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New Zealand Employers Federation Inc v National Union of Public Employees [2001] NZCA 139; [2001] ERNZ 212 (2 May 2001)

Last Updated: 13 December 2011

[1] The New Zealand Employers Federation Incorporated (Employers Federation) seeks leave under s214 of the Employment Relations Act 2000 (ERA) to appeal to this court against the decision of the Employment Court of 13 February 2001 in which the Chief Judge held that the National Union of Public Employees (NUPE) had the necessary status as a union registered under the ERA to issue strike notices and encourage participation in strike action based on those notices by veterinarians employed by the Verification Agency of the Ministry of Agriculture and Forestry (MAF).
[2] Section 214(1) and (3) provide:

(1) Where a party to any proceedings under this Act is dissatisfied with any decision of the Court (other than a decision on the construction of any individual employment agreement or collective employment agreement) as being erroneous in point of law, that party may, with the leave of the Court of Appeal, appeal to the Court of Appeal against the decision; and section 66 of the Judicature Act 1908 applies to any such appeal.

(3) The Court of Appeal may grant leave accordingly if, in the opinion of that Court, the question of law involved in that appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision.

[3] The status of NUPE was in issue before the Employment Court because the Registrar of Unions purported to register NUPE as a union under s15 on 29 September 2000, which was before the Act which had received the Royal Assent on 19 August 2000 came into force on 2 October (s2). The Employment Relations (Prescribed Matters) Regulations 2000, which pursuant to s13(2) prescribed the manner in which applications to be registered as unions must be made, also came into force on 2 October (reg 2).
[4] An Act or Regulation which is not yet in force is not part of the law of New Zealand but, for the reasons he gave, the Chief Judge concluded that the registration of NUPE as a union prior to 2 October came within the exception provided by s11 of the Interpretation Act 1999. Subsections (1) and (2) of s11 read:

(1) A power conferred by an enactment may be exercised before the enactment comes into force or takes effect to—

(a) Make a regulation or rule or other instrument; or

(b) Serve a notice or document; or

(c) Appoint a person to an office or position; or

(d) Establish a body of persons; or

(e) Do any other act or thing for the purposes of an enactment.

(2) The power may be exercised only if the exercise of the power is necessary or desirable to bring, or in connection with bringing, an enactment into operation.

[5] Mr Barton QC for the Employers Federation submitted that the question of law involved in the appeal and in respect of which leave should be granted is whether the registration of a union by the Registrar of Unions under Part 4 of the ERA prior to the commencement date of the ERA, namely 2 October 2000, is the exercise of a power which is "necessary or desirable to bring, or in connection with bringing" the enactment into operation.

The background

[6] The principal responsibily of the Verification Agency of MAF is to ensure compliance with health and safety standards and procedures applying to the slaughter of animals and the preparation of meat products destined for expert markets.
[7] On 29 January 2001, and following the issue by NUPE of strike notices, the Attorney-General on behalf of the Director-General of MAF filed a statement of claim in the Employment Court and sought an interim injunction restraining strike action by NUPE and the other defendants, broadly members or agents of NUPE.
[8] Matters moved quickly. On 2 February the Chief Judge granted an interim injunction. Various grounds had been advanced by MAF, the first concerning, as the Judge put it, NUPE's "apparently premature registration as a union". The Judge did not find it necessary to reach a concluded view on that point because of his conclusion that inadequate notice of strike action had been given in respect of strikes due to commence on 5 February. Strike action was also due to commence on or after 23 February pursuant to subsequent notices and the Chief Judge directed that the next step should be a further hearing on 5 February. The Chief Judge noted that while the consequences of the registration of NUPE prior to 2 October needed further consideration, he found the argument that s11 of the Interpretation Act did not go so far as to authorise the registration of unions ahead of 2 October logically attractive; and that if this argument ultimately prevailed, "it may be necessary for Parliament, if it is so minded, to validate the Registrar's actions if other unions have been registered in this way and have perhaps settled collective employment agreements subsequently in reliance on the validity of registration prior to 2 October 2000".
[9] By minute issued later that day (2 February), the Chief Judge recorded advice that NUPE had just withdrawn all strike notices and was issuing fresh notices. He gave leave to MAF to file a new statement of claim once the new strike notices were issued, putting in issue the legality of such notices by reason of the registration of NUPE prior to 2 October. He made a fixture for 9 February and directed:

Given the possible effect of the Court's finding on other unions and other employers, the Registrar is to give notice of these proceedings to the Registrar of Unions, the New Zealand Council of Trade Unions, and the New Zealand Employers Federation, each of whom is to be entitled to apply to be heard on Friday upon giving to the Registrar notice in writing by 1pm on Thursday of intention to appear.

