Two ERA Determinations, by Members Beck and O’Sullivan, suggest that the ERA now balk at being used by forum shoppers to litigate between parties other than employees, employers and unions. This article sets out two possible reasons.
We have already reported on New Era IT Ltd, where Member David Beck declined a joinder that would have allowed New Era to sue Contrast NZ Ltd, the new employer of three of its former staff it alleged breached restraint of trade clauses (noncompetes).
Then Member Geoff O’Sullivan declined a non-publication order against an employment advocate which Pak n Save Mill Street claimed had disparaged it in the course of handling two clients’ personal grievance claims.
These cases are not expected to be resolved for some time due to a large backlog of claims filed with the ERA. The only thing they have in common is an unsuccessful attempt by the employer to enforce against third parties.
There is considerable debate in the legal community over whether or not the ERA should be able to enforce against third parties. We know that from 2000 to 2018 it just didn’t happen.
Between 2018 and 2020 there were three enforcements of mediated settlement agreements, all of which ended up in the ERA, then the Employment Court, the jurisdiction above the ERA. Of these, two included penalties, and one is yet to be resolved, although we are aware of a teleconference scheduled for May 2021.
Given that there are 6-700 actions filed in the ERA each year, three enforcements against third parties does not sound like a lot.
If you’re reading a Leighton Associates article for the first time, you’ll be blown away by this; all three enforcements are against employment advocacy company Culturesafe NZ Ltd and its director Allan Halse. Two other people have been proceeded against; a former contractor and a former client of Culturesafe. The employer parties are Bay of Plenty DHB, Turuki Healthcare and a Waikato rest home anonymised to RPW.
Member O’Sullivan’s Determination mentioned above, that refused a non-publication order, had involved – you guessed it - Culturesafe and Allan Halse.
All three employer parties are respondents in a Judicial Review, which Caroline Sawyer filed for Allan Halse in the Court of Appeal in August 2020.
Dr Sawyer is a relative latecomer to what could be described as the constitutional aspects of employment law, having previously worked in immigration, property, insolvency and academia (she was an Academic Reader in her native England in the late 2000s). The Judicial Review she filed for Mr Halse says all of the employment cases against him were without jurisdiction, and if there was jurisdiction, New Zealand would be in breach of the United Nations Convention Against Corruption (UNCAC).
Around this time, it became widely known that it was taking several months for a claim to be allocated to an ERA Member, due to a severe backlog, and we understand that the backlog is being addressed with the appointment of new Members.
The findings of three Court of Appeal judges handling the Judicial Review are probably some way off, but regardless of their findings, some serious issues around access to justice have already been publicised.
The recent Determinations of Members Beck and O’Sullivan may seem nondescript, but to us they represent a remarkable reigning in of the ERA’s own powers after a long period of other Members extending its powers through cronyism-driven skirting of rules and limits.
We suspect that in a large measure this reigning in was influenced by both the backlog and the Judicial Review.
Member O’Sullivan appears to imply that if Pak n Save Mill Street believes Culturesafe had caused harm to its business reputation, it could sue Culturesafe and/or its director in the High Court, and the ERA is not a one-stop shop. Similarly, if New Era IT thinks it has a cause of action against its competitor Contrast NZ, Member Beck says the ERA can’t help (although presumably the High Court can look at it). In High Court defamation cases, the defense of truth is available.
Meanwhile, the three employers that are parties in the Judicial Review, started out defending Personal Grievance claims which is unpleasant enough but should have been relatively simple. Subsequently, they were somehow persuaded by their counsel that suing Allan Halse and Culturesafe and a couple of other people was a good idea, but probably now feel that it was not a smart business decision.
No matter how much lipstick the lawyers concerned can slap on a pig, it’s still a pig. No doubt most of the stakeholders will be dreading a day of reckoning handed down by three Court of Appeal judges – win or lose.