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Appendix B: Duties of Public Sector Employers
Severance Payments in the Public Sector.
B.1
This Appendix describes the general duties imposed by legislation and the
common law on employers in the public sector.
Fundamental duties
B.2
The parties to any employment agreement have mutual obligations of trust and
confidence in their dealings with each other. Under the common law, these
obligations are an implied term of every employment agreement.28
B.3
The Employment Relations Act requires the parties to any employment
relationship to deal with each other in good faith. The duty of good faith is
also a reciprocal duty, owed by each party to the other. The Act does not
define what it means to act in “good faith”. However, in the context of
individual (as opposed to collective) employment agreements, it says that
“good faith behaviour” is consistent with the implied term of mutual trust and
confidence.29
“Good employer” obligations
B.4
In addition to the duty of good faith and the implied term of mutual trust and
confidence, most employers in the public sector have a statutory duty to be a “good employer”.
B.5 Most “good employer” duties are found in the entity’s enabling legislation.
They require the entity to operate a personnel policy that “complies with the
principle of being a good employer” – namely, a policy that contains
“provisions generally accepted as necessary for the fair and proper treatment
of employees in all aspects of their employment”.30
B.6
Aspects of the “good employer” obligation overlap with the duty of good faith
and the implied term of mutual trust and confidence. However, unlike those
duties, the “good employer” obligation is borne by the employer alone.
28: See Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372.
29: Section 60(c)(ii) of the Employment Relations Act.
30: See, for example, section 56(1) and (2) of the State Sector Act 1988.