Carter Holt Harvey Ltd v National Distribution Union Inc [2002] NZCA 268; (2002) 6 NZELC 96,841; [2002] 1 ERNZ 239; (2002) 1 NZELR 280 (25 September 2002)

Last Updated: 15 December 2011

     

IN THE COURT OF APPEAL OF NEW ZEALAND

CA22/02

BETWEEN CARTER HOLT HARVEY LIMITED
Appellant

AND NATIONAL DISTRIBUTION UNION INCORPORATED
Respondent

Hearing: 12 August 2002

Coram: Gault P Keith J Blanchard J McGrath J Glazebrook J

Appearances: P T Kiely and J B Cain for Appellant
R E Harrison QC and J R Lawrie for Respondent

Judgment: 25 September 2002

JUDGMENT OF THE COURT DELIVERED BY GAULT P

[1] This appeal against the decision of the Full Court of the Employment Court, limited to questions of law, primarily concerns the scope of the rights of union access to workplaces enacted in the Employment Relations Act 2000. The appellant, Carter Holt Harvey Limited (the company), is an employer and operates a plant at Wiri producing engineered wood products. The National Distribution Union Incorporated, the respondent, is a union registered under s15(2) of the Employment Relations Act. Of the 80 staff employed by the appellant at the Wiri plant, some 47 or 49 were members of the union. The present dispute between the parties arose out of failed negotiations for a collective agreement under the new Act, which led to strike action consisting of a total withdrawal of labour.

Background

[2] The strike began on 17 August 2001 and was accompanied by a picket, which, in the main, was peaceful and lawful. However, at times during the first two weeks of the strike the picketers engaged in unlawful and sometimes extreme behaviour. This behaviour included harassment and intimidation of non-striking workers, egg throwing and intentional damage to trucks coming on to the site to load out products. We were shown a purpose-made road spike representative of those that were placed in the path of a truck causing damage to its tyres. Such behaviour led to a police presence for the purpose of escorting trucks into and out of the site at pre-arranged times. On 28 August a truck arrived at the gate before the arrival of police to escort it into the plant. It drove through the picket, hitting a drum and striking several picketers, some of whom received medical treatment for their injuries. An untrue rumour spread that the company management had encouraged this. Two picketers were arrested in the course of the picket. The conclusion reached by the Employment Court was that all these events escalated the tension and emotion on the picket and the concerns of management.
[3] The central misunderstanding that resulted in the present dispute evolved out of the company’s decision to continue production at the plant during the strike. In this respect s97 reads:

Performance of duties of striking or locked out employees

(1) This section applies if there is a lockout or lawful strike.
(2) An employer may employ or engage another person to perform the work of a striking or locked out employee only in accordance with subsection (3) or subsection (4).
(3) An employer may employ another person to perform the work of a striking or locked out employee if the person –

• (a) is already employed by the employer at the time the strike or lockout commences; and
• (b) is not employed principally for the purpose of performing the work of a striking or locked out employee; and
• (c) agrees to perform the work.

(4) An employer may employ or engage another person to perform the work of a striking or locked out employee if –

• (a) there are reasonable grounds for believing it is necessary for the work to be performed for reasons of safety or health; and
• (b) the person is employed or engaged to perform the work only to the extent necessary for reasons of safety or health.

