TVNZ racks up $275k legal bill for failed Employment Court defence

Wednesday, 26 June 2024

Former Sunday presenters and journalists Miriam Kano and Mark Crysel talk to Stuff’s Emily Brookes about the closing down of the TVNZ flagship current affairs programme.

TVNZ has spent $275k on external legal costs after it announced a proposal to cancel shows, including Sunday and Fair Go, and make staff redundant.

The Employment Court ruled TVNZ had breached the collective agreement.

A spokesperson said TVNZ’s executive has apologised to union members for the breach of the clause, accepts responsibility and will learn from the process.

TVNZ has racked up $275,000 in external legal costs, so far, after it failed to consult staff about cancelling shows and redundancies, in an effort to save $10 million in the wake of declining advertising revenue.

In March, staff at the state-owned broadcaster were told TVNZ would be cancelling programmes, including Sunday and Fair Go, and making about 70 employees redundant.

TVNZ has spent $275k on external legal costs defending it’s restructuring processes.

E tū union acted on behalf of a number of staff and were concerned TVNZ had not complied with its obligations under the relevant collective agreement and sought a compliance order from the Employment Relations Authority. E tū won and the ERA found that TVNZ had breached its obligations.

TVNZ appealed that decision to the Employment Court and again lost after it found they had breached the collective agreement by not letting staff know about its plans for the restructure sooner.

The Employment Court ordered TVNZ to comply with the collective agreement within 20 working days of the judgement. That window expires next week.

Stuff can now reveal TVNZ has so far spent $275,798.15 on external legal costs. The figure was released under the Official Information Act.

E tū’s Michael Wood said “this is a very significant amount of money” which wouldn’t have needed to be spent if TVNZ had not breached the collective agreement in the first place.

Paul Wicks KC represented TVNZ at the Employment Court.

Wood said the money TVNZ had spent “creates a real perception issue” given the costs pressures and showed its always the best approach to sit down and talk with staff and find solutions.

Wood previously told Stuff 17 of the 63 people who had been made redundant remained on TVNZ’s payroll. He couldn’t share an exact figure on the salary cost but “while salary costs vary a lot, sources indicate that with 17 staff still employed, the ongoing cost could be around $170,000 per month” - or nearly $5700 per day.

The broadcaster is now expecting an underlying loss of between $28m-$33m in the 2024 financial year.

At the Employment Court, Paul Wicks KC, acting on behalf of TVNZ, said the broadcaster's dire financial situation required labour savings of $10m.

Brent McAnulty was TVNZ’s acting chief executive in 2023 and told the court a downturn in revenue began at the start of that year, but staff weren’t made aware of the proposal to cut shows and staff until March 2024.

McAnulty told the court that was because they believed telling staff before the Christmas break would have had a “catastrophic impact on morale”, RNZ reported.

“Mr McAnulty gave evidence that he did not think that the news should have come as a shock to anyone, because he had made it very clear to staff that TVNZ needed to address costs and that, if it could not get costs under control, labour would need to be the “last lever” to be pulled,“ the employment court decision said.

The decision said McAnulty’s perspective was likely informed by the level of understanding and knowledge he had.

“When questioned, Mr McAnulty accepted that TVNZ had not attempted to consider options and proposals put forward by staff prior to the proposal to cancel shows, with a consequential impact on staff; nor was there an attempt to reach agreement with staff prior to 8 March and it was common ground that there had been no disclosure of the need to save $10m in costs.”

A spokesperson from TVNZ said the company progressed the matter to the Employment Court as it felt the process TVNZ had run was consistent with the collective agreement.

“The relevant clause which the court was asked to rule on has been part of TVNZ’s collective agreement for at least 10 years, and several restructures had been carried out in this time without concerns raised.”

The spokesperson said TVNZ’s executive has apologised to Union members for the breach of the clause, accepts responsibility and will learn from the process.

Stuff also asked for comment from TVNZ’s board. In response, the spokesperson said “TVNZ’s board does not comment on operational matters”.