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Posts Tagged ‘Employment Court’

The consequences of tax-cuts – worker exploitation?

31 October 2015 10 comments

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Fun Fact #1

Since 1986, there have been no less than seven tax cuts in New Zealand;

1 October 1986 – Labour

1 October 1988 – Labour

1 July 1996 – National

1 July 1998 – National

1 October 2008 – Labour

1 April 2009 – National

1 October 2010 – National

Fun Fact #2

John Key says he supports New Zealanders paid higher wages. In fact, he stated  that desire in 2007, and repeated it in  2008, 2009, 2010, 2011, and 2012;

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We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

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We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008

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We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.”   – John Key, 6 September 2008

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I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009

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Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010

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We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011

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The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more  jobs and higher incomes.” – John Key, 21 December 2011

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We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” –  John Key, 19 April 2012

Mr Key has not repeated those statements since April 2012.

Fun Fact #3

The gender pay gap in New Zealand has worsened, from 9.9% last year to 11.8% this year;

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Timeline

2012

Kristine Bartlett and the Service and Food Workers Union lodge a claim with the Employment Relations Authority, alleging Ms Bartlett’s employer Terranova Homes and Care Ltd was in breach of the Equal Pay Act 1972.

November 2012

Ms Bartlett’s case referred to the Employment Court as it raises an important question of law.

June 2013

A preliminary Employment Court hearing held on questions of law.

23 August 2013

Landmark ruling on equal pay welcomed

Unions are hailing an Employment Court decision which allows a female rest home caregiver to argue she is underpaid because she is in a female-dominated industry.

Hutt Valley woman Kristine Bartlett is arguing her employer Terranova Homes is violating equal pay for equal work legislation, saying she would get more money if she was not working in an industry dominated by female staff.

The Employment Court held a preliminary hearing after Terranova Homes argued the court could only compare staff within its own workplace and not look at other workplaces.

The three court judges say the legislation makes specific provision for work predominantly performed by women.

The law says pay rates must be the same as male employees with the same, or substantially similar, skills, responsibility and service performing the work under substantially similar conditions and with substantially similar effort.

The judges said there was no way gender discrimination in pay could be removed if they could not compare pay rates more widely.

January 2014

Terranova appealed this ruling to the Court of Appeal.

February 2014

A decision on a landmark pay equality case has been reserved by the Court of Appeal.

The Employment Court last year found in favour of Lower Hutt caregiver Kristine Bartlett, who argued her $14.32 hourly pay rate was a result of gender discrimination under the Equal Pay Act.

The ruling – which paves the way for pay equality in the female-dominated aged care sector – has been challenged in the Court of Appeal by Ms Bartlett’s employer, Terranova Homes. The two-day hearing finished yesterday with the decision by Justices Mark O’Regan, Lynton Stevens and Christine French reserved.

October 2014

The Court of Appeal has supported an Employment Court decision which ruled that a Lower Hutt rest home worker should receive pay parity with other equivalent sectors.

Kristine Bartlett won her landmark Employment Court case last year – arguing that being paid less than 15 dollars per hour, despite working in rest homes for over 20 years, was discriminatory. Her employer, Terranova Homes and Care, took the issue to the Court of Appeal. But the Appeal Court has dismissed the appeal, saying the language and purpose of the Equal Pay Act back up the decision by the Employment Court.

November 2014

Today the New Zealand Aged Care Association will appeal to the Supreme Court on behalf of TerraNova Homes and Care Limited in their case with the Service and Food Workers’ Union and Kristine Bartlett.

“This case has vast implications for all New Zealanders and we felt compelled to have the highest court in the land settle the questions around the Equal Pay Act 1972 once and for all,” said Martin Taylor, CEO of the NZACA.

“In handing down its recent judgement, the Court of Appeal said the decision was finely balanced with strong arguments favouring both sides. We believe the issue must be seriously looked at and tested again.

22 December 2014

Supreme Court denies Terranova leave to appeal in landmark pay equity case

The Supreme Court has denied aged care provider Terranova Homes and Care, at the centre of a landmark court case paving the way for gender pay equity, leave to appeal the ruling.In October the Court of Appeal dismissed an appeal by Terranova Homes against an earlier Employment Court ruling backing Lower Hutt rest home worker Kristine Bartlett’s claim that women care workers’ low pay was discriminatory. She took a case against her employer, arguing her $14.32 an hour pay rate was a result of gender discrimination under the Equal Pay Act.

The Service and Food Workers Union also made a claim on behalf of 15 other caregivers employed by the company, asking for a statement of the general principles to be observed for implementing equal pay.

In a Supreme Court decision out this afternoon, the judges said it considered the company’s appeal premature.

20 October 2015

Equal pay on the way for women?

The government has set up a taskforce to look into pay equity issues, which could lead to a change to the current law.

Minister for Workplace Relations and Safety Michael Woodhouse said unions and employers had agreed to a working group to establish principles for dealing with pay equity claims.

It had been prompted by a recent Court of Appeal decision on pay rates in the aged care sector, which found women in predominantly female workforces were paid less.

Early 2016

Case scheduled to go before the Employment Court  to early 2016 (dates to be determined). 

