Auckland City will appeal consultation case ruling

Auckland City decided today it will seek to appeal against an Employment Court ruling which will force employers to consult with unions, even when union members may not be affected.

Auckland City’s Deputy Mayor, Councillor David Hay, said the ruling created new employment law, which effectively meant employers would have to consult with unions whenever they ‘pursued’ a proposal – even if they didn’t adopt the proposal.

Councillor Hay said previously employers were only required to act in good faith when they considered proposals. The ruling, in a case brought by the PSA, effectively extended the definition of good faith to make consultation virtually mandatory when employers are considering proposals that might affect staff.

The court had also not provided employers with a clear definition of what constituted a proposal.

“This is not an Auckland City versus staff issue. The court, in fact, congratulated Auckland

City on its consultation with staff around the Birch Report recommendations. It’s a question

of novel and new interpretations of the law,” Councillor Hay said.

Auckland City would be seeking clarification on areas of consultation, what constituted a

proposal and a definition of good faith as it related to proposals that might affect staff.

Auckland City had been pleased to win on the primary issue in the case – that a consultant’s report did not constitute a “proposal”. But the court had then ventured into creating new law around the good faith issue and required consultation with unions whenever an employer ‘pursued’ any matter, relating to a proposal, that might, or might not, impact on an employee.

Councillor Hay said this would have huge potential impacts on every employer. In local government, it could mean costly delays in policy forming.

“For example, if you take the recent case of a long standing privately owned business, which was for sale: the negotiations were conducted in complete confidentiality. The buyer took on all the staff. However, with this new ruling the employer would have had to consult staff and unions at the outset when pursuing the sale proposal. This sort of law will create major unnecessary upset. It would have destabilised the company and maybe even resulted in needless staff losses – and put the business itself at risk. We need to make sure this is not what is intended by new law.”

There were risks in Auckland City not appealing. When it met this morning, Auckland City’s Assessors and Audit Sub Committee had therefore voted 6 to 2 to seek to appeal the Employment Court’s ruling.

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