New Zealand Law Paper
1) In the light of the current statue and case law, describe the duties of an employer and the rights of an employee where a dismissal on the ground of redundancy is contemplated. (300 words)
In the case of dismissal on the ground of redundancy, the obligations of employers and the rights of employees depend on the terms contained in the employment such as when the procedure and criteria in for redundancy has been expressly or impliedly mentioned (Clarke v. Norske Skog Tasman Limited  AC 42/03. Usually, there is an employee protection provision that sets out the considerations and processes that employers and employees should comply with in case the issue of dismissal due to redundancy arises. In considering the process to follow, employment agreements, policies and rules, and previous practices of the company help. Part of the contract could be a provision for the giving of notice to the employee in the form of a formal letter, verbal communication, or payment. The reasonable period of notice depends on the length of service and position of the employer as well as the financial situation of the employer. Another provision could be the giving of compensation and other benefits to the affected employees.
However, in case there is no such term or the terms are unfair or incomplete, the Employment Relations Act 2000 provides that both employer and employee should exercise good faith in relation to the matter. This means that the employer has to have genuine reasons for dismissing an employee on grounds of redundancy such as site relocation (NZ Post Office Union v. NZ Post Ltd  3 NZILR 913) or technical redundancy. Dismissal due to redundancy should be a last option and alternatives such as redeployment, when reasonable, should receive preference. There should also be consultation and notification of employees affected, fair and justifiable selection criteria for rendering positions redundant, and fair or reasonable compensation or other benefits for people affected depending on the context of the employment relations. In addition, employees have the right to file a claim for unjustifiable dismissal.
2) Discuss the principles on which the Discuss the principles on which the Wages Protection Act 1983 is based and their application is based and their application (350 words)
A number of principles support the Wages Protection Act 1983. One principle is equality. The basic provision of an employer and employee relationship, which is also an element of the employment contract, is the exchange of benefits between the parties, with the employee offering knowledge, skills and experience in performing tasks in exchange for the employer’s payment of compensation. The Wages Protection Act 1983 promotes equality by ensuring that employers compensate the contributions of employees in line with the contractual provisions on the amount, the mode of payment, and the period of payment. By preventing employers from changing the contractual provisions on wage amount, mode of payment and period of payment or influencing the spending or allocation of wages, employees do not feel an undue pressure from the employer that could create in imbalance in the contractual equality of the parties. In the case of inequality, the employment relationship could give rise to opportunities for abuse especially on the part of the employer by gaining in upper hand relative to the employee.
Another principle underlying the Wages Protection Act 1983 is the basic freedom or liberty of employees to exercise their property rights. Employees receiving compensation, in the context of a fair exchange in the employment relations, own their money so that they have the sole discretion to allocate their property. Undue influence from the employer constitutes infringement of property rights and freedom of employees. In addition, changing the value, mode and period of payment without justifiable reason also constitutes and impingement into the property rights of employees.
The Wages Protection Act 1983 also finds basis on employee protection. The sanctity of contracts already ensures the compliance of the parties of the contractual terms such as amount of compensation, mode of payment, and schedule of payment. However, statute also provides for employee protection especially extending to vulnerable workers to prevent discrimination or unfair treatment. Part of the application of employee protection is the exercise of the necessary regulation of the employer-employee relations to prevent opportunities for abuse and address abusive practices to ensure mutual and fair benefit for employers and employees.
3) In Grover v. Southland Engineering Holdings  A.C.J. the Court of Appeal described the Arbitration court as being “a specialist kind of tribunal with a specialized knowledge in industrial relations” and as occupying a “somewhat unusual position which is recognized by Parliament.” Analyse these propositions and their continued force or otherwise with respect to the Employment Relations Authority and the Employment Court. (250 words) Also, compare the relative roles and functions of the Employment Relations Authority and the Employment Court (150 words)
The Arbitration Court came about because of the Industrial Relations Amendment Act 1977. This combined the jurisdiction of the defunct Industrial Commission as well as Industrial Court. As such, it also combined the previous experience and knowledge of these two bodies specializing on issues and policies involving industrial relations. As an integrated body and due to its specialization on industrial relations, the Arbitration Court has been able to derive specialized insight into various industrial relations issues arising in different circumstances enabling it to become a source of input on policies covering industrial relations and dispute resolution guidance in the settlement of industrial relations conflicts. The members of the Arbitration Court comprise the direct nominees coming from both sides of the employee relations, through the Employers Federation together with the Federation of Labour. This means that the Arbitration Court also taps into both the perspectives of the employers and employees in the resolution of disputes resulting to solutions likely acceptable to the both parties for a long-term impact. In addition, the Arbitration Court also presided in a number of single-sector tribunals such as the State Services Tribunal that further expanded its experience and knowledge pool. With the establishment of the Employment Relations Authority and the Employment Tribunal, arbitration remains an important process but the Arbitration Court has declined in importance because of the investigative role of the Employment Relations Authority and the case resolution role of the Employment Court established by the Employment Relations Act 2000. The changing employment context in New Zealand also directed employment legislation towards this change.
