Athlete co-op wins ruling on bargaining

In a recent ruling of the Employment Relations Authority, in Wellington, The Athletes’ Co-operative Incorporated were given the go-ahead to initiate collective bargaining with High Performance Sport New Zealand Ltd for a collective agreement covering elite athletes.

Co-operative founding member and board member Mahe Drysdale gave evidence.

What is unusual about this case is the athlete members of the co-operative are not employees of High Performance Sport New Zealand (HPSNZ).

The provision of funding, and the terms and conditions associated with that funding, do not indicate any direct employment or contractual relationship between the athletes and HPSNZ.

Instead, the athletes have a direct relationship with their respective national sporting organisations.

In the case before the authority, those were Cycling New Zealand and Rowing New Zealand.

Drysdale gave evidence that the design of the funding model was a cause for concern.

Those concerns include that the funding model results in low levels of funding to athletes.

Drysdale also raised associated concerns about athlete wellbeing, and uncertainty and unfairness arising from the way funding could be withdrawn without consultation or warning.

These issues were emphasised and expanded on by letters from several other athletes.

Concerns relating to mental health featured prominently in the evidence.

Drysdale referred to Cycling New Zealand’s 2022 report and a HPSNZ inquiry.

The report concluded the funding model did not provide sufficient priority to athlete wellbeing, and included a recommendation that consultation occur with athletes about a contractor versus employee model.

It also recommended an athletes’ representative body be established. That led to co-operative being established.

The matter came before the authority because HPSNZ declined to engage in collective bargaining on the basis it does not employ athletes.

It claimed it could not be required to employ athletes and there was no relevant employment relationship.

It also said the relevant co-operative members were not employees.

In discussion leading up to the authority hearing, HPSNZ had acknowledged the issues raised about athlete wellbeing and had indicated — with the involvement of the respective national sporting organisations — it was willing to discuss those matters directly with athletes.

However, it said it was not prepared to do that in the context of collective bargaining, as it did not employ athletes.

The authority’s decision focused on certain provisions in the Employment Relations Act.

Bargaining for a collective agreement can be initiated by one or more unions with one or more employers. The co-operative meets the definition of union. But the core issue was whether it could initiate bargaining with HPSNZ, which did not employ any athletes.

While HPSNZ does not employ any athletes, it does employ employees in roles other than those which the co-operative had sought to initiate bargaining.

However, those employees were not subject to the coverage of the collective agreement proposed.

HPSNZ argued the Act clearly contemplated collective bargaining occurring between an employer and a union representing employees of that employer.

The authority’s decision considered the statutory definition of employer and employee. Those definitions can extend to include prospective employees or prospective employers.

The authority found there was nothing that suggested employment — how that might look and the coverage of the proposed agreement — could not be subject to bargaining.

It further found terms "employer" or "employee" should not be limited to prevent the initiation of bargaining in circumstances where there were no current employees within the proposed coverage. Collective employment interests may include matters relating to prospective employment.

The authority also found good faith requirements apply to a union and employer bargaining for a collective agreement.

"Here, there may well objectively be a genuine reason, based on reasonable grounds, why the parties might not conclude a collective agreement.

"However, that does not, in my view, suggest that bargaining cannot be commenced."

Many co-operative members are subject to contractual arrangements. The authority ruled the bargaining process could not apply to existing contractual arrangements between the athletes and national sporting organisations, nor between the athletes and HPSNZ. Such bargaining would potentially breach provisions in the Commerce Act that prohibit independent contractors from joining together to secure terms and conditions.

In a nutshell, the authority found the gateway to initiating collective bargaining is passed by a union that is duly registered and which initiates bargaining with an employer, that being an employer of any employee.

The rational given was that a union can seek to initiate bargaining in relation to a collective agreement that if concluded would set terms and conditions of employment for potential future employees.

While this ruling requires HPSNZ to engage in good faith bargaining with the co-operative, it’s highly unlikely a collective agreement will result.

HPSNZ is clear that it has no intention of employing co-operative members and that it cannot be required to do so.

However, during the course of good faith bargaining, it is likely concerns regarding wellbeing will be thoroughly canvassed and hopefully addressed by other means, if not through agreement to a collective agreement.

— The opinions expressed in this article are those of the writer and do not purport to be specific legal or professional advice. John Farrow is a partner with Anderson Lloyd, specialising in employment law.