[10] The Registrar immediately gave notice to each of the three entities advising that a question about the validity of the registration of NUPE as a union under the ERA was the only live issue before the Employment Court; that the question of the legal consequences of its registration prior to 2 October was to be heard on 9 February; and that the Chief Judge had directed that the proceedings be brought to their notice to enable them to consider whether they wished to be heard. All three gave notice to the Registrar of the court of their intention to appear.
[11] On 8 February, the day before the hearing, MAF filed its amended statement of claim. It raised various matters in relation to the new strike notices. As well, it pleaded as a separate cause of action that NUPE's registration prior to the commencement of the ERA was of no legal force and effect; that at law it could neither bargain on behalf of the defendants nor issue strike notices on their behalf; and that any strike action based on the notices would be unlawful within the meaning of s86 of the ERA. By way of relief MAF sought a declaration that NUPE had not been properly registered as a union within the meaning of ERA and that the purported registration on 29 September 2000, as a union, was of no legal force and effect.
[12] The hearing took place the next day, Friday 9 February. To protect the status quo until he could deliver judgment at 9am on Tuesday 13 February, the Chief Judge restrained the defendants from striking pursuant to the new notices until further order of the court. The Registrar of Unions, the New Zealand Council of Trade Unions (CTU) and the Employers Federation were described in the intitulement and in the appearances as added parties, as they were in the consequential order subsequently sealed by the Employment Court.
[13] On 13 February the Chief Judge dismissed MAF's action and rescinded the interim injunctions. Except for brief discussion and rejection of two arguments advanced concerning compliance with the union's rules as to voting and the form of the notices, the extended judgment is directed to the validity of the registration issue.
[14] After traversing the history of the proceedings, including a section of the judgment under the heading "Added parties", the judgment records in para 19 that "the three added parties now appear in the intituling or heading of this judgment" and refers to them in that way throughout the judgment, a point to which we shall have to return when considering whether the Employers Federation has standing to seek leave to appeal.
[15] Mr M G Hobby was appointed Registrar of Unions on 20 September 2000. His understanding of in-house legal advice given orally was that unions could be registered prior to 2 October 2000 in reliance on s11 of the Interpretation Act on the basis that the registration of unions in readiness for 2 October 2000 could reasonably be regarded as desirable in connection with bringing the ERA into operation. Forty applications for registration were received prior to 2 October and the 20 unions which were registered before that date include some of the largest in the country.
[16] The Chief Judge concluded that the exception contained in s11 applied for reasons which he expanded on but summarised in this way:

η It was not necessary for bringing the Employment Relations Act 2000 into operation to register the first defendant as a union on any date prior to 2 October 2000. However, in connection with bringing it into operation, it was necessary that any society desiring to be registered as a union by 2 October 2000 should be able to secure registration that day. It was therefore necessary (or at least desirable) to receive applications for processing prior to that day as in the case of some applications questions might have arisen requiring investigation and this might not be capable of being achieved within 1 day without an application of resources that could not reasonably be expected to be made available.

η Once it is accepted that applications could be lodged in advance of 2 October 2000, it is unrealistic and unnecessary to separate registration from processing as the former flows from the latter and the Registrar of Unions has no discretion in the matter. He is merely performing a ministerial act.

And, he ended:

105 At the end of the day, my conclusion is that when the Employment Relations Act 2000 came into force on 2 October 2000, any employees desiring to advance their collective interests were entitled to expect to be able to act at once through a union duly registered. Accordingly, if any unions had sought to be registered and had failed to achieve registration by 2 October, that will have engendered a delay that the employees were not obliged to sustain. The Registrar was quite right to recognise this even if, as it turned out, there was no opening of floodgates and the processing of applications was made relatively straightforward by the Act.

[17] On 16 February the Employers Federation applied to this court for leave to appeal and applied to the Employment Court for a stay, or alternatively for an interim injunction to stop the then current strike by veterinarians employed by MAF pending the outcome of the appeal. The Employers Federation accepted that, if granted, it would have to provide an undertaking as to damages. The Employers Federation was referred to throughout that ancillary proceeding as "the third added party". No one suggested that it was not a party and accordingly lacked standing to seek leave to appeal and thus to seek a stay or interim injunction. The Chief Judge rejected the application on the merits.
[18] However, on 12 April in the notice of opposition to the Employers Federation's application to this court for leave to appeal counsel for the Registrar of Unions contended that the Employers Federation was not a party to the proceeding in the Employment Court and accordingly could not appeal under s214.
[19] Against that background we turn to consider the issues for determination. We have had the benefit of extensive submissions from counsel and it is with no disrespect to their arguments that we shall not be summarising in turn the respective arguments advanced by each counsel. Rather, we propose focussing on the crucial points arising in respect of each issue.

