Ross Crotty: Courts not always the best solution

There has been an increase in industrial strife lately.

Action relating to the Auckland buses, the Waharoa cheese and milk powder plant in the Waikato, and the out-sourcing of Telecom technicians have resulted in protracted litigation in the employment jurisdiction, with consequential loss of wages and hefty lawyers' bills.

There is also the damage to customer service and relations (it took ten days for my business landline to be transferred less than a kilometre on the North Shore this month.)

There are also court costs; both the actual cost of the court hearings, and the requirement for the losing party to pay the opposition's legal expenses.

The rationale for all this expense, the recovery of which only partly recompenses the government for the actual cost of providing the resources and services of the Employment Court and Employment Relations Authority (ERA), is that potential litigants will be deterred from embarking on litigation and will settle their disputes at mediation. In the current system, it is almost impossible to avoid mediation.

Litigants keen to enforce their rights in the industrial arena use applications for injunctions in the Employment Court to bypass mediation or the ERA. In doing so they run the risk of paying the costs if they are unsuccessful, and in this event have obtained no remedy to right their perceived wrong.

What, then, are the rules about strikes and lockouts and the use of staff to do the work of striking employees?

The law says that where there is a lockout or lawful strike (apart from safety and health reasons), an employer may employ or engage another person to perform the work of a striking or locked-out employee only if the person is already employed by the employer, is not employed principally for the purpose, and agrees to perform the work.

The Employment Court gave a decision this month in the Waharoa dispute which, applying two recent Court of Appeal decisions, showed how fine distinctions on the facts can cause a different result.

The union unsuccessfully sought a compliance order requiring the cheese company to cease and desist from employing or engaging replacement employees during the period of the current strike, any future strike or any lockout.

The employer's success turned on the facts that Open Country Dairy Ltd wholly owned the cheese company (the defendant), and was in the dominant position of being able to provide the replacement labour over the subsidiary company employing the striking or locked-out workers, without either the consent or the request of the defendant.

The Court pointed out the irony that had the dairy company requested that the cheese company's employees replace striking or locked-out workers at one of the dairy company's own sites, the dairy company would have breached the law.

Two or three farm owners volunteered to assist during the strike, and did some work. It is understandable that the suppliers would be desperate to protect their animals' welfare, quite apart from the loss of income. The Court refrained from a binding view on the use of such volunteers, but said this was arguably a breach of the law by the cheese company.

The headline of an article in the 19 October edition of the Dominion Post by the chairman of the dairy company, Laurie Margrain, said that the company had been bullied by the union tactics (despite the Court victory). Margrain said the 35 union members (of a staff of about 100) were not locked out, but were suspended on full pay. He added there are up to two million litres of milk per day to process, and the perishable nature of milk made processing imperative.

As in the Auckland bus case, there are often disputes about whether the employer is entitled to lock out the workers, or merely suspend them, and whether a suspension should be on full pay or no pay.

Laurie Margrain said he agreed with Helen Kelly (head of the Council of Trade Unions) that industrial relations have taken a turn for the worse, and that a climate is emerging which is "reminiscent of the bad old days of industrial strife."

Court cases never fixed the problems in the bad old days, nor will they now. The one advantage they have is in providing a forum to get the parties into dialogue, and in lessening the potential for any nasty threats and allegations to be prolonged.

Laurie Margrain mentions intimidation of staff and families, and suspected industrial sabotage, and no doubt the suspended employees, in denying the allegations, are also suffering stress and strain, particularly financial, even if they are on full pay.

* Ross Crotty is an Employment Law Special Counsel at Lowndes Associates.