by Maria Hook (University of Otago)
The Supreme Court of New Zealand recently released its decision in Brown v New Zealand Basing Ltd [2017] NZSC 139, determining whether age discrimination provisions in New Zealand employment legislation applied to Cathay Pacific pilots based in Auckland. The employment contract, expressed to be governed by the law of Hong Kong, provided for a mandatory retirement age of 55. Pursuant to the Employment Relations Ac 2000 (NZ), however, the pilots could not be required to retire until they had reached the age of 65. The pilots brought a personal grievance claim against their employer, a Hong Kong based subsidiary of Cathay Pacific, in reliance on the Act.
As many readers will be aware, this is not the first time that the cross-border effect of the airline’s retirement age provisions has been the subject of litigation. In Lawson v Serco Ltd (Crofts) [2006] UKHL 3, [2006] 1 All ER 823, the House of Lords held that the right not to be unfairly dismissed under the Employment Rights Act 1996 (UK) applied to UK-based pilots of Cathay Pacific. But unlike the UK Act, the New Zealand Act does not contain an equivalent to s 204(1), which provides that it is immaterial for the purposes of the Act “whether the law which (apart from this Act) governs any person’s employment is the law of the United Kingdom … or not”.
The Court held unanimously that the Act applied to the plaintiffs’ claim. A copy of the judgment is available here. In this post I would like to offer some comments on the majority’s reasons, which are concise, to say the least (running to just over 15 paragraphs).
The majority judgment
The majority considered that the question was one of statutory interpretation. The reason for this was “the sui generis nature of employment law” (at [77]), as recognised in the Act. Crofts was said to support this approach. The Court considered that Lord Hoffmann had taken a statutory interpretation approach to determining the territorial limits of the UK Act (at [79]), and that he had done so because of his “view of the nature of the employment relationship in law” (at [84]). The UK Act applied to pilots based within the jurisdiction. Section 204 of the UK Act was, on this approach, irrelevant (as were the choice of law clause and the Rome Convention).
There was also nothing in the New Zealand Act to suggest that the approach taken in Crofts was excluded in relation to its anti-discrimination provisions (at [86]). On the contrary, Parliament had given consideration to the extent of the territorial application of the Act, in the form of certain exceptions to the right to be free from unlawful discrimination (contained in ss 24 and 26 of the Human Rights Act 1993). These exceptions, which related to crews of ships and aircraft and work performed outside of New Zealand, did not catch the New Zealand-based pilots (at [88] and [89]). Section 238, a no-contracting out provision, reinforced this position (at [90]). Against this background, the majority considered that “it would be very odd to construe the 2000 Act to allow discrimination in the employment context in relation to persons in the [pilots’] position, solely on the basis of the parties’ choice of law” (at [91]).
Comments
There are a number of reasons why this analysis, in my view, is unpersuasive. First, it is not obvious why the sui generis nature of employment relationships in itself should justify resort to statutory interpretation (as opposed to conflict of laws methodology). If the issue in question cannot be characterised as a contractual matter, and hence does not squarely fall within existing choice of law rules, then arguably it is the court’s task to identify an appropriate choice of law rule: see Raiffeisen Zentralbank Österreich AG v Five Star General Trading LLC [2001] QB 825 (CA). In fact, insofar as personal grievance claims are concerned, the issue may be one of subject-matter jurisdiction rather than (bilateral) choice of law: see M Hook “The ‘statutist trap’ and subject-matter jurisdiction” (2017) 13 Journal of Private International Law 435. And if there is a concern that the issue touches on non-derogable matters of policy, the court should inquire whether New Zealand law has overriding mandatory effect and, hence, whether it operates as an exception to the ordinary choice of law process (see Dixon J in The Wanganui-Rangitikei Electric Power Board v The Australian Mutual Provident Society (1934) 50 CLR 581 at 601; Dicey, Morris and Collins on the Conflict of Laws (15 ed, Sweet & Maxwell, 2012) at [1-040]). This is not the same as saying that the issue is “sui generis”.
In other words, it would have been useful for the Court to frame its reasoning in terms of orthodox conflict of laws methodology (or else justify its departure from it, beyond a vague reference to employment relationships being “sui generis”). At the very least, the Court should have referred to its previous proposition that conflict of laws methodology extends to statutory issues (Ludgater Holdings Ltd v Gerling Australia Insurance Co Pty Ltd [2010] NZSC 49, [2010] 3 NZLR 713 at [24] and [33]). It is true that some conflicts scholars have disagreed with this proposition and consider the cross-border application of statutes to be a matter of interpretation (see, eg, A Briggs, “A Note on the Application of the Statute Law of Singapore” [2005] Singapore Journal of Legal Studies 189) – but again, the Court should have engaged openly with this difference in view, rather than rely on statutory interpretation as the implicit default (see fn 84).
