Landmark ruling as court acts on hardware impasse

A landmark Employment Court decision, which has tested the ‘‘good faith bargaining’’ laws, will see the courts draw up a collective contract for an employer who couldn’t agree to one.

Members of First Union have been trying to get a collective agreement with Dunedin employer Jacks Hardware and Timber since 2013.

The company, which trades as Mitre 10 in Dunedin and Mosgiel, is run by Martin Dippie, a prominent Dunedin businessman and chairman of the Mitre 10 cooperative.

In an attempt to break the impasse, the Employment Court has ordered the parties back to the Employment Relations Authority, which will set the provisions for a collective agreement for both sides to abide by.

First Union’s solicitor, Grace Liu, said the decision was a precedent-setter.

‘‘It’s effectively the first time in New Zealand that provisions of a collective agreement are going to be determined by the authority.

‘‘It’s the first time in New Zealand employment law history, where the union has exhausted all reasonable ways to settle a collective agreement, and then has successfully been granted an application for the authority to fix the terms of the collective agreement.’’

The court’s decision noted that the ERA had concluded the case required a ‘‘game-breaker’’.

The parties have been through face-to-face bargaining, mediation, facilitation and even been to the Employment Court once before.

Jacks Hardware director Martin Dippie said he was disappointed by the court’s decision as there had been agreement on nearly all clauses of the draft collective agreement, with just two outstanding points, one being the level of wages.

‘‘We felt we were making progress,’’ he said.

‘‘We are currently considering next steps, and look forward to concluding negotiations with First Union soon.’’

He noted that only seven of the company’s 200-strong staff were First Union members.

First Union’s southern region secretary, Paul Watson, said one of the sticking points had originally been about the inclusion of pay rates in the agreement.

Jacks had objected to the proposed pay scale and wanted to keep it out of the agreement, but the court felt it made no sense to have a collective for work terms and conditions and an individual one for pay, he said.

The mechanism to ask for a collective agreement to be ‘‘fixed’’

had been available for several years but this was the first time it had been applied.

Watson said over time the ‘‘hard core’’ of 38 workers who had started with the case had shrunk, giving them little power to go out on strike as they were only a small proportion of their workforce.

He said most disputes over collective contracts eventually resolved themselves.

‘‘We get very few employers who refuse to sit down and bargain in a genuine way. Employers recognise it’s a requirement and in many ways, like collective bargaining because it’s a common outcome for all employees . . . and they don’t have to deal with individuals.

‘‘But those who have not been used to it and had their way for many years, and you get into bargaining with them, they’ll either make a decision, ‘yep we’ve got to recognise this, let’s work it through to a conclusion’, or they’ll try and be resistant. And this is what happens if you go down that track.’’

Employment lawyer Susan Hornsby-Geluk said the decision was significant, and a last resort.

‘‘There’s a natural reluctance on the part of the authority and the court to want to do that, because it’s really up to the parties that are bargaining to negotiate the terms of an agreement. The situation would have to be fairly extreme to intervene in that way.’’

Hornsby-Geluk did not think the case would open the floodgates to more applications.

‘‘It’s quite an extreme case where all reasonable avenues were exhausted and the court intervened in this way.’’

The Jack’s Hardware case had likely had a sizeable influence on recent changes to the Employment Relations Act which come into force this May, she said.

‘‘We get very few employers who refuse to sit down and bargain in a genuine way. ’’ Paul Watson of First Union