Williams v Chesterton Group Ltd ((in Liquidation))

 
FREE EXCERPT

[2010] NZEMPC 150

IN THE EMPLOYMENT COURT AUCKLAND

court:

Judge Colgan

ARC 100/09

In The Matter Of A Challenge To A Determination Of The Employment Relations Authority

Between
Lee Williams
Plaintiff
and
Chesterton Group Ltd (In Liquidation)
Defendant
Appearances:

Timothy Oldfield, Counsel for Plaintiff

No appearance for Defendant

Challenge to an Employment Relations Authority determination declining to award a penalty against an employer for a breach of s63A Employment Relations Act 2000 (employer to provide employee a copy of the intended agreement) — employer eventually reluctantly provided a draft agreement which was unsuitable — union responded by providing a copy of a draft agreement which the employer subsequently refused to use on the basis the employment relationship was a casual one — whether a penalty for failure to provide the employee a copy of the intended agreement should be imposed.

Held: Chesterton was more than just “extremely tardy” in its engagement in the process of settling the terms in writing of the parties’ individual employment agreement. It failed or refused to consider the statutory requirement for an employment agreement and its contents. But more than that, the provision of a draft by Chesterton when it finally acknowledged the legal requirement to do something after the union became involved, could really only be regarded as cynical lip service. The form of agreement tendered bore no resemblance to the issue the defendant was required to address. It was simply a further delaying tactic.

The Authority's determination did not address this aspect of Chesterton's conduct. Nor did it deal with Chesterton's subsequent refusal to engage with Williams and her union in negotiation and settlement of the content of an agreement and especially after she had, through her union, provided a reasonable draft agreement that reflected the actual terms and conditions to which the parties had agreed.

Section 63A(2)(a) required Chesterton to provide Williams with a copy of “the intended agreement” under discussion. What it very belatedly provided her with could not be said to have met that obligation. More significantly, for breach and penalty purposes, Chesterton failed to comply with s63A(2)(d) in that it failed or refused to consider issues that Williams raised by her submission of a draft alternative employment agreement and Chesterton failed to respond to those issues. Chesterton's conduct was the antithesis of good faith behaviour required of it and its breaches of s63A(2)(a) and (d) warranted a penalty. A penalty of $4,500 was imposed.

ORAL JUDGMENT OF CHIEF JUDGE GL Colgan

1

The question for decision is whether the defendant should be penalised for breach of s 63A of the Employment Relations Act 2000 (the Act) that relates to the recording in writing of individual employment agreements. The Employment Relations Authority declined to award a penalty against the defendant and this case is a challenge to its determination. 1

2

The defendant company is now in liquidation and the liquidator has both declined to agree to the continuation of the balance of the proceedings brought against the company in the Authority, and to appear on the defendant's behalf. The only cause of action that the law permits the plaintiff to maintain against the defendant in these circumstances is a claim to a penalty payable to the Crown and a

claim for costs in respect of those proceedings under ss 308(b) and 308(c) of the Companies Act 1993.
3

Section 63A of the Act provides materially as follows (with my emphasis on the clauses particularly in issue in this case):

63A Bargaining for individual employment agreement or individual terms and conditions in employment agreement
  • (1) This section applies when bargaining for terms and conditions of employment in the following situations:

    • (a) under section 61(1), in relation to additional terms and conditions to the applicable collective agreement:

    • (b) under section 61(2), in relation to–

      • (i) additional terms and conditions to the collective agreement on which the individual employment agreement is based; and

      • (ii) variations to the individual employment agreement in subparagraph (i):

    • (c) under section 63(2), in relation to additional terms and conditions for the first 30 days of an individual employment agreement:

    • (d) under section 63(5), in relation to variations to terms and conditions of an individual employment agreement after the 30-day period:

    • (e) in relation to terms and conditions of an individual employment agreement for an employee if no collective agreement covers the work done, or to be done, by the employee:

    • (f) where a fixed term of employment, or probationary or trial period of employment, is proposed:

    • (g) under section 69M or section 69N in relation to employee protection provisions in individual employment agreements:

    • (h) under section 69I in relation to redundancy entitlements with a new employer.

  • (2) The employer must do at least the following things:

    • (a) provide to the employee a copy of the intended agreement, or the part of the intended agreement, under discussion ; and

    • (b) advise the employee that he or she is entitled to seek independent advice about the intended agreement or any part of the intended agreement; and

    • (c) give the employee a reasonable opportunity to seek that advice; and

    • (d) consider any issues that the employee raises and respond to them.

  • (3) Every employer who fails to comply with this section is liable to a penalty imposed by the Authority.

  • (4) Failure to comply with this section does not affect the validity of the employment agreement between the employee and the employer.

    (emphasis added)

4

Also relevant is s 60 which sets out the object of Part 6 of the Act within which s 63A is contained. It provides (again with relevant emphasis):

60 Object of this Part

The object of this Part is–

  • (a) to specify the rules for determining the terms and conditions of an employee's employment; and

  • (b) to require new employees, whose terms and conditions of employment are not determined with reference to a collective agreement, to be given sufficient information and an adequate opportunity to seek advice before entering into an individual employment agreement; and

  • (c) to recognise that, in relation to individual employees and their employers, good faith behaviour is—

    • (i) promoted by providing protection against unfair bargaining; and

    • ( ia) required when entering into and varying individual employment agreements; and

    • (ii) consistent with, but not limited to, the implied term of mutual trust and confidence in the relationship between employee and employer.

5

Section 65 is also relevant. It provides:

65 Terms and conditions of employment where no collective agreement applies
  • (1) The individual employment agreement of an employee whose work is not covered by a collective agreement that binds his or her employer–

      ...

To continue reading

REQUEST YOUR TRIAL