Unions fighting change processes: Public Service Association v Secretary for Education

Across New Zealand, the public sector continues to face extensive job cuts and the unions have been fighting back with litigation. The recent Authority determination of Public Service Association v Secretary of Education shows both the importance of pre-consultation engagement between employers and unions, and the lengths that the unions will go to in order to slow down change processes. This follows on from the recent case of Television New Zealand Ltd v E Tū Inc, which also concerned a lack of pre-consultation engagement, and which resulted in the Employment Court halting TVNZ's change process (see our June edition of the Employment Echo).

The PSA v Secretary of Education case concerned the Ministry of Education's attempt to undertake a change process in response to Government-driven cuts. The PSA argued that during its change process, the Ministry did not comply with its obligations under the collective agreement. In particular, the Ministry had an obligation to approach change management processes with the aim of reaching agreement, and making agreed recommendations to management. The PSA sought a compliance order against the Ministry.

The Authority stated that under the collective agreement, the PSA was more than a mere conduit between the Ministry and its member employees for information exchange. The principles in the collective referred to proactive involvement and active participation.

The Authority said that the Ministry ran an orthodox change process where it did not genuinely seek to reach agreement with the PSA prior to the formal consultation process. For example, the Authority said there was only evidence of one specific meeting between management and the PSA, and it was unclear what the purpose of that meeting was (although curiously, elsewhere in the determination the Member referred to a number of meetings between the PSA and management). The PSA were advised of meetings, and acted as a conduit for staff feedback, as well as receiving updates from management. However, the Authority said the Ministry did not treat the PSA as an active participant in the change management process, nor seek to reach agreement with it.

The Authority concluded that the Ministry had not complied with its obligations under the collective agreement. A decision as to whether to grant a compliance order was put on hold for a period of 28 days from the date of the determination. In the meantime, the parties can re-engage on the change proposals.

This determination highlights that the unions are increasingly willing to resort to litigation as a tool to slow down change processes. Public sector collective agreements often contain extensive pre-consultation engagement obligations, and as in the TVNZ case, the Ministry did not find these easy to comply with. As job cuts continue to impact on employers, particularly in the public sector, employers should bear in mind their pre-consultation obligations and be prepared to face a fight with the unions, who have shown they are prepared to enforce these obligations.