reserves the right to provide factual
information to its employees in a general form as to the content
and progress of
employment contract negotiations and the employer's position in
relation to any such negotiations; and
(b) It will provide the New Zealand Professional Firefighters Union with
a copy of any such information contemporaneously
with that
information being released from National Headquarters for purposes of
distribution to employees who are
members of the Union. The means of
communication to the Union to be by facsimile to the registered office of the
Union.
Further negotiations were later adjourned by agreement at the
Commission's request until 23 February 1995. The Commission
then evolved a plan
of action described by the Chief Judge in his judgment as follows:
No doubt the defendant used the interval to formulate new proposals as it had said it would. However, its executives and other advisers also developed a parallel strategy, tactic or offensive. The plan so devised was to put out an information pack to employees containing the new proposals and some exhortative material in such a form and of such content as to exploit to the maximum the licence granted them by the terms of settlement or by the law, whichever was the wider. For example, the pack was not addressed to individual employees by name, as on the previous occasion, but some copies were sent to the officer in charge of each fire station and control room, with instructions to pass them on to staff. To avoid the reproach of bypassing the union, it was intended to present some of the same material to union officials at the negotiations as soon as could be after their scheduled resumption at 10 a.m. on
23 February but to make the pack available to employees on duty by courier
only from 11 a.m. the same day. Instructions to that effect
were issued to the
publicity agency employed to produce and disseminate the material. They were
also to issue much of this material
to the news media, thus removing any
perception, or so it was hoped, that employees were being singled out to be sole
recipients
of an improper communication.
An obvious and therefore intended by-product of this plan was that the
union's officials would be locked in conclave with the defendant
in a hotel
conference room in the grip of negotiations at the time of the delivery of the
material to the employees they would be
representing. It was said to be likely,
and I have no difficulty in accepting such a probability, that their
cellular phones
would be turned off in such circumstances. Each one of them
would have been incommunicado when the employees received their information
packs after 11 a.m.
The plan miscarried because courier drivers began to carry out at 7 a.m. a
task that they had been instructed to perform only after
11 a.m. For present
purposes it is unnecessary to detail the consequent developments on that day,
but it is necessary
to set out quite a long further extract from the Chief Judge's judgment, for
it represents the core of his reasoning:
I find that the defendant set out to outmanoeuvre and outflank the union but
to create the illusion that it was not bypassing it by
providing some of the
same material to the union before, but not materially before, providing it to
staff and by issuing the same
material at the same time to the media and
numerous organisations described as stakeholders in the fire service. In this
way, a
second illusion would be created that the defendant was exercising the
right to address the public and merely providing to employees
copies of what it
had said to the media. However, this was not the reality, as there were
major differences between the
communications to employees and those to the media
and the public, while the communications intended for the union were different
again. The defendant's purpose at all times, indeed its aspiration and
ambition, was that its employees should find out from it
before they found out
from the union what the defendant's new offer was and that they should hear from
the defendant direct and in
its own words what the good points of the offer were
rather than hear first from the union and, in its words, what its bad points
were. I am not persuaded that the chief executive's policy of so-called
inclusion as applied to this situation was anything other
than a convenient
pretext for excluding the union when it suited. The defendant's purpose in part
was to shake the confidence of
the employees in their bargaining representative
by expressing criticism of and showing disrespect for the union. But the
defendant's
probable dominant purpose was to take the negotiation to the
employees direct which it did by presenting its case to them and saying
"The
ball is now ... in your court". This was said in the context of a strong
exhortation from the chief fire service officer, also known as the national
commander,
and appointed to that position, no doubt, for his qualities of
leadership. In his covering letter he exercised those skills.
He intended
its readers to follow his strong lead and ignore any suggestions or advice to
the contrary from any other quarter.
In addition, a pecuniary incentive was
offered for early signature of the contract. All this was characterised by the
plaintiffs
as showing a deliberate intervention in the employees' process of
collective bargaining with the intent of depriving them of the
benefits and
freeing the defendant of the detriment of the employees' enjoyment of the
freedom of association. It is difficult to
see what other effect a
communication of this kind, made when it was, could have had. The motive must
have been the same, as otherwise
there would
have been no need to keep the whole operation strictly secret from the
union.
From the defendant's point of view, it saw itself as in some kind of
competition with the union for the good opinion of the employees.
It regarded
the union as an opponent of notions that it wanted its staff to accept and,
therefore, as an obstacle to the acceptance
of those notions. It did not
necessarily wish the union harm, but it wanted to neutralise the union's
influence with its members,
the defendant's employees. It was prepared to do
whatever it could get away with under the law to achieve this objective. It
deserves
censure only if it broke the law, for otherwise it was merely seeking
to advance its own commercial interests, necessarily (as it
has no business
competitors) at the expense of its employees.
I am satisfied that the defendant intended to secure for itself an advantage
and to cause the plaintiff union discomfiture by the
timing of the various
releases. There is no doubt that it was unprepared for the union to have the
opportunity to consider the offer
and to pass on its salient features to
employees before the negotiations resumed. The defendant wanted employees to
receive this
material individually without contemporaneous commentary or
analysis and editing by the union or discussion among employees collectively.
It is clear to me that it was the defendant's plan by the means adopted to
belittle the union, to reduce its importance and standing
in the eyes of its
members and to prejudice its ability to represent them or to do so
effectively.
That passage is expressed with more vigour than is customary judicially, but
in substance it appears to me to be findings
of fact reasonably open
to the Chief Judge on the evidence. The Commission's elaborately-planned
method of going behind the
back of the union negotiators on 23 February 1995
carried such an obvious risk of a finding of breach of s.12(2) that
there
is nothing surprising in the Chief Judge's conclusions. The very
nature of the Commission's plan can readily be seen to involve
a by-passing and
implied belittling of the Union. In relation to the negotiations the detailed
specific proposals in the information
packages went well beyond factual
information in general form. The Chief Judge's findings accord with the thrust
of the case advanced
for the plaintiffs in the amended statement of claim and
apparently the conduct of the case at the trial (including the
cross-examination),
even if
some of the actual words used by him in the course of his judgment were not
expressly put to the witnesses. In my opinion this Court
is not entitled to
disturb his findings on an appeal limited to points of law.
On that view the injunction granted is unobjectionable and the only other
issue is damages. It was argued in this Court on a limited
basis. At the end
of his judgment Chief Judge Goddard reserved the quantification of pecuniary
losses for agreement or a later
hearing. He also reserved 'the question of
general damages for breach of the settlement contract which was the subject of
some evidence
by Mr Best but was not argued by counsel'. As I understood the
argument for the Commission at our hearing, Mr Broadmore and Mr McBride
accepted
that the reservation of general damages was in order, but challenged the
granting of an opportunity to give further evidence
on alleged pecuniary losses,
maintaining that the plaintiffs' case in the Employment Court had been closed
without reserving the
position in relation to damages in any way. While the
Chief Judge could have taken that perhaps strict view, I do not think that
this
Court can properly interfere with his discretionary decision to allow further
evidence.
For the reasons given by Hardie Boys J. in Capital Coast
Health, I continue to regard it as undesirable to complicate discussions of
what are really issues of fact and degree, dependent on the
circumstances of
individual cases, by formulating propositions which could be mistaken for
principles of law. I add only the following
fairly obvious comments. The
contest between the Commission and the Union has been strenuously fought. It
may be that some of
the tactics accepted by the Union are also open to
criticism. But that is not a issue now before us. Nor, as it eventuates, does
the injunction touch the right to 'go public' by media releases or by
campaigning for a citizens-initiated referendum (as the Union
did). Its wording
is as follows:
That an injunction do issue restraining the defendants, its officers,
employees, or agents from negotiating from attempting
to negotiate directly with
the first, second, and third plaintiffs, or any other employee of the defendant
for whom the fourth plaintiff
is an authorised bargaining agent, whether by
letter, circular, or by otherwise approaching any of them.
I confine my judgment to upholding as reasonably capable of being reached on
the evidence the findings of the Chief Judge already
quoted. Especially in the
light of the New Zealand Bill of Rights Act 1990, s.14, I would be slow to hold
that communications to
the media on subjects of general public interest could
properly be found to be prohibited by s.12(2) of the Employment Contracts
Act.
Insofar as the judgment under appeal may suggest otherwise (which is doubtful),
I must respectfully differ. In this case,
however, the employer's conduct
went much beyond communications to the media and, as just indicated, I do not
read the injunction
as proscribing such communications, nor of course as
preventing the media from making such use of them as the media think fit. While
any effect of the Privacy Act 1993 is best left to be considered in a case where
that issue is clearly raised and fully argued, it
is to be noted that by s.11(2)
in general the information privacy principles do not confer on any person any
legal right that is
enforceable in a court of law.
Consequently, in company with Thomas J., I would dismiss the appeal, but in
accordance with the opinion of the majority it will be
allowed and the
injunction will be discharged. As to costs in this Court the appellant will
have an award against the respondents
of $5000 together with reasonable
disbursements including the cost of preparing the case. As indicated as
possible when the Employers
Federation obtained leave to appear, the Federation
will be ordered to pay $3500 as a contribution to the costs of the Council of
Trade Unions. Costs in the Employment Court stand reserved and should now be
fixed in that Court in the light of the decision of
this
Court.
Solicitors:
Broadmore Barnett, Wellington, for Appellant
Oakley Moran, Wellington, for Respondents
Office Solicitor, New Zealand Employers' Federation, Wellington
Crown Law Office, Wellington, for Amicus Curiae
Macalister Mazengarb Perry Castle, Wellington, for Council of Trade
Unions
IN THE COURT OF APPEAL OF NEW
ZEALAND C.A.145/95
BETWEEN THE NEW ZEALAND FIRE SERVICE COMMISSION
Appellant
AND GRAEME JOHN IVAMY
First Respondent
AND BARRY KEVIN MURPHY
Second Respondent
AND PETER BERNARD STEVENSON
Third Respondent
AND NEW ZEALAND PROFESSIONAL FIREFIGHTERS UNION
INCORPORATED
Coram: Cooke P
5.12.95 Richardson J Gault J
Henry J Thomas J
Hearing: 5,6,7 and 12 December 1995
Fourth Respondent
Counsel: D R Broadmore and P A McBride for Appellant
J R Parker and A O’Brien for Respondents
J F Timmins and A K Knowles for The New Zealand Employers
Federation
P J Bartlett for Council of Trade Unions J R Reid in person by leave of the
Court B J Banks as Amicus Curiae
Judgment: 24 April 1996
JUDGMENT OF RICHARDSON P, GAULT AND HENRY JJ DELIVERED BY GAULT
J
The intensity of the industrial dispute out of which this case arises
suggests that the litigation reflects rather more tactics than
concern for fine
points of the law as it relates to employment contract negotiations.
The appellant, New Zealand Fire Service Commission, is intent upon
restructuring the New Zealand Fire Service. While attempting
to achieve this
it has been engaged also in long-running negotiations with employee firefighters
for a new collective employment
contract. Necessarily the two matters are
inter-related.
The first three respondents and others have pursuant to s 10(1)(b)
of the Employment Contracts Act 1991 chosen to be represented
by the fourth
respondent Union in negotiating for their employment contract.
Central to the case is s 12(2) of the Act which reads:
Where any employee or employer has authorised a person, group, or
organisation to represent the employee or employer in negotiations
for an
employment contract, the employee or employer with whom the negotiations are
being undertaken shall, subject to section 11
of this Act, recognise the
authority of that person, group, or organisation to represent the employee or
employer in those negotiations.
