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Newshub & Bad Faith: When is a Consultation not a Consultation

March 6th, 2024 - Barbara Buckett

On the 28th of February 2024 Newshub announced its proposal to close its local news and current affairs. The announcement came as a shock and sent tsunami like waves through the workplace and the industry.

However, the most devasting effect is the deep impact on its staff who were to suddenly learn that their employment, livelihood, and potentially long-term careers were over.

Whilst there is a sense of inevitability about the outcome the disingenuity of the process adopted by the company is not only obvious but potentially in breach of the Employment Relations Act which requires an employer to act in good faith; including giving its employees all information adverse to their employment at the time it arises not to sit on it and determine when is convenient for it.

The way the proposal was announced arguably was reckless to their safety of the staff due to the uncertainty of reactions in the situation. There was no forewarning and staff went unprepared to the announcement.     

Recent developments in the law have made it clear that whilst a business can make genuine business decisions it must in making and implementing those decisions consult and act as a fair and reasonable employer. Consultation must be meaningful (not perfunctory).

Major flaws in the process can also render an otherwise justified dismissal unjustified. Lacking in good faith may amount to substantive unfairness notwithstanding giving rise to claims.

Under the Act, dismissal is not the default position. The law requires positive engagement. This is an obligation that preceded the proposal announcement.

The staff are entitled to be involved in the decisions affecting the direction, activities, and demise of the company’s activities at the time if they are adverse to the continuance of their employment. Not when it is a fait accompli as it would appear in this situation. Public relations firms were briefed before staff confirming a breach of good faith. The good faith obligation doesn’t come at the time chosen by the company.

Staff have a right to know so they can make informed decisions about their future and alternatives.

That is the purpose of the good faith requirements. It is to empower and treat with dignity and respect. Its purpose is to give staff an opportunity to be involved in options (such as attrition, voluntary redundancy) available before they are exhausted and/or discarded. It is there to prevent surprise. 

Waiting, as it did, could be argued as an improper use of power as the way in which Newshub has gone about it leaves it in a superior position to that of its staff who have been let go in rather an invidious position, working for the company on an extended notice period uncertain as to the future.                  

To add salt to the wound the intention is to lock staff to the bitter end into a unilateral predetermined termination date more advantageous to Newshub under threat of loss of compensation if the condition is not met.

The proposal is arguably oppressive and unfair. This is not only oppressive but not the actions of a fair and reasonable employer as required by the Act.

It means that unhappy staff are locked into an employment arrangement against their will to work at the bidding of Newshub.

It is disadvantageous to its staff as it will mean that they will come back into the recruitment/employment market at the same time competing with their ex-colleagues for employment in a small, highly competitive market.                 

Further, it is not justified in recruiting staff in the knowledge of a precarious situation where arguably someone was either in a redundancy or potential redundancy situation before they started. People resign from other secure employment to take up new positions.

It may be considered unconscionable for Newshub to resile from its commitment to permanent ongoing employment in such a circumstance where employees have been encouraged to join Newshub and where it may have by omission misled as to the true nature of those circumstances.

The situation Newshub finds itself in didn’t happen overnight.

The fact the Newshub sat on vital and relevant information before making its announcement is arguably offensive to its legal obligation to act in good faith.

The purpose of the provision is to give some meaning to consultation.

The cavalier response to this requirement may well, given, the multi-dimensional external political and commercial forces at play, have robbed employees of an opportunity to change or arrest the now more inevitable. Where would for example this place staff if there was suddenly a rescue package or government intervention that came too late.

Certainly, it would have avoided the devasting impact on its staff and the potential serious health and safety risks associated with sudden trauma producing events such as the sudden announcement of a loss of job.

The timing has no doubt been most unfortunate and whilst it may be argued no time is a good time the fact remains that Newshub calculated the timing and was in a superior position to orchestrate that (it knew of the situation well beforehand) and arguably it took advantage of that superior position which was arguably reckless to the impact and detriment of its staff.

Note: BuckettLaw takes no responsibility for the consequences of any actions taken on the basis of our articles. Any views expressed or comments made in an article are the writers option only. The content in our articles does not constitute legal advice. If you need legal or expert advice you should obtain specific advice about your case or matter from a professional. For legal advice based on your individual situation please contact us to speak with one of our expert lawyers.

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Barbara Buckett

Barbara Buckett is a highly experienced senior employment lawyer with over 35 years of practice in New Zealand. She provides expert advice on all areas of employment law and has a proven track record of delivering excellent results for clients. Barbara has extensive experience in resolving workplace issues and is an experienced litigator. In her free time, she enjoys reading, traveling, working out, and fine wine and dining with friends.

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