A recent news article reported a union and an employer were still bargaining for a collective agreement 3½ years after bargaining commenced. FIRST Union and a Dunedin Mitre 10 store are still unable to agree on a collective agreement, even though collective bargaining was initiated on 18 October 2013.
Momentous events have occurred in the time since bargaining commenced. The Irish beat the All Blacks, there was an Ebola epidemic, a robotic spacecraft landed on a comet, Malaysian Airlines flight 370 went missing and then there was Brexit and Donald Trump became President of the United States of America. Viewed in that context, 3½ years is an incredibly long time to bargain without settling a collective agreement.
Which raises the question: what can parties do to bring bargaining to an end? There are legal avenues available to unions and employers to bring bargaining to an end one way or the other, and the example of FIRST Union and the Dunedin Mitre 10 provides a useful case study.
The first and most obvious way to end collective bargaining is by signing a collective agreement. This usually involves a process of compromise and good faith bargaining. This is how most collective bargaining is resolved.
Sometimes, a bit of a push is needed in the form of industrial action. This can either be industrial action by the union, known as a strike, or industrial action by the employer, known as a lockout.
Mediation is also a good way to break deadlocks in collective bargaining. However, MBIE mediations dealing with collective bargaining are not confidential and without prejudice, unless the parties expressly agree they should be.
If mediation fails, parties having serious difficulties in concluding a collective agreement may seek a reference to facilitation from the Employment Relations Authority (‘the Authority’). Facilitated bargaining is bargaining supervised by the Authority itself. There are some threshold tests before a reference to facilitation may be accepted. One of these is that bargaining has become unduly protracted, and extensive efforts, including mediation, have failed to resolve the difficulties that have precluded the parties from entering into a collective agreement.
If a reference to facilitation is accepted, the parties meet in private with a different member of the Authority (to the member that made the referral decision) to try to conclude a collective agreement. The parties must participate in the facilitation process in good faith.
Having said that, to some extent the Authority is a bit of a toothless watchdog in this process, as while it may make recommendations to the parties about the provisions of the collective agreement the parties should conclude, those recommendations are non-binding; the parties are not obliged to adopt or follow them.
FIRST Union and the Dunedin Mitre 10 have been to mediation and facilitated bargaining. While the Authority has made recommendations about how the parties should settle the collective agreement, the parties are still unable to agree.
Generally speaking, a party to collective bargaining may not unilaterally declare that it is at an end. An Employment Court case in late 2015 between FIRST Union and the Dunedin Mitre 10 reaffirmed this principle.
However, in March 2015 the Employment Relations Act 2000 was amended to provide a statutory process by which a party to collective bargaining may seek a declaration from the Employment Relations Authority that bargaining is at an end. If the Authority determines bargaining is at an end, no further collective bargaining between the parties may be initiated for a period of 60 days.
This law was enacted after the protracted dispute between the Ports of Auckland and the Maritime Union, which ran from 2012 to 2015.
In reality, the party seeking a declaration bargaining is at an end will be the employer. If bargaining is at an end, industrial action is unlawful except on the grounds of safety or health. A declaration that bargaining is at an end would allow an employer to stave off a strike.
This process is not available if the party seeking a declaration bargaining is at an end has breached the duty of good faith during the collective bargaining. Accordingly, when employers seek declarations that bargaining is at an end unions will likely use allegations of breaches of good faith against the employer as a shield to continue bargaining.
There have not yet been any cases where a party has successfully sought a declaration bargaining was at an end.
Finally, if a party to collective bargaining commits a serious and sustained breach of good faith in collective bargaining, the Authority has the power to fix the terms of the collective agreement. This law has been on the statute books since December 2004 but it has never successfully been used. It is a significant departure from the general rule that the role of the Authority and Employment Court is not to fix terms and conditions of employment. This rule has existed since the enactment of the Employment Contracts Act 1991 and the abolition of arbitration.
In reality, the best way to conclude collective bargaining is for the parties to sit down and nut out a deal that suits both of them. The parties are better off focussing on the substantive issues rather than legal arguments. The longer bargaining drags on, the more difficult it is to get a deal.
While it is important for employers and unions to be mindful of their legal obligations and to comply with the technical, legal requirements of the bargaining process, unnecessary legalisation of the bargaining itself can increase costs for the parties and distract them from the real issue, which is terms and conditions of employment rather than legal rights and obligations.