In April 1994, after notices of intended strikes had been given by the Union, the Commission made offers of employment contracts direct to individual employees and this led to a counter-claim in proceedings already extant alleging that the Commission had breached s 12(2). That counter-claim was settled by agreement between the appropriate parties dated 17 June 1994 the text of which reads:
However, for the purposes and duration of employment contract negotiations,
the New Zealand Fire Service acknowledges that
the New Zealand
Professional Firefighters Union is the bargaining agent of those of its members
who have given it appropriate authority
and undertakes, until the employment
contract is settled:
(a) Not to negotiate or attempt to negotiate terms and conditions of
employment directly with members of the New Zealand Professional
Firefighters
Union, or
(b) Not to communicate directly with individual employees or groups of
employees who are members of the New Zealand Professional
Firefighters Union,
over their terms and conditions of employment;
so long as the Union remains their authorised bargaining agent. Except that:
(a) The New Zealand Fire Services reserves the right to provide factual
information to its employees in a general form as to the content
and progress of
employment contract negotiations and the employer’s position in relation
to any such negotiations; and
(b) It will provide the New Zealand Professional Firefighters Union with a
copy of any such information contemporaneously with that
information being
released from National Headquarters for purposes of distribution to employees
who are member of the Union. The
means of communiation (sic) to the Union to be
by facsimile to the registered office of the Union.
2. The counterclaim may be struck out.
3. Each party shall bear their or its own costs on the
counterclaim.
It is perhaps relevant to note that this agreement was concluded after the
judgment of this Court in Eketone v Alliance Textiles (NZ)
Ltd [1993] 2 ERNZ 485 and before the judgments both in the Employment
Court (1994 2 ERNZ 93) and this Court [1996] 1 NZLR 7 in Capital Coast
Health Ltd v New Zealand Medical Laboratory Workers Union
Inc.
The judgment under appeal records that:
On dates in January 1995 formal negotiations between the fourth plaintiff and
the defendant were again in progress but were adjourned
by mutual agreement to
23 February 1995.
The adjournment was at the defendant’s request. Its purpose was to
enable the defendant to have an opportunity and the time
that it said it needed
to reconsider its position on some sticking points. At the risk of
oversimplifying a matter that was of some
complexity, the sticking points in the
negotiations can be said to have included the defendant’s proposal to
alter the duty
roster system by introducing structural changes, especially a new
56-hour roster to replace the existing 42- hour roster. The union’s
suggestion that each of its members should be paid a sum of $5,000 as
compensation for the stress encountered during the restructuring
of the fire
service was also controversial.
The proposed 56 hour roster which was an element in the proposed
restructuring of the fire service had been discussed earlier
at briefing
meetings with employees around the country held with the Union’s consent
and co-operation.
On 23 February 1995, the day appointed for the resumption of formal
negotiations between the Union and Commission representatives
the Commission had
new proposals to present to the Union. It intended also on the same day to
notify those proposals to employees,
to the media and other
“stakeholders” including members of Parliament and local
authorities. The dispute between
the parties by then had become a public issue
with the Union advertising its intention to seek signatures in support of a
petition
for a referendum on the proposed restructuring of the Fire
Service.
In this Court, Mr Parker for the Union accepted that the media release was
unexceptionable. The contest concentrated on the communications
to the
employees. It is necessary to describe these. It is convenient first to
describe the media pack because this appears to have
accompanied the letters
sent to the staff.
The “News Release” forming part of the pack and said to be
embargoed to
11.00 am on 23 February is of four pages. It describes the stage reached in
the negotiations, refers to the adjournment to allow
the Commission to formulate
alternatives to the 56 hour week proposal which “ ... has resulted in six
shift options being placed
on the negotiation table today”. There follows
explanation of the shift alternatives while expressing a preference for the
eight hour shift option already on the table. It continues:
However, fire fighters have to decide which is more important, time off, paid
on call sleep and rest, or shift length. But at least
the choice is now
there.
The fire service is keen to implement roster changes on 1 July 1995 and has
offered fire fighters an incentive of $4,000 per firefighter
if they sign the
contract before 31 March 1995.
The document then goes on to deal with aspects of the restructuring not
strictly part of the contract negotiations (the Community
Firefighter
Proposal).
The pack then has six documents describing aspects of and reasons for the
restructuring. The material document is that describing
the six shift options.
Five of these are variations on a 56 hour week comprising three watches of
different shift lengths and patterns.
The last provides for a 40 hour week
roster with five watches and eight hour shifts cycled over 35 days.
Two of these packs were sent to each fire station with the addition of two
letters signed by the Chief Fire Service Officer. The
first of these, addressed
to the officer in charge, merely stated:
The accompanying documents are provided for information of staff. Please
arrange for this material to be brought to the attention
of
staff.
staff”:
The second letter is critical and must be set out in full. It is addressed
“To all
Today the Fire Service re-enters negotiations with the Professional
Firefighters Union over the separate contracts for firefighters
and control room
staff.
As you’ll know, the Union had agreed to a one month break to these
discussions to allow the Fire Service to respond to firefighter
concerns which
had been the 56 hour week proposal for their contracts.
The Fire Service was disappointed, however, that the Union refused to take up
the offer to work with us in developing the alternatives.
However, I believe the
range of six options which are being brought to the negotiating table today
provide the widest choice firefighters
could hope for.
The major concerns have been addressed - there are options which retain four
consecutive days off, options which include paid on-call
sleep, and an 8 hour
shift option has also been included.
The choice is yours.
What isn’t our decision to make, is whether we change or stay the same.
There simply is no option - we must change. The country’s
economic
recovery something all New Zealanders have been waiting for, depends upon
improved performance by organisations of all kinds,
both public and
private.
I’m keen that we all choose to be involved in those changes.
The terms and conditions of employment being negotiated are a part of wider
reform the Fire Service has been implementing in order
to continue providing a
high quality, cost effective service to the people of New Zealand. We consider
that we can provide the
community with the same standards of cover at a lower
cost and that this lower cost can eventually be realised as a lower Fire Service
levy collected through insurance premiums.
Already we’re seeing restructuring taking place. Administrative and
management services have already been through restructuring
which has seen 120
positions disappear as we reassess the skills we need to support a Fire Service
of the future.
In making these changes the Fire Service has been conscious of its
responsibilities as a good employer. We have provided staff with
fair and
reasonable early retirement and voluntary severance options,
retraining and personal support services to help people with the
transition.
In resuming the negotiations with the Union, we will be offering similar
provisions to firefighters.
I encourage you to take the time to read the information in this pack. It
contains a summary of each of the options being presented
to the Union for
negotiation.
This pack also contains an outline of a proposal on which the Fire Service is
seeking consultation with the Union. The Community
Firefighter proposal seeks
to provide a better coverage of service to the areas that need it and provide a
stronger link between
the Fire Service and the community.
Copies of this kit have also been sent to the media and to key Fire Service
stakeholders such as local authorities and MPs to keep
them informed on our
negotiations.
The ball is now basically back in your court. The Fire Service has offered
an incentive of $4,000 gross per firefighter if the contract
is signed before 31
March 1995, to take effect from 1 July 1995. The Union will no doubt be seeking
consultation with your shortly.
I encourage you to carefully consider the options now before you. We need to
go for the option which will ensure we are best able
to serve our communities
both in our role as firefighters and as a service that is answerable to its
funders.
I sincerely believe we now have the range of options that will allow that
choice to be made wisely.
An additional folder was delivered to six centres where control rooms were located. These included an additional letter to the officer in charge reading:
Re: INDUSTRIAL NEGOTIATIONS
As staff will be aware, the Fire Service is re-entering negotiations with the
New Zealand Professional Firefighters Union today.
So that control room staff are fully informed on our proposal we have
enclosed a copy of the full offer document being presented to
the Union by the
Fire Service.
There was also a letter to the staff reading: To all Control Room Staff
Today the Fire Service re-enters negotiations with the Professional
Firefighters Union over the separate contracts for firefighters
and control room
staff.
We wanted to keep you fully informed on our propsal (sic) for control room
staff and have attached a copy of the full offer document
for your information.
The Union will no doubt consult with you shortly on the terms and conditions
proposed.
I also enclose a copy of an information pack we have sent to key Fire Service
stakeholders and the media as a background
to the negotiations,
which I encourage you to read.
There was included a copy of a contract document to cover control room staff.
We were told there were some 85 control room staff as
compared with some 1,800
firefighters.
It happened because of a delivery mix-up that the packs reached some of the
employees before the negotiations resumed on 23 February.
Having learned of
this the Union cancelled the meeting and so received the proposals by delivery
only later in the day. By that
time this proceeding had been commenced alleging
as separate causes of action breach of the settlement agreement of 17 June 1994
and breach of s 12(2).
The first three respondents were permitted to bring the proceedings in a
representative capacity on behalf of all firefighters employed
by the Commission
who have authorised the Union to act as their bargaining agent.
In a judgment delivered on 14 July the Chief Judge of the Employment Court
found against the Commission on both causes of action.
He granted an injunction
restraining the Commission, its officers, employees or agents from negotiating
or attempting to negotiate
directly with the employees who had authorised the
Union as
their bargaining agent whether by letter, circular or by otherwise
approaching any of them.
In addition the Chief Judge reserved questions of pecuniary loss and general
damages for breach of contract to be dealt with at a
later hearing if
necessary.
By the date of the Employment Court’s decision, Capital Coast
Health Ltd v New Zealand Medical Laboratory Workers Union
had been decided by the full Court of the Employment Court but the
judgment on the appeal to this Court (in which somewhat different
views on
aspects of the law were taken) had not been delivered.
The judgment of the Chief Judge in this case is very long and a brief
selective summary will suffice. On the facts he found (in case
motive should be
relevant) that the Commission set out to outmanoeuvre and outflank the Union
creating the illusion that it was not
bypassing it by providing some of the
material to the Union at the same time and by issuing the same material to the
media and others.
He found further that the Commission wanted employees to
receive this material individually without contemporaneous commentary
or
analysis and editing by the Union or discussion among employees
collectively and that it was the plan by the means adopted
to belittle the
Union, to reduce its importance and standing in the eyes of its members and to
prejudice its ability to represent
them or to do so effectively.
The Chief Judge made credibility findings against Mr Hewson the General
Manager, Human Resource and Development of the Commission
particularly
in respect of his evidence that staff had asked to be kept informed of contract
proposals. He said:
There may have been one or two who approached him after a meeting and said
something along those lines, but I do not believe that
this was
a theme, let alone a common theme, of any meeting, let alone all the
meetings.
Turning to the law he quoted from s 5 of the Act which specifies the object
of Part I and commented on what would constitute undue
influence as referred to
in para (b) of that section. While acknowledging this had no direct
application to s 12(2), which is in
Part II, he drew upon what he had said as
rendering it all the more important to “ ... uphold the other rights which
I am about
to indicate ...”.
Then, after quoting the relevant sections in Part II, he said that s 20(3)(b)
makes it clear that where a representative has been
appointed to negotiate an
employment contract on behalf of an employee the employer must conduct all the
negotiations with the representative
and not just some selected portions. He
then said:
In this context, negotiating does not have any technical or special meaning.
It does not signify merely the formal processes of offer
and acceptance or the
advocacy of offer and counter-offer. It is wide enough to include all
communications, oral or written, formal
or informal, from one side to the other,
during employment contract negotiations, intended to induce the other side to
see or accept
the first side’s point of view. It can include staff
meetings, “pep” talks, “briefing”, as well as
letter,
memoranda, and items in internal magazines. It also includes formal steps such
as strikes, lockouts, and notices thereof.
