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Christchurch City Council v Southern Local Government Officers Union Inc [2007] NZCA 11; [2007] 2 NZLR 614; (2007) 8 NZELC 98,697; [2007] ERNZ 37; (2007) 4 NZELR 63 (16 February 2007)

Last Updated: 5 February 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA276/05
[2007] NZCA 11

BETWEEN CHRISTCHURCH CITY COUNCIL
Appellant

AND SOUTHERN LOCAL GOVERNMENT OFFICERS UNION INC
Respondent

Hearing: 10 August 2006

Court: Chambers, O'Regan and Robertson JJ

Counsel: C H Toogood QC and S L Hornsby-Geluk for Appellant
R E Harrison QC and A J McKenzie for Respondent
T P Cleary for Business New Zealand Inc (Intervener)

Judgment: 16 February 2007 at 4 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

B No order as to costs.

REASONS OF THE COURT


(Given by Chambers J)

Table of Contents

Para No
Communications with employees during
the bargaining process [1]
Issues on the appeal [6]
The relevant statutory provisions [11]
Chronology and procedural history [13]
The essential reasoning of the Employment Court [17]
To what extent does s 32(1)(d) prohibit the
council from communicating with its
employees without the union’s consent? [28]
Is the test of whether a party has acted in
bad faith subjective? [46]
Can s 32(1)(d) prohibit communications prior
to the initiation of bargaining? [53]
Result [56]
Costs [59]

Communications with employees during the bargaining process

[1] This appeal is concerned with the extent to which employers may communicate with their employees during the bargaining process, in circumstances where the employees are members of a union.
[2] Many of the employees of the Christchurch City Council, the appellant, are members of the Southern Local Government Officers Union Inc. In 2003, during negotiations between the council and the union for a new collective employment agreement, Dr Lesley McTurk, the chief executive of the council, communicated directly with council employees on matters relating to the bargaining. Then in 2004 she communicated with the employees on four different occasions.
[3] The union objected to the council’s approaching its members directly, claiming such approaches were in breach of s 32(1)(d) of the Employment Relations Act 2000. The complaint was heard in the Employment Court in June 2005. The court delivered its decision on 7 September that year: [2005] NZEmpC 94; [2005] 1 ERNZ 666. The court found the council had breached s 32(1)(d) and had failed to comply with the duty of good faith with respect to three of the 2004 communications. It made a declaration to that effect.
[4] The council has appealed. It is not really concerned with the court’s specific findings with respect to the 2003 and 2004 communications. Its principal concern is with the court’s reasoning and its effect on the council’s ability to communicate with its employees before and during future bargaining rounds. It complains the court’s reasoning was flawed. The council’s general concern is shared apparently by many employers, which led to Business New Zealand Inc requesting to be heard as an intervener. By consent, that request was granted (22 March 2006).
[5] While the specific findings relating to the 2003 and 2004 communications may now be of limited consequence, the union agrees with the council that it is important these parties – and, indeed, all employers, employees, and unions – should know this court’s view as to the limits on employers’ communicating with their employees during the bargaining process.

Issues on the appeal

[6] Although the notice of appeal listed six questions of law, Mr Toogood QC, for the council, suggested in his submissions they really reduced to four. While at the end of these reasons we shall provide answers to those four questions, they can be reduced still further – to three. Also, for discussion purposes, we have rephrased them.
[7] The first issue is: to what extent does s 32(1)(d) prohibit the council from communicating with its employees without the union’s consent?
[8] Secondly, is the test of whether a party has acted in bad faith subjective?
[9] Thirdly, can s 32(1)(d) prohibit communications prior to the initiation of bargaining?
[10] Before dealing with those issues, we set out by way of background:

The relevant statutory provisions

[11] The key section of the Act for the purposes of this appeal is s 32. The relevant parts of it read as follows:
  1. Good faith in bargaining for collective agreement

...

