Employment: Changes to law, November 2014

The Employment Relations Amendment Bill received the Royal Assent and passed into law on 6 November 2014. It will come into force on 6 March 2015.

A number of changes were made to the bill during the committee stages of its passage through Parliament. These were technical changes mainly supplementing the recommendations of the select committee that heard submissions on the bill. 

In the main, the changes do not materially alter the bill as first introduced. The new Employment Relations Amendment Act 2014 makes the following general changes to the Employment Relations Act 2000.

As is always the case with new law, the new provisions are untested and are likely to evolve over time as cases are brought before the courts to test them. Paul Mackay of Business NZ summarises the main changes below.

 

Good faith in providing information

Employers will not be required to provide access to confidential information about an identifiable person other than the affected employee (i.e. the person the information is about) if doing so would involve an unwarranted disclosure of that individual’s affairs or breach privacy or commercial rights. This will impact in issues such as redundancy where employees made redundant have in the past sought information about other employees who were to remain employed.

Collective bargaining

Parties not required to concluded a collective agreement

The current obligation to conclude a collective agreement has been removed, but a new section 33(2) provides that an employer is not acting good faith if they refuse to enter into a collective agreement because they oppose or object in principle to collective bargaining or being a party to a collective agreement. In effect this will require the parties to bargain until each has considered and responded to the others’ claims, but not beyond that.

Opting out of bargaining

An employer who has been cited as a party to bargaining for a multi-employer collective agreement (MECA) can opt of that bargaining and can now also opt not to become a subsequent party to a concluded collective agreement, once one has been concluded with the parties originally cited.

Determination that bargaining has concluded

This has been one of the most widely debated provisions of the Amendment Bill.  The changes empower the Employment Relations Authority to order mediation, or facilitation – particularly if there has been a serious and sustained breach of good faith that has undermined the bargaining – unless it considers that this will not contribute constructively to resolving the difficulties, be in the public interest, will undermine the urgent nature of the process or in the circumstances will be otherwise impractical or inappropriate.

Once any of the criteria are met the Authority must declare that bargaining has concluded and thereafter a 60-day period must elapse before re-initiation can occur. The Authority can decline to make an determination that bargaining has concluded if it believes the parties have not acted in good faith.

30-Day Period

The requirement that a new employee be covered by an applicable collective agreement for the first thirty days of their employment has been removed, but an employer is still required to advise the new employee of the existence of the collective agreement and of the union parties to it.

Flexible working arrangements

Any employee (not just those with dependents) may request flexible work at any time and the employer’s response must be provided in writing as soon as possible (not within three months as previously). Previous limitations on who may apply and the frequency of requests have been removed.

Part 6A: Continuity of employment

The government has elected to retain Part 6A.  However the original Bill’s provisions have been extensively rewritten to make them clearer. The exemption for employers with 19 or fewer employees remains (i.e. affected employees do not have the right to transfer to an employer with 19 or fewer employees).

The previous ability of the Minster to change the scope of application of part 6A (by adding or removing designated groups of workers covered by Schedule 1A) has been removed.  Changes will now require legislative amendment.

Franchisees who manage contracts independently of the franchisor can qualify as exempt employers if they have 19 or fewer staff.  The definition of ‘associated person’ has been amended to allow this.

New sections are provided that set out procedures for providing information for the purposes of giving a warranty that an employer is exempt and specify to whom the warranty is to be provided (in contracting, subcontracting and taking work back in-house situations).

A new section provides that an outgoing employer’s failure to observe the obligations imposed does not affect the employee’s right to transfer or the new employer’s obligations.

The new Act requires that an employer with staff electing to transfer give the new employer an implied warranty that terms and conditions of employment have not changed without good reason remains unchanged.

Provision is made for the outgoing and new employer to agree to a date (that is later than the date on which restructuring takes effect) when information about transferring employees must be provided; the default position is that the information must be provided at least 5 days before the transfer is to take effect.

Rest and meal breaks

Contrary to some press statements from those opposed to the changes, workers are entitled to breaks.  If these cannot be taken then compensatory measures must be provided. It remains unclear as to what is or is not a compensatory measure, but the tenor of the wording of the new law suggests that it be in the form of time off at different time than break that would otherwise have been taken.

Strikes

Strikes notices are to specify the date on which a strike will occur and when it will begin and end. Strike notices can specify employees by reference to a particular worksite. Schedule 1 (which designates essential services) is amended to cover a range of animals (mammals and birds) where 3 days’ notice of strike action must be given to protect those animals awaiting slaughter.

Partial strikes are more clearly defined to cover situations where employees are continuing to do some of their work but are refusing or failing to do work that is part of their normal duties and reducing normal performance, normal output or their normal rate of work.  Partial strikes can also involve breaking the employment agreement with or without the kind of reduction in work activity referred to above. Deductions for pay can be the actual value of the work not done, or 10%. The decision as to which calculation is to be used is made by the employer.

Employment Relations Authority

In order to speed up the process of issuing decisions, the original Bill required the Authority to give an oral indication of its findings after an investigation meeting. That requirement has been modified and the Authority must now do so ‘wherever practicable’. More detailed provisions are inserted which achieve the purpose of making decisions more timely while at the same time recognising that more time may be needed for more complex matters. Therefore the Authority will be able to reserve its determination if satisfied there are good reasons for doing so. The Authority will also be able to determine matters on the basis of written material without holding a hearing or investigation meeting. An appeal to the Employment Court must be lodged 28 days from the date of a written determination or of a written record of an oral determination.