Landmark Employment Court Decision – Cathay Pacific Pilots

We appeared recently in the Employment Court representing a group of Cathay Pacific pilots who are based in New Zealand, but spend most of their working time outside of New Zealand.  Their employment contract specified that their employment was subject to the laws of Hong Kong.  Their employment conditions contained a mandatory retirement age of 55, which would have been otherwise unlawful in New Zealand as it was in breach of the New Zealand Human Rights Act and the New Zealand Employment Relations Act.

An almost identical matter had been heard some years ago in the House of Lords, which had held that Cathay pilots, who were based in the UK (Heathrow), were subject to the employment laws of the United Kingdom and not of Hong Kong.   Cathay considered that it wished to maintain Hong Kong law as applying to its New Zealand pilots and crew, and amongst other matters, a mandatory retirement at age 55.  The Employment Court struck out the “Forums” clause, i.e. the clause that related to the law of Hong Kong being applicable,  and held that the New Zealand Employment Relations Act could not be contracted out of, nor could New Zealand Human Rights legislation.

The Court applied Section 238 of the Employment Relations Act where Parliament had stipulated that the provisions of the Employment Relations Act have effect despite any provision to the contrary in any contract or agreement.

The Court struck out the Hong Kong law clause also on the basis that such a provision was contrary to New Zealand values, and that New Zealand Human Rights legislation is not to be treated as ordinary law of general application, but more by way of fundamental law, and New Zealand’s Parliament had seen fit to include age as a prohibited ground of discrimination as one of a number of deeply held values that bear on the very essence of human identity.  In the case of employment, that identity related to the right to work.   Unlike New Zealand law, Hong Kong law did not provide for protection against age discrimination.  New Zealand law has for many years.

The Court held that the “choice of law” clause was used to circumvent a New Zealand domestic law, which could not be contracted out of.  Therefore, it was not a genuine and permissible contractual clause. The Court struck out the Hong Kong law contractual provision on the basis of public policy.

The Court ordered that Cathay could not discriminate against its pilots in New Zealand on the basis of age as it would be discriminatory and a breach of the New Zealand Human Rights Act.