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Good Faith Obligations for Employers

22 March 2018

When we act for an employee in a dispute we quite often hear the employer say that they have lost “trust and confidence” in that employee to carry out their job as required.

The opposite can be true, where an employee may say that they have “lost trust and confidence” in an employer to say, keep them safe in the workplace.

What is ‘trust and confidence’?

The expression “trust and confidence” relates to the mutual obligations of the employer and the employee to act towards each other with good faith.

Section 4 of the Employment Relations Act sets out this requirement of the parties to deal with each other in good faith.

Generally both parties must not mislead or deceive each other. But the Act goes further to say that both parties must act with a mutual obligation of trust and confidence.

It requires the parties “to an employment relationship to be active and constructive in establishing and maintaining a productive employment relationship in which the parties are, among other things, responsive and communicative;”

Good faith and visas

A recent question had us wondering whether or not this obligation of good faith extended to employers who may have an existing employee requiring support to gain a working visa, in order to stay working in their role.

Our question is whether it is a breach of their obligations of good faith to that employee, if the employer does not support their application.

There are two cases that talk about this obligation in similar circumstances.

C v A is a 2009 decision in the Employment Relations Authority. The case centred on whose responsibility it was to obtain the work visa. The case found that it was both parties obligation to ensure C, the employee, had a working visa and A’s failure to get the working visa was a breach of good faith and mutual obligations under the Employment Agreement.

More recently another ERA decision, T v R, from 2012, noted the same obligations. R had immediately dismissed T when they realised he no longer held a valid work visa. R thought that it would be illegal under Immigration laws to continue to pay him while investigating why he didn’t have a working visa. The Authority found that the Immigration Act did not “trump” the Employment Relations Act and that R should have asked T about the visa issues before dismissing him. As it turned out immigration had the wrong information and T could have kept working!

If you need any advice as an employee or employer, we have both an Immigration and Employment team who can assist.