Union seeks apology from MBIE amid six-figure legal costs
The Ministry of Business, Innovation, and Employment (MBIE) racked up more than $102,000 in legal fees to defend its flexible working policy that a union previously argued violated a collective agreement, according to reports.
Documents reported by Newstalk ZB show MBIE spent $102,451.50 on external legal representation and internal legal consultation after the Public Service Association (PSA) filed a challenge with the Employment Relations Authority (ERA) in July last year.
The ERA action targeted MBIE's May 2025 flexible working policy, which the PSA argued was inconsistent with its "flexible by default" collective agreement obligations.
When the dispute first erupted, MBIE chief people officer Jennifer Nathan told HRD the policy was not a breach of the agreement, saying its intent was to "create greater clarity and consistency on how we apply, agree, and review flexible working to contribute to a high-performing public service."
The updated policy required employees to have a formal agreement in place for any regular or ongoing flexible work arrangement, replacing what had been an informal allowance of up to two days per week working from home.
The PSA disagreed from the start.
"MBIE can't just change existing agreements which are protected under the collective," PSA national secretary Fleur Fitzsimons said at the time.
The union also raised equity concerns, noting that most impacted employees were women and that the change would disproportionately affect people with a disability.
After nine months, three rounds of failed mediation, and thousands in legal costs, the ministry filed a memorandum with the ERA the morning before a scheduled two-day hearing, agreeing to the outcome the union had sought all along.
The ERA confirmed it would issue a consent determination finding MBIE's policy inconsistent with the collective agreement.
In response to questions from Newstalk ZB, Nathan said MBIE "takes its responsibilities to staff and to the careful use of public money seriously," and that the agency chose to end proceedings once a replacement policy was already in force on March 30.
Nathan described the replacement policy as reaching "the balance of providing a Flexible by Default environment, while still meeting MBIE's organisational needs and the Public Service Commission guidance."
Union demands MBIE's apology
The PSA labelled MBIE's withdrawal as a "last minute backdown" and demanded an apology.
"It should never have come to this. MBIE should have listened to the union from the very beginning instead of stonewalling for nine months and dragging workers through three rounds of failed mediation," Fitzsimons told Newstalk ZB.
It comes after the PSA previously slammed MBIE's capitulation as a "damning indictment."
"MBIE denied it was in breach, delaying the hearing at the Authority on numerous occasions. It refused to withdraw the policy. It refused to engage constructively. It went through three rounds of failed mediation. And then, on the eve of the hearing, it folded. Workers deserve an apology," Fitzsimons previously said in a statement.
The PSA has also signalled it will raise personal grievances for any worker disadvantaged by the unlawful policy, and is already scrutinising MBIE's replacement flexible working policy, warning further ERA action remains possible.
The dispute comes as the employment of thousands of New Zealand's public servants is on the chopping block, with the government targeting $2.4 billion in savings and approximately 8,700 job losses across the sector.