(Acknowledgement: Much of the above Time-line, with  exceptions, is re-published from the New Zealand Aged Care Association.)

 

The Case: exploited labour

The case of Kristine Bartlett  is a relatively simple one. For twentytwo years working-experience in rest-home facilities she earned just barely above minimum wage. Since the 1990s, her wages have risen by $5.

Ms Bartlett’s profession is predominantly female, and like many female-dominated professions, it is paid less than male-equivalent jobs.

As Fairfax media Christie Hall wrote  on 19 January;

On  23 August 2013,  the Employment Court ruled that Ms Bartlett’s was in fact underpaid because she worked  in a female-dominated industry. (The document is well-worth reading and provides sound, rational, and carefully-constructed argument for advancing equal pay for women.)

Subsequent Court decisions have upheld the Employment Court (see Timeline above).

The NZ Aged Care Association (NZACA) has expended large sums of money on legal action to thwart  the cost of raising wages for aged-care workers. NZACA fears the increased cost of a ballooning wages-bill impacting on it’s members, which has traditionally relied on low-paid labour to operate.

In October 2014, in a press release published on nzdoctor.co.nz, NZACA stated;

Unfortunately the Government subsidy for aged care is not enough for providers to make a profit. Over the last decade, 200 aged care facilities have closed primarily for financial reasons. The majority of these facilities relied on the government’s subsidy for their revenue.

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The existing aged care sector cannot afford to increase all aged care worker’s wages at an estimated cost of $120 – $140 million alone – the sector will need increased Government subsidies to prevent further closures of our aged care facilities.

In an undated statement on NZACA’s website, the Association states;

The Government contract undervalues the worth of caregivers working in the private aged care sector. A caregiver working in a District Health Board geriatric hospital receives on average $17.50 an hour compared with an average hourly rate of $15.30 in our sector.

NZCA has been lobbying Government for many years to put more money into this sector which cares for New Zealand’s most vulnerable citizens.

And in November 2014, NZACA’s CEO, Martin Taylor, stated;

“Another reason why we need to appeal is that there are hundreds of rest homes operated by individuals and community trusts from Kaitaia to Bluff who have told us they would close if wages went up significantly and funding stayed the same.

When you understand this reality we have no option but to appeal, despite everyone agreeing caregivers are worth more.”

On 23 December last year Service and Food Workers Union National secretary, John Ryall, said it was about time the Government  took responsibility to achieve gender pay equity;

“The Government is the sector funder and it is really up to it to decide whether it wants a resolution to the long standing pay equity issue,” he said.

Encouraging National to act will be no easy task to achieve.

Bronwen Beechey, writing for Fightback! on 17 April 2015, pointed out National’s apalling track record when it came to implementing equal pay legislation;

The Employment Equity Act was passed in 1990, but repealed within months after the National Party came to government.

In 2009, the current National government abolished the Pay and Employment Equity plan of Action and the Pay and Employment Equity Unit that had been set up in the Department of Labour in 2004.

A cynic would suggest that low wages assist National to reduce the amount it has to pay to subsidise aged-care workers. It is providing a service ‘on-the-cheap’, in a way similar to  fast-food chains employing staff at minimum wage, to produce  high-carb, fat-laden, ‘fast food’.

In fact, it would not be the first time that National has been exposed as supporting low wages – despite Key’s pious utterances otherwise.

Three and a half years ago, on  10 April 2011, on TVNZ’s Q+A, English made his now-infamous comments justifying a low-wage economy;

“Well, it’s a way of competing, isn’t it? I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well…

… we need to get on with competing with Australia. So if you take an area like tourism, we are competing with Australia. We’re trying to get Australians here instead of spending their tourist dollar in Australia.”

Three years later, on 30 July 2014, John Key appeared to ‘forget’ his earlier pronouncements on increasing wages when he responded to a question in Parliament from David Cunliffe;

Hon David Cunliffe: Will the Prime Minister support the pay increase for the quarter of a million workers who would directly benefit from Labour’s minimum wage changes, which will provide a significant boost to the economy through boosting workers’ spending power?

Rt Hon John Key: In a word, no. The reason for that is I am not so irresponsible that I would say to 6,000 New Zealanders that they are losing their jobs because the Labour Party is polling at 25 percent—

No wonder E Tu  union spokesperson, Alistair Duncan, was wary of how National would respond to the Court rulings, as he said on 21 October;

“This is a well-timed and very smart move – if we can deliver genuine equal pay, it will be a very good thing.  But it’s not certain and we now need to work very hard to make sure we get equal pay for equal value.”

Meanwhile, as aged-care workers (and low-paid women workers in other industries) have had their case validated by the Courts, employers are not so happy. A new ‘bogey-man’ was erected by the Employers and Manufacturers Association CEO;

Employers and Manufacturers Association chief executive Kim Campbell said the task force would need to establish clear terms of reference, because comparing the relative value of different jobs was complex.

He said any decision to boost pay rates in some industries would come with a cost.

“The government has the greatest interest in this because they’re paying for most of the aged care and hospital workers and they must be concerned that if you increase their salaries, people’s taxes may go through the roof.”

