Warning of costly court battles

The Government's plans to legislate the duty to act in good faith is like inviting a ghost to the contract negotiating table.

Visiting Canadian labour law expert Henry Dinsdale said legislating good-faith bargaining encouraged state involvement in negotiations and offered opportunities for process to over-run substance.

"The question is whether you aspire to a system of free collective bargaining or not," said Mr Dinsdale, who is a partner at leading Canadian law firm Heenan Blaikie.

"Few would disagree with the fundamental principles of good-faith bargaining, but that's something that comes out of a long-standing relationship rather than legislation. The more government distraction there is, the less value the parties will put on establishing good faith.

"It's like children. If you tell them what to do, they won't do it, but if they learn and experience things themselves they can learn from their own mistakes."

Mr Dinsdale said good-faith bargaining legislation had been a big problem in Canada, leading to extensive litigation. While court action had reduced in recent years, he said it was because employers and unions had established long-standing relationships rather than good-faith legislation improving contract negotiations.

"It had been a tremendous problem. It's calmed down a bit in Canada, but it's not because there's been an acceptance of the provision and an acceptance of the Government vetting free collective bargaining. It's come out of long-standing relationships, it's essentially something that takes a lot of time.

"Employers know what goes around comes around. They know in terms of respect that they have to act in good faith. The biggest problems we have are primarily with people who are new to collective bargaining."

He said the good-faith aspect of the Employment Relations Bill would lead to costly court battles and as an alternative, it might be more prudent to introduce the fundamental violations of good faith in labour laws rather than a code.

"I don't think a code's necessary. There's certain mischief that has to be addressed by legislation. You should identify the mischief and make legislation that narrowly defines what it is, such as the employer refusing to recognise the representation capacity of the trade unions.

" If you have a phrase or a code that's difficult to define you're just inviting lawyers."

He said the financial disclosure aspect of the Employment Relations Bill was understandably worrying for employers.