(5) A person who performs the work of a striking or locked out employee in accordance with subsection (3) or (4) must not perform that work for any longer than the duration of the strike or lockout.
(6) An employer who fails to comply with this section is liable to a penalty imposed by the Authority under this Act in respect of each person who performs the work concerned.
[4] Because work that the striking union members were employed to do was involved in the continued production, the union representatives were quite reasonably suspicious of this continued production. They believed that there would only have been about five management staff capable of operating the production machinery at the site. This belief was reinforced during discussions at the picket line with non-union staff coming and going from the plant who indicated to picketers that they had declined the company’s requests to operate the machinery. What they did not know at the time was that the company had instigated an intensive training programme during the first weeks of the strike so that non-striking workers were undertaking the work of the strikers.
[5] Also, on 29 August, picketers and union officials received reports from construction workers on an adjacent site that two people had been seen to enter the company site through a hole in the rear fence. Later, at the Employment Court hearing, one employee who had performed strikers’ work gave evidence that he eventually felt unable to come and go from work through the picket and resorted to getting to and from work through a hole in the rear fence. That same day the picketers heard the plant’s melamine machine operating. They knew this machine required three or four people to operate it but believed that only one non-striking manager was capable of doing so. For reasons that are understandable these circumstances caused strikers and union officials to think that production was taking place in breach of s97 of the Act in that the company was using new employees or contractors to do their work. Therefore the union’s officials decided to attempt to gain access to the plant to ensure compliance with s97 of the Act and to speak to any new employees that might be found operating the new machinery about the fact of the strike and about union membership.
[6] At about 11am on 29 August three union officials approached the main gate seeking access to the workplace pursuant to the provisions of the Act. Two of the officials were wearing appropriate safety clothing and union identification. One, as a former union organiser at the plant, had been through the company’s safety induction course. When they were refused entry they returned to the picket line to attempt to obtain the company’s consent to enter the plant. Mr Bill Andersen, the union’s President and Sector Secretary for Transport, Energy and Stores, spoke to Ms Christine Miller, the company’s acting site manager, by telephone, and advised her of their intention to come on to the site. It appears that she then called the police, 40 of whom subsequently attended the site.
[7] After the arrival of the police several discussions took place between the union officials, Ms Miller and Sergeant Crawford, the officer responsible for policing the picket that day. The union officials advised that they intended to access the workplace under s20 of the Act. As neither Ms Miller nor the sergeant was familiar with the legislation they both took time to seek advice about it by telephone. After about two hours Ms Miller indicated that access would be permitted only to the boardroom where the officials could meet with all the employees to discuss recruitment of union members but not the strike and the picket. Initially this offer was subject to the employer monitoring the discussions, although this condition was later withdrawn. This offer was declined and access to the actual plant was insisted upon. Again this was refused, ostensibly on safety grounds, although the Employment Court held that the union officials posed no safety threat and were conversant with safety requirements. Ms Miller conceded in evidence that a significant reason for refusing access was the potential for further abuse and intimidation of non-striking workers should they later be identified to the picketers by the union officials. She did not explain this at the time.
[8] The union officials felt that they were being stalled and that there was a lack of candour on the part of the company. No doubt this impression was not helped by Ms Miller’s uncertainty and the necessity for her to repeatedly take advice from others in the company and from the police. The Employment Court found that Ms Miller was inexperienced in employment relations and was left substantially unsupported by the company to deal with a difficult industrial relations situation. But the Court also found that the decision to prevent access by the officials to the plant was that of the company.
[9] The stand-off ended when, fearing that any further delay could prejudice the purposes for which they sought access, the officials confirmed their intention to access the plant area and began to walk in that direction. Ms Miller asked the police to intervene and as a result the union officials were arrested and charged with trespass.
[10] The Employment Court recorded that the underlying industrial dispute was eventually settled. Normal work resumed at the company on 17 September 2001.

The Employment Court decision

[11] A Full Court began by reviewing the provisions of the Act concerning access to workplaces, namely ss20 to 25. Sections 20, 21 and 25 read as follows:

20 Access to workplaces

(1) A representative of a union is entitled, in accordance with this section and section 21, to enter a workplace –

(a) for purposes related to the employment of its members; or

(b) for purposes related to the union’s business; or

(c) both.

(2) The purposes related to the employment of a union’s members include –

(a) to participate in bargaining for a collective agreement:

(b) to deal with matters concerning the health and safety of union members:

(c) to monitor compliance with the operation of a collective agreement.

(d) to monitor compliance with this Act and other Acts dealing with employment-related rights in relation to union members:

(e) with the authority of an employee, to deal with matters relating to an individual employment agreement or a proposed individual employment agreement or an individual employee’s terms and conditions of employment or an individual employee’s proposed terms and conditions of employment:

(f) to seek compliance with relevant requirements in any case where non-compliance is detected.

