Good faith definition lacking

Good faith definition lacking

Business NZ welcomes the Auckland City Council's move to appeal against a recent Employment Court ruling (PSA v Auckland City Council) on good faith.

The Court had ruled that the City Council breached the good faith provisions of the Employment Relations Act in not consulting the union sooner about a consultant's cost-cutting recommendations. The ruling found that consultation had to be with a union even although its members may not be affected.

Business NZ Executive Director Anne Knowles says there are some novel areas in the judgment.

"The decision says parties to an employment agreement are required to be 'energetic' in displaying good faith behaviour, although no definition exists of what that might mean," Ms Knowles said.

"The judgment also gives no guidance on the crucial points of what constitutes a proposal, or what it means to 'pursue' a proposal, and when an employer should consult over a proposal."

Ms Knowles said employers needed more certainty in these areas.

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