The Employment Relations Authority and the Employment Court operate complementarily. However, there are differences in the roles of functions of these two bodies. On one hand, the Employment Relations Authority constitutes an investigative body operating informally in considering the facts of employment dispute cases to make decision on merits or claims of the case but not on issues involving legal technicalities. The Employment Relations Authority has jurisdiction over claims relating to the employment contract, personal grievances, and compliance order for employers. On the other hand, the Employment Court comprises a special appellate court for challenges against the decisions of the Employment Relations Authority covering issues of statutory interpretation as well as review and/or issuance of injunctions in relation to lockouts and strikes. As part of the structure of the judicial system, the Employment Court operates formally unlike the Employment Relations Authority and handles appeals of cases handled by the Employment Relations Authority.
4) Collective employment agreement talks between the Engineers Union and Chathams Polytechnic break down and the union gives notice that 2 weeks thereafter, no overtime will be worked by its members on Mondays and Tuesdays until the employer increases its present pay offer to a general increase of 6%. (A secondary reason for the overtime ban is the employer’s refusal to become a party to a new multi-employer agreement with several other polytechnics). The notice is given 5 weeks after the existing collective employment agreement has expired. The polytechnic management responds by notifying the staff who are participants in the industrial action that work will not be made available to them whilst the overtime ban is in effect. The Union considers its members have been locked out. Management then:
a. Arranges for other staff not members of the Engineers Union to carry out the duties of the union members
b. Issues notices to the engineers union members demanding their individual agreement to a full resumption of duties (including overtime as required) within 7 days and 2 week later dismisses those workers who fail to comply with employer’s demand.
Personal grievance applications are commenced by the union on behalf of the dismissed workers. Give your opinion as to the law of relevance to the various issues arising. (500 words)
The relevant law covering the various issues arising from the situation is the Employment Relations Act 2000. The issues revolve around employment relations and the law has provisions on these various issues.
One issue is the collective bargaining agreement and its breakdown. Section 3 promotes the engagement in collective bargaining by recognizing the innate inequality in employment relations and collective bargaining or representation enables employees to deal on a common ground with the employer by leveraging on number. Section 12 provides for the important role of unions in representing the pool of employees and advocating collective rights. In engaging in collective bargaining, the employer and union representatives should exercise good faith in their dealings as provided in Section 4 to ensure the achievement of the objectives of the collective bargaining process mentioned in Section 40 until Section 50, which is primarily to achieve a collective agreement covering all the employment relations concerns primarily of the employees. The breakdown of the collective bargaining process could be because of the failure of one party to exercise good faith or the inability of the parties to achieve a concession on particular issues. Section 33 of the statute provides that good faith requires as outcome the completion of a collective bargaining agreement and the failure to achieve this outcome should find justification by genuine and reasonable grounds. While the law hopes for the parties to achieve a collective agreement as the result of the bargaining process, it also recognizes that the process could fail leading to the breakdown of the collective bargaining process. Collective bargaining process commenced but failed in this case resulting to the strike of the employees and the temporary replacement of the employees on strike, which led to the claim of lockout.
Another issue is strike of the employees and the corresponding claims of lockout made by the employers against the employees on strikes. Section 81 provides a definition or the actions that constitute a strike including the complete or partial work stoppage or reduction of the normal performance. In this case, the union stated they would discontinue working overtime, which could represent a change in the normal performance when overtime is a common practice. Section 81 covers the concept of lockout and the actions that constitute a lockout. Sections 83 to 86 provide for lawful and unlawful strikes and lockouts. These provisions are important because of the implications on the claims of the parties in the given case. In the given case, the strike appears to be lawful since notice was given to the employer five days after the previous collective bargaining agreement has lapsed In the case of a strike, the employer could suspend the employees on strike as provided in Section 86 so that the replacement may not constitute a lockout. However, if there was suspension the employer should communicate this to the employee according to Section 89. If there was lockout, the employer is not entitled to provide the employees with compensation. Resumption of the Sections 102 and 103 covers the requirements and grounds for filing a personal grievance claim of the dismissed employees with a union representative. The provisions of the Employment Relations Act 2000 and the 2004 amendments cover the issues in the case.