He further said:
But it must now be taken to be a trespass on the employees’ freedom of
association for the employer, while negotiations are
in progress, to seek to
come between the employees and their representative by offering to employees
arguments or inducements intended
to have or having the effect of persuading the
employees to act without waiting for advice from their representative or in
disregard
of that advice.
With reference to the asserted employers’ freedom of expression he said: The sender’s freedom to impart information may clash with but cannot,
in general, be allowed to override the intended addressee’s objection
to
receiving it. The objection, if made known in time, as here it was, must be
respected.
He then reached his conclusion which has been said to constitute a “blanket prohibition” expressed as follows:
I would now hold that once negotiations for an employment contract have begun
and the employees’ representative has established
its authority to
represent the relevant employees, no further communication on the subject
of the negotiations should be addressed
by the employer to those employees
except such as may be authorised or required by the Employment Contracts Act
1991 to be personally
addressed (notices of lockout or of suspension of striking
workers are immediately obvious examples). I stress the phrase, “on
the
subject of the negotiations”. Communications on all other subjects may
continue but if the employer has anything to say
about the negotiations, there
is no reason why it should not say it to the employees’ authorised
representative. This restriction
is necessary, as the Court of Appeal in
Eketone pointed out, to make s 12(2) properly effective. No real
curtailment of the employer’s freedom of expression is involved in
requiring certain classes of communication to be addressed to the
employees’ representative. Acting through a representative
is
equivalent to acting in person and by communicating with the employees’
representative, the employer is in effect communicating
with the employees
themselves, even if psychologically it may not seem so. It follows that it is
now my view that employers should
have little difficulty in discriminating
between a prohibited communication on the subject of negotiations and a
permissible one
on that subject or one unrelated to
negotiations.
The Chief Judge’s conclusion on this case was:
The plaintiffs are entitled to a finding that their freedom of association
prevails, in the circumstances of this case, over
the defendant’s
freedom of expression for the purposes and duration of the
negotiations. The plaintiffs
qualify for the favourable exercise of the
Court’s discretion to issue a declaration and, in view of the history, an
injunction
seems necessary as well.
On the claim for breach of the settlement agreement the Chief Judge found the Court had jurisdiction to entertain the claim. He then held that his earlier findings as to the Commission’s motives were conclusive on this claim and added that:
I find that the information pack was not mere factual information in a
general form as to the state of the negotiations or anything
else that was
permitted by the settlement.
...
I note that the information was not issued to the union as soon as it should
have been under the contract.
When the Capital Coast Health Ltd case was decided in this Court we adopted principles for the application of s 12(2) which included a somewhat narrower view of what constitutes negotiations and a less restricted view of permissible communications by employers to employees. In the judgment of Hardie Boys J (with whom the President and Gault J agreed) he said:
The Employment Contracts Act must be seen as essentially practical
legislation designed to deal with everyday practical situations.
It is not
appropriate to subject it to esoteric analysis or to draw fine distinctions in
its application. As Gault J said in Eketone it is a matter in
each case of striking a balance between the competing rights of the parties -
those of the employer under s 14 of
the Bill of Rights Act, and those of the
employee under s 12 of the Employment Contracts Act. It is not a case of one
prevailing
over the other, but of both being given sensible and practical
effect. That can be done by allowing s 12 to speak for itself.
I do not think
that its meaning is greatly assisted by devising tests, whether they be of
motive, either dominant or secondary, or
of effect, either intended or
incidental.
Section 12(2) is predicated on the basis that negotiations for an employment contract are under way between the employer and the employees’ authorised representative. Negotiations are as I have said a process of mutual discussion and bargaining, involving putting forward and debating proposal and counter-proposal, persisting, conceding, persuading, threatening, all with the objective of reaching what will probably be a compromise that the parties are able to accept and live with. Once that process is under way with an authorised representative participating, the process may not be conducted directly with any party so represented. The provision of factual information
calculated to persuade or to threaten the consequences of not yielding
does. Whether any words or actions are of that kind is a question of fact to
be determined on an overall view of what was said or
done and the context in
which it was said or done.
Attempts to undermine the authority of the agent may be in breach of s
8(1), but will also be in breach of s 12(2), because it is for
the particular parties to choose their representative.
It is their right to
have that person act on their behalf without interference. But again the
provision of factual information,
relevant to the matter in hand, cannot be
interference. And again, the same kind of overall assessment must be made to
determine
on which side of the line particular facts fall.
Notwithstanding all of the argument addressed to us, we consider that is a
sufficient statement of the law to be applied in the circumstances
of particular
cases. Further we consider that the settlement agreement entered into by the
parties in this case is consistent with
that.
There was much argument before us directed to the elastic terms
“persuade” and “interference” but we see little
difficulty with them if there is kept in mind the actual wording of the statute
which must govern, that is that the employer must
“... recognise the
authority of [the bargaining agent] to represent the employee ... in those
negotiations” [“for
an employment contract”].
Because of views expressed in the judgment under appeal brief elaboration is
desirable.
negotiations for an employment contract arises out of, but generally is not
regarded as an element of, the freedom of association:
Eketone
v Alliance Textiles (796) Capital Coast Health Ltd
v New Zealand Medical Laboratory Workers Union Inc per
Hardie Boys J (17). The issue here is the construction and application
of the statutory obligation imposed on employers
in s 12(2). That must be
given meaning consistent with the rights and freedoms contained in the Bill of
Rights Act (s 6) which include
the freedom of expression which extends to
“ .. the freedom to seek, receive and impart information and opinions of
any kind
in any form”.
The Chief Judge’s proposition that the freedom of expression cannot
be allowed to override an intended addressee’s
objection to
receiving it rested upon Rowan v US Post Office Dept
[1970] USSC 105; 397 US 728 (1970) but that case must be viewed in light of Bolger
v Young’s Drug Products Corp [1983] USSC 145; 463 US 60
(1983).
provided so as to be entirely free from any element of persuasion, at least
as to its veracity. Therefore it does not advance matters
to test
communications solely by reference to whether it tends to persuade. What are
significant, if there is attempted persuasion,
are the subject matter and
target. Who does it persuade and of what? If, as in the
Eketone and Capital Coast Health Ltd cases, there
is persuasion of employees to exclude the representative and enter
into contracts direct with the employer,
then plainly it is persuasion of a kind
that is inconsistent with the employer’s obligation under s 12(2). If it
is persuasion
as to the reasonableness of an employer’s stance on a
particular issue which all parties understand is the subject of
negotiations between representatives it need not amount to a failure to
recognise an authority so as to contravene s 12(2).
to impact upon the outcome of negotiations, whether employees
commonly initiate or participate in direct communications
in the work place. It
will be relevant also to consider the general background to, and history of, the
complaint together with the
particular circumstances in which it has arisen.
In summary there must be a broad factual assessment by reference to the
terms of the statute.
authority to represent the employees. That may include in some
circumstances unjustified or misleading denigration of the
agent to employees
but each case will depend on its own facts with due allowance for the
traditional robustness that is part and
parcel of contract
negotiations.
1995. The appeal
to this Court has been withdrawn. That decision preceded delivery of the
judgment in this Court in the Capital Coast Health Ltd case but
was after the decision on the present case now under appeal. The judgment of
Judge Colgan reflects a realistic approach
to the particular fact situations
with which he was presented against a view of the law very much as it emerged
subsequently in this
Court. The judgment of Chief Judge Goddard in the
New Zealand Airline Pilots Association v Airways Corporation
of New Zealand Ltd was delivered on 14 November 1995 after the judgment
in this Court in the Capital Coast Health Ltd case. It was
appealed and will be the subject of a separate judgment delivered at the same
time as that in the present case.
In this case, in light of the subsequent judgment of this Court in the
Capital Coast Health Ltd case, the approach taken by the Chief
Judge on the law was in certain respects erroneous. Before examining the facts
as he found
them against the principles we have referred to, it is necessary to
consider the separate ground of appeal advanced. That was, in
effect, that
certain of the factual findings made by the Chief
Judge were not supported by the evidence. Such an error of law is not easy
to make out and it should not be advanced simply as an
attempt to secure review
on appeal of the facts. Appeals to this Court are confined to questions of law
(s 135). Nor is it appropriate
(or even logical) to suggest that if the Judge
had not misconstrued the law he would have reached different findings of
fact.
After carefully reading all the evidence we accept the submission that there
was no evidence that the distribution of the media pack
to the media and others
was a “risky charade” and designed to create an illusion to mask the
true purpose of outmanoeuvring
and outflanking the Union by direct contact with
employees. It was not put to Commission witnesses that they intended to create
such an illusion. Nor was it put to them that the Commission’s plan was
to “belittle the Union, to reduce its standing
in the eyes of its members
and to prejudice its ability to represent them and to do so effectively”.
But there was evidence
from which the inference reasonably could be drawn that
the intended timing of the deliveries of the material on 23 February was
to
bypass the Union whose representatives were not to receive the
Commission’s offer materially in advance of that time.
What was intended by the Commission is of little importance in this case
because, through bungling by its representatives and agents,
what occurred was
much worse from its point of view. The packs which purported to outline what
had been proposed in the negotiations
were received by some employees prior to
the time set for the presentation of the proposals in the resumed negotiations.
Of course
this time difference would have been of little significance if the
Union had not cancelled the negotiating meeting fixed for 10.00
am on the same
day.
The issue is whether communicating the material to the employees in that
manner amounted in all the circumstances to a failure to
recognise the authority
of the
Union. That turns on what was communicated. As the Chief Judge
said, the documents must speak for themselves. The
meaning conveyed by the
documents is to be determined by reference to what they said. It is not
assisted by evidence from employees
as to their interpretation of the documents
any more than it is by evidence from Commission representatives as to what they
intended
them to mean (to rely on such evidence is to err in law). Evidence of
hurt and distress by recipients and of good employer communications
policies by
those responsible for the documents must be seen more as argument than as
fact.
Accordingly, bearing in mind the Chief Judge’s findings of fact save as
mentioned but allowing the documents to speak for themselves,
we turn to
application of the principles outlined to determine whether s 12(2) was
contravened by the Commission.
We take into account as background that the negotiations had been in train
with the Union as appointed bargaining agent for a considerable
period; that
to the knowledge of the Commission the Union was active in its communications
with members as to the negotiations
and the restructuring of the service; that
the restructuring and contract negotiations were inter-related and there had
been vigorous
discussion direct between employees and Commission representatives
at meetings around the country on the restructuring particularly
the proposed 56
hour rosters and possible variations of that; that there had been a series of
disputes about alleged attempts by
the employer to bypass or undermine the Union
in the context of which the agreement of 17 June 1994 was signed; that the
Union had
sought in the negotiations a payment of $5,000 per firefighter for
stress associated with the restructuring and had informed its
members of that;
that the whole issue of the restructuring and its impact on terms and conditions
of employment for firefighters
were the subject of public debate by the
parties which extended to the intended referendum; that to
the
knowledge of the Commission the Union had in its newsletters employed
provocative language in its criticism of the restructuring and
the
Commission’s contract proposals; and that there had been a previous
occasion when the Commission was criticised for allowing
employees to learn of
aspects of the proposed restructuring first from the media.
Against that background we do not consider the delivery to employees of
material setting out the proposals the Commission believed
it would have
presented to the bargaining agent by the time employees received the documents
breached either the agreement or s 12(2).
In the course of argument attention was focussed primarily upon whether the
letter addressed to all staff amounted to an attempt by
the Commission to
negotiate directly with employees over the head of the authorised agent thereby
failing to recognise the authority.
Two particular aspects were emphasised.