(3) The matters that are relevant to whether a union and an employer bargaining for a collective agreement are dealing with each other in good faith include –
(4) For the purposes of subsection (3)(d), circumstances, in relation to a union and an employer, include –

(5) This section does not limit the application of the duty of good faith in section 4 in relation to bargaining for a collective agreement.

[12] Other relevant provisions include s 4(1) and (3) and the definition of “bargaining” in s 5:
  1. Parties to employment relationship to deal with each other in good faith
    • (1) The parties to an employment relationship specified in subsection (2) –
      • (a) must deal with each other in good faith; and
      • (b) without limiting paragraph (a), must not, whether directly or indirectly, do anything –
        • (i) to mislead or deceive each other; or
        • (ii) that is likely to mislead or deceive each other.

...

(3) Subsection (1) does not prevent a party to an employment relationship communicating to another person a statement of fact or of opinion reasonably held about an employer’s business or a union’s affairs.

...

5 Interpretation

In this Act, unless the context otherwise requires, -

...

bargaining, in relation to bargaining for a collective agreement, -

(a) means all the interactions between the parties to the bargaining that relate to the bargaining; and
(b) includes –

Chronology and procedural history

[13] Dr McTurk first corresponded with the council’s employees in September 2003. The union subsequently complained about this direct approach. The council considered it was within its rights, but decided to test the matter by applying to the Employment Relations Authority for declaratory relief. The council sought a declaration confirming its right to communicate with its employees, provided such communications did not undermine the bargaining or the union’s authority. The council rejected the union’s stance that there was a complete ban on direct approaches to union members during the bargaining process.
[14] There was some delay in the hearing of the council’s application. On 8 June 2004, as part of the 2004 bargaining round, the council sent another communication to its employees without the union’s consent. The following day, the union filed a counterclaim with the authority, in which it sought declaratory relief with respect to this recent communication. The authority heard both claim and counterclaim later that month, and delivered its determination on 24 August 2004. The authority found that both communications had been sent in breach of s 32, but held that the council’s actions, in the circumstances, did not constitute a deliberate breach of their duty of good faith. From that decision, the council appealed to the Employment Court.
[15] In September 2004, after the authority’s determination had been released, the council sent three further communications directly to its employees. The union made a fresh complaint to the authority with respect to those communications. That application was subsequently removed to the Employment Court for consideration, under s 178 of the Act.
[16] The court dealt with both the appeal and the subsequent application at the same hearing. Its subsequent decision dealt with all five communications to which the union had objected.

The essential reasoning of the Employment Court

[17] The Employment Court (Chief Judge Colgan and Judges Travis and Shaw) held that “bargain” in s 32(1)(d)(ii) incorporated the definition of “bargaining” in s 5. Because the definition included “communications or correspondence ... that relate to the bargaining”, it followed that the council could not communicate with its employees on matters relating to this bargaining without the union’s consent:

[87] The effect of s 32(1)(d)(ii) is that, on matters of bargaining, the union and the employer must neither engage in negotiations that relate to the bargaining nor communicate or correspond with persons for whom a representative is acting.

[18] The court described s 32 as "considerably more specific and prescriptive than s 12 of the [Employment Contracts Act 1991] and the case law decided under it”: at [98].
[19] The court found the council’s reliance on s 4(3) was misplaced. The effect of this subsection, the court considered, was to “provide justification for acting in a way which might otherwise not be perceived to be acting in good faith”: at [90]. But its applicability in its pure form was limited to “good faith” situations other than situations covered by s 32. In s 32 circumstances, s 4(3) was “modified ... in its scope” as s 32 was “a specific code for good faith bargaining”: at [94].
[20] The court further held that the restriction on communication “relating to the bargaining” could apply even before the bargaining had commenced:

[101] “Relating to the bargaining” is a general term not to be read down. It is not limited to communications that persuade or undermine. Communications and correspondence need only concern the bargaining which has been or will be initiated, to be regarded as relating to the bargaining for a collective agreement. [Emphasis added.]

