The Inland Revenue Department is in the midst of an enormous restructuring to the way that it records tax matters, and that is resulting in change processes happening for potentially thousands of employees who work at IRD – as well as litigation.
A recent decision of the Employment Court shows that, no matter what the circumstances, an employer has to deal with an employee’s representative when the employee has chosen to be represented in something to do with their employment.
Many employees in IRD’s workforce are members of the Public Service Association, and they are employed under a collective agreement. IRD has been consulting over a long period with employees who are potentially affected by these changes. This has involved consultation with the PSA over what appears to be a large number of matters, and about what is to happen during a lengthy transition process when the technology supporting the tax system is upgraded.
Matters reached a head late last year when IRD made offers of redeployment to employees to work during that transition. The PSA had a number of concerns about these offers, and recommended to its member employees that the PSA represent them in discussions with IRD. This is something that the Employment Relations Act provides for: any person can chose a representative to deal with matters relating to their employment on their behalf; and an employer has to respect that choice.
Some 1,300 employees agreed with that recommendation, and the PSA notified IRD that it represented these employees. Despite that, IRD declined to send the offers to the PSA, saying that it needed to ensure every affected employee (whether or not they were represented) had to get the offer of redeployment at the same time. It was said that this meant they had the fullest opportunity to consider them. The offers were therefore sent directly to the employees who were represented. Pressure was then put on employees to accept the offers by a particular time, despite the PSA challenging aspects of the offers (as well as employees being dealt with directly) in the Employment Relations Authority and Employment Court.
The Court did not accept that this was a valid reason for IRD not dealing directly with the PSA. The Court was also critical of the pressure applied to employees by the IRD doing so, and the effective bypassing of their representatives. The Court made a declaration of a breach of the Act, and has reserved remedies. What those might be is hard to say, and could involve penalties, but it is clear that the Courts will be very unhappy to see parties fail to recognise representatives that have been chosen to act on a person’s behalf.
This is likely to be only one issue in a range of many that will be dealt with in this restructuring. A Full Court of the Employment Court in May 2018 will hear an argument between these parties about whether it is fair to use psychometric testing in selecting employees for some new roles in the restructuring. That case is likely to be a fascinating one which will have an impact for employers in the use of such testing – both during restructurings and at the time of hiring. We will update you when that case comes to hearing.