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The New Zealand Air Line Pilots' Association Newsletter.

Comment - Hugh Rennie QC

NATIONAL AIRLINE MERGER BEGAN IN CONFUSION FOR GOVERNMENT, CREW AND JUDICIARY

On the 40th Anniversary of the merger between Air New Zealand and the National Airline Corporation (NAC) noted barrister Hugh Rennie QC remembers when the government of the day ‘forgot to comply with its own laws’, leading to potential flight cancellations even for the judiciary!

Everyone knows that “ignorance of the law is no excuse”. If it was an excuse, could our laws ever be fully effective? But if the law has not yet been passed by Parliament, how do we know what we can’t yet know?

This is why lawyers, and even MPs, strongly dislike retrospective laws.

Sometimes politicians cannot avoid back dated laws which fix their mistakes.

One example has its 40th anniversary this year. It is forty years since NAC was merged into Air New Zealand by government action.

On 31 March 1978 there were two airlines. On 1 April 1978 there was supposed to be one.

One commentator said “On 31 March 1978 Boeing 737 ZK-NAP wearing the godwit emblem on its tail performed the very last official flight NZ434 from Wellington to Auckland”.

Except that the next day, whatever the paintwork might suggest, NAC was flying as usual. It was not until 11 October of that year that NAC ceased to exist. And when it did, it ceased to exist from 1 March!

On 11 October, Parliament solemnly enacted the New Zealand National Airways Corporation Dissolution Act 1978. It said that NAC was dissolved and that this was deemed to happen on 1 March 1978.

Further, retrospectively, all NAC’s “engagements” were deemed to have been transferred at that date, and Air New Zealand was deemed to have held all the licences needed and to have been able to operate NAC flights.

How did this happen? Put simply, the government, under Prime Minister Rob Muldoon, forgot to comply with its own laws.

NAC pilots were employed by NAC. On 1 April 1978, Muldoon expected NAC staff to turn up to work for Air New Zealand Ltd – a company they had no employment contract with. Its CEO Morrie Davis had rejected NZALPA’s offer to assist in this transition. He insisted that pilots would do what Air New Zealand told them to.

Easter 1978 was at the end of March. NZALPA told Air New Zealand that either it offered employment to NAC pilots which they agreed with, or NAC pilots would continue to fly such flights as were NAC flights using such planes as NAC could operate and no others.

Air New Zealand refused to recognise this, declaratory proceedings were issued in late March, and New Zealand went on holiday. In the case of judges and lawyers many went to Auckland for the triennial law conference.

Suddenly Crown lawyers realised that there might be an issue. Suddenly, many judges in Auckland for the conference realised they might not be flying home. Suddenly, a court was convened before Justice O’Regan. Counsel for NZALPA and for the Crown arrived to find a clearly worried Judge.

The late Dr George Barton, instructed for the Crown, offered some comfort. He undertook to the Court that on and after 1 April, NAC pilots would continue to be employed by NAC and fly planes that NAC was authorised to operate on domestic routes.

Privately he conceded to NZALPA counsel that “no-one had even thought about it”.

Dr Barton was certainly aware of the 1940 English case of Nokes v Doncaster Amalgamated Collieries Ltd, where a similar attempt to forcibly transfer employment had occurred, and failed.

In the House of Lords, the famous jurist Lord Atkin observed:

“It appears to me astonishing that, apart from overriding questions of public welfare, power should be given to a court or to anyone else to transfer a man without his knowledge, and possibly against his will, from the service of one person to the service of another. I had fancied that ingrained in the personal status of a citizen under our laws was the right to choose for himself whom he would serve, and that this right of choice constituted the main difference between a servant and a serf.”

The undertaking given, the lawyers and judges returned home. Air New Zealand appeared to have begun domestic flying, but it hadn’t.

This continued until 11 October when Parliament acted, and all of NAC’s staff was forced into Air New Zealand employment. Morrie Davis was not going to give in and make new agreements. He relied on the Prime Minister to force it through.

So what is the anniversary date? 1 April - as it looked like to the public? 11 October – when the law lined up with the facts? Or 1 March – when Parliament says it is “deemed” to have happened (but it had not)?

Last year the 1978 Act, having served its purpose, was quietly repealed. It remains of significance only as one of the worst examples of back-dated legislation in the history of New Zealand.

 

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