A recent Employment Court decision involving SkyCity, considered the lawfulness of a lockout which the union claimed was motivated by reasons not relating to bargaining. The union argued that SkyCity's motive for the lockouts was to eliminate the disruptive effects that short duration strike action by Table Games employees was having on its business.

Background facts

Since 1 January 2011 union members, predominantly in the Table Games department, had been taking strike action of short duration during their shifts. Sometimes the strike lasted a few hours, at other times 15 minutes. SkyCity subsequently locked out the striking Table Games employees for the remainder of their shifts.

The lockout notices prepared by SkyCity and handed to Table Games employees referred to SkyCity's pay offer made during the bargaining, and demanded the union accept it. However, a separate communication issued by Human Resources discussed the reason for the lockouts and referred to the "disruptive" industrial action which meant other employees were working additional hours, delaying breaks and dealing with frustrated customers.

Based on this communication, the union challenged the lawfulness of SkyCity's lockouts, claiming the real reason behind them was that the short duration strikes were causing difficulties for the business.

Employment Court decision

The Employment Court applied the "dominant motive" test to determine whether the union's claim about the real motive for the lockouts was correct. The Court concluded that the real intention of the lockouts was to further the bargaining and to persuade employees to accept SkyCity's pay offer.

While the Court accepted the union's submission that SkyCity also hoped the lockouts would reduce disruption in Table Games, it held that this was not the dominant motive and did not make the lockouts unlawful. SkyCity was able to establish a lawful reason for its lockouts which met the test in the Employment Relations Act.

Implications for employers

This decision illustrates that so long as the employer's main reason for the lockout is lawful, the industrial action will not be illegal just because the lockout also has the desired effect of minimising disruption caused by strike action in the workplace.

However, this case also highlights the importance of ensuring consistent messages are provided about the reasons for lockouts.