Nelmac Ltd v Reunited Employees Assoc Inc

Nelmac Ltd and the Reunited Employees Association Inc (REA) had a history of collective agreements. In 2017, their relationship soured, leading to difficult negotiations for a new agreement from July 2020. Both sides adopted antagonistic approaches, resulting in stalled talks and extensive efforts to resolve differences.

The Employment Relations Authority intervened, first accepting a reference for facilitation due to the protracted bargaining. When facilitation failed, the Authority fixed the terms of the collective agreement and found REA had breached the duty of good faith. Costs were reserved, and Nelmac sought reimbursement. Both parties challenged the Authority’s decisions, leading to a hearing in the Employment Court.

The Employment Court reviewed both challenges: REA’s dispute over the finding that it breached good faith and Nelmac’s challenge to the costs determination. The Court found that REA’s conduct during bargaining was problematic and unproductive, confirming the Authority’s finding that REA breached the duty of good faith.

Nelmac’s challenge to the costs determination was successful. The Court awarded Nelmac $15,000 for costs arising from the Authority’s investigation meetings, based on the daily tariff for four hearing days. The Court did not award additional disbursements claimed by Nelmac, finding those costs were part of the bargaining process and not wasted expense.

If your business is involved in collective bargaining, this case shows the risks of adopting antagonistic or unproductive negotiation tactics. Both employers and unions must act in good faith, which means being honest, sharing relevant information, and seeking compromise.

Document your bargaining efforts and communications. If negotiations stall, consider seeking facilitation through the Employment Relations Authority. If disputes escalate, be prepared for the Authority or Court to review your conduct and potentially fix the terms of the agreement or award costs.

To avoid disputes and financial penalties during collective bargaining, follow these practical steps:

The Employment Relations Act 2000 sets out the duty of good faith in collective bargaining. Section 50C allows the Authority to accept references for facilitation if bargaining is unduly protracted. Section 50J enables the Authority to fix the terms of a collective agreement if facilitation fails.

Employers and unions must comply with these provisions to avoid disputes and potential penalties. Costs may be awarded based on the conduct of the parties during the bargaining process and subsequent proceedings.