(3) The purposes related to a union’s business include –

(a) to discuss union business with union members:

(b) to seek to recruit employees as union members:

(c) to provide information on the union and union membership to any employee on the premises.

21. Conditions relating to access to workplaces
    

(1) A representative of a union may enter a workplace –

(a) for a purpose specified in section 20(2) if the representative believes, on reasonable grounds, that a member of the union, to whom the purpose of the entry relates, is working or normally works in the workplace:

(b) for a purpose specified in section 20(3) if the representative believes, on reasonable grounds, that the union’s membership rule covers an employee who is working or normally works in the workplace.

(2) A representative of a union exercising the right to enter a workplace.

(a) may do so only at reasonable times during any period when any employee is employed to work in the workplace; and

(b) must do so in a reasonable way, having regard to normal business operations in the workplace; and

(c) must comply with any existing reasonable procedures and requirements applying in respect of the workplace that relate to –

(i) safety or health; or

(ii) security

(3) A representative of a union exercising the right to enter a workplace must, at the time of the initial entry and, if requested by the employer or a representative of the employer or by a person in control of the workplace, at any time after entering the workplace, -

(a) give the purpose of the entry; and

(b) produce –

(i) evidence of his or her identity; and

(ii) evidence of his or her authority to represent the union concerned.

(4) If a representative of a union exercises the right to enter a workplace and is unable, despite reasonable efforts, to find the employer or a representative of the employer or the person in control of the workplace, the representative must leave in a prominent place in the workplace a written statement of –

(a) the identity of the person who entered the premises; and

(b) the union the person is a representative of; and

(c) the date and time of entry; and

(d) the purpose or purposes of the entry.

(5) Nothing in subsections (1) to (4) allows an employer to unreasonably deny a representative of a union access to a workplace.

25. Penalty for certain acts in relation to entering workplace

Every person is liable to a penalty, imposed by the Authority, who, without lawful excuse, -

(a) refuses to allow a representative of a union to enter a workplace; or

(b) obstructs a representative of a union in entering a workplace or in doing anything reasonably necessary for or incidental to the purpose of entering the workplace; or

(c) wilfully fails to comply with section 21.

[12] The Court considered the applicable case law under earlier legislation noting that such cases must be treated carefully but are helpful for the general principles they espouse. Reference was made to Service Workers Union of Aotearoa v Southern Pacific Hotel Corp [1993] 2 ERNZ 513 in which the Employment Court had held that it was clearly the intention of Parliament that the only restrictions on access should be those contained in the Act. The Court also referred to Foodstuffs (Auckland) Ltd v National Distribution Union Inc [1995] 1 ERNZ 110, 117 where this Court, discussing the concept of “reasonableness” in relation to access, held that this was “a matter of striking a fair balance between the employer’s interest and those of the employees and their representatives”. However, it was noted that in contrast with the statutory rights conferred by the earlier legislation, the particular rights in issue in this case are expressed absolutely.
[13] The Court held that the provisions prescribing rights and obligations of union access constitute a code that should be strictly construed consistent with the issue being one of incursion into property rights. The Court recorded that under s20 there are two purposes for which the right of access exists, purposes related to the employment of the union’s members and purposes related to the union’s business. The former is widely defined as including monitoring compliance with the Employment Relations Act 2000. Monitoring compliance with s97 was therefore included and that means, the Court said, that the right of entry provisions apply in situations of strike or lockout.
[14] It was held that the conditions of s21(1) were fulfilled in that the representatives believed on reasonable grounds that the union’s membership rule covered employees who normally worked in the workplace. The Court also considered that there was no real argument that s21(2) had not been complied with on the part of the union representatives. Health and safety requirements were not really in issue and in any event were not a ground for refusing access, the sanction for non-compliance with that obligation being a penalty under s25(c). Access was sought at a reasonable time (s21(2)(a)). The Court further held that the right of access was exercised in a reasonable way in accordance with s21(2)(b), having regard to what were then normal business operations and the statutory purpose of s97 compliance.
[15] The company’s submission that s97 did not confer rights on employees was rejected. The Court stated:

The Act supports and sets out to promote collective bargaining and recognises and addresses “the inherent inequality of bargaining power in employment relationships”: s3(a)(ii). Section 97 is one of the provisions that does so. Its purpose is to ensure that employers cannot use strikebreakers to blunt the economic effect of a strike (or, equally, a lockout) by limiting the circumstances in which an employer may employ other persons to perform the work of striking or locked out employees. It is putting a strained construction on ordinary language to suggest that s97 does not deal with employment related rights in relation to union members.

[16] After considering the actions of the company the Court held that the requirement that the union officials should meet the employees only in the boardroom was neither an existing health, safety or security procedure nor was it a reasonable one. It concluded that the company denied access without lawful excuse. We add, however, that the Court found that there had, in fact, been no breach of s97 by the company.
[17] The Court was also asked to declare that the company’s actions were a breach of the good faith obligations set out in s4 of the Act. By way of general comment the Court suggested that any breach of the Act was likely to be a breach of s4 unless inadvertent or technical or possibly if made in reliance upon a genuine but mistaken view of the law. In this case the arrest of the union officials as trespassers, the refusal of access and the refusal to disclose the true reasons for denying access were held to be breaches of the good faith obligation.
[18] Finally, the Court was required to consider whether a penalty should be imposed under s25. Having regard to the “deliberate breach” by the company it concluded that a penalty in the amount of $5,000 was appropriate. It declined to order that the penalty be paid to the union in light of the illegal picketing behaviour engaged in by the union and its members, noting that good faith obligations under the Act apply as much to employees and their unions as to employers. The Court stated that old-style dispute tactics must change accordingly.

The present appeal

[19] For the appellant Mr Kiely’s primary submission was that the Employment Court erred in finding that the union’s representatives had a right of access pursuant to s20(1)(a) to enter the workplace for purposes related to the employment of its members. He accepted that the respondent did have a right of access under s20(1)(b) (purposes related to union business) but submitted that sufficient access was granted for those purposes (access to workers gathered in the boardroom). More particularly, Mr Kiely argued that s97 did not confer employment related rights on union members so as to fall within the expanded definition of that specified purpose in s20(2)(d).
[20] Secondly, Mr Kiely took issue with the Employment Court’s conclusion that the company failed to grant sufficient access to employees in the “workplace” when it offered the union representatives access to the boardroom. He emphasised the need to strike a fair balance between the rights of the union to perform its function referred to in s20(1) and the rights of the employer as property owner. This was, in essence, an argument based on reasonableness. His argument was to the effect that so long as the employer acted reasonably conditions could be imposed upon the right of access and, if such conditions were not complied with, access could be refused. That, he argued, was what occurred in this case. He submitted that the Court’s interpretation of the term “security” in s21(2)(c) was too narrow and failed to take into account the company’s fears for the safety of non-striking employees in an environment in which unlawful acts had already taken place and in which considerable tension existed.
[21] Next, counsel submitted that the Employment Court erred in finding that the company breached its good faith obligations. Mr Kiely drew from the Court’s finding that not all breaches of the Act will necessarily result in a finding of a breach of the good faith obligation and submitted that the Court had applied the wrong test in this case. He argued for a subjective test and then submitted that such a test could not be met in this case where Ms Miller’s intentions were good and where she had acted in reliance on the advice of the police.
[22] In a related submission, Mr Kiely argued that the Court’s finding that the company’s conduct amounted to a considered and deliberate breach was unsustainable on the evidence. Rather, he submitted that the evidence showed merely that an inexperienced company manager faced with two experienced union officials denied access on the advice of the company’s industrial relations manager and, independently, on the advice of the police.
[23] Lastly, counsel submitted that the Employment Court was wrong in law to impose a penalty in the circumstances, or, alternatively, that it was manifestly excessive.
[24] Mr Harrison QC for the union presented comprehensive written submissions in support of the judgment and in response to the appellant’s points of appeal. He contended that the judgment did not go so far as to exclude any ground on which access might be refused or resisted by an employer – confining any sanction in respect of abuse or threatened abuse of the right of access to the imposition of a penalty under s25(c). In the event that it did, he supported the judgment but also advanced the alternative submission that, as the Employment Court found, there was no valid ground in this case for refusing entry.