This argument that, by increasing wages, people’s taxes “may go through the roof” is not just over-the-top scare-mongering – but is instructive of the mentality of individuals like Kim Campbell.

The argument that Campbell is putting forward is that taxpayers are entitled to cheap labour.

Is this the inevitable consequence after seven tax cuts, spanning twentynine years?

Because if reduced tax revenue has resulted in central government being unable to pay fair wages for workers (whether as state sector employees or subsidised workers in the private sector), then we have created a rod for our own backs.

Regardless whether sufficient tax revenue exists or not, Campbell’s suggestion that taxpayers are somehow justified in expecting an exploited workforce is odious. It is attempting to re-create a quasi-modern-day slave work-force.

The Employment Court addressed this very issue in it’s 22 August 2013 Judgment:

History is redolent with examples of strongly voiced concerns about the
implementation of anti-discrimination initiatives on the basis that they will spell
financial and social ruin, but which prove to be misplaced or have been acceptable as
the short term price of the longer term social good. The abolition of slavery is an old
example, and the prohibition on discrimination in employment based on sex is both a
recent and particularly apposite example. [pg 32]

If successive governments were foolish in cutting taxes (usually as election bribes) to such a level that the State can no longer afford to pay for services New Zealanders expect as of right, then the solution is crystal clear: raise taxes.

Or go without.

I doubt many National-voting New Zealanders will happily contemplate a future in their dotage without a workforce of aged-care staff who are remunerated sufficiently to wipe the spittle from their wrinkled chins; change their faeces-and-urine-soaked underwear; and all the other myriad tasks associated with necessary good care.

Just how much do New Zealanders want aged-care in their twilight years?

If we do, we should be prepared to pay for it.

National Prompted to act

The successful court cases supporting Kristin Bartlett’,  equal-pay case has prompted National to finally move on the problem;

The government has set up a taskforce to look into pay equity issues, which could lead to a change to the current law.

Minister for Workplace Relations and Safety Michael Woodhouse said unions and employers had agreed to a working group to establish principles for dealing with pay equity claims.

It had been prompted by a recent Court of Appeal decision on pay rates in the aged care sector, which found women in predominantly female workforces were paid less.

Mr Woodhouse said there were other cases before the courts.

“We believe the most efficient way to deal with that, and to step back and take a look at what the principles for pay equity might look like is to get this working group together, and I’m very pleased we’ve been able to do that.”

Unions had agreed to put legal action on hold until March 2016 to allow the working group to proceed, he said.

This problem could never be resolved without government involvement. By subsidising aged-care workers, it is in effect, a secondary employer, and therefore has responsibilities to make good an untenable and unfair situation.

Otherwise, if National cannot resolve this decades long problem, more radical and direct solutions need to be considered.

Possible solutions

  1. Where aged-care facilities are non-profit, increase subsidies paid directly to workers or change their employment status to State employees, with similar pay rates, benefits, and protections.
  2. Where an aged-care company, are profit-making ventures that return a dividend to shareholders, such Oceania (45 facilities), Ryman (25 facilities), and Radius (19 facilities), they should be made by law to increase the wages of their staff first and foremost.
  3. Nationalise the aged-care industry. Looking after the elderly should not be an “industry” where the profit motive (in many instances) is the guiding principle. This should be no more acceptable than having primary schools or hospices run as businesses.

If private enterprise cannot pay it’s workers a fair wage, as well as operate effectively, then the State has a responsibility to intervene and assume a more direct role.

Neo-liberal activists and fellow-travellers may balk at such a suggestion, but they should consider one important factor they may have forgotten: we all grow old eventually. Including free-marketeers.

Appendix1

Legislation.

Equal Pay Act 1972

Court may state principles for implementation of equal pay
  • The court shall have power from time to time, of its own motion or on the application of any organisation of employers or employees, to state, for the guidance of parties in negotiations, the general principles to be observed for the implementation of equal pay in accordance with the provisions of sections 3 to 8.

Appendix2

Employment Court.

[108]

Reference was also made to the likely high costs of adopting a broader
approach, if it leads to a significant wage increase for the plaintiff members.
The Aged Care Association made the point that it receives funding from the Government,
via the Ministry of Health, on a per bed basis and that it would not be able to absorb
any increase. Although the Ministry was invited to appear as intervener it apparently
declined to do so. Accordingly, we did not have the benefit of hearing from it. In
any event, it is apparent that the Government of the day, in promoting the Bill, was
aware of the potential financial implications of the legislation. The Minister
of Labour made the point that female industries would feel the greatest impact in terms
of cost, a point later echoed by the Hon E S F Holland. [pg 31]

[109]

Further, and more fundamentally, the expressed concerns relating to cost
overlook one important point, namely the unquantifiable cost (including societal
cost) of adopting an approach which may have the effect of perpetuating
discrimination against a significant and vulnerable group in the community simply
because they are women, doing what has been described as undervalued women’s work. [pg 32]

[110]

History is redolent with examples of strongly voiced concerns about the
implementation of anti-discrimination initiatives on the basis that they will spell
financial and social ruin, but which prove to be misplaced or have been acceptable as
the short term price of the longer term social good. The abolition of slavery is an old
example, and the prohibition on discrimination in employment based on sex is both a
recent and particularly apposite example. [pg 32]

Employment Court – Judgment: 22 August 2013

Appendix3

Employment Court.

