The Court of Appeal 1 and Employment Court 2 have recently sent warnings to employers to act in good faith under the Employment Relations Act.

“Good faith connotes honesty, openness and absence of ulterior purpose or motivation”. It is far more than mere lip service to the notion of good faith. It must be real. Don’t let your business fall foul of the requirement for good faith. Get advice before problems arise.

In the Court of Appeal case union officials wished to gain access to a site during a strike to check that outside employees were not being used to do the striking employees work. (The Employment Relations Act s97 restricts the use of such workers). The company refused access on safety grounds to the part of the site containing the machinery thought to be being used and had the union officials arrested when they tried to enter that part of the site.

The Court of Appeal held that union representatives are allowed to enter to check compliance with the Act. Access is allowed to those areas of the site necessary to check compliance. In this case the machinery area.

The employer also breached its good faith obligation by refusing access for unjustified “safety reasons” and involving the police to arrest the union officials who had the right to be there.

The approach by the Court of Appeal has also been reflected by the Employment Court.

The Court found in a recent case that the employer failed to consult in good faith with the union in relation to restructuring.

The employer:

  1. started consultation too late in its restructuring process,
  2. withheld information from the union,
  3. behaved in a misleading way in relation to information; and
  4. did not respect the workers nomination of the union to conduct their side of the consultation.

The employer beached the statutory duty of good faith and the duty to consult in the collective agreement.

Consultation must be meaningful but there is no obligation to agree to employees’ proposals.

The Court also noted that if the process results in redundancies being necessary there is also a duty of good faith to consult on the process of how redundancies shall occur.

Good faith applies to all aspects of employment relations and cannot be ignored. It requires real good faith in its application to employment situations.

For assistance on how these matters affect your work place contact Alan Knowsley at Rainey Collins, Lawyers, by e-mail, phone (04) 473 6850 or post PO Box 689, Wellington.

1National Distribution Union Inc v Carter Holt Harvey Ltd
(CA 22/02)

2Engineering, Printing & Manufacturing Union v Carter Holt Harvey
(ARC 42/02)