Decision

[25] We agree with the Employment Court that the provisions of ss19 – 25 constitute an effective code governing access by union representatives to workplaces. The Court accepted the submission for the employer that, because they authorise incursions on the private property of employers, the provisions for access should be strictly construed if there is doubt. We agree that the impact of the rights conferred is an appropriate factor to be kept in mind but, as directed by s5(1) Interpretation Act 1999, so too is the purpose of the provisions. A specific object of the Act (s3(a)(ii)) is to acknowledge and address the inherent inequality of bargaining power in employment relationships. Access to the workplace by union representatives plainly is supportive of collective activity available to offset possible disadvantages encountered by individual workers. A union is entitled to represent its members in relation to any matter involving their collective interests as employees (s18(1)).
[26] Employment relationships include a relationship between a union and an employer (s4(2)(b)). The parties to an employment relationship must deal with each other in good faith. That requirement is applied expressly to access to a workplace by a representative of a union (s4(4)(f)). Plainly the employment relationship is not suspended during a lawful strike or lockout relating to bargaining for a new collective agreement as was the position in this case.
[27] Section 20 confers on a representative of a union the entitlement to enter a workplace for specified purposes. They are purposes related to the employment of members of the union concerned and purposes related to the union’s business. Each of those general purposes is elaborated upon non-exhaustively. Material in this case is s20(2)(d) providing that purposes related to the employment of union members includes:

To monitor compliance with this Act and other Acts dealing with employment-related rights in relation to union members.