Never let it be said that the Employment Court is bereft of a sense of humour, as this comment suggests;

[31]
The purpose of the Equal Pay Act is plain, and is reflected in its long title. [p 9]

Appendix4

On 2 April, Aged Care Association’s CEO, Martin Taylor, left his role at NZACA and assumed a new position  as Labour leader, Andrew Little’s,  director of research and policy. The nzdoctor.co.nz press release refers to Taylor’s role in the Kristin Bartlett equal-pay case.

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References

Ministry for Women: Gender pay gap

Radio NZ: Caregivers back equal pay campaign

New Zealand Aged Care Association: Equal Pay Case

TV3 News: Landmark ruling on equal pay welcomed

NZ Herald: Landmark pay equality case decision reserved

Scoop media: Court dismisses appeal by Hutt rest home, supports decision on equal pay

Scoop media: TerraNova Case Appealed To Supreme Court

Scoop media: Supreme Court denies Terranova leave to appeal in pay case

Radio NZ: Equal pay on the way for women?

Radio NZ: Landmark ruling for women

Fairfax media: Where next for equal pay

Nzdoctor.co.nz: Understanding caregiver wages in aged residential care

Fightback!: Fight for Equal Pay continues

TVNZ Q+A: Guyon Espiner interviws Bill English (April 2011)

Parliament: Hansards – Wage Rates – Growth, Inequality, and Minimum Wage

Legislation: Equal Pay Act 1972

Employment Court: Judgment: 22 August 2013

Nzdoctor.co.nz: Andrew Little headhunts Aged Care boss Martin Taylor

Additional

NBR:  National bows to minimum wage myths – ACT

NZ Herald: Battle to close the pay gap

Previous related blogposts

“It’s one of those things we’d love to do if we had the cash”

Roads, grandma, and John Key

John Key’s track record on raising wages – 4. Rest Home Workers

Aged Care: The Price of Compassion

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This blogpost was first published on The Daily Blog on 26 October 2015.

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John Key’s track record on raising wages – 3. Ports of Auckland Dispute

11 November 2012 5 comments

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Continued from: John Key’s track record on raising wages – 2. The 90 Day Employment Trial Period

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3. Ports of Auckland Dispute

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“The average income has been about $90,000, so it hasn’t been a badly-paid place. But the problem is flexibility when ships arrive and when staff get called out, how they can cope with that.” – John Key, 12 March 2012

See: Jackson pulls back from port comments

Putting aside from the myth of  POAL maritime workers earning $90,000 – so what?

Even if it were true (which is doubtful) – POAL has never released the workings of how they arrived at that sum, despite requests), isn’t such a good wage precisely what Dear Leader was advocating in his quotes above?

POAL management sought to reduce costs;  casualise their workforce; and compete with Ports of Tauranga for shipping business. Unfortunately, competing on costs would, by necessity, involve driving down wages.

There is also a high degree of price-fixing by shipping cartels, as was pointed out by the Productivity Commision in April,

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Full story

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Rather than supporting the workers, Dear Leader bought into a situation where international shipping companies were playing New Zealand ports off against each other, to gain the  lowest possible port-charges.  Even local company, Fonterra, was playing the game.

Here we have a situation where New Zealand workers were enjoying high wages – something John Key insists he supports – and yet he was effectively allowing international corporations to create circumstances where those wages could eventually be cut and driven down.

As with the “Hobbit Law”, our Dear Leader appears to pay more heed to the demands of international corporate interests than to fulfilling his pledges to raise wages.

Precisely how does this raise wages, as per Dear Leader’s promises?

Next chapter: 4. Rest Home Workers

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Weak Comments of the Week – 31 March

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This week, two comments by public figures vie for top placing as the Foot in Mouth, Weak Comment of the Week. Both are so unbelievably unconvincing that it speaks volumes about how these people view the public as fools…

Candidate #1: Tony Gibson, CEO of Ports of Auckland Ltd (POAL)

However, Ports of Auckland chief executive Tony Gibson said the back down was an attempt to reduce pressure on the supply chain, where the company was “acutely aware” that customers and businesses were hurting. ” – Source

POAL has listened to the wishes of the Court, as well the views of the Mayor and all other stakeholders”, Gibson said. ” – Ibid

Oh gosh, Tony, you think ?!

The port workers collective employment agreement  expired on 30 September 2011, and formal negotiations had been ongoing since 5 August 2011 – over half a year!

In that time, POAL announced an agenda to casualise the workforce ; contract out jobs;  workers have been forced to resort to strike action to secure their jobs and conditions; and the company  exacerbated the crisis with needless, expensive  lockouts.

Even the Employment Court found that the port workers had an “arguable case“.

In all that time, as weeks turned into months, and the intransigence of POAL Board and management worsened, importers and exporters were bleeding money,

Weekly trade worth around $27 million – and $90,000 to $100,000 a week for the port – will instead be rerouted through the ports of Tauranga and Napier from the end of the month.” – Source

Has it taken six months for Tony Gibson to recognise that ” customers and businesses were hurting “?