Was the Employers Federation a party in the Employment Court?

[20] In terms of s214(1), only "a party to any proceedings" under the ERA may appeal against the decision of the Employment Court. The ERA provides two distinct ways in which persons not initially parties to the proceedings may appear in the proceedings. First, by s221 and "in order to enable the court ... to more effectually dispose of any matter before it according to the substantial merits and equities of the case, it may, at any stage of the proceedings, of its own motion or on the application of any of the parties, and upon such terms as it thinks fit by order, - (a) direct parties to be joined". Second, in terms of cl 2(2) of Schedule 3:

In any proceedings the Court may allow to appear or to be represented any person who applies to the Court for leave to appear or be represented and who, in the opinion of the Court, is justly entitled to be heard; and the Court may order any other person so to appear or be represented.

The course adopted will have implications for appeal rights and costs and may affect the manner and extent of participation at the hearing (and see Drew v Attorney-General (CA 189/00, judgment 15 March 2001)).

[21] There is no record in the case of an express order under either s221 or cl 2(2). But it is clear that the Chief Judge immediately saw the desirability of involving the Registrar of Unions, whose action in registering NUPE was challenged by MAF, and the Employers Federation and the CTU because of the wide ramifications for employers, employees, unions and the functioning of the ERA of a decision which could also affect the operations of the other 19 unions which were registered before 2 October. In the absence of any existing application from the three entities to participate in the proceedings the Chief Judge could only draw their attention to the forthcoming hearing at which the consequences of NUPE's registration as a union prior to 2 October was the only live issue and give them the opportunity to be heard.
[22] While the language of that notice to the three entities may be more indicative of a future order under cl 2(2), it is significant that, when the entities had responded and the Chief Judge was fully seized of the matter, he deliberately and consistently in his judgments described them as added parties. And it is readily understandable that in the urgency and rush of the looming strike action the Chief Judge did not see the need for a formal hearing to canvass obvious matters before making that decision which the court was entitled to make of its own motion.
[23] MAF was seeking a declaration that NUPE had not been properly registered as a union under the ERA and that the registration - by the Registrar of Unions - on 29 September was of no legal force and effect. At the outset the Chief Judge rejected the submission by the Registrar of Unions that the Employment Court had no jurisdiction to determine the validity of the Registrar's action, ruling that the Employment Court had jurisdiction to entertain what he called a collateral challenge to the validity of the Registrar's decision in the context of the injunction application. Clearly, however, if the Registrar was to be bound by the declaration of invalidity which MAF was seeking, the Registrar had to be there as a party and with the appeal rights available to parties. No doubt the Judge saw no justification for differentiating between the Registrar of Unions and the Employers Federation and the CTU as to their status in the proceedings. And the stay application made to the Employment Court when the Employers Federation was seeking leave to appeal to this court was dealt with on the basis that the Employers Federation was a party to the proceedings.
[24] The only reasonable inference is that the Chief Judge meant what he said in consistently describing the three entities as added parties. The Employment Court must be taken to have acted on its own motion to order their joinder as added parties under s221.

Leave to appeal under s214

[25] Because this is the first leave application under s214 we shall discuss briefly the principles governing leave and the practice which may helpfully be followed in seeking leave to appeal to this court.
[26] In terms of s214(3) the Court of Appeal may grant leave to appeal against a decision of the Employment Court in point of law "if, in the opinion of that Court, the question of law involved in that appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision". That formulation of the test to be applied in considering leave applications uses exactly the same language as in s144(3) of the Summary Proceedings Act 1957 governing appeals to this court from decisions of the High Court on criminal appeals from the District Court. At least until there is a body of decisions under s214(3), decisions of this court under s144 may provide some guidance as to the criteria under s214(3) and their application.
[27] Clearly there must be a question of law and the question must be one which by reason of its general or public importance or for any other reason ought to be submitted to the Court of Appeal for decision. The court has a residual discretion to refuse leave even though there is a question of law involved and that question is of general or public importance. But, as this court has emphasised in its decisions under s144, the stringent requirements of that section must be satisfied and neither the determination of what comprises a question of law nor the question whether that point of law raises a question of general or public importance is to be diluted (R v Slater [1997] 1 NZLR 211). And in considering whether a question of law which is not of general or public importance ought nevertheless "for any other reason" to be submitted to the court for decision, and in exercising the residual discretion, the court can be expected to have regard to the special jurisdiction of the Employment Court under the ERA (cf s216).
[28] As a matter of practice, an applicant seeking leave to appeal under s214 should at the outset file a memorandum identifying the question or questions of law involved in the appeal and stating shortly the grounds on which leave is sought and the considerations to be advanced in support of the proposition that the particular question of law identified ought to be submitted to the court for decision.

