Employment Relations Act 2000 – Employment Relations Authority – New Zealand professional sport – collective bargaining – definition of “employer”, “employee” and “union” – good faith bargaining

The Athletes’ Cooperative Incorporated v High Performance Sport New Zealand Limited [2024] NZERA 43.

The Athletes’ Cooperative Incorporated (TAC) initiated bargaining with High Performance Sport New Zealand Limited (HPSNZ) for a collective agreement covering elite athletes.

TAC believed that HPSNZ was obligated to engage in collective bargaining and sought compliance orders to ensure the process was conducted in good faith. However, HPSNZ argued that it was not required to engage in collective bargaining as it did not employ any TAC members.

The main issue was whether HPSNZ was required to engage in collective bargaining with TAC and comply with the requirements set out in the Employment Relations Act 2000. The parties agreed to resolve this issue before addressing the compliance orders sought by TAC.

During the investigation, Mahé Drysdale, a foundation member and board member of TAC, and Stephen Tew, Director of High Performance for HPSNZ, gave evidence and answered questions under oath. Drysdale discussed concerns about the funding model for athletes, including the low levels of funding, athlete wellbeing and uncertainty about funding allocation. He also referred to a report by Cycling New Zealand and HPSNZ, which recommended consultation with athletes and the establishment of an athletes’ representative body.

TAC’s athlete members are not employees of HPSNZ but have direct relationships with their respective national sporting organisations (NSOs). TAC seeks to cover athletes who fall under certain categories, such as those receiving tailored athlete pathway support (TAPS), those contracted or engaged by NSOs, and those representing their country at international competitions.

It was agreed that HPSNZ is an employer, employing individuals in roles other than those covered by TAC’s proposed collective agreement. TAC argued that it had complied with the requirements of the Act by initiating bargaining with HPSNZ, considering itself a single union representing athletes, and that the Act promoted collective bargaining. On the other hand, HPSNZ maintained that collective bargaining under the Act applied only to employees and an employment relationship was a prerequisite.

To determine the validity of TAC’s notice and HPSNZ’s obligation to engage in collective bargaining, the interpretation of “employer” and “employee”  needed to be explored. The Act defines these terms, subject to the context qualifier which requires consideration of the specific circumstances. The Employment Relations Authority (ERA) must consider whether HPSNZ is an “employer” for the purposes of the Act, which hinges on the definition of “employee.” Additionally, it needed to determine whether the term “union” in s 40 of the Act required the union represent employees of the relevant employer when initiating bargaining.

Both parties presented their arguments based on the text, purpose, and context of the Act. TAC believed that HPSNZ was attempting to introduce a new requirement by asserting that an employment relationship is a prerequisite for bargaining initiation. TAC argued that promoting collective bargaining was in line with the Act’s objectives and because of the vulnerable position of athletes, collective bargaining should be encouraged.

The ERA examined whether HPSNZ was obligated to bargain under the Act, while considering definitions of “employer,” “employee,” and “union” within the Act’s context. It concluded that bargaining could be validly initiated without the need for current employment relationships within the proposed coverage, therefore obligating HPSNZ to comply with good faith bargaining requirements.

Applicable principles: criteria for collective bargaining – the definition and statutory meanings of “employee” and “employer”- meaning of relevant provisions in collective bargaining – definition of “union” – context qualifier for definition of “employees” – seriousness of good faith duties – expansive meaning of “employee” as suggested in China Navigation – whether employment is a “gateway” to various rights and obligations as suggested in Raiser Operations – statutory interpretation in relation to coverage of “employment”.

Held: TAC had given HPSNZ valid notice, initiating bargaining in accordance with s 42 of the Act. Bargaining was validly initiated on 20 July 2022, the day the notice was given and HPSNZ is obligated to comply with s 32 of the Act.

The Athletes’ Cooperative Incorporated v High Performance Sport New Zealand Limited [2024] NZERA 43.