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Rats and Rates and Recent changes

It was big, grey and right outside Invercargill Pak’n Save. Around its neck was a sign saying,

‘Don’t Be a Rat Mr Dobson.’

It was an inflatable rat and it was part of First Union’s protest. Invercargill Pak‘n Save (trading as Kaikorai Service Centre Limited) had declined to bargain with the Union over wage rates. They would bargain over other issues, but individual wage rates were something they wanted to keep private; to take ‘off-line’ and deal with on a one to one basis. In this way they hoped salaries could better tailored to the contribution of the employee.

Both sides to the dispute claimed a breach of good faith. The union because of the refusal to include wage rates in the collective agreement; the employer because of the rat (and also the banner reading ‘Pak’n Slave’)

So, who was in breach? The union with their floating rodent? Or the employer with their insistence on an agreement that didn’t mention money?

According to the Court [1], neither.

 

I consider there is nothing in the use of the inflatable rat and the sign justifying

Kaikorai’s concern. The combined image could not be described as mean‐spirited

or draw on negative connotations of a rat which Mr McPhail preferred to see in

his dislike of it. The sign did not cross the threshold where it could be said to be so

offensive or undermining that a breach occurred. The sign, by itself, could not

exert pressure, improper or otherwise, on Mr Dobson. The pleading was that he

was insulted, but no reasonable person in his position would have been insulted

by the inflatable rat, or the combination of the rat and sign [2].

 

Not only was protesting using an inflatable rat not a breach of good faith, it wasn’t even insulting.

Nor was it a breach to decline to include a wage scale within the agreement so long as the employer was responsive and communicative in bargaining. Kaikorai has shown its responsiveness by  providing a revised draft wage clause which moved closer to the union’s position. It had considered the union’s proposals and explained its reasons for rejecting them.

Further-

There is nothing in s 32 which requires good faith in bargaining to extend to the

inclusion of a wage scale in a collective agreement or, for that matter, any other

provision which might be proposed by one or other party to the bargaining … [3].

 

Since then, legislation has been passed which requires the parties to bargain over wages, so this aspect of the case would be decided differently today. Section 54 of the Employment Relations Act includes the following –

For the purposes of subsection (3)(a)(ii), a collective agreement contains the rates of wages or salary payable to employees bound by the agreement if it—

  • contains, in respect of the employees bound by the collective agreement (whether by reference to the work or types of work done by the employees or by reference to named employees or types of employees),—
  • the rates of wages or salary payable for certain work or types of work or to certain employees or types of employees; or
  • the minimum rates of wages or salary payable for certain work or types of work or to certain employees or types of employees; or

(iii) 1 or more methods of calculating the rates or minimum rates of wages or salary payable for certain work or types of work or to certain employees or types of employees; and

(b) indicates how the rate of wages or salary payable to an employee bound by the agreement may increase during the term of the agreement.

 

So far, no new legislation has been proposed about inflatable rats.

 

[1] Kaikorai Service Centre Limited v First Union Incorporated [2018] NZEmpC

[2] At [66]

[3] At [44]

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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