Is the s11 issue of general or public importance?

[29] Like its predecessor s12 of the Acts Interpretation Act 1924, s11 of the 1999 Act allows in a limited way for the exercise of certain specified powers between the passing and the commencement of an Act or Regulation. The powers to which it relates are those specified by s11(1), including by para (d), establishing a body of persons, and by para (e), doing any other act or thing for the purposes of the enactment. Those powers are exercisable only when the action is "necessary or desirable to bring, or in connection with bringing, an enactment into operation".
[30] Burrows, Statute Law in New Zealand (2ed 1999), notes that in the rush of modern law making when deadlines are short and much has to be accomplished very quickly, Government officials are often tempted to start administering an Act before it has come into force (p354); that there is little authority but such as there is suggests that s12 of the 1924 Act was not narrowly construed (p353); and that the change from "necessary or expedient" in s12 to "necessary or desirable" in s11(2) was probably only cosmetic (p354).
[31] We are satisfied that the question identified by Mr Barton for the Employers Federation is a question of law which is of general or public importance in connection with the administration of enactments before they come into force. The proper interpretation and application of s11 affects all enactments. The section employs general language both in s11(1)(d) and (e) and in s11(2). What considerations apply and how and where the line is to be drawn are important practical questions. It seems, too, that there is little authority to provide adequate guidance for those concerned to ensure that the enactment can be operative the moment it comes into force and for those who may be affected by those pre-commencement decisions. And the argument that the registration of a union prior to the commencement of the ERA is the exercise of a power which is necessary or desirable to bring the Act into operation, has potentially wide ramifications raising substantial public interest considerations. It looms over the continuing acts of NUPE and of the actions of the other 19 entities registered as unions before the Act came into force - what Mr Barton not unfairly described as a time bomb. The potential public interest considerations were also noted by the Chief Judge in his interim decision (para [8] above).
[32] It was suggested in argument that the pursuance of the appeal could destabilise employment relations between unions registered prior to 2 October and employers, with potential to invalidate countless actions taken by unions and to cause widespread confusion, contrary to the public interest. On the contrary, until resolved this remains an open issue for consideration where the Employment Relations Authority or the Employment Court is adjudicating on matters in which the validity of a union's registration may arise. There are obvious advantages in the public interest of removing uncertainty by an early definitive decision.
[33] As well, it was common ground that the argument which ultimately succeeded in the Employment Court would potentially apply in determining what decisions registration authorities under other new legislation would be entitled to take prior to the commencement of that legislation. For example, on similar reasoning, could the Registrar of Companies under the Companies Act 1993 have registered companies under that legislation before the statute came into force?
[34] Clearly the question of law which is raised in the application for special leave is a matter of general and public importance.

Ought the question of law be submitted to this court for decision?

[35] For the reasons already given we are satisfied that the proposed question of law ought to be submitted to this court for decision. The remaining matters raised in that regard can be dealt with very shortly.
[36] First, it does not follow from the cessation of strike action by the veterinarians that no live issue remains. Lawfulness of registration goes to the heart of the relationship between union and employer. We were advised that a collective agreement has not yet been entered into between MAF and NUPE and, of course, any such agreement which is entered into may be voidable if NUPE's registration was invalid. Further, the Employment Court decision on the separate cause of action in the amended statement of claim relating to the registration issue and seeking a declaration of invalidity is still open to appeal. It is still a live issue between the parties.
[37] Had it not been still a live issue between the parties it would have been necessary to consider, given the wider implications of the Employment Court's decision, whether the application for leave to appeal might reasonably have been viewed as analogous to raising an issue involving a public authority as to a question of public law (see R v Secretary of State for the Home Department, ex parte Salem [1999] 2 All ER 42).
[38] The second and final matter raised in argument which requires mention concerns the effect of registration of a society as a union. Section 15(3)(a) provides that the certificate of registration given by the Registrar of Unions is conclusive evidence that all the requirements of the Act relating to the registration of the union have been complied with. But that does not override the statement in the certificate of registration that NUPE was registered on 29 September. In that regard s15(3)(b) provides that the certificate of registration is conclusive evidence that the union was registered "on and from the date of registration stated in the certificate". If that registration was unlawful it is not protected by s15.

Result

[39] Leave to appeal is granted in respect of the question of law posed in para [5]. Costs are reserved.

Solicitors
Solicitor, Employers' and Manufacturers' Association, Wellington, for appellant
Crown Law Office, Wellington, for sixth respondent

Solicitor, New Zealand Public Service Association (Inc), Wellington, for eighth respondent