[21] The court went on to deal with the five disputed communications. Because the precise details do not matter for the purpose of this appeal, we shall do no more than summarise the court’s overall conclusions. With respect to the 2003 communication (disputed communication 1, as the court called it), the court found the council had breached a term of the parties’ bargaining arrangement: at [112]. But that was “academic”, as the parties had subsequently settled their differences and had expressly agreed “there had been no breach of good faith by either party”: at [113].
[22] Disputed communication 2 (sent in June 2004) was in breach of s 32(1)(d)(ii) and (iii) but was nonetheless made in good faith “in the sense that the employer sent it based on its interpretation of the 2000 Act at that time”. So “while the communication breached the 2000 Act, it was not bad faith conduct”: at [117]. In this regard, the court upheld the finding of the Employment Relations Authority.
[23] Disputed communications 3-5 (sent in September 2004) were also in breach of s 32(1)(d)(ii) and (iii): at [119]-[122]. By the time of these communications, the council knew the attitude of the Employment Relations Authority on the obligations under s 32 with respect to disputed communication 2. While the council had challenged the authority’s findings, “they were and remained valid and enforceable until they were the subject of a successful challenge”: at [121]. For the council to continue communicating with its employees after that ruling meant it had acted in bad faith.
[24] The court noted the only remedy it could give was declaratory relief. The court concluded:

[132] For these reasons we are not persuaded that any remedy other than the declarations we have made are available or appropriate.

[25] Unfortunately, the judgment is not completely clear as to the exact form of the declarations. It may be that the reference to “the declarations we have made” was a reference back to [129]. In any event, what we take from reading the judgment as a whole is that the court must have intended something along the following lines:

A declaration that the council failed to comply with the duty of good faith in respect of disputed communications 3, 4, and 5.

[26] We observe, as the court itself did, that, at the time of the conduct in question, the Act did not provide an express remedy for breach of the duty of good faith: at [130]. Since then, Parliament has provided one: see s 4A, inserted by s 6 of the Employment Relations Amendment Act (No 2) 2004.
[27] The Employment Court added that the parties were “expected to comply with the standard of conduct required by s 32 and interpreted in this judgment in the course of future negotiations”: at [131].

To what extent does s 32(1)(d) prohibit the council from communicating with its employees without the union’s consent?

[28] With that background, we now turn to the first issue on this appeal. Mr Toogood’s primary submission was that the disputed communications were protected by s 4(3). He submitted that, “if a statement of fact is true or an expressed opinion is reasonably held, it could not, by definition, undermine a process which is based on openness and honesty”. In effect, he was arguing that s 32 was subject to s 4(3).
[29] We are not sure whether the argument was put in this way to the Employment Court. (Mr Toogood did not appear for the council before that court.) But the submission is certainly contrary to the Employment Court’s reasoning. That court found that s 4(3) was subject to s 32, the exact converse of Mr Toogood’s first argument. On this point, we are satisfied the Employment Court was right.
[30] Sections 4 and 32 are both concerned with the duty of good faith, but the relationship between them is somewhat problematic. It is clear s 4 is the general good faith provision while s 32 sets up a specific code as to how the good faith obligation is to work in the bargaining situation. Section 32 does not render s 4 ineffective in the bargaining situation: that is made clear by s 32(1) (“the duty of good faith in section 4 requires a union and an employer bargaining for a collective agreement to do ...”) and s 32(5) (the section “does not limit the application of the duty of good faith in section 4 ...”). But s 32 must, as the Employment Court held, modify s 4 where there is a conflict between a specific provision in s 32 and a more generalised concept in s 4. In short, s 4 continues to apply in a s 32 case to the extent it is not inconsistent with the specific provisions of s 32.
[31] An example of a conflict between ss 4 and 32 has arisen in the present case. Section 4(3) permits a party to an employment relationship to communicate to another person a statement of fact or of opinion reasonably held about an employer’s business or a union’s affairs. Section 32(1)(d)(iii), on the other hand, provides that an employer must not undermine or do anything that is likely to undermine the bargaining or the authority of the union in the bargaining. Clearly, an employer might undermine a union’s authority by what it said to the union’s members. The general power to communicate conferred by s 4(3) must be constrained by the restriction in s 32(1)(d)(iii). The “modification” required to s 4(3) is something along the following lines:

so long as, in a case of a union and an employer bargaining for a collective agreement, such communication does not amount to or lead to a breach of section 32(1).

[32] We do not accept Mr Toogood’s submission that a communication coming within s 4(3) “could not, by definition, undermine [the bargaining] process”. An employer’s reasonably held opinion about the way the union was conducting the negotiations might very seriously undermine the bargaining and the union’s status as representative of the employees. Making s 32 subject to s 4(3) would lead to the emasculation of s 32(1)(d)(iii).
[33] In our view, therefore, s 4(3) has only limited relevance in this case, where the disputed communications all took place while the bargaining process was under way. This case stands or falls on the meaning to be ascribed to s 32. With respect to that section, we turn first to consider subs (1)(d)(iii).
[34] In the case of disputed communication 2, the authority found the council had breached s 32(1)(d)(iii), a view confirmed on appeal by the Employment Court: at [117]. In the case of disputed communications 3-5 (which came to the Employment Court by removal, rather than on appeal from the authority), the court itself found a breach of s 32(1)(d)(iii). Those findings of fact cannot be challenged in this court. The only answer the council gave to them was the s 4(3) trump, but for reasons we have given, that argument is flawed. The council does not suggest, apart from the relevance of s 4(3), that the court’s interpretation of s 32(1)(d)(iii) was wrong. So the court’s conclusion on breach of s 32(1)(d)(iii) with respect to disputed communications 2-5 must stand.
[35] The real point of the appeal, however, concerns the interpretation of s 32(1)(d)(ii). Does it widen the restriction on communication during bargaining to cover situations where the communication does not undermine the bargaining or the union’s authority in the bargaining? The council and Business New Zealand argue the court’s interpretation that s 32(1)(d)(ii) widens the net to catch all communications during bargaining is wrong.
[36] We are satisfied that the court’s interpretation of s 32(1)(d)(ii) was, with respect, wrong. The correct interpretation of the paragraph becomes clear when the use of the term “bargain” is closely analysed and the paragraph is considered in the context of the Employment Contracts Act 1991 and its own legislative history.
[37] There was no true equivalent to s 32 in the 1991 Act. The nearest provision to it was s 12, which read as follows:
  1. Authority to represent –
    • (1) Any person, group, or organisation who or which purports, in negotiations for an employment contract, to represent any employee or employer shall establish the authority of that person, group, or organisation to represent that employee or employer in those negotiations.
    • (2) Where an 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.

[38] The Employment Relations Bill, as introduced into the House in 2000, provided in cl 33(1) as follows:

...

(d) the union and the employer –
[39] Under the Bill, “bargaining” was defined in cl 5 as follows:

Bargaining, in relation to bargaining for a collective agreement, means all the interactions between the parties to the bargaining, and includes negotiations, and any communications or correspondence between or on behalf of the parties before, during, or after negotiations

[40] Clause 33(1)(d)(i) was obviously intended to replicate s 12(2) of the 1991 Act, but the rest of the clause, including subpara (ii), was new. The breadth of subpara (ii) was the subject of criticism in submissions to Parliament. The Employment and Accident Insurance Legislation Committee, to which the Bill was referred, responded by redrafting the clause in the form in which it was ultimately enacted: see [11] above. The committee, in its commentary on this change, said: (“Report on the Employment Relations Bill and Related Petitions” [2000] AJHR 1.22A at 12)

A significant number of submissions from employers, employer organisations and others opposed or expressed concern about the restriction on direct communications between employers and employees.