Nah, rubbish.

Gibson, Pearson, et al, have endured an embarressing bollicking from the Employment Court decision that their lockout was illegal; they had most likely broken the law (vis-a-viz the Employment Relations Act) in terms of bargaining in good faith; and that the Maritime Union had an “arguable case”.

Claiming to be suddenly concerned for the welfare of Auckland businesses and  that  ” the back down was an attempt to reduce pressure on the supply chain ” is disingenuous.

And just a little bit darkly cheeky.

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Candidate #2: Michelle Boag, ex National Party President

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This one is a ‘classic‘, and I think most folk will understand why I had a tough time trying to determine whether Gibson or Boag’s comments merited the most derision,

One of her advisers, anticipating that a confidential settlement might be reached, said it would be wise to include all the people who were aware of the dispute so that if any of them asked afterwards, Bronwyn would not be accused of breaching confidentiality. ”  – Source

The comment refers to Bronwyn Pullar’s letter to her insurance company Sovereign, seeking $14 million in compensation for a head accident she suffered ten years ago. (I make no judgement on this matter. Personal experience with other individuals has shown me that head injuries can create long-lasting mental and emotional effects.)

However, in Ms Pullar’s letter – which yet again was leaked to the media (TVNZ’s “Close Up” programme) – she listed twentyeight people  as members of her supposed “support/advisory team” including Prime Minister John Key, ex-Prime Minister  Jenny Shipley, National Party fundraiser Selwyn Cushing,  and ex-minister Wayne Mapp.

John Key has steadfastly denied any involvement in being  included in the list.

Wayne Mapp and Selwyn Cushing have admitted involvement.

Now, for Ms Boag to suddenly claim that ” it would be wise to include all the people who were aware of the dispute so that if any of them asked afterwards, Bronwyn would not be accused of breaching confidentiality ” – is simply bizarre. It makes no sense.  It is clutching at straws and offering the most feeble excuse imaginable to explain why Ms Pullar’s letter  required 28 high-powered New Zealanders to have their names included in her letter.

In short; bollicks.

Anyone with two inter-connected, firing, neurons would understand that listing 28 prominent individuals would be done for one reason only; to add weight to Ms Pullar’s claim against Sovereign Insurance. In effect, she’s saying, “Look here! I know all these High Ups! Don’t mess with me or they may do ‘XYZ’ to you! So gimme the cash and I’ll go away.”

That would tie in with allegations (unsubstantiated) that she requested two years’ worth of benefits from ACC “to move forward”.

So, no, Ms Boag. Your rational for why those 28 names were included in Ms Pullar’s letter is nonsense. More than that, it’s an insult to our intelligence.

If you’re going to bullshit us, can you at least make it convincing?

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Employment Court Upholds Maritime Union Injunction!

29 March 2012 6 comments

Announced today, the Employment Court has judged in favour of the Maritime Court, seeking an injunction against Ports of Employment Ltd’s  plans to contract out 297 jobs currently held by union workers,

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MARITIME UNION OF NEW ZEALAND INC V PORTS OF AUCKLAND LIMITED

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NZEmpC AK [2012]
NZEmpC 54 [27 March 2012]

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IN THE EMPLOYMENT COURT
AUCKLAND

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[2012] NZEmpC 54
ARC 13/12
ARC 17/12

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IN THE MATTER OF an application for declaration, proceedings removed from Employment Relations Authority
AND IN THE MATTER OF applications for interim injunctions
BETWEEN MARITIME UNION OF NEW ZEALAND INC Plaintiff
AND PORTS OF AUCKLAND LIMITED Defendant

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Hearing: 27 March 2012 (Heard at Auckland)
Counsel: Mr Carruthers QC, Mr Cranney and Mr Mitchell, counsel for plaintiff Mr Haigh QC, Mr McIlraith and Ms Dunn, counsel for defendant
Judgment: 27 March 2012
Reasons: 29 March 2012

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REASONS FOR ORAL INTERLOCUTORY JUDGMENT
OF JUDGE B S TRAVIS

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[1] These are my reasons for issuing interim injunctions on 27 March 2012 in the following terms:

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(i) The defendant will take no further steps to advance or implement the proposal to make the plaintiff’s members redundant.
(ii) The defendant will not dismiss the plaintiff’s members.
(iii) The defendant will not employ or engage Drake New Zealand Ltd or Allied Workforce Ltd or any other person to perform the work of striking or locked-out employees in breach of s 97 of the Employment Relations Act 2000.
(iv) The defendant will instruct Drake New Zealand Ltd and Allied Workforce Ltd and any other contractor employed or engaged by the defendant to cease any form of advertising, training or recruitment or any form of preparation for those activities on behalf of the defendant or otherwise.
(v) The defendant will not make any statement to, or which could, encourage any union member to seek or accept employment with the contractors identified in (iv) above.
(vi) In the event that the defendant intends to employ or engage any other person to perform work covered by the collective agreement in dispute, it will give the plaintiff 48 hours’ notice to enable the plaintiff to apply for relief.
[8] The defendant will not take any further steps in relation to applications for voluntary redundancy until 5pm on Friday 30 March 2012 or further order of the Court.

