Two
Cathay Pacific pilots living in Auckland failed to overturn compulsory
retirement rules in their Hong Kong-based employment contract with their call to enforce
New Zealand age discrimination rules. Employment
contracts governed by foreign law will be enforced in this country said the
Court of Appeal, unless they breach a New Zealand statute or contain terms that
would shock the conscience of a reasonable New Zealander.
Cathay pilots David Brown and Glen
Sycamore challenged their compulsory retirements at age 55. The Court of Appeal was told they flew A340
and A330 aircraft between Auckland and Hong Kong employed by NZ Basing Ltd, a
Hong Kong subsidiary of Cathay Pacific.
Cathay has over 3000 pilots worldwide with NZ Basing employing its New
Zealand-based crew. From 2004, many
airlines began raising retirement ages extending retirement to age 60 for
pilots in command and age 65 as co-pilot.
As part of this international trend, Cathay Pacific raised its
retirement age from 55 years to 65 but with a lower pay scale for this ten
years of service. Messrs Brown and
Sycamore declined to take up the new terms on offer, saying they were not going
to bargain down their salary in order to work longer. With retirement for them looming at age 55
they challenged the retirement rule arguing it breached in New Zealand the
Employment Contracts Act and the Human Rights Act.
The Court of Appeal said the modern world
of peripatetic employment has raised new conceptual and practical difficulties
for private international law – the rules governing cross-border contracts. As a general rule, courts are willing to
enforce the country’s rules contracting parties have agreed is the “proper law”
governing their relationship.
Messrs Brown and Sycamore signed
employment contracts with Hong Kong law named as the “proper law”. Hong Kong does not have laws prohibiting age
discrimination.
There is a need for certainty and
confidence in recognising and enforcing agreements which regulate transnational
activities, said the Court. NZ Basing’s
forced retirement at age 55 was enforceable.
It did not breach New Zealand law the Court of Appeal ruled: breaching neither
the Employment Contracts Act (section 238 which prohibits “contracting out”
does not override rules of private international law) nor was it contrary to public
policy (rules on retirement age are flexible reflecting a range of fiscal,
social and cultural factors).
NZ
Basing Ltd v. Brown – Court of Appeal (4.11.16)
16.155