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Case of Interest: Initiation of Bargaining but No Employees in Coverage?

The Authority issued an interesting, and arguably controversial, decision with its release of this determination earlier this month.*  In the decision, the Authority was asked to decide if the Cooperative had validly initiated collective bargaining with HPS or not.

The Cooperative said its notice to initiate collective bargaining complied with the law while HPS said it was not bound to respond because it did not employ athletes (a statement of fact) and that there is no relevant employment relationship.

So put shortly, the Authority determined that its task was to decide whether collective bargaining could be initiated by the Cooperative in circumstances where the other party (HPS) does not employ employees within the intended coverage of the proposed collective agreement.

It concluded that collective bargaining could be initiated in those circumstances because a proper construction of the relevant provisions of the statute ( the Employment Relations Act) allowed of that outcome.  The Authority went on to imply , however, that it was clear that bargaining could never be concluded in those circumstances because ratification of any deal would be impossible (ratification requiring a member within the coverage of the agreement).

I suggest this decision will be controversial because here there is no common intention as to future employment.  Nor, to emphasize the point, does HPS want to employ persons within the proposed coverage clause.

So, without the prospect of employment and with the apparent acknowledgement that any collective negotiations could never be concluded within the terms of the Employment Relations Act, how is it possible for the Authority to conclude that bargaining could be initiated?

The relevant definitions in the statute, according to the Authority lead it to its conclusion.  For example, the definition of “employer” does not limit that concept to bodies employing or intending to employ staff within the relevant coverage clause; all that is required is that the employer employ some staff, as HPS does, and that the concept of employer must include “prospective employer”.  And, the definition of ‘employee’ similarly must include a “prospective employee” in reliance on AFFCO NZ LTD v NZ Meatworkers Union [2017]NZSC 135.

Moreover, nothing in the statute requires that there must be an employment relationship before bargaining can be initiated.

But what of the practical consequences of all this?  Is it practical to allow bargaining to be initiated in circumstances where it cannot legally be concluded?  Similarly, is it sensible for bargaining to be able to be initiated where there is no relevant employment relationship either existing or in prospect?

While we understand High Performance Sport has decided to challenge the Authority’s determination, we also understand that the parties have commenced bargaining for some form of collective agreement although, as we mention above, it is difficult to see how that agreement might be finalised given the present state of the parties.

Perhaps it has to be assumed that the parties’ positions will change as the matter progresses and perhaps their ultimate positions may be different from their starting positions.

Only time can answer those questions.

 

Summary written by James Crichton, Employment Relations Specialist & Barrister

 

*Full judgement: Athletes’ Cooperative Inc v High Performance Sport New Zealand Ltd [2024] NZERA 43

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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