The first was the detailed shift options put forward with the invitation to
chose and the
second was the reference to the $4,000 incentive if the contract
was signed before 31 March.
The letter itself and the accompanying media release expressly stated that
those matters were being presented to the Union in negotiations.
There was no
prospect of employees instructing the authorised agent on these matters so as to
influence the negotiations on 23 February
even on the timing of the actual
deliveries. The two matters of particular complaint - the shift options and the
incentive payment
- were Commission proposals in on-going matters well known to
employees as a result of earlier meetings and Union publicity. In
taking that
view it seems reasonable to relate the $4,000 offer by the Commission to the
$5,000 per firefighter that had been sought
by the Union.
Taken as a whole and read objectively (and not with regard to what combative
recipients might want to read into them) the documents
more appropriately fall
within factual statements as to the Commission’s position in the
negotiations than within direct negotiations
of terms and conditions of
employment.
We regard the conduct of the Commission (though perhaps ill-judged and, as it
emerged, counterproductive) as not inconsistent with
the obligation to recognise
the authority of the bargaining agent. It was abundantly clear that it was
contemplated that the bargaining
would be with the authorised negotiators. We
are unconvinced that there should be read into the documents the element of
subtle
influence of those employees having the effect of negotiation. Nor do we
accept, as Mr Reid contended, that the letter to staff
itself constituted an
offer of $4,000 to each member of the staff who should sign an individual
employment contract before 31 march
which it was open to him to
accept.
There remains the additional matter relied upon in respect of the material
that was delivered to the control room staff. That material
included a copy of
the draft employment contract the Commission proposed separately for control
room staff. Normally presenting a
form of contract direct to employees over the
head of a bargaining agent would be indefensible. In this case it was said for
the
Commission that the detail of the form of contract had been requested and
that in any event the letter with which it was provided
to control room staff
stated “the Union will no doubt consult you shortly on the terms and
conditions proposed”.
There was conflicting evidence as to whether firefighters had asked to be
informed direct during (or after) the meetings that had
been held to discuss the
restructuring. The Judge substantially rejected Mr Hewson’s evidence on
that score. But his evidence
of requests from control room staff was separate,
he was not cross-
examined on that and there was no adverse finding on it by the Chief Judge.
We are therefore not convinced that any different view
should be taken in the
case of the comparatively small number of control room staff who received in the
pack the draft contract forms.
Since this judgment was prepared we have read in draft the judgments to be
delivered by Lord Cooke and Thomas J.
We would allow the appeal and discharge the
injunction.
Solicitors
Broadmore Barnett, Wellington, for Appellant
Oakley Moran, Wellington, for Respondents
A K Knowles, Wellington, for New Zealand Employers Federation Incorporated Macalister Mazengarb Perry Castle, Wellington, for Council of Trade Unions Crown Law Office, Wellington, for Amicus Curiae
IN THE COURT OF APPEAL OF NEW ZEALAND CA
145/95
BETWEEN THE NEW ZEALAND FIRE SERVICE COMMISSION
Appellant
A N D G J IVAMY
First Respondent
A N D B K MURPHY
Second Respondent
A N D P B STEVENSON
Third Respondent
A N D NEW ZEALAND PROFESSIONAL FIRE FIGHTERS UNION
Fourth Respondent
Coram: Cooke P (5.12.95) Richardson J
Gault J Henry J Thomas J
Hearing: 5, 6, 7 and 12 December 1995
Counsel: D R Broadmore and P A McBride for Appellant
J R Parker and A O'Brien for Respondents
J F Timmins and A K Knowles for the New Zealand Employers
Federation
B J Banks as Amicus Curiae
P J Bartlett for New Zealand Council of Trade Union
J R Reid (appearing by leave) Judgment: 24 April 1996
JUDGMENT OF THOMAS J
Introduction
I have had the opportunity to read the joint judgment of Richardson P and
Gault and Henry JJ. The outcome perturbs me, and I will
therefore strive to
write a strong dissenting judgment.
My primary concerns are that a decision allowing this appeal will -
* derogate from the principle that the findings of fact of the tribunal at first instance are to be accepted by this Court unless they cannot be reasonably supported in the evidence;
* will result in this Court substituting its own opinion as to the significance and effect of the documents in issue for the view of the specialist tribunal, the Employment Court;
* fail to give full regard to essential and largely uncontestable
facts;
* seriously reduce the effectiveness of a bargaining agent to represent employees in negotiations for a collective employment contract pursuant to s 12(2) of the Contracts Employment Act 1991;
* allow a strategy on the part of the employer which is alien to both the letter and spirit of s 12(2);
* effectively bring to an end the practice of collective bargaining for a
collective employment contract as recognised and defined
by Parliament in the
Employment Contracts Act.
The issue in this appeal is simple enough and is largely one of fact and
degree. It is whether the New Zealand Fire Service Commission
failed to
recognise the authority of its employees' duly authorised bargaining agent,
the Union, to represent them in
negotiations for a collective employment contract as required by s
12(2) of the
Employment Contracts Act.
Chief Judge Goddard had no doubt that the Commission had contravened the
subsection, and it is his judgment which is now under appeal.
The essential facts
The Chief Judge correctly observed that the central allegations of fact in
this case were not contested. Considerable evidence was
nevertheless adduced.
Some of the evidence was of little or no help to the Judge, but he was able to
conclude that the events leading
up to the critical day, that is, 23 February
1995, were relatively plain. I agree with this assessment. This is not an
appeal which
permits much, if any, scope for disagreement on the essential
facts.
In the result, the Chief Judge dealt with the facts by setting out the
sequence of events in paragraphs which he numbered 1 to 27.
Nothing in the
first 15 paragraphs was challenged by Mr Broadmore, counsel for the Commission.
Having concluded this narrative,
the Chief Judge reached further findings of
fact hostile to the Commission under the heading, "A question of motive". He
did this,
he said, "in case motive turns out to be relevant". The Chief Judge
also reviewed the oral evidence of some of the 16 witnesses
which he heard at
some length. He held that it had been demonstrated that the evidence of the
Commission's General Manager, Human
Resource and Development, who was
principally responsible for the negotiations with the Union, was unreliable. He
declined to accept
it. The Chief Judge ultimately concluded that it was the
Commission's plan to adopt means designed to belittle the Union, to reduce
the
Union's importance and standing in the eyes of its members, and to prejudice its
ability to represent them or to represent them
effectively.
In setting out what I will call the essential facts, I propose to adhere to
the Chief Judge's sequence of events, adopting his numbering
up to paragraph 24,
abridging the account where possible, and editing and enlarging his findings
only where that is appropriate to
a resolution of the question in issue. Any
such departure follows a close reading of the evidence. The essential facts,
then, are
as follows:
1. Formal negotiations between the Commission and the Union for a new
collective employment contract to replace the contract which
expired on 24
February 1994 began on 16 February 1994 and continued until 18 April
1994.
2. Up to that date, little progress was made.
3. On 8 and 11 April 1994 the Union gave notice of strikes to take place in
the last week of that month.
4. Although the notices were otherwise in order, a strike under the Union's
rules required a resolution passed by a majority of members
voting in secret
ballot. As at the time the notices were served no such secret ballot had been
held, although one was shortly put
in train.
5. On 18 April the Commission sought an interim and a permanent injunction
in the Employment Court against the Union and four employees,
sued as
representatives of the general body of members, to prevent the strikes from
proceeding.
6. On the same day, the Commission issued to employees an information pack
containing the employment contract which it was offering.
It solicited
individual acceptances from employees. It is to be noted that it is not in
dispute that the dissemination of this
earlier information pack contravened s
12(2).
communicating further with the employees. The Commission sought an
injunction to restrain the strikes from proceeding.
8. These applications came before a full Court of the Employment Court on 21
April
1994. The outcome of the secret ballot was made known; 1,441
of the 1,914 members who voted, or just over 75 per
cent, voted in favour of
striking.
9. The Union's application for an injunction to restrain the Commission
from communicating with the employees was adjourned on the
basis of undertakings
given by the Commission.
10. The full Court, however, granted the Commission's application for an
interim injunction to restrain the strikes from proceeding,
essentially because
the notices were arguably defective having been given in advance of a resolution
of members voting in a secret
ballot.
11. The Union's application for a permanent injunction was later adjourned
when it became known that another full Court of the Employment
Court was about
to hear a similar case between other parties. It was thought preferable to let
the issue be settled between those
parties.
12. On 17 June 1994, the Union and the Commission entered into a formal settlement document which was duly filed in the Employment Court. The body of the document reads as follows:
DEFENDANTS
However, for the purposes and duration of employment contract
negotiations, the New Zealand Fire Service acknowledges
that the New Zealand
Professional Firefighters Union is the bargaining agent of those of its members
who have given it appropriate
authority and undertakes, until the employment
contract is settled.
(a) Not to negotiate or attempt to negotiate terms and conditions
of employment directly with members of the New Zealand
Professional Firefighters
Union, or
(b) Not to communicate directly with individual employees or groups of employees who are members of the New Zealand Professional Firefighters Union, over their terms and conditions of employment;
so long as the Union remains their authorised bargaining agent. Except that
(a) The New Zealand Fire Services reserves the right to provide
factual information to its employees in a general form as
to the content and
progress of employment contract negotiations and the employer's position in
relation to any such negotiations;
and
(b) It will provide the New Zealand Professional Firefighters Union with a
copy of any such information contemporaneously with that
information being
released from National Headquarters for purposes of distribution to employees
who are members of the Union. The
means of communication (sic) to the Union to
be by facsimile to the registered office of the Union."
13. Formal negotiations continued on various dates in January 1995. The
negotiations were then adjourned to 10 a.m. on 23 February
1995.
14. The Commission requested this adjournment. It wanted further time to
consider its position on what was called "some sticking
points". These points
included the Commission's proposal to alter the existing duty roster
system by introducing
structural changes, particularly a new 56 hour roster to replace the existing
42 hour roster. The current shift and roster systems
are written into
firefighters' employment contracts. Any change to the roster system therefore
required the renegotiation of employment
contracts. The "sticking points" also
encompassed the suggestion by the Union that its members be paid $5,000 as
compensation for
the stress encountered during the restructuring of the fire
service. The Union agreed to the Commission's request for an adjournment
of
negotiations.
15. As it was not disputed, paragraph 15 may be quoted verbatim:
"The agreement to adjourn the negotiations was reached in an atmosphere of
general goodwill and in a mood of optimism encouraged
by the defendant
[the Commission]. It was even arranged, in pursuit of this spirit of
cooperation, that the next session of negotiations
should take place at the
union's office situated in Petone. As the date approached, however, the
defendant changed its mind,
ostensibly for reasons of its own
administrative convenience."
16. During the adjournment, the Commission reviewed the position. A public relations firm was instructed to assist it. A plan was devised whereby an information pack containing the Commission's proposals and other material would be made available to its employees. The packs would not, however, be addressed to individual employees, as had been the case on 18 April of the previous year. Rather, they would be sent to the officers in charge of each fire station and control room with instructions to pass them on to the staff. According to the plan, this was to be done at 11 a.m. on
23 February 1995. At that time Union officials, some from other parts of the
country, would be gathered in Wellington for the meeting.
The Commission, or
its representative, was to make the information packs available to the Union's
representatives after the meeting
commenced at 10 a.m., but before 11
a.m.
The public relations firm wrote or assisted with the production of the
material to be distributed in this way and were eventually
instructed to
disseminate it in accordance
with the strategy which had been devised. The information pack was also to
be issued to the news media at the same time. Publication
of the media release
would be possible before those employees who were off duty, estimated in
evidence to be three- quarters or more,
received their information
packs.