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[2] The plaintiff union (MUNZ) has made two applications for interim injunctions against the defendant. The first in time was filed on 13 March 2012 and sought interlocutory injunctions, in broad terms, to prevent the defendant, Ports of Auckland Limited (POAL), from proceeding to contract out stevedoring and other work at the ports of Auckland (the contracting out injunctions). The contracting out injunctions were set down for hearing on 22 March. They were then adjourned on the basis of undertakings offered to the Court by the defendant, which were accepted by the plaintiff on 21 March, and are recorded in a minute of 22 March. It was agreed that the interlocutory application for the contracting out injunctions could be brought on at short notice by either party.

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[3] The plaintiff union applied on 23 March to bring on the contracting out injunctions for hearing. This was on the grounds that the undertakings offered to the Court by the defendant and recorded in the minute of 22 March had been breached. The plaintiff sought more effective oversight by the Court of the defendant’s conduct. The injunction application was therefore set down for hearing on Tuesday 27 March.

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[4] At that hearing, the defendant consented to the plaintiff’s application but the Court was required to be satisfied that it had the jurisdiction to issue the interim injunctions and that this was a proper case for the exercise of its discretion. Mr Carruthers, counsel for the plaintiff, provided his written submissions to the Court and the defendant. These contained references to a schedule of documents from the bundles of documents obtained on disclosure and filed in Court by the plaintiff. It was agreed that I should not have regard to those documents until the defendant had had the opportunity to respond to them, which it would do by midday on Thursday 29 March. As I shall indicate, I was satisfied from the balance of Mr Carruthers’s submissions that this was a proper case for the issuance of the interim injunctions as consented to by the defendant.

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[5] The second application for interlocutory injunctions was to restrain what were allegedly unlawful lockouts imposed by the defendant on 22 March (the lockout injunctions). That application was filed on 23 March and agreed to be heard at the same time as the contracting out injunctions. The second application was adjourned by consent until Friday 30 March 2012 on the basis of the defendant’s offer to pay all permanent and P24 union employees (a category covered by the expired collective agreement) who were available for work, for the period from 3pm on Thursday 22 March when the strike notices were lifted, for their guaranteed shifts under the expired collective agreement, until 3pm on Friday 30 March 2012. To determine which union employees were available for work, those union members would need to present themselves at 3pm on Thursday 29 March 2012 at a place within one kilometre of the Port nominated by the defendant, and which was to be advised to the plaintiff by 9am on Wednesday 28 March.

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Factual background

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[6] The factual background which I am about to set out is not, for the most part, in dispute and is based on the current pleadings. It should be noted, however, that although leave may be required to do so, as the substantive matter has been set down, either party may apply to amend its pleadings so the admissions on which I have relied for present purposes only, may not be those on which the substantive proceedings are heard.

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[7] Three classic tests are to be applied to the question of whether an interlocutory injunction should issue. The first is whether the plaintiff has an arguable case. The second test is where the balance of convenience lies between the parties before the substantive matter can be heard and determined. Because the grant of interim relief is discretionary, the third test requires the Court to stand back from the detail of the first two tests and to ask where the overall justice of the case lies at the interlocutory stage.

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[8] The plaintiff is a registered union. The defendant was established under the Port Companies Act 1988 and operates the port at Auckland. The defendant employs approximately 297 of the plaintiff’s members (the union members), of whom approximately 235 are employed as stevedores. Others are engineers and tradespersons. The plaintiff and the defendant are engaged in collective bargaining to settle a new collective agreement to replace the collective agreement which expired on 30 September 2011. The expired agreement continues in force, pursuant to s 53 of the Employment Relations Act 2000 (the Act). The bargaining commenced on 6 September 2011.

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[9] One of the issues discussed, but yet to be settled in the bargaining, is a proposal by the plaintiff that work covered by the new collective agreement not be contracted out during the term of the agreement. The expired collective agreement contains a clause which deals with contracting out but there is a dispute as to whether it has been properly complied with by the defendant.

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[10] On 9 January 2012, it is alleged that the defendant issued a public press statement and advised the plaintiff that the defendant proposed the introduction of a contracting out model which might lead to the redundancy of the union members (the contracting out proposal). All subsequent dates refer to events in 2012.

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[11] On 7 March, the defendant informed the plaintiff that it had decided to implement the contracting out proposal and stated that this would result in the termination of the union members’ employment and their reengagement with new employers (the contractors) from whom proposals were being sought by the defendant. The defendant referred to a six week period of consultation prior to the
defendant issuing notices of termination. The defendant alleges that stevedores employed by it, including the union’s members, have the opportunity to apply for employment with the selected contractors, that it has consulted with the union on these matters and alleges that the union has refused to engage on these issues. These matters are in dispute.

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[12] On 9 March, it is alleged that the plaintiff received a media release from the defendant which stated that it had signed contracts with Drake New Zealand Limited (Drake) and Allied Workforce Limited (AWF) following its decision “to introduce competitive stevedoring at its Fergusson and Bledisloe Container Terminal operations” and that a further press release naming the third company that would be working with the defendant was expected shortly.

