New Zealand: Collective Employment Agreement Negotiations: The Battle For Hearts And Minds

Last Updated: 7 June 2007
Article by John Hannan

The battle for hearts and minds is, in the work place as much as in politics, a crucial dimension of success.

There are regular examples of employers believing that Unions are misrepresenting their position to staff during Collective Employment Agreement (CEA) negotiations, and trying to communicate directly with staff to explain their position. Similarly, there are examples of Unions claiming that employers have been communicating with staff in a way intended to undermine the Union’s negotiating position. Such disputes are often bitter. Employers claim a right to communicate freely with their staff. Unions say employers must not try to come between them and their members.

So the ways in which employers and Unions can communicate with Union-represented staff during CEA negotiations is one of the key issues in Union/employer relations. Unions and employers have regularly gone to Court about it. It is specifically dealt with in the Employment Relations Act (ERA).

A recent case from the local government sector has made some major changes to what is and isn’t permissible.

The Court of Appeal has now made a decision on the issue that largely puts the position back to what it was in the late 1990s under the Employment Contracts Act.

In Christchurch City Council v Southern Local Government Officers Union Inc the Council and Union were negotiating for a new collective employment agreement. The CEO of the Council communicated directly with staff on a number of occasions. The Union objected. It said the communications breached the ERA. The Employment Court held the communications did breach the ERA and the Council now appealed.

The basic question was whether the ERA imposes a complete ban on employers communicating with staff in any way touching on the topic of collective bargaining (or anything else) while CEA negotiations are under way.

This question arises because of section 32 of the ERA. This says that during bargaining employers and Unions must not try to bargain directly with the persons the other party represents; eg, employers must not try to bargain directly with employees who are Union members. The ERA also provides that a Union or employer must not do anything that undermines the bargaining or the authority of the other party in the bargaining.

What is ‘bargaining’? This is important because it determines the time frame in which employer/staff communications are restricted. The ERA defines bargaining as ‘all the interactions between the parties to the bargaining’ and includes ‘communications or correspondence that relate to the bargaining'.

The Employment Court decision had said that any communication touching on bargaining topics during the bargaining process was prohibited. Indeed effectively the Employment Court held that the Council could not communicate at all with staff in any way which could be regarded as relating to the bargaining.

The Employment Court also found that the restriction applied even before bargaining had commenced, if commencement of bargaining was likely in the near future.

The basic problem was that the Employment Court’s interpretation introduced a general ban on communications between employers and employees during bargaining. The Court of Appeal thought this was wrong. The intent of the ERA was to prevent communications between employers and staff only if they might undermine the bargaining or the Union’s authority in the bargaining.

The Court of Appeal said that ‘bargain’ in the Act means ‘negotiate’. What the ERA was trying to prevent was employers negotiating, or attempting to negotiate, directly or indirectly with staff, in other words going around a Union and trying to persuade staff directly to accept the employer’s proposals, rather than the Union’s recommendations. Clearly this sort of behaviour, of which there are documented incidents, can seriously undermine the Union’s position, or might do so. A Union is entitled to have its relationship with its members respected by the employer.

So employer communications with Union-represented staff during bargaining are now only prohibited if they are an attempt, whether direct or indirect, to negotiate with employees about terms and conditions of employment, or if they undermine or are likely to undermine the bargaining or the Union’s authority.

Outside of those areas, employers are free to continue to communicate with staff in the usual way. Provided they do not attempt to negotiate or undermine the authority of the Union, they might also be free to communicate with staff on factual matters or the employer’s opinion about its business. So there might be more general statements by the employer about the current status or viability of the business or organisation, its needs, and its requirements. Clearly that opens the door to PR or, more bleakly, propaganda campaigns during collective bargaining. Such campaigns have been mounted in the past under the old Employment Contracts Act system.

The Court of Appeal also said that the restrictions on communication which do exist under the ERA do not apply before bargaining has been formally initiated.

This decision has a significant potential impact on what will happen during collective bargaining processes. While employers will not be entitled to either try to bargain directly with staff, or say and do things which undermine the authority of the Union, they will be entitled to continue to communicate with staff about the affairs and general status of the organisation or business.

Undoubtedly such communications can be framed in such a way as to potentially influence the opinion of Union members about Union recommendations. The battle for hearts and minds during collective bargaining will continue. More controversy over what employers can say to staff during collective bargaining is likely.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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