It is convenient to describe the information pack at this point. Two packages of documents were sent to each fire station. The packages contained a letter addressed to the officer in charge, a letter signed by the Chief Fire Service Officer addressed to all staff, a media release, and documents entitled "Today's Permanent Firefighter", "The Need for Reform", "The 56 Hour Week Option", "Other benefits", "The Shift Options", and "Balancing Service with Need: the Community Firefighter Model".
The covering letter addressed to the officer in charge reads as follows:
"RE: INDUSTRIAL RELATIONS NEGOTIATIONS
The accompanying documents are provided for information of staff. Please
arrange for this material to be brought to the attention
of
staff."
The letter signed by the Chief Fire Service Officer was dated 23 February and
addressed, "To all staff", and reads as follows:
23 February 1995
To all staff
Today the Fire Service re-enters negotiations with the Professional Firefighters
Union over the separate contracts for firefighters and control room
staff.
As you'll know, the Union had agreed to a one month break to
these discussions to allow the Fire Service to respond to
firefighter concerns
which had been raised with the 56 hour week proposal for their
contracts.
The Fire Service was disappointed, however, that the Union refused to take up
the offer to work with us in developing the alternatives.
However, I believe
the
range of six options which are being brought to the negotiating table today
provide the widest choice firefighters could hope for.
The major concerns have been addressed - there are options which retain four
consecutive days off, options which include paid on-call
sleep, and an 8 hour
shift option has also been included.
The choice is yours.
What isn't our decision to make, is whether we change or stay the same.
There simply is no option - we must change. The country's
economic recovery,
something all New Zealanders have been waiting for, depends upon improved
performance by organisations of all
kinds, both public and private.
I'm keen that we all choose to be involved in those changes.
The terms and conditions of employment being negotiated are a part of wider
reform the Fire Service has been implementing in order
to continue providing a
high quality, cost effective service to the people of New Zealand We consider
that we can provide the community
with the same standards of cover at a lower
cost and that this lower cost can eventually be realised as a lower Fire Service
levy
collected through insurance premiums.
Already we're seeing restructuring taking place. Administrative and management services have already been through restructuring which has seen
120 positions disappear as we reassess the skills we need to support a Fire
Service of the future.
In making these changes the Fire Service has been conscious of its
responsibilities as a good employer. We have provided staff with
fair and
reasonable early retirement and voluntary severance options, retraining and
personal support services to help people with
the transition.
In resuming the negotiations with the Union, we will be offering similar
provisions to firefighters.
I encourage you to take the time to read the information in this pack. It
contains a summary of each of the options being presented
to the Union for
negotiation.
This pack also contains an outline of a proposal on which the Fire Service is
seeking consultation with the Union. The Community
Firefighter proposal seeks
to provide a better coverage of service to the areas that need it and provide a
stronger link between
the Fire Service and the community.
Copies of this kit have also been sent to the media and to key Fire Service
stakeholders such as local authorities and MPs to keep
them informed on our
negotiations.
The ball is now basically back in your court. The Fire Service has offered an incentive of $4,000 gross per firefighter if the contract is signed before 31
March 1995, to take effect from 1 July 1995. The Union will no doubt be
seeking consultation with you shortly.
I encourage you to carefully consider the options now before you. We need to
go for the option which will ensure we are best able
to serve our communities
both in our role as firefighters and as a service that is answerable to its
funders.
I sincerely believe we now have the range of options that will allow that
choice to be made wisely".
No complaint is made by the Union about the media release other than that it
records the offer of the incentive of $4,000 per firefighter
if the contract was
to be signed before 31 March 1995. The document "Today's Permanent
Firefighter" summarises the Commission's
view of the employment conditions of
firefighters. The document headed "The Need for Reform" contains the
Commission's view
of the need for changes in the Fire Service, to cut
costs, alter funding services, and to privatise the Fire Service. It refers
to
three earlier review documents of the Fire Service and sets out the basis on
which reform is being undertaken. It describes the
restructuring already
completed.
"The 56 Hour Week Concept" sets out the Commission's perception of
firefighters' concerns regarding their roster system and briefly
records the
Commission's reasons for preferring the 56 hour week concept. The document
headed "Other Benefits" sets out "Other improvements
the Fire Service is
offering firefighters". It refers to an enhanced retirement package, variations
to the superannuation scheme,
and an intent to improve access to training. The
document, "The Shift Options", summarises the six shift options "being
presented"
for negotiation that day, that is, 23 February 1995. The five 56
hour roster options and a 40 hour week roster option follow, and
it is stated
that the Fire Service's standards of cover will be maintained. The last
document headed, "Balancing Service with Need:
the Community Firefighter Model"
relates, not
so much to the negotiations in train, but to matters on which the Commission
wished to enter into negotiations with the Union.
Information packs were also delivered to the officers in charge of the
control rooms at each of six stations. They contained the
same documents as
those described above. In addition, however, this pack contained a letter from
the Chief Fire Service Officer
addressed, "To all control room staff", and a
document headed, "NZ Fire Service Communication Centres Employees Collective
Agreement
Contract", that is, the contract which the Commission intended to
tender to the Union. The second paragraph of the letter
stated that the
"full offer document" was enclosed so that control room staff would be
fully informed of the Commission's
proposals. The contract included
annual salaries applicable to each rank in the Fire Service.
The information packs were brought to the attention of staff. In one case the officer in charge directed the staff to read it, and in another case the officer in charge read the information out to the employees who were present at the time. On the same day, 23
February, senior command staff also visited the stations affected by the
Commission's proposals. Evidence disclosed, for example,
that at two fire
stations employees were told by the senior officer that he had authority to
advise them that those permanent firefighters
who were affected by the change to
community firefighting would have an enhanced early retirement option, even
though they might
not otherwise meet the minimum requirement of 15 years
continuous service.
17. It must be accepted that the implementation of the plan described above
meant that the employees would receive the information
pack while the Union's
representatives were in the process of negotiating the terms of the collective
employment contract with the
Union.
18. But the implementation of the plan badly miscarried. Courier drivers
throughout the country began to deliver the information
packs at 7 a.m. This
blunder meant that fire stations and control rooms received the information
packs well before the Union had
received a pack. Control rooms also received
the contract which the Commission proposed to submit to the Union. A number of
employees
had received the pack by 8 a.m.
19. Not unexpectedly, the Union received advice from its members
that the information packs had been handed to employees.
Also not
unexpectedly, it postponed the start of the meeting from 10 a.m. to 12
noon.
20. The Commission then decided to hand-deliver the information pack
to the Union.
21. An executive of the Commission delivered a pack to the Union's office in
Petone. It arrived at 10.15 a.m. Again, the Commission's
intention misfired.
The documents delivered to the Union did not correspond with the documents sent
to the fire stations and control
rooms for distribution to employees at 11
a.m.
22. Shortly after 1 p.m. the Union cancelled the meeting altogether and
advised the
Commission that it would be taking proceedings in the Employment
Court.
23. Realising its earlier error, the Commission then delivered to the
Union's office a copy of the information pack that had been
issued for
distribution to employees. This arrived at around 3 p.m. It was, however, also
incomplete. It omitted the two letters
which were addressed to the
staff.
24. The Union's application for an interim injunction to restrain the
Commission from further communicating with the employees was
heard on the same
day. The Chief Judge accepted an undertaking from the Commission that it would
not address any
further information about the contract negotiations to its employees until 2
March
1995 or the earlier disposal of the proceedings. Information packs continued
to be delivered, some as late as 27 February, although
without the involvement
of the Commission. The Commission took steps to prevent further circulation of
the information packs and
to collect any information packs, or copies, at the
fire stations and control rooms. More than half of the original packs
were recovered.
The Employment Court's decision
The Chief Judge held, in the first place, that negotiations
embraced all communications, oral or written, formal or informal,
of one party
to the other during negotiations for an employment contract which induced the
other side to see or accept the first
side's point of view. The representative,
he said, stands in the shoes of the persons represented, and this means that an
employer
must respect its employees' decision to choose to be represented. To
do so, he added, as opposed to paying lip service to doing
so, it must leave the
employees alone and deal exclusively with their representative.
What counsel for the Commission then described as a "blanket prohibition" on communications by the employer to employees during the course of negotiations was later stated in these terms:
"I would now hold that once negotiations for an employment contract have
begun and the employees' representative has established its
authority to
represent the relevant employees, no further communication on the subject of the
negotiations should be addressed by
the employer to those employees except such
as may be authorised by or required by the Employment Contracts Act 1991 to be
personally
addressed (notices of lockout or of suspension of striking workers
are immediately obvious examples). I stress the phrase "on the
subject on the
negotiations". Communications on all other subjects may continue but if the
employer has anything to say about the
negotiations, there is no reason why it
should not say it to the employees' authorised representative."
The Chief Judge's judgment was given before this Court's decision in
Capital Coast Ltd v NZ Medical Laboratory Workers Union Inc
(Unreported, 26 October 1994, CA126/94). To the extent that this dictum
goes further than the law as expounded in that decision,
the Chief Judge's views
must be deemed to have been overruled.
The Chief Judge correctly observed, however, that much depends on the facts
and circumstances of each case. He concluded that, even
if his findings as to
the Commission's motives were not relied upon, "this is not a borderline case".
I agree with that observation
and believe that, viewed objectively, the only
proper conclusion is that the Commission failed to recognise the authority of
the
Union to represent its members in negotiations relating to the collective
employment contract.
Turning to the allegation that the Commission was in breach of the settlement
agreement, the Chief Judge held that his findings as
to motive were conclusive
on this aspect of the case. He held that the information pack was not mere
factual information in a general
form as to the state of negotiations or
anything else that was permitted by the settlement. It was, he added, as the
defendant had
formally admitted (see para 9 of the statement of defence),
information about the terms and conditions of future employment, and
was
intended to thwart the ability of the employees to negotiate effectively by
intervening between them and their representative.
I again consider that, not only was it open to the Chief Judge
to arrive at this conclusion on the essential facts
of the case, but that it
was again the only decision properly open to him.
An appeal on the facts?
Section 135, the section under which this appeal is brought, is limited to
questions of law. This preclusion has been emphasised
many times over. See,
Sears v Attorney-
General (1995) 8 PRNZ 571, and for a recent discussion on the
point, Ogilvy & Mather v Turner (Unreported, 19 December 1995,
CA 16/95, per McKay J at p 8.
With the scope of the appeal firmly in mind, I wish to venture three
comments.
First, any argument that the Chief Judge's findings as to the essential facts
of this case were so at variance with the evidence that
he erred in law simply
cannot be sustained. There is ample evidence to support the essential findings
of fact. Indeed, I do not
apprehend that the majority of this Court take the
view that the Chief Judge's findings of fact were so wrong that he committed an
error of law. Rather, the Chief Judge's findings of fact are borne in mind, but
the documents are allowed "to speak for themselves".
The notion that the documents can be allowed "to speak for themselves" so
that this Court can form its own original view of them concerns
me. Parliament
has established the Employment Court as the specialist tribunal in industrial
matters. In many areas it exercises
exclusive jurisdiction. It is a
long-established principle, too well-founded in the law to require the citation
of authority, that
courts exercising an appellate or reviewing function are to
recognise the expertise and experience of the specialist tribunal. In
my view,
that principle must embrace the tribunal's capacity to determine the
significance and effect of documents in the context
in which they occur. In
this case, the Employment Court has reached a firm view as to the meaning and
impact of the information
packs. This Court should not now adopt a different
view unless the Employment Court's view is one which it was not reasonably open
to that Court to hold.