5) Explain the employee’s common law duty of fidelity and good faith. (200 words).
a. The objects provision of Part 5 (collective bargaining) of the Employment Relations Act 2000 states that its purposes is “to provide the core requirements of the duty of good faith in relation to collective bargaining.” Explain the meaning of the concept of “good faith” in this context (100 words)
The employee’s common law duty of fidelity and good faith covers a number of actions based on the fiduciary nature of the employment relationship. This means that the employment relations works on mutual trust and benefit with the employer and the employee working together to realize collective or common goals and objectives. Actions in pursuance of this common law duty is the faithful rendition of service or fulfilment of duties for the employer, abstinence from knowingly damaging the interests or reputation of the employer, and respect or recognition of the confidentiality of information brought to the knowledge of the employee in the course of the performance of work. In addition, the common law duty of employees rests on the recognition that in the performance of tasks, the employee could act as a representative or even agent of the employer and as such, this enjoins the employee to make decisions and act in accordance with the interest of the employer. This common law duty extends even beyond the employee’s working hours for activities of the employee linked to the business operations of the employer. Violation of this duty constitutes a breach of the employment contract and a finding to this effect could render the employee liable for compensatory damages depending on the extent of damage caused to the employer.
In the Employment Relations Act 2000, the concept of good faith in Part 5 on collective bargaining agreement pertains to the intention of the parties in engaging the process and the cooperation to achieve a collective bargaining agreement as the outcome. Actions comprising good faith are found in Section 32 outlining the basic actions or processes that the unions and employers should cooperate on, including the agreement on the bargaining process, meeting to negotiate, considering and responding to mutual proposals, recognizing each other’s authority so that one part of the other should not bargain with individuals without authority or with individuals belonging to a union outside of collective representation, and providing each other with information necessary to support their respective bargaining claims.
6) Describe the circumstances in which a strike or lockout may be lawful under the Employment Relations Act 2000. Note: Question does not require you to discuss the definitions of a strike or lockout. (300 words)
Section 83 to 86 covers the lawful strike or lockout. Section 83(a) provides that a lawful strike is one that part of unlawful strike or lockout under Section 86. Concurrently, Section 86 explains that an unlawful strike or lockout occurs when the collective bargaining is still in force except when the collective agreement allows strikes or lockout and the collective agreement has expired but bargaining continues. A strike or lockout is also unlawful when this is made while a collective bargaining agreement covering the employees on strike or lockout is in progress except when 40 days or more has already lapsed from the initiation of the bargaining process, if the previous collective agreement expired on the day bargaining commenced, or the expiration of one collective agreement when the parties are covered by more than one collective agreement. A strike or lockout is also unlawful when made relative to a personal grievance claim or these were made in the context of a dispute, an issue of freedom of association, or bargaining fee. A strike or lockout is unlawful when the company provides essential service and the notice or period of notice was not complied with. Lastly, a strike or lockout is unlawful when this is made in direct contravention of a court order. This means that as long as the strike does not match any of the actions and circumstances comprising an unlawful strike or lockout, then it may be lawful.
Section 83(b) provides that a strike or lockout is lawful when the participation is for a collective bargaining agreement that would bind the employees joining the strike or affected by the lockout or if it was made relative to a collective bargaining agreement and the right to commence a strike or lockout is made available via court declaration subject to the operation of Section 192(2).
7) S.143 of the Employment Relations Act provides, in part, that the legislation is about establishing procedures and institutions that:
a. Recognize that judicial intervention at the lowest level needs to be that of a specialist decision-making body that is not inhibited by strict procedural requirements and
b. Recognize that difficult issues of law will need to be determined by higher courts
Explain with reference to the role and function of the Employment Relations Authority and the Employment Court how these principles are given effect to. (350 words)
Section 143 clarifies the different but connected roles and functions of the Employment Relations Authority established by Section 157 and the Employment Court established by Section 187 to develop a system, intended to be the effective venue in dealing with issues in employment relations such as disputes and claims.
Section 143(f) provides that a body with specialized knowledge and experience and operating without the restriction of procedural requirements should work judicial intervention at the lowest or frontline level. This provision implies the need for a flexible and experienced body at the frontline of employment relations issues. This is necessary for the body to concentrate on the consideration of issues and claims instead of formal process, which could lengthen or complicate context-based resolution of issues. The Employment Relations Authority is the embodiment of this provision because the body operates informally in being a front line authority that investigates the merit of employment relations cases. The Employment Relations Authority meets this provision by operating informally and specializing on matters arising from the employment relations. As such, the body has been able to derive expertise on different employment relations issues covering various circumstances as well as resolve issues flexibly depending on the context of the issues but guided by employment law and policies.