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[13] The affidavits filed in support of the interim injunction stated that the union has received no information as to the terms of the contracts between the defendant and the selected contractors. The affidavits also deposed that the union understands that its members are going to be encouraged to make applications for positions with the new contractors. In support of those allegations, references were made to statements made by the chairman of the defendant, Richard Pearson, in the media in which he was alleged to have said that the union members needed to apply for jobs with the new contractors.

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[14] Affidavits from three union members have deposed that they are permanent stevedores who have been employed by the defendant for up to 15 years, have economic commitments to their family and are torn between wanting a collective agreement between their union and the defendant and their concerns that they might have no option but to apply for employment with the contractors. The affidavit of Russell Mayn, the secretary/treasurer of the Auckland branch of the plaintiff union, has expressed the view that the union membership will be torn between the need to keep working even with contractors and their wish to be employed under a collective agreement and that since the announcement of 9 January, the collective bargaining has been undermined by the threat of the contracting out proposal. Mr Mayn also deposes that the active recruitment of stevedores for the contracting companies would allow such employees to be engaged to perform the work of striking workers
during the strikes which, at the time the affidavits were sworn, were currently in place and were to continue. The strike notices were withdrawn on 22 March.

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[15] On 21 March, the agreement referred to above (at [2]) was reached between the parties which allowed the application for the lockout injunctions to be adjourned sine die to be brought on at short notice, if sought by either party. It also allowed for the substantive hearing, set down to commence on 26 March for five days, to be adjourned sine die on the same basis. This agreement was reached on the basis of the undertakings given by the defendant in the following terms:

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The defendant makes the following undertakings for a period of one month from Thursday 22 March 2012 and thereafter by agreement or further order of the Court:

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(i) The defendant will take no further steps to implement the proposal to make the plaintiff’s members redundant.
(ii) The defendant will not dismiss the plaintiff’s members.
(iii) The defendant will not employ or engage Drake Personnel Limited or Allied Workforce Limited, or any other person to perform the work of striking employees in breach of s 97 of the Employment Relations Act 2000 and will take steps to instruct Drake Personnel Limited, Allied Workforce Limited and any other potential contractor not to undertake any recruitment or training related to the contracting out of work at Ports of Auckland.
(iv) In the event that the defendant intends to employ or engage any other person to perform work covered by the collective agreement in dispute, it will give the plaintiff 48 hours’ notice to enable the plaintiff to apply for relief.

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[16] The plaintiff’s affidavits set out statements allegedly made by Mr Pearson on 22 March in radio and television interviews to the effect that there had been “no U-turn. You could call it a route deviation if you have to”. He also allegedly stated on television on 22 March that the defendant was:
… encouraging our staff that’s on strike still to come and apply for jobs with the contractors. So there’s no change there. The board, we’ve made no change in our view, of the benefits of contracting and it’s the right decision for the Port.

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[17] Other examples are given, including an interview allegedly given at 7.16am on 22 March on Newstalk ZB Auckland during the Mike Hosking Breakfast programme, in answer to a question as to whether there had been a U-turn, Mr Pearson stated:
… we are encouraging our staff that are actually still on strike, if they want to apply for jobs at the Port, come and apply, there’s no change to that process at all.

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[18] The plaintiff also provided an affidavit which detailed enquiries allegedly made of Drake and AWF which suggested that the staff of those companies, responding to enquiries on 21 and 22 March, were unaware of any instruction from the defendant to cease recruitment of staff for work at the defendant’s premises. I note that Mr Haigh, counsel for the defendant, gave an undertaking in open Court on 27 March confirming that the defendant had instructed both Drake and AWF to cease any form of advertising, training or recruitment or any form of preparation for those activities on behalf of the defendant, as it had undertaken so to do. I unhesitatingly accepted Mr Haigh’s undertaking, as did Mr Carruthers.

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[19] At around midday on 22 March, the members of the union voted to end their strike currently in place, which was to end on 23 March, and voted to end the two week strike that would have commenced on 23 March and have concluded on 6 April 2012. The union immediately wrote to the defendant advising it that the strikes ended immediately and that it was the union’s expectation “that members will be rostered from second shift today commencing at 3pm.”

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[20] Mr Mayn deposes that the union members had an expectation that some members would be able to return to work at the commencement of the second shift at 3pm on 22 March. He also deposes that since that time, members of the union have not been allowed to return to work and that the defendant invited the plaintiff to attend a meeting to discuss the issue on 23 March. He also deposes that at around midday on 22 March, the defendant served a lockout notice on the plaintiff advising of a complete and continuous discontinuance of employment from 12.01 am on 6 April until its demands were complied with.

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[21] The issues relating to the lockout notice and the defendant’s alleged refusal to allow the union employees to return to work on 22 March will be dealt with in the hearing on 30 March.

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Arguable case

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[22] Counsel for the defendant has advised the Court that, whilst the defendant does not accept that it has breached any of the undertakings recorded in the Court minute of 22 March, it nevertheless consented to the orders sought by the plaintiff in the contracting out injunctions.

