Lyttelton Port Company Ltd v Maritime Union of New Zealand and Anor

Lyttelton Port Company Limited set out to restructure its container terminal operations in 2024, aiming to improve safety, optimise performance, and create a more contemporary structure for frontline staff. Amrita Balaraman was appointed as chief operating officer to lead the review and develop a new structure for the operations team.

Staff were notified that a review was underway, but unions representing affected employees were not consulted during the proposal's development. The Maritime Union of New Zealand (MUNZ) and Rail and Maritime Transport Union (RMTU) argued that this breached their collective agreements and the Employment Relations Act, leading to a dispute and a compliance order from the Employment Relations Authority.

The Authority required LPC to halt direct consultation and engage in structured consultation with unions and affected staff.

Both LPC and the unions challenged the Authority's determination in the Employment Court, seeking clarity on the interpretation of the relevant collective agreements and the Act's consultation requirements.

The Employment Court reviewed challenges from both the employer and unions. It examined the relevant collective agreement clauses and the requirements of the Employment Relations Act 2000. The Court considered whether the Act or the agreements required union involvement at the proposal development stage, or only before final decisions were made.

The Court found that employers must consult with unions and affected employees before making decisions on restructures, but are not required to involve unions at the proposal development stage unless the agreement specifically says so. The compliance order was found to have been complied with, and the interim injunction was lifted, allowing the restructure to proceed. The Court also noted that costs were reserved, with parties able to apply for costs within set timeframes.

If your business is planning a restructure and has unionised staff, this case shows the importance of understanding your collective agreements. Consultation is a legal requirement, but the timing and process depend on the agreement's wording. Employers should provide information and allow unions and affected employees to comment before making decisions. However, unless the agreement requires it, unions do not need to be involved in developing the initial proposal.

Structured consultation must be genuine and in good faith, meaning employers should share relevant information, listen to feedback, and consider it before finalising decisions.

For example, if your collective agreement only requires consultation before decisions are made, you can develop a proposal internally, but must engage with unions and staff once the proposal is ready. If the agreement requires earlier involvement, you must include unions in the development process. Documenting your consultation steps and communications can help demonstrate compliance if challenged.

To avoid disputes and legal challenges during a restructure, follow these practical steps:

The Employment Relations Act 2000 sets out good faith obligations for employers and employees, including unions. Collective agreements often add specific consultation requirements. Good faith means parties must be active and constructive in maintaining a productive employment relationship, including sharing relevant information and considering each other's views.

If parties fail to engage as required, the Employment Relations Authority or Court can issue compliance orders, requiring structured consultation and halting actions until proper engagement occurs. Injunctions may also be granted to prevent premature decisions. For example, in this case, the Authority issued a compliance order requiring LPC to halt direct consultation and engage in structured consultation with unions. The Court confirmed that all parties complied, and the injunction was lifted.