The Select Committee has released its report on the Employment Relations Amendment Bill 2013 ("Bill").  The report sets out the Select Committee's recommendations following consideration of submissions.  On the whole, the Select Committee has not made substantial changes to the Bill that was introduced to Parliament in June this year. 

The Bill proposes amendments to the law regarding the duty of good faith in relation to disclosure of information; collective bargaining and the requirements around the conclusion of bargaining; the extension of employees' rights to request flexible working arrangements; an exemption from the continuity of employment provisions under Part 6A for small to medium-sized enterprises; increasing flexibility and compensatory measures for rest and meal breaks; written notice for strikes and lockouts and alteration of the timeframes for Employment Relations Authority determinations.

By way of summary, the Select Committee's recommended changes have been set out below.

Good Faith - provision of informationThe Bill would now allow an employer to refuse to provide access to confidential information where that information would involve an unwarranted disclosure of the affairs of another individual.  This is the same test as the Privacy Act and may go some way to address concerns that have arisen following the Wrigley case regarding disclosure of information in restructure and disciplinary situations.

The draft provisions that would have enabled an employer to withhold evaluative or opinion material, or information identifying the person who compiled material, have been removed.  This is because the Select Committee recommended that the need for an employee to see and respond to this kind of information, where their employment is at risk, outweighs any confidentiality considerations.

The Select Committee also recommends clarifying the definition of "confidential information" to dispel concerns that employers would have sole discretion as to what information could be withheld as confidential.

Collective Bargaining

The Bill provides that a party to collective bargaining is not required to conclude a collective agreement.  The Select Committee proposes that this section would not apply where the party has not concluded a collective agreement due to an objection to collective bargaining or collective agreements in principle.

The Select Committee also recommends:

  • allowing employers 15 days (rather than 10 days as provided in the Bill) to notify employees about the initiation of bargaining where more than one employer is involved (ie for multi-employer collective agreements);
  • an amendment to the Bill to make it clear that the ability to opt out of bargaining would also apply to a multi-employer collective agreement where bargaining is initiated for the purpose of obtaining an employer's agreement to become a party to an already-concluded collective agreement;
  • aligning the sections regarding applications for a determination from the Authority that bargaining has been concluded with current sections under the Employment Relations Act;
  • ensuring that the Authority must make a declaration if it finds that bargaining has concluded; and
  • clarifying the position in the Bill that where bargaining is underway a collective agreement will continue in force until its expiry, or for up to 12 months, in relation to an employer who has opted out of bargaining for a multi-employer collective agreement.

Part 6A: Continuity of Employment The Bill provides for an amendment to the wording of the object of Part 6A to provide clearer guidance on what kind of employees are covered by Part 6A.  This amendment includes wording which reflects the categories of employees listed in Schedule 1A of the Employment Relations Act.  The Select Committee recommends providing some guidance as to the kind of employees who would be covered by the protections in Part 6A.  For example, whether the employees work in sectors where restructuring of the employer's business is common, where terms and conditions of employment tend to be undermined by restructuring, and where employees have little bargaining power.

The Bill provides that employers with fewer than 20 employees (including employees of associated entities) would be exempt from the regulations regarding vulnerable employees.  This ensures that small to medium-sized enterprises would not be constrained by having to take on staff from a previous employer.  The Select Committee proposes that this exemption is extended to franchisees with 19 or fewer employees who operate at arm's length from the franchisor.

The Select Committee also recommends inserting the following new sections under Part 6A:

  • detailed procedures for providing information for the purpose of giving a warranty as an exempt employer and specifying who the warranty must be provided to; 
  • provision of a penalty for non-compliance with the warranty provisions; 
  • inclusion of an additional term to the implied warranty by an outgoing employer that the employer would not without good reason change the employees who perform the work affected by the restructure.  Whether the employer has a good reason will be determined on an objective basis;
  • clarification that a failure of an outgoing employer to fulfil their obligations under Part 6A does not affect an employee's entitlement to transfer to the new employer or obligations of the new employer; and
  • clarification of the timing requirements for the provision of information about transferring employees, to avoid compliance issues which arise on the previous wording.  The proposed amendment would allow incoming and outgoing employers to agree on a later date for providing the required information.

The amendments to Part 6A are aimed at providing greater clarity and consistency throughout the provisions relating to exempt employer warranties.  

Notice of Strikes and Lockouts

The Bill provides that a notice specifying both a start and end date and time must be given before all strikes and lockouts.  The Select Committee recommends that this notice could instead specify an event which would mark the end of a strike or lockout.  This inclusion would provide flexibility for the parties, while it would still be open to the parties to issue another notice should they decide to continue with the strike or lockout after the end date.

Partial strikes

The Bill enables an employer to make a deduction from an employee's pay when they are partially on strike.  The Select Committee recommends an amendment to the definition of partial strike to include breaking an employment agreement when production or output is not affected. The Select Committee recommends clarification of the Bill, in that a refusal to work overtime or perform call-out work should be considered a full strike and therefore an employer would not be allowed to make specified pay deductions in such circumstances.  The Select Committee also considers that the definition of a partial strike could be made clearer, by focusing on the distinguishing features of a partial strike.  In the Select Committee's view, this would include the following actions by employees:

  • refusing, or failing to accept, particular tasks that would normally form part of their duties, such as answering phone calls, but otherwise performing their work;
  • reducing their normal performance;
  • reducing their normal output or normal rate or work; or
  • breaking some aspect of their employment agreement, for example by refusing to wear a uniform.

The Bill requires employers to notify employees about an intention to recover overpayments if a partial strike has occurred.  The Select Committee proposes amending the notice period for this from 1 working day to 5 working days to ensure it is more practical.  

Employment Relations Authority Determinations

The Bill would require the Authority to provide an oral determination or an oral indication of its preliminary findings at the conclusion of an investigation meeting.  The Select Committee proposes to include the ability for the Authority to reserve its determination if it is satisfied that there were good reasons why it was not practical to issue an oral determination.  This recognises the need for timely determinations, and also the fact that it may not be practical for complex matters.

The Select Committee also proposes that where the Authority provides an oral determination at the conclusion of the investigation meeting, it is required to provide a written determination within one month (as opposed to the proposed 'outer' limit of three months).  The three month 'outer' limit would be retained for reserved determinations.  However, the Chief of the Authority may decide to allow a longer timeframe for a written determination in exceptional circumstances.

Rest and Meal Breaks

The majority of the Select Committee did not recommend any amendments to these provisions.  The Select Committee considered that the Bill meets the policy intent of encouraging employers and employees to negotiate in good faith to achieve workable arrangements for rest and meal breaks.  This was due to two important points:

  1. The Bill would not override any other requirements under other legislation, eg general duties under the Health and Safety in Employment Act; and
  2. The inclusion of the reasonableness test in the proposed sections.  

Flexible Work ArrangementsThe Bill extends the right to request flexible working arrangements to all employees and amends the timeframes and limits for such requests.  The Select Committee supports these changes and noted that the changes promote the benefits of flexible working arrangements, allowing productivity gains and a better work-life balance.

The Select Committee's only recommendation is to amend the proposed section to require that an employer's response to a request must be in writing, and state and explain the employer's reasons if the request is refused.  This amendment would ensure consistency.

Next Steps

The next step in the legislative process is for the Bill to come back before Parliament for its second reading and consideration.  There is no indication of when this is scheduled to occur.  The Bill would not be passed into law until after its third and final reading.  Once passed by Parliament, and given the royal assent the amendments would not take effect for four months.