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City not required to consult on Birch report


24 March 2003

Auckland City not required to consult on
Birch report – court ruling

A decision handed down today in the Employment Court ruled that a “proposal” for the purposes of the Employment Relations Act (ERA) does not include a consultant’s proposals or recommendations (such as those in the Birch Report) put forward for an employer to consider.

Auckland City welcomes this finding as it was the central issue that the PSA had taken to court.

The council is concerned that the Employment Court went on to make findings against the council on a number of ancillary matters. The court ruled that the council was in breach of the ERA in terms of its good faith obligations by not consulting with the PSA early enough.

The Court said “the Council deserves credit” for the way it consulted with affected and potentially affected staff. However, the council finds it surprising that the court ruled that this consultation should have included the PSA even though the council believed no PSA members were potentially affected.

The council is also concerned that this decision has wide ramifications for all employers as the court appears to have extended the definition of good faith under the act where it relates to proposals that may affect staff.

The court has effectively said that it’s not enough to act fairly, but employers will have to be “energetic in positively displaying good faith behaviour”.

Auckland City’s chief executive Bryan Taylor welcomed the central finding that it did not need to consult with the union when it commissioned the Birch Report.

Mr Taylor said, “The council has always attempted to act as a good employer and to treat its staff fairly and in good faith. This is a responsibility we take very seriously.

“We are therefore surprised that the court has found against the council on the issue of good faith by giving a very wide definition to this previously untested area of the law. This ruling could have significant adverse consequences for all employers.”

Mr Taylor says, “It is disappointing that the full court’s lengthy decision still doesn’t provide employers with clarity about what constitutes a ‘proposal’ under the Employment Relations Act.”

The council is considering whether to appeal.


Ref: GB

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