We agree that the ban on communication in clause 33(1)(d)(ii), as opposed to bargaining/negotiation, is arguably excessive. However, deleting “communicate” gives greater scope for one party to attempt to undermine the integrity of bargaining. This risk can be managed by adding a general requirement for the parties not to do anything to undermine the authority of the other party or the bargaining process, which is the underlying outcome sought by the clause.

The majority recommends that clause 33(1)(d)(ii) be amended to –

(a) remove the requirement that the parties not “communicate” with the persons for whom the advocate/representative is acting; and

(b) require instead that a party not undermine or do anything that is likely to undermine the authority of the other party in the bargaining process.

[41] The committee’s majority position was accepted by the Government. The Minister of Labour referred to this change in her speech on the second reading of the Bill ((9 August 2000) 586 NZPD 4213):

I think it is also important to note that this part shows how the Government has listened to the submissions of employers, particularly in respect of those relating to communication. It is made quite clear, then, in clause 33(1)(d)(iii) where it is only if it undermines the authority of the bargaining. Also, some employers do not find it a difficulty in terms of the confidential information, since they were the ones who recommended this change.

[42] In our view, the Employment Court’s interpretation is inconsistent with the committee’s and minister’s views and with the changed wording they introduced to reflect those views.
[43] The court’s interpretation reintroduces a general ban on communications between employer and employees during bargaining, when the parliamentary intent was clearly to prevent communications only to the extent that they undermine or might undermine the bargaining or the union’s authority in the bargaining. The s 5 definition of “bargaining”, which itself was altered during the Bill’s progress, must be applied with caution. Section 32(1)(d)(ii), as enacted, is concerned with interactions between a party (the union or the employer) and non-parties (almost invariably, the employees whom the union is representing). Those parts of the “bargaining” definition concerned with interactions between the parties themselves (i.e. the employer and the union) are, in the nature of things, therefore inapplicable to s 32(1)(d)(ii): paras (a) and (b)(ii) of the “bargaining” definition cannot apply. The only part of the definition which can apply in the s 32(1)(d)(ii) context is para (b)(i) – “negotiations that relate to the bargaining”. So “bargain” in s 32(1)(d)(ii) means “negotiate”. What 32(1)(d)(ii) is concerned to prevent is employers’ negotiating or attempting to negotiate with their employees directly, in circumstances where those employees have a union acting for them. The Employment Court has purported to apply para (b)(ii) of the “bargaining” definition but has overlooked that that definition is concerned only with communications between or on behalf of the parties. The “communications” caught by s 32(1)(d)(ii) are not such communications; indeed, what is considered reprehensible about them is that they are communications not between or on behalf of the parties (i.e. the employer and the union).
[44] The answer to the first issue is, therefore, that s 32(1)(d) prohibited the council from communicating with its employees only in so far as:
[45] The Employment Court found some of the disputed communications breached (2), a finding which cannot be challenged in this court for the reasons already given. The union never suggested that the chief executive’s letters amounted to negotiation with the council employees. Thus, but for the finding with respect to limitation (2), the disputed communications would not have fallen foul of s 32(1)(d).

Is the test of whether a party has acted in bad faith subjective?

[46] The second issue arises from what the Employment Court held at [129]:

We have concluded that communications 3, 4, and 5 were not only in breach of s 32 but were also not in good faith in that they were made both without any consultation and after the determination of the Employment Relations Authority when the council must have known they were prohibited.