It is true that some evidence was given by various witnesses as to their
interpretation of the documents. But the Chief Judge did
not rely upon that
evidence. Indeed, he rejected it as "advocacy". He expressly had regard to
evidence on the subject of
motive and the extent of the Commission's questioned activities. He also
considered relevant, evidence about the validity of the
factual basis for the
reasons advanced by the Commission for acting as it did. The Chief Judge then
dealt with the information pack
as part of what he called "the physical
evidence". He set out or referred to various documents in the pack without
adverting to
the evidence of what others may have thought. For my part, I
cannot fault this approach.
In any event, I do not consider that the content of the information packs can
be isolated and considered independently of the essential
facts set out above.
It could also be said that those facts tend to "speak for themselves".
Consequently, whatever scope may exist
to interpret the documents, those facts
must be taken into account unless the Chief Judge's findings are also found
wanting as a
matter of law. But the majority have not held that the Chief
Judge's essential findings of fact are so wanting.
Secondly, it is not tenable to impugn the Chief Judge's factual findings in
this case by asserting that they were influenced by an
erroneous view of the
law. It is clear that the Judge first found the facts and then sought to apply
his understanding of the law
to those facts. Even if it were accepted that the
Judge approached the evidence being of the view that, once negotiations had
started,
communications from the employer to its employees are totally
prohibited, his basic findings of fact would not change. Those findings
are
based on his perception of the evidence, including the information pack, and not
his perception of the law. Consequently, the
essential findings of fact remain
extant as the basis for determining whether the Commission failed to recognise
the authority of
the Union in negotiations for a collective employment
contract.
Thirdly, confining attention to the contents of the information pack has the
effect of remaking the facts of this case. The actions
of the Commission and
the import of those actions also are squarely in issue. Nor can the Chief
Judge's finding of bad faith
against the Commission be entirely set at nought. Yet, the judgment of the
majority in this case necessarily presents a different
view of the factual
position from that held by the Chief Judge. Respondents can, I consider, be
justifiably aggrieved if the factual
situation shifts so markedly in this
Court.
Section 12(2)
Having provided for the appointment of an agent to represent the employees or employers in negotiations for an employment contract in subs (1) of s 12, Parliament enacted subs (2) in the following terms:
"(2) Where any employee or employer has authorised a person, group or
organisation to represent the employee or employer in negotiations
for an
employment contract, the employee or employer with whom the negotiations are
being undertaken shall, subject to section 11 of this Act, recognise the
authority of that person, group, or organisation to represent the employee or
employer in those negotiations." (Emphasis added)
The subsection applies to both employers and employees and the recognition of
their representatives, but because of the facts in this
case I propose to refer
only to the obligations of the employer to recognise the authority of the
employees' bargaining agent to
represent the employees in negotiations for an
employment contract.
(1) A tendency to persuade
Delivering the main judgment of this Court in Capital Coast Ltd v The
NZ Medical Laboratory Workers Union Inc (supra), Hardie Boys J pointed
out that the Employment Contracts Act is to be seen as essentially practical
legislation designed to
deal with every day practical situations. Section 12,
he said, can be allowed to "speak for itself". There is therefore little
to be
gained by going beyond the wording of the section.
I wholeheartedly endorse this viewpoint. Alternative formulations tend
to add confusion to the process of applying the statutory
test. Nor,
generally, will it be profitable to break the question into segments and focus
on a particular word, such as "negotiations".
For the most part the question
should be posed as a whole, viz, whether the employer (where the employer is the
defendant) with
whom negotiations for an employment contract are being
undertaken by a bargaining agent has failed to recognise the authority of
that
agent to represent the employees in those negotiations.
It was held in Capital Coast that the provision of factual
information relevant to the matter in hand does not impinge upon the process
contemplated in s 12(2).
It was further held, however, that, "anything that is
intended or is calculated to persuade or to threaten the consequences of not
yielding" does so. It is the first part of this phrase which poses the
difficulty for, as indicated in the main judgment of the
majority, the provision
of factual information may well occur in such a manner as to be persuasive.
Information, it is observed,
will seldom be provided so as to be entirely free
from any element of persuasion, at least as to its veracity, and it does not
therefore
advance matters to test communications solely by reference to the
question whether it tends to persuade.
I agree that it is likely that information relating to the subject
matter of any negotiations may tend to persuade and
may well be "intended or
calculated to persuade". If persuasion per se is to be the test, therefore, the
actions of the employer
will be circumscribed to a greater extent that is
contemplated by s 12(2). Employers who wish to pursue an open policy of
inclusion
as part of their responsibility as a good employer would be unduly
inhibited by being restricted in what they can say to their employees
if all
elements of persuasiveness are to be excluded. So, too, it would be artificial
to expect communications between employers
and employees in the many smaller
work places throughout the country to limit their informal discussions to purely
factual information.
Employers are, of course, also free to communicate freely
to
those employees who have chosen not to be represented by the bargaining
agent. Then, again, media releases which the employer may
issue, will or may
contain persuasive argument which the employees will be able to read. These
practical considerations need to
be taken into account in construing s
12(2).
Consequently, information which may tend to persuade should be able to be
furnished without it necessarily meaning that the employer
has failed to
recognise the authority of the bargaining agent to represent the employees in
negotiations for an employment contract.
The answer will always be a question
of fact and degree. A tendency to persuade or being calculated to persuade, of
course, may
become an element to be taken into account depending on the
circumstances. It is this exercise which I shall undertake shortly.
(2) Collective bargaining
Before doing so, however, I wish to make what I consider a critical point
relating to the interpretation and application of s 12(2).
In providing that
the employer must recognise the authority of a bargaining agent to
represent the employees in negotiations
for an employment contract, and the
employment contract is a collective employment contract, the section gives
effect to the process
of collective bargaining between employers and
employees.
Collective bargaining has a long tradition in New Zealand's industrial
relations. (See John Deeks, "Other Central Concerns of Industrial
Relations",
Industrial Relations in New Zealand (1978) at 156). By
authorising employees to opt for a collective employment contract and appoint an
authorised representative, Parliament
has sought to preserve, albeit in a
modified form, the practice of collective bargaining if employees choose to
associate for that
purpose. It is not difficult to demonstrate Parliament's
intention. The Long Title to the Act provides that the Act is, among other
things, intended to allow employees to determine who should represent
their interests in
relation to employment issues and to enable each employee to choose
either to negotiate an individual employment contract
with his or her employer,
or to be bound by a collective employment contract to which his or her employer
is a party. (Para (c)).
The same rights are given to employers. (Para (d)).
The question whether employment contracts are individual or collective is
itself
a matter for negotiation. (Para (e)). Under the heading, "Freedom of
Association", s 5(a) provides that employees are to have
the freedom to choose
whether or not to associate with other employees for the purpose of advancing
the employee's collective interests.
The object of Part II of the Act, in which s 12(2) falls, is to establish
that an employee (or employer), in negotiating for
an employment
contract, may conduct the negotiations on his or her own behalf or may choose
to be represented by another person,
group or organisation. (s 9(a)).
Appropriate arrangements to govern the employment relationship may be provided
by an individual
employment contract or a collective employment contract. (s
9(b)). Then, pursuant to s 10, each person may, in negotiating for
an
employment contract, determine whether he or she wishes to be represented by a
bargaining agent, and if they do wish to be represented
by such an agent, to
determine the person, group or organisation by which they will be
represented. Rights to object
to the representative are conferred in s 11, but
are not relevant in the present context. Section 12 then follows. Section 20
also
makes provision for collective employment contracts. An employer
may enter into a collective employment contract with
any or all of the
employees employed by him or her and may, in negotiating for a collective
employment contract, negotiate with the
employees themselves or, if the
employees so wish, any authorised representative of them.
It is also particularly to be noted that the provision which Parliament has
made for employees to participate in a lawful strike (see
ss 61 and 63) is
restricted to strikes relating to negotiations for a collective
employment contract (see s
64(1)(b)). To the closely defined extent prescribed by the statute,
therefore, lawful strikes (as well as lawful lockouts) have been
authorised as
part of the process of collective bargaining.
I wish to stress that I am not suggesting that collective bargaining has been
perpetuated in its historical form. The abolition
of compulsory union
membership and the introduction of flexible bargaining arrangements must
necessarily make a difference to that
practice. The abolition of compulsory
unionism and the introduction of more flexible bargaining arrangements means, of
course, that
individual employees need not accept the collective bargaining
which might be opted for by their workmates. The workplace is not
a "closed
shop". But the practice of collective bargaining where employees elect to
associate and choose a representative to negotiate
a collective employment
agreement on their behalf persists.
Such a view accords with the basic principles of the Act described by the Minister of Labour in the Second Reading of the Employment Contracts Bill as "freedom of association, freedom of choice of representation, and freedom of contract". (New Zealand Parliamentary Debates Vol 514., at p 1437). The Minister adverted to collective bargaining in the debate on the Third Reading of the Bill when discussing the consequences of reinstating compulsory unionism. It would, he said, (ibid, at p 1648):
"...take away from ordinary New Zealanders the rights that will be obtained
through this legislation to choose whether they belong
to a union, to choose
whether they bargain collectively - which seems to me to be a fundamental
right - and to choose their bargaining agent or representative." (Emphasis
added)
These statutory provisions, as well as the process of collective bargaining
which they empower, are undermined if the authority of
the bargaining agent to
represent the
employees in negotiations for a collective employment contract is not
recognised by the employer. Section 12(2) must, therefore,
be interpreted and
applied having full regard to that consideration. Recognition of the agent's
authority at a level lower than
that which is necessary to preserve the process
of collective bargaining defeats the very objective of these statutory
provisions.
It is my firm view that acceptance of the Commission's actions and
communications in this case will have that effect.
(3) Freedom of expression
A further point needs to be made. Much time and space, and many words, were
directed in argument at the hearing of this appeal to
the assertion of the
employer's right to freedom of expression as enshrined in s 14 of the Bill of
Rights Act 1990 and to the need
to balance that right against the employees'
right to freedom of association recognised in s 17 of the Act. To some extent
this
exercise may have been quickened by the dictum of Hardie Boys J in
Capital Coast, referring to what Gault J had said in Eketone
v The Alliance Textiles (NZ) Ltd [1993] 2ERNZ 783, to the effect that it
is a matter in each case of striking a balance between the competing rights of
the parties
- those of the employer under s 14 of the Bill of Rights Act and
those of the employer under s 12 of the Employment Contracts Act.
It therefore
needs to be stressed that, while the right to freedom of expression and the
right to freedom of association, out of
which collective bargaining arises, may
influence the interpretation of s 12(2), freedom of expression cannot be
permitted to lead
to an interpretation or application of the section which would
defeat the objective of enabling collective bargaining to operate
in terms of
the Act. The statutory requirements of the Act must prevail.
Again, as probably goes without saying, I regard the conduct of the
Commission, including the information pack distributed to its
employees, as
being so blatantly a breach of s 12(2) that it cannot be saved by reference to
the Commission's right to freedom of
expression.
Of fact and degree
I turn now to examine the factors which I consider point ineluctably to the
conclusion that the Commission failed to recognise the
authority of the Union to
represent the employees in negotiations for a collective employment
contract.
