Bargaining fee test case for employees who resign their union

The Christchurch Employment Relations Authority has issued a determination which is of importance not only to all unions but to all employees and employers with collective employment agreements. The case is New Zealand Dairy Workers' Union v Westland Co-Operative Dairy Company Ltd (CA 206/10 5295246).

In short, 7 employees resigned from the union but, for various periods, continued to be employed pursuant to the Collective Agreement which contained a bargaining fee clause. The employees however refused to consent to the deduction of a bargaining fee in accordance with the Agreement and Westland refused to deduct that bargaining fee without the consent of the former members of the Union.

The case involved the union trying to rely on Part 6B of the Employment Relations Act 2000 to recover the bargaining fees.

The purpose of a bargaining fee is to deal with the issue of what is sometimes called the freeloader situation, where a worker obtains a benefit from the negotiations of a bargaining agent (including a union) but fails to contribute financially to the activities of that bargaining agent, notwithstanding that that worker has received a benefit from those activities.

The ERA determined that the Union was entitled to receive a bargaining fee pro rated for the period from the date of the resignation from the Union to the date that each of those seven employees signed an individual employment agreement which was different in its terms from the collective employment agreement which the Union bargained for.

For some employees that amounted to just one day, for others, several months. There’s a lesson there!