[47] Mr Toogood submitted this paragraph revealed error. He said the court was wrong “to apply an objective test”. He submitted the evidence before the court was that the relevant council officers had not read the authority’s determination before these disputed communications were sent. It was wrong, he said, for the court “to assess objectively what the employer ‘ought to’ have known and should have focused on what the appellant did in fact understand”.
[48] We do not accept the council’s criticism of this part of the court’s reasoning. We adhere to the view this court has expressed on other occasions, both with respect to this Act and with respect to its predecessor: it is not helpful to characterise the “good faith” test as either objective or subjective. Rather, the court, in the s 32 context, must have regard to the circumstances referred to in s 32(3). And while, as this court said in Auckland City Council v New Zealand Public Service Association Inc [2004] 2 NZLR 10 at [22], “no judgment can substitute for the words of the Act”, the following passage from that judgment is apposite:

[22] ... Further, it does not follow that because good faith was related to the mutual obligations of trust, confidence and fair dealing, the Court should be taken to have mandated a wholly objective assessment by reference to effect. That would be to exclude consideration of honesty or lack of it which can be an important element in the concept of good faith. To suggest that conduct, undertaken honestly, that has an adverse effect for reasons completely unforeseen, is to be held to have been undertaken other than in good faith would be a significant departure from the natural meaning of those words. To judge conduct solely by reference to effect in this way would be to invoke hindsight and to disregard the influence of the circumstances in which conduct is undertaken. We think a broader and more balanced approach is called for.

[49] To similar effect is what this court said in Carter Holt Harvey Ltd v National Distribution Union [2002] NZCA 268; [2002] 1 ERNZ 239 at [55]:

[55] The matter is not greatly assisted by seeking to characterise the inquiry 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.

[50] See also New Zealand Fire Service Commission v Ivamy [1996] NZCA 63; [1996] 1 ERNZ 85 at 99-100 (CA).
[51] As we read the Employment Court’s decision in this case, it is entirely consistent with this earlier appellate authority: see at [77]-[78].
[52] Mr Toogood’s submission is based on a premise that the court found the chief executive did not know, but ought to have known, what the authority had ruled. The court does not expressly say that was the basis of its decision. But, in any event, as Dr Harrison QC, for the union, submitted, “imputing to the appellant knowledge of the outcome and effect of a decision delivered in Employment Relations Authority proceedings, when it was not only party to but indeed the initiator of those proceedings was plain and simple common sense”. We agree. It is not for us, on an appeal restricted to questions of law, to second-guess the Employment Court on its findings of fact, whether based on direct evidence or available inference.

Can s 32(1)(d) prohibit communications prior to the initiation of bargaining?

[53] The final issue concerns the passage of the Employment Court’s judgment we have quoted above at [20]. In particular, Mr Toogood submitted the court was wrong in its assertion that s 32(1)(d) might catch communications which preceded the initiation of bargaining. He said the “potential impact” of this dictum was that employers and unions could be “bound by the obligations of good faith as set out in s 32 at all times, including in any communications or correspondence which could be regarded as related to bargaining, irrespective of whether or not bargaining has been initiated”. He said the court should not have made such a finding in the absence of submissions from the parties. In particular, Mr Toogood referred to the precise provisions relating to the initiation of bargaining: ss 40-44. He submitted the “good faith” provisions relating to bargaining should apply only after bargaining has been initiated as determined under s 44.
[54] On this issue, there is no real dispute, as Dr Harrison accepted the court was wrong when it suggested that the s 32 good faith obligation could arise even before bargaining had been initiated. He accepted that bargaining “must have been formally initiated for the s 32(1) duties to come into force”.
[55] We agree with counsel. The pen may have slipped in this part of the judgment. It may be, when the court said the communications “need only concern the bargaining which has been or will be initiated”, it was using “bargaining” loosely in the sense of “negotiation”. If so interpreted, the passage is unremarkable, as communications may be caught under s 32(1)(d) before negotiations have started, provided that bargaining itself (as defined in the Act) has by then been initiated. But, so far as the actual dispute with which we are dealing is concerned, nothing turns on this error. The offending words – “or will be initiated” – were not crucial to the court’s decision or its reasoning. There was no dispute in this case that bargaining had been initiated in terms of the Act when the disputed communications were sent.

