In a determination released late last month,[1] the Employment Relations Authority (Authority) found that The Athletes’ Cooperative (TAC), a recently formed union for athletes had validly initiated collective bargaining with High Performance Sport New Zealand Limited (HPSNZ).
This is despite HPSNZ having no intention to employ TAC members and significantly increasing HPSNZ’s obligations in a previously unexpected situation.
By necessary implication, the Authority further found that HPSNZ (and TAC, as the other bargaining party) had an obligation to participate in good faith bargaining, which among other things, requires the parties to:
- use best endeavours to enter into an agreement as soon as possible after bargaining is initiated;
- meet from time to time for the purpose of bargaining;
- provide certain requested information to each other;
- consider and respond to proposals made by the other; and
- not undermine or do anything that is likely to undermine the bargaining or authority of the other.
Compliance with this could be scrutinised with regard to the Ministry of Business, Innovation and Employment’s Code of Good Faith in Collective Bargaining.
So, what’s all the fuss about?
Well, the Employment Relations Act 2000 (Act) provides at section 40 that collective bargaining can only be initiated by one or more unions with one or more employer, or vice versa.
While it was accepted that TAC is a union and HPSNZ is an employer (in that it has employees), question was whether HPSNZ is an “employer” in this context and for the purpose of section 40.
Importantly, in this context it was not disputed that TAC members are not employees, that there is no existing employment relationship between the parties and HSPNZ’s current employees are not subject to the intended scope of TAC’s collective bargaining.
Instead, the relationship between TAC members and HPSNZ is essentially a funding model, where athletes have relationships with relevant “national sporting organisations” (NSOs), who in turn are in partnership with HPSNZ. This funding model has been criticised however, as funding can be withdrawn without warning or consultation and this is seen as not providing “sufficient priority to athlete wellbeing”, where uncertainty and unfairness arose. This context was the catalyst for TAC initiating collective bargaining.
In line with this, TAC submitted that the vulnerable position of athletes under this model and the Act’s promotion of collective bargaining both point towards HPSNZ being an “employer”.
In contrast, HPSNZ submitted:
- the Act contemplated collective bargaining being between an employer and a union representing that employer’s employees;
- that an employment relationship or want of an ongoing employment relationship was a precondition to this;
- in the current situation there was no mutually intended employment relationship; and
- as the Authority has jurisdiction over employment relationship problems, it was not empowered to address the arrangement between TAC members, NSOs and HPSNZ.
The Determination
The Authority approached the question of “employer” by considering who would be considered an “employee”, and ultimately accepted HPSNZ was an employer and collective bargaining could commence.
This was because the Supreme Court had previously accepted that seasonal workers who were not currently employed could be seen as employees[2] and the Employment Court had allowed collective bargaining to occur between prospective employees and prospective employers.[3]
It was also not accepted that the parties’ disagreement over whether future employment would occur was determinative, as collective bargaining seeks to address the terms and conditions of potential future employment. [4]
The Authority was mindful of the potential consequences of engaging in collective bargaining. It was noted that collective bargaining does not guarantee a collective agreement would be reached. It was also noted that that there may be potentially anti-competitive consequences that TAC members would need to be cautious of.
Conclusion
Given the significant impact this determination has on HPSNZ’s obligations, we expect that it will appeal the Authority’s determination.
Pending the outcome of an appeal to the Employment Court, however, the Authority’s determination stands. This marks a significant expansion to when collective bargaining may be initiated, indicating that an employer may be obliged to partake in unexpected bargaining even if it holds no intention to employ union members.
If you have any concerns or queries about how this may affect you, please do not hesitate to get in touch with Lane Neave’s specialist employment law team.
[1] The Athletes’ Collective v High Performance Sport New Zealand [2024] NZERA 43.
[2] AFFCO New Zealand Ltd v New Zealand Meatworkers and Related Trades Union Inc [2017] NZSC 135.
[3] Maritime Union of New Zealand Inc v China Nagivation Co Ptd Ltd [2016] NZEmpC 111.
[4] at [56] to [59].