Section 143(g) provides that difficult legal issues fall within the jurisdiction of the higher courts. This finds support in the expertise of the higher courts in dealing with technical issues since this forms part of the appellate or original role of the courts in handling appeals on grounds of the presentation of new material facts or technical questions of law. The Employment Court is the implementations of this provision since this court is considered as a special court handling employment disputes. It also enjoys equal standing with New Zealand’s High Court, making the Employment Court itself a high court. In terms of the Employment Court’s jurisdiction or roles, based on the items listed in Section 187, all pertain to technical matters of employment law such as questions of law provided in Section 177, applications for injunction, review or warrants, and recovery of penalties.
8) Outline the law regarding the status and standing of a union under the Employment Relations Act including with respect to their rights of access to work-places. (300 words)
Part 4 on the recognition and operation of unions within the Employment Relations Act 2000 explains that unions have legal standing provided the union is duly registered with the Registrar of Unions. Registration is subject to compliance with requirements contained in Section 13 such as the filing of an application together with the necessary documents such as the certificate of incorporation, rules, and declaration stating the justification for the grant of its application for registration. Apart from the documents, the applicant union also needs to show proof of its ability to represent effectively the collective interest of employees and the fairness of its rules under Section 14. Upon registration, the union carries a legal and authoritative status to exercise its rights.
Duly registered unions have certain legal entitlements. First is the union’s right to represent the collective interest of its members under Section 18(1) or the interest of and individual member provided this comes with the consent of the member as found in Section 18(3) and Section 236. Part of its entitlement of representation is the establishment of classes of membership. Second is access to workplaces, which pertains to the entry of union representatives to enter workplaces provided this is in line with the employment of union members such as collective bargaining participation, health and safety issues, collective agreement compliance monitoring, and other similar reasons or the business of the union such as meetings, recruitment, or information dissemination covered by Sections 19 to 25. Third is the right to expect or claim two paid meeting sessions with its members with duration of two hours every year subject to the communication of the claim of this right via fourteen days notice subject to Section 26. Fourth is the standing of the duly registered union as a party in proceedings lodged with the Employment Relations Authority.
9) Discuss the law relating to the formation of the employment contract/agreement. Include in your answer appropriate reference to both:
a. the law of misrepresentation in the employment contract and
b. the relevant provisions of the Employment Relations Act 2000 (350 words)
The formation of an employment contract or agreement in New Zealand follows the common law with modifications from a number of statutes. As such, an employment contract arises with the concurrence of these elements, which are the making of a valid offer and acceptance, presence of a consideration, intention of the parties to establish legal relations, capacity of the parties to enter the contract, and compliance with the necessary formalities. The Minor’s Contracts Act 1969 recognizes as an adult married minors for purposes of establishing the validity of employment contracts. Illegal Contracts Act 1970 providing that illegal acts are not valid so that the remedy of rescission places the parties in their original position before engagement in the contract. Contractual Mistakes Act 1970 that focused on the balance between the exercise of fairness in the accountability of parties for provisions that has not received their consent and the protection of other parties in the contract implied that in the employment contract, enforcement of obligations should consider the knowledge and agreement of the party to whom these are enforced. Mistake under the law could refer to a mistake made by one party with within the knowledge of the other party, mistake committed by both of the parties, or contractual matters with the parties holding different beliefs on the matter. Contractual Remedies Act 1979 is the law that considered misrepresentation, whether fraudulent or innocent, in the employment contract. In the case of misrepresentation, the innocent party or the aggrieved party can cancel the contract and seek remedies such as payment of a sum, directions to seize or do an action, or transfer of property, whichever the court thinks as reasonable based on the circumstances of the case. The Employment Relations Act 2000 provides specifies the basic terms and conditions of the employment contract depending on different circumstances such as for employees who are members or non-members of unions, different employment arrangement such as probationary and contractual status together with possible regularization, wages and benefits. It also highlights the importance of good faith in the negotiation or derivation of the employment agreement since this determines the validity of the employment contract, the liability of one or both of the parties, and the remedies available to the parties.