[28] For the Company Mr Kiely accepted that the union representatives were entitled to access for purposes related to the union’s business. He submitted that access for that purpose (for recruitment and to provide union information) was “granted” by the offer to address the workers in the boardroom. But he contended there was no entitlement to go into the plant area as there are no “employment-related rights in relation to union members” in respect of which compliance could be monitored.
[29] That submission gave rise to two issues. The first is the correct interpretation of s20(2)(d) and the second is whether s97 confers employment-related rights on employees.
[30] The second point is clear enough. Section 97 imposes restrictions on the persons employers may employ or engage to do the work of striking or locked out workers. Although the section is couched in terms of what the employer “may” do, it was accepted that without the section the employer would be free to employ persons to do the work unconstrained. The section, in imposing the restriction, is doing so to constrain the bargaining power of the employer for the benefit of the striking or locked out employees. That patently confers rights on the employees.
[31] We accept, as Mr Harrison argued, that s20(1)(d) might be capable of being interpreted in any of three ways. They are: first, that the qualification “dealing with ...” applies only to “other Acts”, secondly, that it applies also to “this Act”, and thirdly, that the first part of the qualification applies only to “other Acts” but the second part (“in relation to union members”) applies also to “this Act”. But nothing turns on the possible differences in this case. On any view the provision covers the purpose of monitoring compliance with s97. Nor do we think those differences are likely to be material in other cases when the context is kept in mind. The purpose in every case must relate to employment of union members, and it would be unlikely that a union representative would seek to monitor compliance with the Employment Relations Act otherwise than in respect of employment-related rights of its members. We prefer to defer any further consideration until we are presented with a case in which the precise construction is material.
[32] We consider the right of access in this case also arises directly under s20(1)(a). The stated purpose for which entry was sought to the plant area was to ascertain whether the company was in breach of the restrictions imposed by s97. Whether that was so related to the employment of union members.
[33] Mr Kiely submitted that s20(1)(a) needs to be read down. Unless that is done, he said, the right of access would be extremely and unduly wide. We are not convinced of that. A union is entitled to represent its members in relation to any matter involving their collective interest as employees. Member employees themselves are given access to their employer’s workplace to enable them to perform their duties. In those circumstances we see no reason to read down language giving effect to Parliament’s decision that union representatives should have access to the workplace, to fulfil the union’s role in relation to collective interests of members. To do so would be resistant to the purpose of the legislation. There are safeguards against abuse of the entitlement. There are those conditions set out in s21. There are the express exceptions in ss22 and 23. There is the obligation on the union representatives to act in good faith, and there are the limits inherent in the purposes for which access is sought. In this last respect we agree with Mr Harrison that the union representative must hold the relevant belief required in s21(1)(a) and (b) and that must be held on reasonable grounds. In addition the purpose for the proposed access must be a genuine quest, objectively justifiable.
[34] We are satisfied the Employment Court was correct in finding that the union representatives were entitled to access, first for the purposes of the union’s business to provide information on the union and to explain the strike and reasons for it to employees on the premises, and secondly for the purpose of monitoring compliance with s97.
[35] There was an argument referred to in the judgment, and raised again on appeal, whether there may be another mechanism for monitoring compliance with s97. It was contended that this could be done by Labour Inspectors acting under s229. We do not see that as bearing upon the union’s entitlement to access in the present case and offer no views on the scope of the powers of Labour Inspectors.
[36] We turn to the conditions of access. There is no question that union members normally worked in the plant area. It is not claimed for the company that the plant area was not the “workplace”. It was submitted, however, that the boardroom also was within the broad definition of “workplace” in s5 so that access to the employees there was sufficient. We do not agree. What part or parts of the workplace may be assessed must be dictated by the purpose for which the entitlement to access is exercised. In this case it was entirely appropriate for the union representatives to require access to the plant area for the purpose of monitoring compliance by the company with s97.
[37] In this respect we note that there was a finding of fact by the Employment Court that the union representatives did not know that all employees had been called together in the boardroom so that viewing the plant area at the time they moved to do so would not have enabled any monitoring of s97. It may reasonably be assumed that, had the union representatives been allowed the access they sought, the employees would not have remained in the boardroom and would have resumed work.
[38] The Court below determined that the conditions for access in s21(2) were met. The union representatives sought access at a reasonable time and were going about the matter in a reasonable way. The reason for refusing access to the plant area given by Ms Miller at the time was “safety”. That was rejected by the Employment Court as a sufficient reason because she knew there was no activity in the plant area at the time. In her evidence, by way of elaboration, she explained that she wished to protect the identity of the workers operating the plant because of their strongly expressed concerns for their security. The Court also rejected that as a sufficient reason to resist access. The Court could not see how identity could be protected to any greater extent if the employees met the union officials in the boardroom. It might be said that in the boardroom it would not be apparent just what work the non-striking workers were performing. But there are two further reasons why the claimed reason could not be sufficient. The first is that the entitlement to enter a workplace to monitor compliance with s97 is given to enable a union to ascertain what workers are performing the work of the striking or locked out union members. The second is that the statutory condition in s21(2)(c) required compliance with any “existing” reasonable procedures and requirements applying in relation to health, safety or security. That does not envisage the employer imposing at the time such requirements to apply specifically to union representatives. We should add, however, that common sense safety and security requirements would not require express prior formulation to qualify as existing in this context.
[39] Perhaps the real issue in the case arose from the submission on behalf of the company that, s21 apart, an employer can impose reasonable conditions on access and may prevent access if they are not complied with. It was said that this is what the company did in this case for the very valid reason of protecting its other employees having regard to their experiences at the hands of the picketers and their genuinely held anxiety.
[40] It was submitted that the Employment Court was incorrect in finding in paras [35], [69] and [72] that the rights of access at issue in this case are not qualified by reference to reasonableness but are “expressed absolutely and are not so qualified” and that s21(2) does not give grounds for refusing access – the sanction for non-compliance with that obligation being a penalty under s25(1). The Court said:

To hold otherwise would be to allow reasons that seem subjectively good to a particular employer, to defeat statutory rights that are limited only by demonstrable objective and classified reasons.