(1) The timing and secrecy of the communication
The Commission obtained an adjournment of negotiations in
January 1995, purportedly to reconsider its position in
respect of "some
sticking points". During that period it devised a strategy which smacks more of
a cheap public relations exercise
than serious and responsible industrial
negotiations. Negotiations were to resume with the Union at 10 a.m. on 23
February. At
11 a.m. employees would receive the information packs. At some
point prior to that time the Union's representatives would be presented
with the
materials contained in the pack. The representatives, including those from
other centres, would be attending the meeting
and would be difficult if not
impossible to contact. In any event, the Union would be faced with a fait
accompli and would find
it difficult to fully consider the material and
comment upon it to its members within an effective time frame. It is
little
wonder that the Union felt that the Commission set out to "ambush"
it.
I fail to see why, if the objective of the Commission was to provide its
employees with information relating to the negotiations and
the proposals which
it was purportedly advising the Union, it had to adopt this strategy.
Information could well have been imparted
before or after the meeting on 23
February, with a copy of the information being facsimiled contemporaneously to
the Union as required
by the agreed settlement. This course was open to the
Commission even if its objective, as its counsel submitted, was to counter
the
public or referendum campaign which was being undertaken by the Union or to
ensure that its employees were made aware of the
information before reading it
in the media. The same course was also open to the Commission if, as its
officers stated in evidence,
it had formed the view that the Union was not
giving timely and accurate information to its members. Nothing required the
timing
and secrecy which the Commission pursued.
To me, the subterfuge adopted, for that is what it was, indicates that the
Commission sought to obtain a negotiating advantage in
the course of
negotiations for a collective employment contract with the Union. When the
advantage which is sought involves
the employees themselves in this way, the negotiating is being carried beyond
the negotiating table. The timing and secrecy become
part of the negotiations.
As Cooke P said in Eketone (supra, at 787); "To go behind the
Union's back does not seem consistent with recognising its
authority".
(2) The unilateral change of course
The agreement to adjourn the negotiations in January was reached in an atmosphere of goodwill and cooperation. A mood of optimism, encouraged by the Commission, existed, and the next meeting was even to take place at the Union's office. The Union was necessarily left believing that the Commission would come back to it on 23
February with proposals to deal with the "sticking points" which had been
identified. The strategy adopted by the Commission can scarcely
be described as
consistent with that arrangement.
This unilateral change in the Commission's approach is relevant to the
question in issue under s 12(2) in that it perceptibly
impinged upon
the course of the negotiating process. It is, of course, open to any party
to change its negotiating strategy
in the course of negotiations. But in this
case the Commission had led the Union to believe that it would consider the
points causing
difficulty and would then return to the negotiating table and
outline its proposals and continue to negotiate with the Union. In
these
circumstances, the Commission's decision to involve the employees directly
before or at the same time as it returned to the
negotiating table cut across
the negotiations in a manner which amounts to a denial of the Union's authority
to conduct those negotiations.
(3) What actually happened
I believe that the Commission must accept responsibility and be
judged on what actually happened with the dissemination
of the information
packs. It is fixed with the
consequences of its conduct, and not just its intent, in
determining whether it recognised the authority of the Union
to represent the
employees.
When what actually happened on 23 February is examined, a disquieting picture
emerges. The information packs containing material
not yet made available to
the Union was delivered to fire stations and control rooms at 7 a.m. and had
come to the attention of some
members of the staff before 8.00 a.m. The need
to avert the situation whereby the information packs were distributed before the
Union had its pack was recognised by the fact that the Commission then sought to
deliver the documents direct to the Union's office.
But the wrong documents
were sent. It was not until 3 p.m. that the documents were delivered to the
Union, and even then, they
were incomplete.
I do not doubt that if the Commission had set about implementing this
sequence of events deliberately it would be held to have failed
to recognise the
authority of the bargaining agent to represent the employees in
negotiations for a collective employment
contract. Employees were not
only informed of the Commission's position and proposals independently, but
were also advised
ahead of the Union. Even then the Union was incorrectly
informed as to what had been handed to the employees. This whole course
of
conduct, if implemented as an intentional plan, would be seen as flouting the
requirements of s 12(2).
Yet, in my view the Commission must accept responsibility for the
consequences of its strategy and the fact that the strategy miscarried.
Not
even the benefit of hindsight is required to foresee that the plan it devised
was fraught with danger. It might even be said
that something was bound to go
wrong. A strategy involving public relations personnel, numerous couriers, a
significant number of
Fire Service officers acting on instructions from head
office, and the assumption that a meeting with the Union would proceed as
planned, is almost certainly not going to work with the precision of
a
military operation. The Commission undertook the risks inherent in its
strategy and it must be prepared to accept the consequences
when some of those
risks eventuate. Fixed, then, with what actually happened, the Commission
undeniably failed to recognise the authority
of the Union to represent the
employees in negotiations for a collective employment contract.
(4) No effective opportunity for the Union to comment
The Union was deprived of an effective opportunity to assimilate and analyse
the contents of the information pack and comment upon
it to its members either
contemporaneously or shortly after the packs were delivered to employees. Nor
would most of the Union's
officials be on the spot when the packs were
distributed as they would have gathered in Wellington for the meeting. The
Commission's
action undoubtedly represented a pre-emptive strike.
I fail to see how the employee's statutory right to be represented by a
bargaining agent of their choice can be regarded as an effective
right if the
employer can act in a way which has the effect of diminishing the agent's
capacity to represent them. Yet, depriving
the Union of an effective
opportunity to assimilate, analyse and comment on what the employer proposes to
those the agent represents
must necessarily have that effect. There is little
or no value in ostensibly acknowledging the bargaining agent's authority and
then undermining its ability to effectively represent those it is authorised to
represent.
(5) The terms and content of the information packs
Sensibly read, the covering letter dated 23 February, prepared by the public
relations firm and sent out under the name of the Chief
Fire Service Officer, is
directed to persuading the employees that the Commission has acted responsibly
and considered all major
concerns, that the Union's role had been disappointing,
that there is no alternative but to accept change, and that the employees
should
take a close and direct
interest in the proposals being offered and tabled with the Union. Most of
the points made in the letter were the kind of points
which the Commission could
be expected to make across the negotiating table in the course of negotiations
with the Union.
Moreover, the letter is one of exhortation to employees to accept the
reasonableness of the Commission's point of view, and it is
difficult to escape
the conclusion that it was written with a view to encouraging them to assert
pressure on the Union. It represents
a direct appeal to the employees.
Moreover, the insinuation underlying the letter is that the Union cannot be
relied upon to accurately
convey material to the employees, an insinuation which
would, indeed, accord with the tenor of the evidence given by various of the
Commission's officers.
Some of the language used in the letter is particularly indicative of an
attempt to deal directly with the employees. An example
is the single sentence
paragraph; "The choice is yours". Another example is the paragraph reading,
"I'm keen that we all choose
to be involved in those changes", that is, changes
which it is claimed are inevitable and require alternatives which the Union
refused
to participate in developing. An even more direct example is the words
in the third to last paragraph; "The ball is now basically
back in your court",
a statement accompanied by advice of "an incentive" which is being offered of
$4,000 if the employment contract
(which is to be a collective employment
contract) is signed before 31 March 1995. These various statements also tend to
convey the
impression that the choices available to employees were confined to
those put forward by the Commission.
Not only does the letter indicate an attempt to negotiate direct with
employees in the manner which I have described, but it trespasses
upon the
Union's ability to effectively negotiate on behalf of those it has been
appointed to represent. Confidence in the chosen
bargaining agent is likely to
be undermined by the deprecatory reference to the Union, the implication that
it cannot be relied
upon to convey the Commission's
proposals to its members, the acknowledgement that the information is being
made available to employees at or about the same time
as it is being tabled and
discussed with the Union, and the implicit invitation to bring pressure to bear
upon the Union. Moreover,
the Union's capacity to negotiate with the Commission
as it might see fit in the interests of its members is necessarily circumscribed
by the knowledge that a direct appeal has been made to those
members.
It is not necessary to traverse in detail the other documents in the
information pack. The Chief Judge described them as "partly informative
and
partly argumentative", and that is a fair description of them. The documents
comprise a comprehensive statement of the Commission's
position, its negotiating
stance and its proposals and, when read together with the Chief Fire Officer's
letter, are clearly calculated
to persuade the employees to bring pressure to
bear upon the Union and so weaken the negotiating strength of that body. This
effect
was, of course, reinforced by the visits of the senior officers to the
various stations. In at least two cases their conduct certainly
went beyond
consultation and amounted to a direct approach to employees to accept a
variation of their contracts of employment with
regard to early
retirement.
(6) The incentive payment
The offer of an incentive of $4,000 warrants restating:
"The ball is now basically back in your court. The Fire Service has offered
an incentive of $4,000 gross per firefighter if the contract
is signed before 31
March 1995, to take effect from 1 July 1995. The Union will no doubt be
seeking consultation with you shortly."
This offer cannot be construed as anything other than a clear and direct
inducement to the employees to accept the Commission's proposals
or, at least,
as an attempt to compromise the position taken by the Union. The incentive
offered is directly related to the signing
of the employment contract by a
certain date. It is, indeed, the kind of offer which might be expected to be
made in the
give and take of negotiations with the authorised bargaining agent. It is
also the kind of offer which the Union could want to comment
upon promptly,
preferably at the time it is referred to its members.
In my view, such a blatant inducement cannot be saved by wording the
inducement as an incentive which has been "offered", especially
following the
exhortation that the "ball is now basically back" in the employee's court. Nor
can its open bargaining character be
diminished by the last sentence expressing
the expectation that the Union will no doubt be "seeking" consultation with the
employees.
The offer should be seen for what it is; a deliberate attempt to
pre- empt the Union's authority to represent the employees in
negotiations for a
collective employment contract.
Nor do I consider that the offer of a $4,000 incentive payment if the
employment contract is signed by a certain date can be related
to the claim for
$5,000 per firefighter that had been sought by the Union, as suggested in the
majority judgment. In my view, it
cannot be construed as a counter offer. The
Union's suggestion that each employee be paid $5,000 to compensate them for the
stress
which would be encountered in the process of restructuring the fire
service had nothing to do with signing the employment
contract by a
given date. Conversely, the offer of an incentive of $4,000 had nothing to do
with the disruption to employees
attendant upon the proposed restructuring.
Other than that both the Union's suggestion and the Commission's offer include
monetary
sums they do not correspond.
Finally, I cannot find anything in the evidence which suggests that the offer
of a
$4,000 incentive payment was intended to counter the Union's request or was
otherwise related to it. Certainly, the Commission's
witnesses did not say
so.
Nor, in his submissions, did Mr Broadmore suggest any connection between the
two sums. Indeed, in a lengthy and comprehensive submission
Mr Broadmore dealt
with the incentive payment abruptly, an abruptness which perhaps reflected the
fact that the offer simply "speaks
for itself".
(7) Failure of Commission to comply with the terms of the agreed
settlement
The context in which the agreed terms of settlement were completed has been
set out above, but it may be reiterated that the
settlement arose
from a communication by the Commission to employees in April
1994 which indisputably contravened
s 12(2). Following the ensuing
proceedings in the Employment Court the parties set their own criteria
for the purpose
of compliance with that subsection. To meet its
obligations the Commission agreed, among other things, not to communicate
directly with individual employees or groups of employees over their
terms and conditions of employment so long as the
Union remained their
authorised bargaining agent. Exceptions to these general provisions were then
closely defined.
A number of breaches of this agreement were committed by the Commission.
First, the Commission quite clearly agreed not to communicate
directly with
individual employees or groups of employees over their terms and conditions of
employment. Although the information
pack may not have been addressed to
individual employees, arrangements were made for it to be distributed to
individual employees.
And the Chief Fire Service Officer's covering letters to
firefighters and to control room staff were addressed to "All staff" and
"To all
control room staff" respectively. Quite clearly, the Commission set about
communicating directly with the employees.
