NORTHLAND DISTRICT HEALTH BOARD and 20 OTHERS v NEW ZEALAND RESIDENT DOCTORS' ASSOCIATION Inc. NZEmpC
 NZEmpC 3
IN THE EMPLOYMENT COURT AUCKLAND
In the Matter of Proceedings Removed from the Employment Relations Authority
Hamish Kynaston and Andrea Pazin, counsel for plaintiffs
Bill Manning and Anna Paton, counsel for defendant
Reasons for decision dismissing the plaintiff's challenge to the defendant's initiation of collective bargaining — defendant's notice initiating bargaining under s42 Employment Relations Act 2000 (how bargaining initiated) was signed by an employee of contractor to the defendant union — whether notice signed by the union or employer — whether there was an implied power of delegation under s42 — whether the defendant could ratify the notices — whether the Court should validate any informality under s219 Employment Relations Act 2000 (validation of informal proceedings).
The issues were: whether the notices had been signed by the Union or its duly authorised representative and complied with s42 ERA (how bargaining initiated); whether there was an implied power of delegation under s42; whether the Union could ratify the notices and if the notices contravened the legislative requirements, whether the Court could validate the informality under s219 ERA (validation of informal proceedings).
Held: The Union was an incorporated society and its actions were governed by the Incorporated Societies Act 1908 (“ISA”) and its registered rules. The ISA did not provide any express provision as to how a society was to give statutory notices such as those required under s42 ERA, so the rules applied. Rule 25.4 (“duties and powers of the General Secretary”) of the Union's rules provided that the General Secretary was to carry out all duties required under the ERA and any legal documents were to be signed by the President or Secretary under r46 (“legal documents”). A bargaining initiation notice under s42 ERA was not a legal document as contemplated by r46. Although legal in the sense of being connected to the law, the notices were not instruments in the sense contemplated by r46 that was in the nature of contracts and agreements. Therefore s42 ERA notices were not required to be executed by the President or Secretary so there was no requirement for the Union to determine how such notices would be executed. Although
Although the physical handwritten signature was that of B's, it had been signed for and on behalf of P and it had been done with the appropriate notation that it was by proxy. Even if the notices had not been signed by P, CNS was the Union's duly authorised representative and B was employed by CNS.
There had to be an implied power of delegation to execute s42 ERA notices. The Union had no administrative staff and had members spread throughout New Zealand. It was both necessary and logical for business efficacy that the primary power to sign notices not only resided with the President but must also be delegable to the organisation responsible for its administration and collective bargaining, in particular CNS.
Assuming that neither the Union's National Executive nor Secretary were empowered to delegate the signing of the notices, that did not extend to an inability of the National Executive to ratify the notices. The Union must be authorised in law to ratify a notice given invalidly where it was the person primarily entitled to give the notice itself or to delegate that task.
Even if the signing of the notice initiating bargaining had contravened the ERA, this was an appropriate case to validate that informality under s219 ERA. Any default would have been technical. B had been authorised and had been instructed to sign the notices on behalf of P.
The DHB's claims were dismissed.
REASONS FOR JUDGMENT OF CHIEF JUDGE G L Colgan
These are the reasons for dismissing the plaintiffs' proceedings in an oral judgment delivered at the end of the hearing on 10 February 2010. 1 That was done on a clear view of the merits of the proceeding, to allow the parties to get on with collective bargaining at the earliest available opportunity, and because of pressure of other judicial work requiring urgent decisions. I regret the subsequent delay in the provision of these reasons.
The question of law which caused this proceeding to be removed by the Employment Relations Authority for hearing at first instance in this Court concerns how a union may sign a notice initiating bargaining under s 42 of the Employment Relations Act 2000 (the Act). In this case, the defendant's notices initiating collective bargaining with district health boards were signed by an employee of a contractor to the Union, for and on behalf of (“pp”) the Union's General Secretary. The plaintiffs say that this does not meet the requirement in s 42(2)(a) of the Act that a compliant notice initiating bargaining “… is in writing and signed by the union or the employer giving the notice or its duly authorised representative …”.