[41] Mr Kiely argued to the contrary, that the right of access is qualified both by s21(2) and “the fundamental property rights discussed earlier”.
[42] Mr Harrison did not accept that the judgment goes so far as to find that access could not be refused where the requirements of s21(2) are not met. But to the extent that it does, he submitted it was a “tenable view”. He referred to the “problematical” prospect of employers being entitled to engage in a form of “self help”.
[43] We can envisage situations in which the potential damage to an employer’s business could be such that denial of access on the ground of failure or refusal to comply with the requirements of s21(2) could not be remedied by the subsequent imposition of a penalty under s95. Serious risk to health or safety or loss of valuable commercial information are obvious examples.
[44] Accordingly we do not accept that there can be no circumstances in which an employer might deny access through non-compliance by a union representative with the requirements of s21(2). Indeed that follows from the very words of s21(2)(a) that the right to enter can be exercised “only” at reasonable times.
[45] We are not persuaded, however, that the right of access can be denied for reasons beyond failure to comply with the statutory requirements. We agree with Mr Harrison that s21(5), providing that nothing in the preceding subsections allows an employer unreasonably to deny a union representative access, does not imply its obverse, that access may be reasonably denied.
[46] The legislature has constructed in some detail the circumstances and conditions for access to the workplace in these sections. There are express provisions specifying when access may be denied. It would be surprising indeed if that detailed structure was intended to be over-ridden by inference from s21(5) that the entitlement of access is subject to denial by the employer on grounds other than those contemplated in the provisions themselves. We do not accept that would represent a correct interpretation. We consider that s21(5) is intended to do no more than recognise that an employer might deny access where the requirements of ss20 and 21 are not met, and to do so would not be unreasonable.
[47] We therefore reject the contention that, in this case, the company was entitled to deny access to the union officials for failure or refusal to comply with conditions it sought to impose beyond compliance with ss20 and 21.
[48] The Employment Court found as facts that the requirements in s21(2) were met. It was therefore justified in reaching the conclusions set out in the judgment as follows:

The company, without lawful excuse, refused to allow representatives of the union to enter the workplace in question and obstructed them in doing so. It did this, first, by taking the stance that the representatives had no right of entry; secondly, by agreeing to a right of entry to the boardroom subject to that being supervised by the company’s management and purporting to limit the subject matter of discussion; and, finally, by telling them that they could only have access to the boardroom without such supervision. From the fact that Ms Miller was able to take advice from her superiors, it seems plain that the refusal of entry and the obstruction of representatives was deliberate on the part of the company. We find Ms Miller would have done whatever she was advised or instructed to do and continued to obstruct the union’s representatives.

We do not accept the company’s defences. While Ms Miller is entitled to considerable sympathy, that is not because of anything that the union’s representatives did by way of trying to exercise statutory rights. Rather, it was because the company’s affairs were being so managed at the site that a manager inexperienced in employment relations was left practically unsupported in a difficult situation. The only recourse she had was to human resource managers available on the telephone, one in the Bay of Plenty and one in Rangiora. There was no reason to think that Mr Andersen and Mr Keepa were going to behave in the way some picketers had behaved. The company was wrong to refuse entry and wrong to set in motion the processes of the criminal law. It did so deliberately after considering its position. Not only were the actions deliberate, we hold that the intent was to prevent or at least delay and obstruct the union officials from gaining entry to the premises. Going so far as to have them arrested testifies to that.