Result

[56] Although we have found the Employment Court was in error in two respects, the declaratory relief (assuming it to be along the lines set out at [25] above) needs no amendment. That is because we have upheld the Employment Court’s opinion that the council, by sending disputed communications 3, 4 and 5, did breach s 32(1)(d)(iii), in circumstances amounting to a failure to comply with the duty of good faith. Neither of the errors we have identified affects that conclusion. Accordingly, the formal result of this appeal must be that the council’s appeal is dismissed.
[57] Mr Toogood effectively accepted this should be the result on the appeal if we rejected his s 4(3) trump argument. He did not seek to have disputed communications 3-5 referred back to the Employment Court, because he accepted that, even if the court were to apply the correct law, that court was unlikely to come to a different view with respect to the particular conduct underlying disputed communications 3-5. The “live issue”, and the reason for the appeal, was not the court’s view as to past conduct, but rather the court’s “expectation” that the parties would comply with s 32 as interpreted in the Employment Court’s judgment in the course of future negotiations: at [131]. Although that expectation did not translate into a formal order or remedy, Dr Harrison accepted that the union would be requiring compliance with the judgment in its future dealings with the council and would be litigating if the council failed to comply. Dr Harrison agreed there was a live issue which required determination. He joined in asking that we answer Mr Toogood’s four questions.
[58] We now turn to those questions.

Question 1

(i) Whether s 4(3) of the Employment Relations Act 2000, read in conjunction with s 32(1)(d), permits the parties to collective bargaining to communicate statements of fact or opinion reasonably held about an employer’s business or a union’s affairs (including in relation to the bargaining), to persons for whom an authorised representative is acting, provided that the communication does not otherwise breach s 32(1)(d)?

(ii) Whether s 32(1)(d) creates a complete ban on communications relating to bargaining by a party to the bargaining to persons for whom an authorised representative is acting?

Answer

As to (i), yes. As to (ii), no.

Question 2

Whether the term “bargain” in s 32(1)(d) has a more specific meaning than the definition of “bargaining” in s 5, namely that it relates exclusively to interactions between a party to the bargaining and persons for whom an authorised representative is acting, for the purposes of furthering that parties’ bargaining position?

Answer

“Bargain” in s 32(1)(d)(ii) means “negotiate”. That is part of the definition of “bargaining” in s 5: see para (b)(i). The other parts of the definition of “bargaining” do not apply in a s 32(1)(d)(ii) situation as they apply to interactions, communications, and correspondence between the parties to the bargaining. The other parts of the definition are inapt for a situation concerned with an interaction between one party and third persons, namely “persons whom the representative or advocate are acting for”.

Question 3

Whether the expression “interactions ... that relate to the bargaining” in s 5 relates only to interactions which occur after bargaining has been initiated?

Answer

Yes.

Question 4

Whether a subjective test should be applied to the question of whether a party to bargaining has acted in breach of good faith, pursuant to s 4 and/or s 32 of the Employment Relations Act?

Answer

No. The test is neither wholly objective nor wholly subjective, and those labels are not particularly helpful. In s 32 circumstances, the court must apply the plain words of subs (1), in light of the matters specified in subss (3)(5). Earlier decisions of this court, to which reference has been made in these reasons for judgment, may provide assistance in this regard.

Costs

[59] Each side has had a measure of success in this court. While the appeal has been formally dismissed, the council has nonetheless succeeded on several of its arguments and its future conduct will not be quite as constrained as it would have been under the Employment Court’s reasoning. Both sides saw advantage in having the issues raised by the council resolved for the future. We also note that the Employment Court thought there should be no order for costs in that court: at [133]. In all the circumstances, each party should bear its own costs in this court.






Solicitors:
Kensington Swan, Wellington, for Appellant
F S Legal, Christchurch, for Respondent
E M A Legal, Wellington, for Intervener

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