Effect given to the recommendations of the committee and the Governing Body - Report No 304, June 1996

Case No 1698 (New Zealand) - Complaint date: 08-FEB-93 - Closed

Effect given to the recommendations of the Committee and the Governing Body

1. 14. The Committee requested the Government at its meeting in November 1995 (300th Report, paras. 26-29) to keep it informed of the outcome of the Capital Coast Health case so that it could examine the impact of this jurisprudence. In a communication dated 8 March 1996, the Government provided the judgement handed down in the Capital Coast Health case as well as other relevant court decisions.
2. 15. The Government highlighted the findings in the various judgements furnished and which touched upon the following issues: recognition of authorized representative; communications between employers and employees during negotiations; implied obligations of trust and confidence; authorization and ratification; and bargaining behaviour. In summary, according to the Government, the case-law in Capital Coast Health and other cases has now clearly confirmed the principle that recognition of the authorized representative means that, once employers and employees have agreed to negotiate, they must negotiate through any representative authorized by the other party. Moreover, the courts have consistently found that mutual obligations of trust and confidence are implied terms in employment contracts, that they continue to operate during negotiations and that they must be respected. Freedom of association and collective bargaining is supported under the current legislative environment through enforcement of bargaining undertakings agreed to by the parties and the availability of mediation in the Employment Tribunal. Other cases have demonstrated the importance of the statutory ratification requirements in upholding the integrity of collective bargaining and clarified that claims for relief in relation to harsh and oppressive behaviour can be made in respect of an employment contract which has expired or by a former employee.
3. 16. In the Capital Coast Health case, the Court of Appeal has confirmed that section 12 of the Employment Contracts Act (hereinafter, "the Act") gives employees the right to appoint a representative and to have the representative recognized by the employer. As to the question of whether direct communications by an employer with employees who have a representative in the course of negotiations constitute a breach of section 12 of the Act or only amount to an exercise of the freedom to express views or provide information, the Court of Appeals held that this was a matter of "striking a balance between the competing rights of the parties - those of the employer under section 14 of the Bill of Rights Act, and those of the employee under section 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 ... Once (the negotiation) process is under way with an authorized representative participating, the process may not be conducted directly with any party so represented. The provision of factual information does not impinge on that process. But anything that is intended or is calculated to persuade or 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". The Court then went on to determine whether the communications in question in the case were actually calculated to persuade the workers. The Court of Appeal upheld the findings of the Employment Tribunal in this regard with respect to three of the four communications on appeal. With respect to a communication concerning, inter alia, the severe financial consequences of a strike and the likelihood of these costs being reflected in future settlements, the Court found that the dividing line between informing and warning (which are permissible) and threatening if a negotiated position is not abandoned (which is not permissible) was not crossed.
4. 17. The Committee notes this information with interest. The Committee requests the Government to keep it informed of any significant judgements handed down concerning the implementation of the Employment Contracts Act as well as of the developments in the discussions to be held with the NZCTU and the NZEF.