Good faith has become the clarion call for the faithful in the new employment relations environment – but is the practice undermining the original intent?
No one can argue with the concept of good faith – it’s like “Peace on Earth” – an ideal we all want to live up to. The reality is that as employers, employees and unions work to interpret good faith, we run the risk of devaluing the concept.
As people try to come to grips with the application of an ideal with the best intent, it could easily turn into the worst kind of dogma.
A real concern amongst many practitioners is that good faith actions are being used as tactical weapon and the original intention of the law is being lost. The consequences of this could severely undermine one of the cornerstones of the Employment Relations Act – duty on employers, staff and unions to act fairly with one another in any employment relationship. Technically, that means any breach of employment conditions, contractors or agreements are by that definition breach of good faith.
This is reflected in the frequency of arguments, and claims about good faith are either the focus or regular feature of actions in the Employment Court and Employment Relations Authority.
Good faith was intended to “build productive employment relationships” by promoting “mutual trust and confidence”.
Instead of concept that underpins the law and its intent, good faith is fast being reduced to technicality.
Those who drafted the ERA recognised how much work would be needed after its enactment to develop body of common law and accepted practice – it seems many have forgotten that.
No one can say categorically how good faith should work – not even those who drafted the law.
The Employment Relations Act is 100 pages longer than the Employment Contracts Act it replaced – many of those pages dealing with the application of good faith more so than defining practice.
The definition is the work of special working party that has spent several months trying to develop codes of good faith.
To suggest there is some universal truth and interpretation of good faith is the very sort of narrow definition the lawmakers deliberately avoided.
They knew full well that any measure of good faith would need to take account of the particular circumstance of individual cases.
Instead of yardstick to measure intent, good faith claims are being used as tactical weapon in negotiations to frustrate and divert.
Good faith actions – or the threat of them – are being used to try and trip up the opposing party on technicalities, especially in the absence of established practices and firm guidelines.
Testing and interpreting the new legislation is not only expected but also necessary to provide guidance and body of case law for employers, employees and unions to follow.
Understandably, many want to try and shape that guiding information. Sadly, many of the cases being brought or proposed under the good faith provisions are based on trivia rather than substance.
There have been important cases such as INL, Coutts Cars, Customs and Ports of Auckland that have helped clarify good faith as it relates to key issues such as bargaining and industrial action.
On day-to-day level practitioners are meeting vexatious and tactical claims that only devalue the purpose and intent of the Act and hardly augur well for providing solid base of precedent.
Another disturbing feature is that after more than year of the Employment Relations Act, the huge renaissance predicted in union membership and strength has not happened which must be of concern to unions.
It is also disturbing to employers who now see good faith or alleged breaches of it being used by unions as marketing ploy to scare people into membership instead of proving value through better conditions and enhanced relationships.
Does the ERA need interpretation? Yes. Do employers and unions need guidelines and precedent? Yes.
What we don’t need is to get bogged down in some technical debate every time disagreement looms in the workplace.
Instead of arguing about the dotting of i’s and crossing of t’s, time would be better spent debating substance, meaning and intent.
One of the aims of the ERA was to remove the worst aspects of law and lawyers from workplace relationships. Unfortunately it’s lawyers who are making most from the law at the moment.
Patrick Greene is principal of the organisational performance consultancy, The Empower Group.