10) With reference to the so-called statutory codes of minimum conditions, to what extent is there a “safety net” for employees in New Zealand? (250 words)
The statutory codes of minimum conditions ensure minimum entitlements to all employees in New Zealand. One entitlement is the minimum wage for employees on two levels, a minimum wage rate for adults and another minimum wage rate for youth workers. Another is the protection from any undue wage deductions. Entitlement to eleven public holidays with pay when the holidays are working days, with three weeks of paid leave every year after employment of twelve months, and fide days of special leave after employment for six months, parental leave and other employment protection benefits also form part of minimum conditions. Equal pay for male and female workers for doing substantially similar work is also covered. All employees also receive access to venues and procedures for lodging personal grievances and resolving disputes. These minimum conditions provide a security net to employees but only to the extent of ensuring employees experience the minimum acceptable working conditions in engaging in employment relations. However, most of the conditions of employment and the terms of the employment contract are likely subject to negotiations by the employer and employee in case of non-union membership or the employer and union representatives in case of unionized employees. During the negotiations, the relative status of the employer and employee or union determines whether employees receive a better employment condition more than the minimum conditions set out by law. In addition, the minimum entitlements provided by law are largely inflexible because of procedures required in reviewing and changing these so that the minimum conditions may not really reflect the actual minimum entitlement needs of considering changing socio-economic conditions.
11) “It is not possible in any meaningful sense to analyse the employment relationship as purely a private contractual relationship between two parties.” Discuss the above statement in light of the external influences which affect the relationship. Consider the extent to which the Employment Relations Act intrudes on the private contractual relationship. (350 words)
The employment relationship cannot be considered as a purely private contractual relationship between two parties because employment conditions comprise a public interest or welfare issue. Employment is the source of income of households so that it is in the best interest of society for the exercise of external influences on the employment relations, determined by the employment contract, to ensure and improve employee well-being in terms of employment stability and prevention of employer abuse. A number of external influences affect the employment relations. One is shift in the labour market that determines the supply and demand of labour, with limited supply relative to demand raising the wages and improving employment conditions as incentives to retain employees. This influence variedly affected employers and employees in terms of their relative bargaining power so that employees require external influence when supply exceeds demand because the bargaining power favours employers. The other is statutory regulation enforced through employment regulatory bodies. The legal concept of implied terms applies to employment contracts since even if the employment contract has not expressly provided for certain basic terms such as benefits, the employee has entitlement to statutory benefits included in the statutory codes of minimum conditions. This means that the employment contract is not limited only to the express terms but also include implied statutory terms for purposes of the rights and obligations of employers and employees. In addition, the validity of employment agreements depends on statutory provisions. Section 10 of the Employment Relations Act provides that employment agreements have no effect if this is inconsistent with Section 8 covering union membership and Section 9 on prohibition on preference. This means that even if the parties agreed to the contractual terms but if the contract falls within Section 10, then the contract has no effect. Section 32 and Section 60A provides for the parties to the employment agreement to exercise good faith whether the agreement is between the employer and the union representatives or the individual respectively. Section 54 and Section 65 provide for the basic terms of the collective agreement or individual employment agreement respectively so that even if the parties have the freedom to determine majority of terms beyond the minimum entitlements, they have to comply with contractual regulations.
12) “The law implies or incorporates some provisions into every employment contact.” Discuss the above statement considering the source, nature and effect of implied terms. (350 words)
Implied contractual terms operate as part of the contract even if it is not stated as a term or provision of the legally binding agreement. Implied terms in employment contracts are those assumed, essential terms, and unspoken terms that affect the implementation of the rights and obligations of the employment agreement. An implied term is the existence of a fiduciary relationship between the employer and employee so that even if the contract does not explicitly provide for these terms, the parties to the employment agreement are enjoined to comply with their fiduciary duty. As such, the employer extends confidence on the employees in completing their tasks and the employee not unduly destroying the reputation of the employer.
There are two ways for implied terms to become infused into employment contracts. One is through the factual context of the establishment of the employment agreement. When the parties to the employment contract agreed for one party to provide technical service in exchange for compensation, the facts suggest the application of the implied term on the delivery of quality technical service especially when the required service requires expertise limited to only a limited member of the workforce. Even if the parties have not provided for the quality of service, the party delivering the service needs to comply with quality standards. Another is the operation of implied terms through statutory provisions. An example is the statutory provision on the venues and claims for personal grievance or dispute resolution of employees that comprise implied terms in employment contracts. Even if the parties have not included contractual provisions on the venue or process of raising and filing grievance, in case conflicts arise, the venue and process provided by law applies. In case the parties have contemplated on the manner of resolving disputes, if this is deemed not fair or insufficient, legal provisions apply. The statutory codes of minimum conditions also comprise implied contractual terms by operation of law so that these form part of the contract even if not implicitly considered in the agreement. Minimum wage and benefits form part of the obligation of the employer under the employment agreement.