A recent decision by the Court of Appeal (New Zealand Employers Federation Inc v National Union of Public Employees (NUPE) & Ors, 24 September 2001, CA 32/01, Richardson P, Keith, Blanchard, Tipping, McGrath JJ) has held that the registration of many of New Zealand’s unions is invalid. This finding has in turn thrown into doubt the legal effect of much of what has happened in the New Zealand industrial relations environment over the last 12 months.
The Employment Relations Act 2000 (ERA) became law on 19 August 2000, but did not come into force until 2 October 2000. The new Registrar of Unions, Mr G Hobby, anticipated that about 100 unions would apply for registration on or about 2 October 2000, and that the possibility of delays in processing these applications meant that some unions might not be able to exercise their various rights and responsibilities under the ERA immediately on its coming into force. Acting on oral legal advice from the Department of Labour, in which Mr Hobby is employed, he accepted applications for processing from 18 September, and then purported to register 20 unions (including some of the largest in the country) under the ERA, but before 2 October.
One such union was the National Union of Public Employees (NUPE). The issue which came before the Court of Appeal in this case initially arose in the Employment Court, where the Attorney-General on behalf of the Director-General of the Ministry of Agriculture and Forestry (MAF) had attempted to prevent strike action by NUPE members. One of the arguments advanced by MAF in an attempt to have strike declared unlawful was NUPE’s apparently premature registration as a union. The Employment Court found in favour of the union, and the matter eventually came before the Court of Appeal on the initiative of the New Zealand Employers’ Federation, which had intervened in the Employment Court proceeding.
In the leading judgment of the majority, Richardson P focussed mainly on the application of s11 of the Interpretation Act 1999. That section allows a power conferred by an enactment to be exercised before the enactment comes into force or takes effect. Two requirements imposed on the exercise of such power is that it must relate to one of the actions set out in s11(1)(a)-(e), which include at s11(1)(c) the appointment of a person to an office or a position (which was relied upon to appoint Mr Hobby) and at s11(1)(e) any "other act or thing for the purposes of an enactment". Importantly, under s11(2):
"the power may be exercised only if the exercise of the power is necessary or desirable to bring, or in connection with bringing, an enactment into operation."
The question of law for the Court of Appeal was, therefore:
"whether the registration of a union … prior to the commencement date of the ERA … is the exercise of a power which is "necessary or desirable to bring, or in connection with bringing" the enactment into operation within the exception provided by s 11 of the Interpretation Act 1999."
Richardson P held that the early registration of unions was not an action which s 11 could be invoked to support. He noted that:
"there is a clear distinction under the legislation in this regard between actions of the executive in readying the administrative machinery of the ERA and actions taken by others, including employee associations, once the Act comes into force. In essence, s 11 is a governmental powers provision, not also directed to the exercise of private powers under the substantive provisions of enactments."
Richardson P also considered whether s5 Judicature Amendment Act 1972 could allow the Court of Appeal to make an order validating the actions of the Registrar of unions. However, Richardson P held that "the premature purported registration of NUPE is not a defect in form or a technical irregularity". Rather, he held that "it is a matter of prime substance. The power, as invoked, simply did not exist. The process adopted was fatally flawed."
Richardson P also noted the effect that the validation of the Registrar’s actions would have in the wider picture. He held that:
"the plea to avoid administrative chaos has to be weighed alongside two other considerations. One is the high public policy requirement that statutory officers ensure they keep within their powers and are accountable in law ... the other is that to refuse relief would still leave undesirable uncertainty as to the rights and liabilities of employee associations, employees and employers in respect of past and future actions."
His second concern was noted in light of the fact that a declaration in favour of NUPE in this case would not close the door on employers in the future who wished to challenge the premature registration of a different union.
Implications of the decision
By declaring that any union who sought and was granted registration prior to 2 October 2000 was not properly registered as a union within the meaning of the ERA, the Court of Appeal has created a situation whereby all actions undertaken, and all agreements entered into, by the unions affected are, at best, of dubious legality. Accordingly, many collective agreements already ratified may not be directly enforceable under the ERA (although they may still have some legal effect1). Similarly, many collective bargaining situations in respect of which a deal has been reached at the table and where the ratification process is under way may not be able to proceed to finalisation. Finally, all strike notices issued by any of the unions which were prematurely registered are technically invalid.
The Court of Appeal’s decision affects approximately 150,000 workers and 20 unions, including the National Union of Public Employees, the New Zealand Public Service Association, the Rail and Maritime Transport Union and the New Zealand Police Association, which were all purportedly registered prior to 2 October 2000. The decision may also affect a further 20 unions, including the National Distribution Union and the Service and Food Workers Union which, whilst not registered until after 2 October, applied to be registered prior to that date.
The union movement has called for urgent legislation to rectify the obvious potential for industrial chaos flowing from the Court’s decision. The Minister of Labour has undertaken to introduce urgent validating legislation when the House sits again from 2 October. In the meantime, she has called for calm, and essentially suggested that the parties to industrial agreements and negotiations should simply proceed as normal.
These approaches may be contrasted with the comment by Anne Knowles, formerly of the Employer’s Federation and now of Business New Zealand, that legislation is unnecessary and that affected parties should simply reach negotiated solutions to the problems presented by the decision of the Court.
Meanwhile, employers, unions and employees will hope that remedial legislation will quickly pass into law. In case it does not, however, any party to a collective understanding negotiated by a union whose registration is in doubt or invalid should urgently seek advice concerning just what their obligations under that understanding are.
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1. This is because of the decisions of the Court of Appeal in Wellington Area Health Board v Wellington Hotel etc IUOW  2 ERNZ 467; and NZ Building Trades etc IUOW v Zip Commercial Interiors Ltd  2 ERNZ 489. These decisions comment on the enforceability at common law of industrial arrangements that were not registered (or not able to be registered) under applicable employment legislation, and indicate that there is still considerable scope for enforcement: just under the general law rather than under employment law. However, the extent of enforceability will be a question to be determined on a case by case basis rather than one that can be easily answered in the abstract.
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