Testing the Limits of Collective Bargaining in New Zealand
A recent legal dispute between The Athletes’ Cooperative Inc (“TAC”) and High Performance Sport New Zealand Ltd (“HPSNZ”) has tested the outer limits of New Zealand’s collective bargaining framework under the Employment Relations Act 2000 (“the Act”). The case, which journeyed from the Employment Relations Authority up to the Court of Appeal, highlights the importance of having an employment relationship when attempting to trigger collective bargaining rights.
Collective bargaining in New Zealand is governed by Part 5 of the Act, which is built around the duty of good faith. This duty, set out in sections 4 and 32 to 34, requires parties to be transparent, active and constructive in bargaining.
TAC, a union representing elite athletes, gave notice to initiate collective bargaining with HPSNZ for a collective agreement for its elite rowing and cycling athletes (“the Notice”). TAC wanted to address power imbalances, promote athlete well-being, and secure financial stability for their athletes. It also wanted to establish a culture of mutual respect and equality between staff and athletes, and ensure athletes received remuneration that matched their roles and responsibilities. The decision to initiate collective bargaining arose following the tragic death of Olympic cyclist Olivia Podmore in 2021, and a critical review of New Zealand’s high-performance sport environment.
However, HPSNZ declined to bargain with TAC, arguing there was no employment relationship between HPSNZ and TAC’s athlete members. TAC subsequently filed an application with the Employment Relations Authority (“ERA”) seeking an order compelling HPSNZ to bargain in accordance with the Notice.
Employment Relations Authority: broad interpretation of “employer”
The ERA adopted a broad interpretation of the terms “employer” and “employee” under the Act. It found that a union could initiate bargaining even where the proposed employer had no current employees covered by the agreement, aligning with the Act’s objective of promoting collective bargaining and reducing judicial intervention.[1]
The ERA later directed HPSNZ to engage in good faith bargaining. However, it declined to issue compliance orders compelling the conclusion of bargaining due to HPSNZ's position that it neither employed nor intended to employ TAC athletes, possibly constituting a genuine reason not to reach agreement under section 33(1) of the Act.[2]
Employment Court: nexus required for bargaining rights
The Employment Court overturned the ERA’s approach, ruling that for a union to validly initiate bargaining under section 40, there must be an employment relationship between the union's members and the employer. Although TAC was a union and HPSNZ was an employer in the general sense, their lack of a direct employment relationship was decisive.[3]
The Employment Court relied on AFFCO[4], emphasising that collective bargaining under the Act assumes union representation of employees, and that bargaining rights hinge on that employment nexus.
Court of Appeal: employment relationship is essential
The Court of Appeal upheld the Employment Court’s findings. It confirmed that for a union to initiate collective bargaining, its members must be employed by the employer. The Court of Appeal rejected the notion that a potential or indirect future relationship with an employer was sufficient in this context.
While the definition of “employee” allows some flexibility where the context permits, the Court of Appeal found no basis for applying an expanded meaning here. Allowing collective bargaining in the absence of an employment relationship would be inconsistent with the statutory framework of the Act. As such, the Court of Appeal declined TAC’s application for leave to appeal.[5]
Implications for unions and employers
For employers, including those operating indirectly through third parties (such as National Sporting Organisations), the decision provides assurance that collective bargaining obligations will only apply where direct employment relationships exist.
For unions, the case is a cautionary reminder to assess the nature of its members’ relationships with target organisations before initiating bargaining. Unions cannot compel an entity to bargain simply because it plays a significant role in its members' professional environment or finances their activity.
Looking ahead
TAC v HPSNZ may reignite calls for legislative reform to better protect the rights of non-traditional or indirectly engaged workers, such as elite athletes, gig workers, or freelancers, who may fall outside traditional employment definitions but still experience power imbalances.
The Screen Industry Workers Act 2022 has already carved out a tailored collective bargaining regime for screen production workers, recognising the need for more flexible structures. A similar model for elite athletes could be a future policy consideration.
Conclusion
The TAC v HPSNZ decisions reinforce the centrality of the employment relationship in New Zealand’s collective bargaining framework. While unions play a vital role in advocating for its members, its ability to initiate bargaining is ultimately limited by the statutory requirement for a direct employment connection.
Frequently Asked Questions about Collective Bargaining for Employers and Employees
Q. What is collective bargaining in NZ?
A. Collective bargaining in New Zealand is a negotiation process between an employer and a registered union. Its purpose is to establish a collective employment agreement that outlines the terms and conditions of employment, including wages, leave, and health and safety.
Q. What is the relationship between the parties to a collective employment agreement?
A. A collective agreement, formally ratified by union members and signed by both the union and employer following collective bargaining, outlines the terms and conditions of employment. These conditions apply to union members whose work falls within the agreement's coverage clause.
If you are seeking advice about collective bargaining or good faith obligations or employment related issues, please do not hesitate to contact our employment experts, Jaesen Sumner, for more information: jaesen@fsl.nz.
[1] TAC v HPSNZ [2024] NZERA 43.
[2] TAC v HPSNZ [2024] NZERA 500.
[3] HPSNZ v TAC [2024] NZEmpC 250.
[4] AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc [2017] NZSC 135; [2018] 1 NZLR 212 (2017) 14 NZELR 877.
[5] TAC v HPSNZ [2025] NZCA 30.