Knowledge E Tū Incorporated v Television New Zealand Ltd
Earlier this year, TVNZ announced the surprise cancellation of Sunday, Fair Go, Midday, Tonight news and the disestablishment of 68 roles.
In response, E Tū Incorporated raised proceedings (on behalf of impacted employees) on the grounds that TVNZ had breached their obligations under the Employment Relations Act 2000 and the collective agreement.
Ultimately, the Employment Relations Authority and Employment Court have held that TVNZ breached their obligations under the collective agreement to consult with employees about the proposed changes. The Court issued compliance orders to TVNZ requiring them to meet their contractual obligations under the collective agreement by 20 June 2024. Redundancies were paused, and employment extended for affected staff.
What obligations did TVNZ breach?
In reaching a decision to restructure, TVNZ had two sets of obligations, including statutory and collective agreement requirements.
Under the Employment Relations Act 2000, TVNZ has an overarching obligation to act in good faith about the proposed changes by:
- providing sufficient notice of the proposed changes;
- disclosing information relevant to their proposal;
- consulting with impacted employees on the proposed changes; and
- considering any feedback received before making a final decision.
On the face of it, TVNZ appeared to uphold these obligations. They presented the channel cuts in the form of a “proposal” in early March, provided a 3-week response period for staff and reserved their final decision announcement for late March. The Court did not raise any issues with this meeting their minimum requirements of consultation.
However, the course of action was found to be insufficient in respect of their obligations under the collective agreement.
Obligations under the collective agreement
Characterising the collective agreement as imposing more “onerous obligations”, the Court recognised that it set higher standards for TVNZ to consult with and include staff in the decision making process. Under clause 10.1.1. TVNZ need to ensure staff’s “active participation” through developmental decision-making stages.
Executive discussions to address TVNZ’s financial position began in late 2023 and centred around channel and job cuts. Ultimately the executive team reached a decision that TVNZ intended to reduce labour costs by 10 million dollars. Staff were not involved in these discussions until March 2024, by which point it was too late for staff to suggest other ways for TVNZ to address financial pressures. The Court held that TVNZ needed to have included staff in these initial conversations, at the developmental stages of decision making.
The extent of consultation with staff was also limited in “Ideas week”, where employees were asked to submit ideas for how TVNZ could develop and diversify its platform. However, staff were not informed that these recommendations could affect their roles. Even so, of the 2,000 recommendations made, only four included cuts to channels. Therefore, it is unlikely that TVNZ meaningfully considered the submissions with the required “open mind”.
This pattern of breaches suggest that the final decision reached in March was likely pre-determined – or as the Court described, reflected “well-advanced” thinking. While not explicitly argued by E Tū, this would mean the consultation period was a mere formality (perfunctory) – rather than genuine opportunity for collaboration.
Overall, this case highlights:
- The significant obligations placed on employers and senior leaders under legislation, common law, individual employment agreements, and collective agreements; and
- the importance of engaging with employees, prior to reaching a decision to restructure. While it is apparent that many employers have genuine (and often significant) financial needs to propose a restructure, this can sometimes be undermined by insufficient consultation or a predetermined position.
Therefore, it is important that all employers seek legal advice as early as possible to ensure that they are in the best position to make sound decisions.
For further guidance in navigating restructures, whether you are an employer or employee, get in touch with the team at Black Door Law.
Disclaimer: This information is intended as general legal information and does not constitute legal advice. If you have a specific issue and wish to discuss it, get in contact with the Black Door Law team.