7 Sep 2016

A rod for Victoria Uni's back?

10:06 am on 7 September 2016

Opinion - Victoria University has been accused of breaching good faith by offering candidates for a librarian role $41,874 to $73,910 if on a collective agreement, but $57,280 to $78,760 if on an individual agreement.

It's an unusual case - and, legally fair or not, it seems the university could be making a rod for its own back.

A man in a white business shirt signs a job offer or contract (file)

Even if legal questions are put aside, different pay for those doing similar work can cause resentment and lower productivity. Photo: 123RF

The first obvious and unusual factor is the very wide disparity between the salary bands at issue. This may be perceived as unfair and requires explanation.

Either the union-negotiated band is completely out of step with market forces or there are other benefits built into the collective agreement that offset a $16,000 differential on the minimum salary.

The union denies that is the case and says the university has ulterior motives, and the ads are "anti-union". That challenge should have been predicable at an early stage, and the university will want to be able to answer it compellingly.

It contends it is meeting the market, and no doubt will have completed an independent objective job sizing and banding exercise justifying the different salary grades.

Possible unlawful 'preference'

There are laws that relate, in a way, to fairness. The university will be mindful of the prohibition against conferring "any preference in relation to terms or conditions of employment" because a person "is or is not a member of a union or a particular union" (Section 9, Employment Relations Act 2000). This could give rise to a legal challenge by the union.

If the only reason those on a collective agreement are not offered the more beneficial terms is because of union membership, that would be a prohibited preference. The intention of the university is not relevant in this test.

To defend a legal challenge, the university would want to be able to show conclusively that the beneficial salary was not being conferred on non-union employees just because they were not in the union.

The good faith argument

There is also the question of possible breaches of the obligation of good faith; the union has raised this claim already, although without specifics.

There is certainly an overarching obligation of good faith between employers and unions as parties to an employment relationship. If the parties are currently initiating or engaged in collective bargaining, or the union can show ulterior motives by the university for the differing salary scales, this could become litigious.

Strategically, at the next collective bargaining round, it will be much more difficult for the university to negotiate for lower remuneration rates for union members, or even to plead that the coffers are empty.

Office politics not to be overlooked

A further fairness issue is the effect of potentially engaging two librarians on grossly disparate salaries - without justifiable reasons that would be unfair.

Although this may not eventuate and "like may be treated as like", if one librarian was receiving significantly more remuneration for no good reason (and these "confidential" details tend to get out) the potential for discontent in the workplace is obvious.

Nothing fosters resentment and grievances faster than the sense someone else is getting more than their fair share, and grievances amongst staff tend to negatively impact moral and productivity overall.

So, legally, the university may be able to justify the higher pay bands for non-union members but the perception of unfairness from the wide salary differences is already a given. The union is using the perception to support its case and the perception is likely to cause discontent in the university's workplace for some time to come.

* Charles McGuinness is a barrister and solicitor with no connection to either Victoria University or the unions involved in this story. He specialises in employment and health and safety law, and regularly writes articles for employment-law-related publications and discusses employment law matters on RNZ National and in other media.

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