A second issue raised by the defendant was whether, even if the plaintiff is right that the bargaining initiation notices had not been signed lawfully, these had been validated retrospectively by the Union.
There was also a third issue, also raised by the defendant, in the event that the Court might decide in favour of the plaintiffs on either or both of the first two issues. This was whether, under s 219 of the Act, the Court is entitled to, and if so should, validate any informality in the notices initiating bargaining.
The significance of what might be seen as esoteric questions lies in the order in which bargaining has been lawfully initiated. The plaintiffs sought to have a very different bargaining agenda from the defendant's. The statute gives unions the first opportunity to initiate bargaining and the case law 2 means that if this opportunity is taken lawfully, an employer cannot counter-initiate bargaining on its terms. So if the district health boards could have had the Union's purported initiation of bargaining declared invalid, then the employers' purported initiation of bargaining would have moved to the front of the queue and the Union would have borne the disadvantage experienced by the employers, of having the initial bargaining agenda set for it.
Deborah Powell is the General Secretary of the defendant. Dr Powell is also the majority shareholder in and director of Contract Negotiation Services Limited(CNS). The defendant contracts with CNS for advocacy services in negotiating collective agreements, representation and advice in employment relations disputes on behalf of the Union's members, for Dr Powell's services as the Union's General Secretary, and for the administration of the Union's business. The Union has no employees or other full-time staff of its own although it does, of course, have a president and other elected officers and an elected executive. All administrative operations of the Union are carried out by CNS, one of whose employees is a solicitor, Carisse de Beer.
Following ballots of its members which approved the negotiation by the defendant of a number of different collective agreements, on 16 November 2009 Dr Powell instructed her staff to prepare, check, sign, and send notices initiating collective bargaining for those agreements. Dr Powell was unable to sign the notices herself because she was absent on business in Christchurch. Accordingly, each notice was signed by Ms de Beer on Dr Powell's behalf.
The notices initiating bargaining are all materially identical for the purpose of this case. They are under the letterhead of the defendant which includes its logo. The letters refer to the defendant's initiation of collective bargaining. They are signed as follows:
Dr Deborah Powell General Secretary
After a challenge to the validity of the execution of the notices by the plaintiff, the defendant's National Executive, at a quarterly meeting on 14 December 2009, resolved to ratify the bargaining initiation notices sent to the District Health Boards on 16 November 2009. The resolution so passed was to the following effect:
That the notices of initiation for bargaining for a collective employment agreement as attached (being notices issued in respect of a single employer collective agreement with each Auckland DHB, Counties Manukau DHB and Waitemata DHB; and one multi-employer collective agreement with the other 18 DHBs), signed “pp” by Carisse de Beer for the General Secretary, should be ratified by the National Executive as having been signed by or on behalf of NZRDA in accordance with section 42 of the Employment Relations Act 2000.
Section 42 of the Act refers to the mode of giving notice of commencement of collective bargaining as follows:
42 How bargaining initiated
(1) A union or employer initiates bargaining for a collective agreement by giving to the intended party or parties to the agreement a notice that complies with subsection (2).
(2) A notice complies with this subsection if-
(a) it is in writing and signed by the union or the employer giving the notice or its duly authorised representative; and
(b) it identifies each of the intended parties to the collective agreement; and
(c) it identifies the intended coverage of the collective agreement.
The Union is, as all such bodies must be, an incorporated society. As such, its actions are governed by the Incorporated Societies Act 1908 and by its registered rules, as well as by relevant provisions of the Act.
Rule 25.4 (“Duties and powers of the General Secretary”) of the defendant's rules provides:
It shall be the duty of the General Secretary to carry out all lawful instructions that may be given by the National Executive and Generally to perform all the duties required under the [Employment Relations] Act and usually appertaining to the...
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