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Say what you mean
"'When I use a word,' Humpty Dumpty said in rather a scornful tone 'it means just what I choose it to mean, neither more nor less'."
Lewis Carroll,
"Through the Looking Glass"
One of the curious features of my lectures in contract law is the introduction of a concept known as "the meeting of the minds". One might imagine that a cartoonist would illustrate this concept with a depiction of a couple of brains holding martini glasses at a cocktail party introducing themselves to one another.
In essence, the concept embodies an essential part of contract - each party to a contract must have the same understanding of its content as any other party to it.
In other words, if I want you to agree with something, I had better make sure you understand what you are agreeing to.
The need to ensure common understanding is one of the major reasons why most important contracts are written - rather than simply being left to "handshake deals" based on verbal acknowledgements between parties. Even then, however, a written contract is no guarantee that each side fully understands and acknowledges its content. Difficulties posed in this area are of particular importance in the area of employment. Amongst other things, mediation often results in agreement between an employer and an employee about a way forward in an employment relationship. It is essential (if a good relationship is to continue) that each understands the content of their agreement.
The recent decision of Thomas v Fujitsu New Zealand Limited (Unreported, Employment Relations Authority, Wellington, 30 July 2002) illustrates the difficulties that can arise in this area.
Ms Thomas worked for Fujitsu as an analyst at its call centre. She raised an employment problem concerning certain aspects of her job. The matter proceeded to a mediation, where the parties reached an oral agreement as to terms of settlement. One of the key issues for Ms Thomas was the need for further training in her work. This was one of the matters which was the subject of oral agreement, and which was left for later written confirmation.
Following the mediation, Fujitsu advised all of its staff about an arrangement for the provision of training. One of the features of the arrangement was a proposed bonding policy (whereby employees who received training would be bonded to the company for a certain period following).
Ms Thomas raised a concern about this communication. She said that the agreement which had been reached at mediation had made no mention of the possibility of bonding being a consequence of the provision of training. At this time, the written settlement agreement had not been concluded - and Ms Thomas had sought to introduce a clause clarifying that she would not be subject to any bonding arrangement.
Fujitsu did not agree that this was a reasonable approach. It said that the bonding policy was non negotiable and that it was intended to apply to all employees. It refused to include a special term in the written settlement agreement.
Ultimately, both parties signed a settlement agreement (without the exclusion clause that Ms Thomas had sought).
As things transpired, Ms Thomas developed another concern - she thought that Fujitsu had failed in its obligations by failing to develop a training plan for her within a reasonable time frame. She also took issue with the precise training proposed by Fujitsu was not appropriate for her purposes - and, essentially, that it was inadequate.
Ms Thomas pursued her two concerns to the Employment Relations Authority. As to the first issue, the Authority noted that the written settlement agreement made no reference to the proposed bonding arrangement. It recorded the employer's argument that, prior to signing the written agreement, it had been made clear to Ms Thomas that settlement could only be agreed to if bonding was a consequence of the provision of training.
The Authority found, however, that Ms Thomas had never agreed to the requirement of bonding. The Authority found that the bonding policy fell outside the "meeting of the minds" that was reached at mediation - and that the employer was seeking to introduce a new principle (beyond the terms that had been agreed) by imposing a bonding requirement as a consequence of training.
As to the second issue, the Authority found that, while Ms Thomas did not consider the type of training provided by Fujitsu to be optimal, it was within the bounds of what had been agreed at mediation.
In this way, the Authority found that the employer's proposal for training was within the terms of what had been agreed - but the imposition of a bonding policy was not.
This case illustrates the need for parties to ensure that agreements reached at mediation are thorough enough to record their true understanding. There are a number of different aspects to this.
It is important that parties at mediation say what they mean. There is little to be gained by a party concealing an essential part of an arrangement - especially if it is known that the other party's agreement will not be obtained if a thorough disclosure of the situation is not made.
Secondly, parties would be well advised to ensure that the terms of their arrangement are recorded in a written agreement. There is less prospect of misunderstanding being asserted later if the terms of the "meeting of the minds" are recorded in a document which both parties signed to indicate their acceptance. In order to be effective, however, that document needs to reflect the true agreement between the parties - and needs to be thorough in capturing any essential details (such as the need for a bonding arrangement in this case).
Humpty Dumpty's skill was in manipulating words - so that Alice was unable to discern one clear meaning from what he said. We have all come across people who might remind us of Humpty Dumpty - whether their ambiguous meanings may be accidental or intended. In the context of mediation of employment problems, however, neither side gains by adopting Humpty Dumpty's approach to negotiation in drafting.
Say what you mean (and mean what you say).
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