Louise Carr, Pact CEO.
Dunedin-based mental health and disability services
provider Pact must pay staff more than $50,000 in back pay
after acting in ''serious bad faith'' during pay negotiations.
The order was part of an Employment Court decision that
rejected Pact's appeal against an earlier Employment
Relations Authority finding that it misled union negotiators
and breached the collective agreement in the 2011 bargaining
Employment Court Judge Graeme Colgan was damning of Pact's
behaviour in the bargaining round, during which it told its
''modestly'' paid staff it could not afford more than a 1%
pay-rise - all the while saying it wished it could afford to
However, this claim was found to be misleading when Pact
offered its 150 non-union workers a pay rise of 2% backdated
to July 2011, as opposed to the pay rise accepted by union
members, which was backdated to November 2011 - amounting to
a 1% rise for the entire year.
Judge Colgan rejected Pact's argument that its statements
were part of the ''strategic cut and thrust of robust
The statements were made by experienced managers and were not
made ''hastily or mistakenly''.
''It was also serious bad faith because Pact acknowledged
repeatedly, and apparently solemnly, that it would have
wished to have paid its employees ... more than it said it
was able and prepared to pay.
''They compared its corporate financial circumstances to
those of its employees in refusing adamantly to agree in
bargaining to any more than a 1% wage increase but a greater
amount than which, shortly afterwards, it offered of its own
The workers concerned were paid ''very modestly for
performing challenging and important social work'', the judge
Despite three years passing since the events, there was still
a ''significant level of disaffection'' among most of Pact's
workforce and ''much bridge building'' was needed.
''Responsibility for initiating that rests with Pact and its
management as the party responsible for the relationship
deterioration and breakdown.''
Pact was ordered to pay each of the 213 union members
employed in November 2011 back pay of 2% of their wages -
plus interest for late payment - for the period between July
and November 2011.
This amounted to about $249 for each staff member, before
interest, and added up to more than $50,000 in total.
Pact was also fined $5000, half of which was to be paid to
the court and the other half split between the two unions
that represent Pact staff - the Service and Food Workers
Union and the Public Service Association (PSA).
Pact corporate services director Paul Chamberlain and PSA
national secretary Richard Wagstaff did not return calls