By MATHEW DEARNALEY
Auckland City Council has been found in breach of a good-faith requirement of industrial law after its cost-cutting Birch report, but may ask the Court of Appeal to clear its name.
A full bench of the Employment Court led by Chief Judge Tom Goddard found the council erred by keeping the Public Service Association "in the dark" over proposals stemming from Sir William Birch's report.
The court, which also included Judge Graeme Colgan and Judge Barrie Travis, stopped short of saying the council should have consulted the union when Sir William was asked after the 2001 election to find cost savings of $25 million over three years.
Neither did the judges accept that Mayor John Banks was obliged to meet the union merely because it was concerned at the way the election campaign was conducted, and at disparaging remarks he reportedly made about council staff in general.
But they said council chief executive Bryan Taylor was wrong to have refused to give the union, which represented about 360 of his 1562 full-time-equivalent employees, enough information for four months after the council made decisions from the Birch report.
They said Mr Taylor withheld information the PSA considered it needed to represent its members' collective interests rather than having to wait with other city "stakeholders" to respond to the council's draft annual plan for 2002.
"Whatever the council's motive, it is difficult to see how a stance based on a refusal to provide requested information was going to build productive employment relationships," the judges said, in reference to a key objective of the Employment Relations Act.
"The council finally gave in to the union's requests, but only after a lapse of several months, during which there was - as far as the applicant was concerned - an information blackout."
Although a council committee rejected many of the report's ideas, the court said that Mr Taylor realised at once that there would be potential impacts on staff from various decisions, including a $2.5 million savings target in communications and marketing.
But he did not believe these impacts would be great, affecting 19 staff at most.
The court said the council deserved credit for consulting potentially affected employees such as the communications and marketing staff, of whom three were transferred and five made redundant after fixed-term contracts expired.
But one was a PSA member and delegate, unbeknown to department manager Adrianne Cranshaw, and the judges said the council was required in good faith to deal with relevant unions whenever it consulted employees on such matters.
This was because the legislation extended the requirements of good faith from the employer-employee relationship to ancillary relationships including those between employers and unions.
Parties to employment relationship were also required now to be "energetic in positively displaying good-faith behaviour" rather than merely avoiding expressly prohibited bad-faith conduct.
The judges said the council was mistaken in protesting that consulting the PSA before posting its annual plan would have breached its Local Government Act obligations and prejudiced other stakeholders.
PSA secretary Richard Wagstaff hailed the decision as a victory for workers and unions and said that, although the council might not believe in inclusive practices, it would have to "get its act together" to abide by the law.
Mr Taylor also claimed some measure of success, welcoming the decision's "central finding" that the council did not need to consult the union over commissioning the Birch report in the first place. But he said the overall decision could have significant adverse consequences for all employers by giving a very wide definition of good faith.
He said the council had always tried to treat its staff fairly and was considering an appeal.
Timeline
* 2001: The Public Service Association, representing 360 of 1562 full-time council staff, is concerned at John Banks' election campaign, particularly reported remarks about council staff.
* October 2001: Banks elected mayor. Hires former National minister of finance Sir William Birch to find cost savings of $25 million over three-year term.
* 2002: Banks declines to meet union. Union believes council chief executive Bryan Taylor withholds information after the council makes decisions from the Birch report.
* 2003: Employment Court finds Auckland City erred by keeping PSA in the dark over Birch report's proposals.
* Now: City may take case to Court of Appeal to clear its name.
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