[49] The Court went on to make a finding that the company breached its obligations of good faith. The union had included in its statement of claim a separate cause of action alleging such breaches and seeking by way of relief a declaration or other determination, but no further penalty. It is not clear why this was done. We accept there may be a breach of obligations of good faith without contravention of other statutory obligations and vice versa. But here the alleged failure to act in good faith was by denying access to the workplace by the union representatives. The claim for denial of access necessarily required consideration in light of the obligations of good faith which expressly apply (s4(4)(f)).
[50] It will not be conducive of speedy and efficient determination of disputes in this field if proceedings are complicated by the unnecessary addition of a separate cause of action in each case in which it is alleged that the conduct in respect of which relief is claimed involved failure to act in good faith.
[51] In the course of its judgment the Employment Court made the general comment that most, perhaps all, breaches of the legislation’s provisions setting out the rights and obligations of employers, unions, and employees may, in addition to being breaches of the particular provision, also amount to a failure or refusal by one party to act towards the other in good faith. However, it is quite possible to postulate circumstances in which persons acting in good faith might engage in conduct which amounts to a breach of statutory rights. Whether rights have been breached and whether persons have acted in good faith involve rather different considerations. They do not arise in this case.
[52] The findings of the Court were that the company refused to allow the union representatives access to the plant area for a claimed safety reason when that could not be justified and failed or refused to disclose the true reason. The company then set in train criminal processes against the representatives. On those findings the conclusion that the company did not act in good faith was inevitable.
[53] Mr Kiely submitted that the absence of good faith conclusion was reached on an improper basis. He said the assessment must be a subjective one and that the Court did not sufficiently analyse Ms Miller’s state of mind and intentions. He emphasised the evidence of her inexperience and reliance on the advice of the police. The latter point confronts the finding of the Court that the stance taken was that determined by the company. Ms Miller acted on instructions from her company advisers and consulted the police sergeant in light of that.
[54] Mr Harrison submitted that good faith in terms of ss3 and 4 of the Act is about objective standards of behaviour. He relied on Coutts Cars Ltd v Baguley [2002] 2 NZLR 533. We do not find in the judgments in that case any real support for that view.
[55] The matter is not greatly assisted by seeking to characterise the enquiry as subjective or objective. Good faith connotes honesty, openness and absence of ulterior purpose or motivation. In any particular circumstances the assessment whether a person has acted towards another in good faith will involve consideration of the knowledge with which the conduct is undertaken as disclosed in any direct evidence, and the circumstantial evidence of what occurred. We do not find the Employment Court proceeded inconsistently with that in this case. The judgment expresses considerable sympathy with Ms Miller in the situation in which she was left, but that did not prevent the finding that the company did not act in good faith.
[56] The remaining grounds of appeal were directed to the imposition of the penalty upon the company for breach of its obligation to allow access. It was submitted that it constituted error of law to impose a penalty in the circumstances. Three matters were raised. The first was that the Employment Court’s approach to the issue of penalty rested on a factual finding of “a considered and deliberate breach” which so misstated the evidence as to constitute a failure of the judicial process and amounted to an error of law. The Coutts Cars Ltd case was cited as recognising such an approach. There is nothing in this point. It was argued as if this were an appeal against a finding of fact. The argument did not come near establishing that there was no evidence to support the finding. The Court clearly articulated what was meant by considered and deliberate breach in the first of the two paragraphs we have quoted at [48] above.
[57] The second matter advanced was that it constituted error of law to impose a penalty where there was no wilful breach. Severed from the further factual argument advanced, again resting on claimed reliance on the advice of the police sergeant, the points made were that no penalty should be imposed unless the breach of statutory obligation involved intentional breach (as distinct from a deliberate act that constituted breach), nor when there has been some uncertainty over the law, as when the breach occurs through reasonable error of law.
[58] We find neither of these matters to be legal pre-requisites to the imposition of a penalty under s25. Nor can we find error of law by the Court in fixing the amount of the penalty. It was within the statutory maximum and the assessment of quantum was within the discretion of the Employment Court. It was not contended that the Court proceeded on any wrong principle. It was said merely that in other cases of deliberate breach penalties generally have been of 40% or less of the maximum, whereas in this case the penalty was 50% of the maximum. That does not constitute error of law.
[59] Accordingly, none of the grounds having been made out, the appeal is dismissed.
[60] The respondent is entitled to costs which we fix at $5,000 together with disbursements including the reasonable travel and accommodation expenses of counsel fixed, if necessary, by the Registrar.

Solicitors:
Kiely Thompson Caisley, Auckland, for Appellant
Jock Lawrie, Auckland, for Respondent