Secondly, to escape the condemnation of transgressing the agreed settlement,
the
Commission had to bring itself within the terms of the exceptions. It failed
to do
this in three respects. In the first place, the Commission
breached the requirement that the information be factual
and "in a general
form". The persuasive force of the information pack cannot be denied. It does
not constitute purely factual
material. Nor do the exhortations contained in
the Chief Fire Service Officer's letter constitute factual information. How,
for
example, can such expressions as, "the choice is yours", and, "the ball is
now basically back in your court", be regarded as statements
of fact,
particularly in the context in which they appear?
Furthermore, much of the information is not in "a general form". It is
precise in its detail. The material cannot fairly be described
as "general
information as to the content and progress of the negotiations and the
employer's position in relation to those negotiations".
I imagine that the
contract distributed to control room staff would be the most potent example of
information which is not in "a
general form".
In the second place, the Commission breached its obligation to provide a copy
of the information contemporaneously with the information
being released from
the Commission's headquarters for the purposes of distribution to employees. I
do not propose to endorse Mr
Parker's submission that the failure to provide a
copy by facsimile represents a breach in itself. Strictly speaking it may be a
breach. But providing that the information was delivered contemporaneously with
the information being released from the Commission's
headquarters for
distribution to employees, I would not be inclined to complain about the
departure from the letter of the agreed
terms. It is, I believe, more important
to look at the purpose of the provision. Clearly the Union required
contemporaneous advice
of any information to be provided by the Commission to
employees so that it would have time - at least 24 hours - to assimilate and
comment on the information. Mr Best, the Union Secretary's explanation to this
effect can be accepted. Hence,
the use of the words, "contemporaneously" and "released from National
Headquarters for purposes of distribution to employees". A facsimile
communication was the most effective means of ensuring that this objective would
be achieved.
In fact, the Commission did not satisfy this requirement and would not have
done so even if the strategy which it devised had been
implemented successfully.
The information packs, and the proposed contract for control room staff, were
released from the Commission's
headquarters for the purpose of being distributed
to employees prior to the meeting to be held on 23 February. They had to be
released
in time for the documents to be available to couriers for distribution
that day.
In terms of the agreed settlement, the information pack and the
proposed contract should have been forwarded to the Union
when they were sent to
the officers in charge at the fire stations and control rooms for later
distribution to employees. The date
and time when the information packs were
released from the Commission's headquarters for the purposes of distribution is
the critical
date and not the time when employees were intended to receive or
actually received the packs. In the result, the Union was denied
an effective
opportunity to comment on the information at the time it was distributed to
employees.
In any event, what actually happened clearly contravened the agreed
settlement. The information packs were not made available to the
Union
contemporaneously with their release from the Commission's headquarters. They
were delivered incompletely after 11 a.m. and,
finally, at 3 p.m. It just cannot
be said that providing the Union with a complete copy of the information
supplied to employees
at 3 p.m. when employees had begun to receive the
information from
8.00 a.m. onwards represents compliance with the exception contained in the
agreed settlement.
The Commission cannot be excused from these breaches simply because it did
not intend them. I am unaware of any doctrine to the effect
that a contracting
party is not in breach of a contractual provision unless he or she intends to
breach that provision. A supplier
of defective goods or services is liable
notwithstanding that he did not intend them to be defective. The Commission
must therefore
be judged by what actually happened. Once that is done the
Commission must be adjudged to be in breach of the agreed settlement.
It
certainly acted contrary to the spirit and intent of the agreement.
I acknowledge that the fact the Commission may be in breach of an agreed settlement is not necessarily decisive as to whether it is in contravention of s
12(2). The conduct of the Commission in breaching either the letter or the
spirit of the settlement is nevertheless a relevant factor.
In determining what
the Commission could or could not do the parties themselves specified the
conduct which was required on the
part of the Commission to recognise the
authority of the Union to represent the employees in negotiations for a
collective employment
contract. In departing from that specified conduct it
departed from what had been agreed was required to recognise the Union's
authority in the circumstances of this case.
(8) Delivery of proposed contract to control room staff
As with the monetary inducement held out to employees to sign the agreement
by a certain date, I regard the Commission's delivery
of the proposed contract
to control rooms, including as it did a schedule with annual rates of pay for
each rank, a blatant trespass
on the authority of the Union to conduct
negotiations on behalf of the employees. This is particularly so when the
contract is
coupled
with the offer of an incentive payment and not delivered to the Union until 3
p.m., many hours after it had been available to control
room staff. To accept
that employers are free to provide employees with copies of the very contract
being negotiated before or
at the same time as negotiations are in process with
the bargaining agent is necessarily inconsistent with the requirement to
recognise
the bargaining agent's authority to represent the employees in
negotiations relating to that contract.
(9) Lack of good faith
Finally, as I do not think that the Chief Judge's finding that the Commission acted other than in good faith can be rejected, it is pertinent to have regard to the consequences of that finding. The strategy which the Commission adopted, and the secrecy and timing it entailed, is inexplicable unless the Commission wished to pre-empt the Union's authority. At the same time the Commission's conduct was a breach of the terms and spirit of the agreed settlement. The whole subterfuge runs counter to the employer's obligation to deal with its employees in a manner which is not calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. (See Auckland Electric Power Board v Auckland Local Authorities Officers [1994]
2NZLR 415, per Cooke P at 419.)
There was ample evidence to support the Chief Judge's finding.
The Commission had contravened s 12(2) in April
1944 when it addressed
its previous information packs to individual employees and invited them to
respond directly to the Commission.
I believe that it must be accepted on the
evidence that its objective did not differ greatly in February 1995. It simply
adopted
a more sophisticated and subtle means of dealing with the employees
direct so that it would be in a more tenable position to claim
that it had
complied with the requirements of s 12(2).
The Chief Judge dealt with the Commission's lack of good faith
under the heading of motive. I would prefer to deal with
the matter as a
question of intent. To my mind, an intention on the part of the employer not to
recognise the authority of the bargaining
agent should be decisive even if the
employer's conduct may not appear to contravene s 12(2) when viewed objectively.
This opinion
would surely prevail if the employer evinced his or her hostile
intent by expressly declaring that they did not recognise the agent's
authority
to represent the employees in negotiations? The same principle should hold good
when the intent is manifest by conduct.
Whether or not an intention of this kind should be regarded as decisive,
however, cannot appropriately be determined in a dissenting
judgment. For
present purposes, I am content to regard the Commission's intention
demonstrating, as it does, a lack of good faith
as a further relevant factor in
deciding that it failed to recognise the authority of the Union as required by s
12(2).
One can, of course, appreciate the position of the Commission. It is engaged
in a major restructuring of the fire service. To the
extent that its proposals
to restructure the service require changes in the employee's collective
employment contract, its ability
to communicate with its employees and persuade
them of the necessity and advantages of the proposed restructuring is curbed by
the
requirements of s 12(2). But the Commission's frustration cannot excuse it
from compliance with that subsection.
I believe that, when the above factors are viewed collectively, they point
inescapably to the conclusion that the Commission failed
to recognise the
authority of the Union in negotiations for a collective employment contract.
More than one of those factors
support that conclusion even when
viewed
independently. I cannot, with respect, agree that there is a sound basis for
reversing the Chief Judge's decision.
Section 12(2) and collective employment contracts
Under New Zealand's parliamentary system of government, legislation is often
the outcome of various forces at work in a democracy;
party political policy,
extensive governmental preparation, consultation with interested
parties, intensive lobbying,
submissions to parliamentary select committees,
considerable parliamentary and public debate, and public opinion. The
Employment
Contracts Act was no exception.
In that legislation Parliament abolished compulsory unionism and made express
provision for more flexible bargaining arrangements.
One option was collective
employment contracts. Providing it is voluntarily adopted by the employees,
therefore, collective bargaining,
as defined in the statute, was sanctioned by
Parliament. It is my concern that a decision in favour of the Commission in
this case
will be perceived by employers and employees alike as significantly
eroding the import of s 12(2) and thereby undermining the practice
of collective
bargaining. While ostensibly proceeding in accordance with the format provided
by the subsection, negotiations will
be diverted from or subordinated to the
objective of "winning the hearts and minds" of the employees in a manner which
is an affront
to the requirements of that subsection. In the result, the
statutory right - described by the Minister as a fundamental right (supra)
- for
employees "to choose whether they bargain collectively" will be
curtailed.
It may well be that no new principles of law are enunciated in the majority
judgment and that the principle that each case must turn
on its particular
circumstances is reiterated. But it would be unrealistic to believe that a
decision
of this Court will not be closely scrutinised by industrial parties and their
advisers to discern what conduct and communications
on the part of the employer
is acceptable under s 12(2). How else can employers and employees, and their
advisers, respond? Although
each case, therefore, is one of fact and degree,
the facts of any particular case which are held not to cross the prohibited line
will be precedential in their effect.
Consider, therefore, what employers and employees may consider legitimate
conduct on the part of the employer and permissible communications
direct to
employees before it can be said that the employer has failed to recognise the
authority of the employee's chosen bargaining
agent in negotiations for a
collective employment contract; the employer may communicate direct with
employees in furtherance of
a strategy which must or will be likely to embarrass
or disadvantage the bargaining agent in negotiations; the employer
may, without advice to the bargaining agent, depart from the course of
negotiations which the employer had led the bargaining agent
to expect and
involve the employees direct; the employer may issue comprehensive information
for distribution to employees with
the intention that they will receive the
information at or about the same time as their bargaining agent and while their
agent is
engaged in negotiations; the employer may deprive the bargaining agent
of an effective opportunity to assimilate and comment on
the employer's
proposals to those he or she represents; the employer may distribute
information which is not solely factual, and
which will tend to persuade or
which is calculated to persuade employees of the reasonableness of the
employer's proposals and, by
necessary implication, the unreasonableness of the
bargaining agent's stance.
The employer may comment adversely on the performance of the bargaining
agent, that is, that it is "disappointing" or the like; the
employer may
distribute information encouraging and exhorting employees to make their own
decision;
the employer may seek to persuade the employees to adopt a point of view
which is not the position of the bargaining agent and to
bring pressure to bear
on the bargaining agent; the employer may impliedly infer that the bargaining
agent cannot be trusted to
convey the employer's proposals; the employer may
offer, albeit indirectly, a monetary inducement to employees if they sign the
collective employment contract, including, presumably, all or much of the
employer's proposals, by a date which has been fixed without
reference to the
bargaining agent; the employer may deliver a copy of the proposed collective
employment contract which is under
negotiation with the bargaining agent direct
to the employees before or about the same time as it is made available to the
agent;
the employer may avoid accepting the consequences of any strategy
adopted which, if it misfires, would undoubtedly contravene s
12(2), providing
that the employer did not intend that the strategy should misfire or have those
consequences; the employer may
breach both the letter and spirit of any
agreement reached between the employer and the bargaining agent proscribing the
criteria
for recognising the authority of the bargaining agent; and the
employer may act without good faith, that is, fully intending not
to recognise
the authority of the bargaining agent in negotiations for a collective
employment contract.
In these circumstances it is not to be unexpected that employers and
employees alike may conclude that collective bargaining in the
form recognised
in the Employment Contracts Act is largely vitiated.
For my part, therefore, I would dismiss the
appeal.
Broadmore Barnett, Wellington for Appellant
Oakley Moran, Wellington, for Respondents
Office Solicitor, New Zealand Employers' Federation, Wellington
Crown Law Office, Wellington, for Amicus Curiae
McAlister Mazengarb Perry Castle, Wellington, for Council of Trade Unions
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