Fixing usually means repairing

In my last post relating to the proposal for binding arbitration in the ongoing collective bargaining between Te Whata Ora and the ASMS I stated that ‘For completeness it should also be noted that the Employment Relations Authority does have limited powers to fix terms and conditions if there has been a “serious and sustained breach of good faith in relation to bargaining’ (s 50J). This provision is not relevant to the current dispute.”

It seems that I was wrong as Te Whata Ora has now applied to the Authority for a determination fixing the provisions of a new collective agreement. Of course filing an application and succeeding in the application are not the same thing.

To succeed Te Whata Ora will first need to demonstrate that the ASMS has been breaching its obligation to bargain in good faith to an extent that “was sufficiently serious and sustained as to significantly undermine the bargaining”. Even if that substantial barrier can be overcome it must also show that (a) “all other reasonable alternatives for reaching agreement have been exhausted” and (b) that fixing the provisions of the collective agreement is the only effective remedy for the party or parties affected by the breach of the duty of good faith.”

I suppose Te Whata Ora could be innovative in its legal approach and argue that its own actions meet the threshold of significantly undermining the bargaining - but that might undermine its position that all reasonable alternatives have been exhausted!

Successful applications to fix a collective agreement are very rare – indeed only one I am aware of concerning First Union and Jacks Hardware and Timber Ltd which traded under the Mitre 10 brand. The details of that dispute are summarised in Jacks Hardware and Timber Limited v First Union Incorporated [2019] NZEmpC 20. In that case bargaining had been initiated in 2013 and the application was filed in 2018 almost five years later. Jacks engagement in bargaining appeared to be perfunctory at best and largely concerned with preventing the inclusion of any pay scales in the proposed collective agreement. An earlier decision by the Court had summarised the position as follows:

“Jacks Hardware did not return to bargaining in February 2015 other than ‘…in a very restricted, artificial and strategic way’. The company’s bargaining consisted of a request for a concession and, when that was declined, to declare it was not prepared to continue bargaining.”

In the 2019 decision the Court concluded that “Jacks Hardware’s behaviour illustrated that it was delaying and going through the motions of bargaining, a practice commonly known as surface bargaining” and that this conduct met the statutory test of significantly undermining the bargaining.

The facts of the Jacks case suggest that Te Whata Ora will have to show a very strong case to succeed – words like ‘significantly’, ‘serious and ‘sustained’ indicate that the intention of the Act is to deter egregious conduct during bargaining, not to provide what is effectively arbitration if bargaining reaches an impasse. It is also a significant call by Te Whata Ora to accuse the ASMS of serious bad faith in bargaining. The ASMS appears to have been assiduous in consulting its membership and in ensuring membership support as bargaining and strike action take place.

If the facts of the bargaining process as stated by ASMS in the press release criticising Te Whata Ora’s application are correct, and there is no reason to suspect otherwise, the case for fixing would seem to come down to the ASMS’s refusal to accept the bargaining offer made by Te Whata Ora. To find that this conduct amounted to serious and sustained bad faith that had significantly undermined the bargaining would require a massive shift in the way the Act has been interpreted and one that would inevitably be challenged in further litigation. That, to put it mildly, it would be unlikely to resolve the dispute and to the contrary would be more likely to further widen the gap between senior doctors and Te Whata Ora.

Until the Courts decide otherwise I will stick with my view that “This provision is not relevant to the current dispute.”