Award, Agreement or Nothing? A Review of the Impact of S132(a) of the Labour Relations Act 1987 on Collective Bargaining

Abstract

The on-going saga of the G.N. Hale redundancy dispute appears now to have run its course. From grievance committee, to the Labour Court, to the Court of Appeal, and back to the Labour Court, the case has attracted considerable attention - from the media and naturally from industrial relations practitioners, eager to learn the view of the New Zealand court system on the vexed matter of redundancy compensation. In the most recent Labour Coun decision on Hale (WLC89/90), Goddard C J held that while the employer was able to prove that the worker was genuinely made redundant the dismissal was unjustifiable because "the circumstances called for the payment of compensation; none was paid; and the amount that was offered and refused was fixed by unilateral decision of the employer and was inadequate". The effect of this decision is profound. Employers planning to make employees redundant have a new set of requirements to meet before their actions can be taken as justifiable. While it will remain the case that there is no right to compensation for a dismissal on the grounds of redundancy unless that right is conferred by a redundancy agreement or by an award or collective agreement, there may still be a right to compensation if the dismissal, although genuinely on the grounds of redundancy, is unjustifiable and thereby gives rise to a successful personal grievance. An employer will now need to focus on the circumstances of the redundancy to detetuaine whether it calls for compensation and where it does, the employer will need to offer, and have accepted, compensation that is both adequate and negotiated.