The Court’s reference to Crofts does not shed any more light on the matter, given the decision is widely read as proceeding on the assumption that s 204 conferred overriding mandatory effect on the UK Act (see Dicey, Morris and Collins at [1-057]; L Merrett Employment Contracts in Private International Law (OUP, 2011), Ch 7). Conversely, it would be difficult to interpret the majority’s reasoning along similar lines – ie as an application of an overriding mandatory rule – given its view that s 204 did not play a crucial role in Crofts (see also the references in fn 84). For the majority, Crofts was simply authority for the proposition that employment relationships are sui generis, that the territorial scope of employment legislation is a matter of construction and (apparently) that the territorial scope includes pilots whose home base is within the jurisdiction (at [78]).
Second, the Court found support in the territorial exceptions in ss 24 and 26, treating them as evidence that Parliament had turned its mind to the territorial scope of the anti-discrimination provisions. These exceptions may offer broader clues on the cross-border application of the rights involved. But not for the reason apparently relied upon by the Court, which was that there was therefore nothing in the legislative scheme to exclude the Crofts approach for cases not falling within the exceptions.
Section 24 excludes the right to be free from discrimination from employment of “a person on a ship or aircraft, not being a New Zealand ship or aircraft, if the person employed or seeking employment was engaged or applied for it outside New Zealand”; section 26 allows discrimination “if the duties of the position in respect of which that treatment is accorded (a) are to be performed wholly or mainly outside New Zealand and (b) are such that, because of the laws, customs, or practices of the country in which those duties are to be performed, they are ordinarily carried out only by a person who is of a particular sex or religious or ethical belief, or who is in a particular age group”.
It is obvious that Parliament did turn its mind to the cross-border application of the Act in these sections. But this should not be construed as an implicit endorsement of the base test for cases falling outside of the exclusions. Why would Parliament provide for clear territorial exclusions in ss 24 and 26 but then leave the overall delimitation of rights for judges to work out (by way of statutory interpretation)? It is more likely that Parliament meant these provisions to be self-limiting: see further Hook (above) at 439. In other words, Parliament intended that the exclusions would take effect once New Zealand law had been determined to be applicable pursuant to ordinary conflict of laws rules. So ironically, the sections may offer support for the view that personal grievance claims for discrimination are subject to external limitations (in the form of conflict of laws rules).
(That ss 24 and 26 on their own are insufficient to delimit the right to be free from discrimination is obvious. Clearly New Zealand’s anti-discrimination provisions cannot apply in all cases that do not fall within ss 24 and 26. This approach would be over-inclusive and would lead to potentially absurd results. It would mean, for example, that a person (who is not working on a ship or aircraft) can bring a personal grievance claim for discrimination under the Act even if the relevant duties are duties to be performed wholly or mainly outside New Zealand, as long as the duties are not such that, because of the laws and customs of the country, they are ordinarily carried out only by a person who is in a particular age group.) So some limitation is needed, but contrary to the Court’s reasoning, this limitation is to be found in conflict of laws rules and not statutory interpretation.)
Third, the Court’s reference to s 238 is problematic. Section 238 provides that “[t]he provisions of [the Act] have effect despite any provision to the contrary in any contract or agreement”. The better view is that contracting out provisions of this nature do not apply to choice of law agreements (and that Parliament only intended this to be a domestic non-evasion rule): for an elaboration of this point in relation to s 238, see M Hook & J Wass “The Employment Relations Act and its effect on contracts governed by foreign law” [2017] NZLJ 80. But the Court’s reliance on s 238 also seems to run counter to its overall proposition. If s 238 “makes explicit the proposition … that the parties’ choice of law provision is irrelevant” (at [90]), would that not suggest that Parliament presumed the Act to be subject to ordinary conflict of laws rules (but sought to exclude party choice)?
In its final paragraph, the Court noted that it would be “very odd to construe the 2000 Act to allow discrimination in the employment context in relation to persons in the [pilots’] position, solely on the basis of the parties’ choice of law” (at [91]). With all due respect, this statement does not capture the breadth of the Court’s own reasoning. The Act’s personal grievance provisions applied because they were not considered to be subject to ordinary conflict of laws rules. The determining consideration was not that it was a choice of law clause – as opposed to choice of law rules in the absence of agreement – that was said to lead to Hong Kong law being applicable. Contrary to the Court’s suggestion, this conclusion was by no means an obvious one to reach.
