Last week two high-profile employers were on the end of some stinging criticism as they failed to defend employment processes they had undertaken. Those employers were TVNZ and E Tu, each with significant human resources capability.
This raises questions as to how they got it so wrong and whether employment law obligations have become too onerous, even for large well-resourced employers.
In the case of TVNZ, the Employment Court heard the company’s challenge to an earlier Employment Relations Authority determination which found that the broadcaster had failed to comply with its consultation obligations in making the decision to disestablish 68 roles. Whilst staff were aware from mid-2023 that the company was in a dire financial position and were engaged in developing ideas to save costs and improve productivity, TVNZ seemingly kept them in the dark about its plans to cut jobs.
Chief Operations Officer Brent McAnulty told the court that staff were not made aware of the proposal before the Christmas break because this would have a “catastrophic impact on morale”. It would also undermine market confidence in the broadcaster, code for less advertising revenue.
Another TVNZ manager, News and Current Affairs Executive Editor Phil O’Sullivan, admitted in cross examination that when asked by the Sunday team in February what they needed to do to in light of the financial challenges, he said something to the effect “Nothing. Keep doing what you are doing”. He justified this by saying that raising the prospect of closing Sunday at that meeting would have been “brutal”.
By the time the plan was announced in March 2024 it was a fully-fledged proposal which employees felt was presented as a fait accompli. The fact that the company confirmed most of the original proposal in its decision making presumably fed into this.
Whilst presenting a proposal and then consulting on it, is typically an acceptable approach, the problem in this case was that TVNZ was party to a collective agreement containing heightened consultation obligations. This included the requirement to involve employees in the development of any organisation changes and to discuss all relevant information openly and honestly with a view to attempting to reach agreement on recommendations to be made to management.
Counsel for the union representing 46 of the affected employees, Simon Mitchell KC, said that there had been a “total failure” by TVNZ to comply with these obligations.
The court agreed and ordered TVNZ to go back and consult again, this time complying with the collective agreement. Chief Judge Christina Inglis noted that only one of TVNZ’s witnesses appeared to be aware of the particular requirements in the agreement. Those involved in decision making at executive level “candidly accepted that they were not”.
Michael Wood, E Tu negotiation specialist, was highly critical of TVNZ, claiming that it had “completely botched” the consultation process and withheld critical information from staff. He described the outcome as an “embarrassing” one for the company and a clear victory for workers.
Ironically E Tu cannot afford to be too trenchant in its criticism of TVNZ as it has also received a scathing rebuke in a recent decision of the Employment Court. The union lost an appeal by a former employee, Sher Singh, and has been ordered to pay him a year’s salary – around $73 000, plus $25 000 in compensation for humiliation and distress and $11 500 towards his costs in the authority, with a further award of costs relating to the court proceedings yet to be determined.
In brief the facts were that Singh was dismissed after a complaint was made against him by a colleague alleging he had sent her sexually harassing messages. When Singh claimed that these were fabricated, E Tu pivoted and instead dismissed him because of the role that he took at a settlement meeting some two years earlier.
Chief Judge Christine Inglis, who also heard this case, was highly critical of E Tu’s approach finding that Singh would be entitled to feel he had been “hung out to dry”. She found that E Tu had conducted a highly flawed process on multiple counts, including failing to investigate the claims against Singh or to attempt corroborate his explanations. The Chief Judge also noted that the company’s reasons for dismissing Singh had changed several times and that “reasons cannot be retrofitted to a decision to justify it”.
Matt McCarten, former trade unionist who gave evidence in support of Singh also weighed in, describing E Tu’s process as a “woeful litany of missteps” and “an endless series of cover ups”. He also castigated the union for clocking up some $200 000 in legal fees in defending the case saying “members don’t pay their union fees for this sort of thing”.
Two very different cases, but epic fails for both employers, with significant consequences.
Turning to the question of whether employment law has become too complex and difficult for employers to get right, it is true that the authority and court are concerned to ensure that a fair and robust process is followed by an employer prior to taking any action that may adversely impact an employee. They also generally hold larger well resourced employers to a higher standard.
But the key requirements of genuine consultation, providing all relevant information and acting in good faith, are themselves quite straight forward. In each of the TVNZ and E Tu cases, simply reading the applicable employment agreement and being straight up would have gone a long way. Not too difficult really.
This article was originally published in The Post