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[23] The plaintiff has indicated that it intended to amend its application, in relation to the contracting out injunction, to seek a further order that the defendant not progress any voluntary redundancies. This is based on a letter allegedly sent to members of the union on 23 March by Mr Gibson (Chief Executive of POAL), which refers to the handling of enquiries from employees seeking voluntary severance. Without objection, the plaintiff has been granted leave to amend its contracting out injunctions application to include reference to the allegations about voluntary severance and this matter will be dealt with on 30 March. In the meantime the situation will be covered by the last interim injunction set out in [1] above.

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[24] I find that there is a seriously arguable case that the actions of the defendant in allegedly threatening to and then deciding to contract out the work on which the union employees were engaged under the expired collective agreement whilst collective bargaining was on foot for a new collective agreement was likely to undermine and arguably has undermined the bargaining. It will also, arguably, undermine the bargaining in the future. It is therefore seriously arguable that those actions have breached s 32(1)(d)(iii) of the Act. This section provides that the duty of good faith in s 4 of the Act requires a union and an employer bargaining for a collective agreement to do a number of things. These include the requirement in subsection (d)(iii) that the union and the employer:
must not undermine or do anything that is likely to undermine the bargaining or the authority of the other in the bargaining.

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[25] It is contended by the plaintiff that the proposal and the decision to contract out have caused a fear of dismissals among union members and has created pressure on their families and thereby undermined the bargaining for the new collective. There is evidence in the affidavits before the Court which makes this arguable.
[26] Mr Carruthers’s submissions noted that the issue of mass dismissals of the workforce during bargaining has been addressed only briefly in the s 32(1)(d)(iii) context and was left open by Chief Judge Colgan in Eastern Bay Independent Industrial Workers Union 1995 Inc v Norske Skog Tasman Ltd.1 It was not raised in New Zealand Amalgamated Engineering Printing & Manufacturing Union Inc v Carter Holt Harvey Ltd2 and he submitted that the restructuring in that case was allowed to continue in parallel with bargaining because contracting out was, unlike the present case, not an issue in the bargaining.

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[27] Mr Carruthers submitted that, even under the Employment Contracts Act 1991, mass dismissals for bargaining purposes had been found to be unlawful in McCulloch v New Zealand Fire Service Commission3 and New Zealand Seafarers’ Union Inc v Silver Fern Shipping Ltd (No 2).4

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[28] Next, it has been contended that the dismissal proposals constituted an unlawful lockout. I consider that this is less seriously arguable because there appears to be a lack of the demands which are required to bring the defendant’s alleged actions within the definition of “lock out” in s 82(1)(b)(ii) of the Act.

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[29] It is also contended that the dismissal proposals are contrary to the obligation imposed by s 4(1A)(b) of the Act which requires the defendant to be active and constructive in maintaining a productive employment relationship with the union members of the plaintiff. It is contended that the decision to initiate mass dismissals of the entire bargaining unit was contrary to that duty. There is also an allegation that the defendant has failed to provide information concerning the contracting out proposals in breach of s 4(1A) before any decision was made.

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1 [2010] NZEmpC 165 at [11].
2 [2002] 1 ERNZ 597.
3 [1998] 3 ERNZ 378.
4 [1998] 3 ERNZ 786.

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[30] Finally, there is an issue that by progressing the dismissal proposal and engaging the contractors, their employees will be performing the work of striking employees in breach of s 97 of the Act. That will be equally arguable, even though the strike has ceased, if the dismissal proposals are pursued while the threatened lockouts apply. I find that all these issues are arguable and they will be dealt with in the substantive hearing commencing on 16 May.

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[31] As to the balance of convenience, if the dismissal proposals were allowed to proceed before the issues can be substantively resolved, this arguably would have irretrievable consequences for those dismissed employees. The injunctions sought apply until the substantive hearing and may delay the defendant exercising its contractual rights (which are also in issue). However, to permit the exercise of those rights, which are in dispute in the interim because of statutory requirements, could cause irreversible damage to the plaintiff’s members. I note, in this regard, that the substantive issues would have been addressed in the week commencing 26 March but for the undertakings which arguably have been breached. The Court could have provided an earlier fixture in the week commencing 23 April, but counsel for the defendant advised that the defendant was not available. The date finally allocated was suitable for the parties. In all the circumstances, I was satisfied that the balance of convenience favoured the granting of the injunctive relief sought, in the form to which the defendant consented.

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[32] Standing back from the detail, I was also persuaded that the overall justice of the case required that the defendant be prevented from exercising its dismissal proposals until its right to be able to do so, in light of the statutory requirements, is dealt with by the substantive hearing.

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B S Travis
Judge

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Judgment signed at 11.00am on 29 March 2012

Source

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__________

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Clearly, Judge Travis is thouroughly unimpressed with the behaviour of POAL and has issured his judgement accordingly.

It is reassuring that the Employment Relations Act works in favour of workers and employers cannot ride roughshod over their employees.

Long may this continue.

Nek step: sack the board and CEO of POAL. Their incompetance has cost Auckland millions in lost income.  The Auckland Council must address this vital issue, or themselves be accused of gross dereliction of duty.

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* * *

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Acknowledgement

Helen Kelly

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