Analysis of Employment Agreement and Good Faith Provisions under Employment Relations Act

Manufacturing company and union collective agreement negotiation

A manufacturing company is in negotiation with a union to renew a collective agreement.  Currently the manufacturing plant normally operates daytime hours between Monday and Friday.  The parties have so far spent 5 days in negotiation.  During this time claims from both sides have all been presented, debated, and responded to.  The current status is that while a number of these claims have now been agreed to by the parties, there are still some other significant claims which have not yet been settled.  It is agreed to adjourn negotiations for 2 weeks so that the parties could further consider their respective positions on the outstanding claims. Before adjourning the employer advised the union of its intention to update affected employees on the current status of the negotiations.  The union said it wanted to receive a copy of what employees were told.

The employer sent a written report on the current status of the negotiations to its employees who are bound by the collective agreement.  The employer gave a copy of its report to the union at the same time.  The report factually details those matters which have so far been agreed to in principle, as well as listing other significant ones still not settled.  In particular the report refers to the employer’s unsettled claim to introduce terms and conditions of employment for shift workers.  It stated the reason for the claim was that shift work would help keep the business competitive by lowering the unit cost of production through increased plant utilisation.   The report also summarised the union’s response, namely that they were not in favour of shift work because it was anti-social and could have long-term adverse effects on employee health.

The union reacted angrily to the report.  In particular, it said the report was a breach of good faith and a blatant attempt to undermine the bargaining authority of the union and to bargain directly with the employees.

REQUIRED

Analyse the facts provided and the relevant law.  Then give your opinion as to whether the employer’s statements in its written report to employees amounts to a breach of the Employment Relations Act’s good faith provisions.   Cite all legal authority from the Act that supports your answer.

B: Analysing an EMployment Agreement 34 Marks

Mary wants to employ someone to look after her extensive gardens. She shows you a brief document and asks you whether this will be sufficient. The document reads:

Employer's report to employees regarding negotiation status

I am pleased to offer you employment as my gardener on the following terms and conditions:

1. You will be employed at my house at 263 Gloucester Street Taradale, and report to me.

2. You must dress in a tidy manner and be punctual and courteous at all times.

3. Your hours of work will be 8 am to 3 pm.

4. Your rate of pay will be $12.50 per hour.

Mary asks what else she needs to include and changes she may need to make to satisfy the requirements of the Employment Relations Act and any other relevant statutes. Outline these requirements in a letter to Mary. Then draft an employment agreement using the Employment Agreement Builder that would satisfy these requirements and include it in your assignment.

You can find the EAB at https://eab.business.govt.nz/employmentagreementbuilder/startscreen/

C: Personal Grievance Procedure 33 Marks

A man and a company enter into a contract for services for the provision of a security officer service.   The company provides a uniform bearing the company’s logo.  The terms of the contract, amongst other things, state that the man shall work the times and locations stipulated by the company.  Another term was that the man required the company’s approval before taking any time off.

After 14 months the man decided he needed a break for some rest and recreation.  He requested the company’s approval for a two week absence, to begin in three weeks time.  The company declined his request, saying it did not leave it with enough time to organise a replacement.  The man considered the company’s response was unreasonable, and advised his intention to go ahead and take the time off anyway.  The company responded that this amounted to a breach of a fundamental term of the contract, which now entitled it to cancel the contract. The man left the company’s premises and did not return.

Five months later, after taking some advice, the man lodged a personal grievance with the Employment Relations Authority claiming unjustified dismissal.  The company’s defence was to assert that the claim was outside the jurisdiction of the Employment Relations Act because the relationship of the parties had been that of principal and independent contractor.  Eleven months later, following a series of hearings and appeals in lower courts on the threshold issue of jurisdiction, the Court of Appeal held that the real nature of the relationship between the parties had been an employment relationship, i.e. it ruled that the man had been an employee and not an independent contractor.  Thus the Employment Relations Act had application.  The Court remitted the claim back to the Employment Relations Authority (“the Authority”) for a hearing of the man’s personal grievance.  The company then argued before the Authority that the personal grievance could not be brought because it was now “out of time.”  The Authority then advised that, pursuant to s 114(3) of the Act, it would firstly hear from the employer and then consider the threshold issue of whether to grant leave for the man to raise his grievance.  

Required

Give your opinion as to whether or not, in the above circumstances, the Authority will grant the employee leave to raise his personal grievance “out of time.” Support your answer with reference to any relevant parts of the Employment Relations Act 2000 and any relevant cases.

Assuming leave to raise the personal grievance is granted, give your opinion as to whether the man’s claim of unjustifiable dismissal would be successful.