An Employment Relations Amendment Bill was introduced in Parliament on Friday. The Bill is intended to improve fairness and flexibility in employment relations in New Zealand.

While most of the changes were expected, the Bill contains a new proposal that is designed to speed up the Employment Relations Authority decision-making process. In practice, the effect of this proposal will remain to be seen.

As foreshadowed by the Government prior to its re-election in 2011, the proposed amendments include:

  • extending an employee's right to request flexible working arrangements;

  • clarifying the good faith requirement to provide an employee access to confidential information;

  • issues in relation to collective bargaining, including removing the requirement to conclude a collective agreement and allowing employers to reduce employees' pay in response to partial strikes;

  • issues in relation to Part 6A of the Employment Relations Act, particularly exempting small to medium enterprises from certain requirements; and

  • allowing employers flexibility in relation to employees' rest and meal breaks.

We summarise the proposed amendments below.

Speeding up Authority determinations

An unexpected proposal is that which requires Authority members to present an oral determination on the last day of each investigation meeting. All parties will welcome the speeding up of Authority decisions, as it will ensure faster resolution for parties who are in dispute. From an employer's point of view, an immediate decision will allow employers to move on with business operations more quickly. However, a couple of concerns have been raised in relation to how the reform could operate in practice. Firstly, it is possible that the average length of an investigation meeting could be extended somewhat as a result of the change, as an Authority member may be inclined to fully and carefully consider each matter before presenting an oral determination. Secondly, there is a possibility that speedy decision making could increase the risk of rushed, and consequently flawed, decisions.

The amendment is designed to ensure that the employment issues are dealt with in a more timely manner, in accordance with the Authority's objective of delivering "speedy, informal, and practical justice".1 If enacted, the new clause will place an obligation on the Authority to:

  • give an oral determination at the conclusion of an investigation meeting; or

  • give, an oral indication of its preliminary findings to the parties at the conclusion of an investigation meeting, subject to any additional evidence or submissions; and

  • record its final determination no later than three months after the conclusion of the investigation meeting (or, if further evidence or information is required, no later than three months after receipt of that evidence of information).

In exceptional circumstances, the Chief of the Authority may extend the time time for recording a determination.

Flexible working arrangements

As expected, and in accordance with the recommendations of a review carried out by the Department of Labour in 2011, the Bill proposes a number of changes to an employee's right to request flexible working arrangements. Specifically, the amendments:

  • extend the right to request flexible work arrangements to all employees;

  • allow an employee to request a flexible working arrangement at any time during employment, irrespective of time worked;

  • remove the limits on the number of requests an employee may make for flexible working arrangements over a 12-month period; and

  • reduce the time for an employer to consider requests from three months to one month.

Good faith - confidential information

As a result of the Chancellor of Massey University v Wrigley decision of 2010, the Bill proposes to amend an employer's obligation to provide an employee access to confidential information where an employer is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of that employment.

The Massey decision highlighted differences between the disclosure of information under section 4 of the Act and the disclosure of personal information under the Privacy Act 1993. The Bill amends section 4 of the Act. It provides that an employer is not required to give access to confidential information if that information is:

  • about an identifiable individual other than the affected employee;

  • evaluative or opinion material complied for the purpose of making a decision that may affect an employee's continued employment;

  • about the identity of the person who supplied the evaluative or opinion material; or

  • subject to a statutory requirement to maintain confidentiality.

Collective bargaining

For more information about the proposed changes to collective bargaining procedures, please see our Employment Update of 18 May 2012 entitled Changes announced to law on collective bargaining and flexible working.

As expected, the Bill removes the requirement for a collective agreement to be concluded. The Act currently requires parties bargaining for a collective agreement to conclude a collective agreement unless there is genuine reason based on reasonable grounds not to. The Government wishes to reduce unnecessarily protracted bargaining. The obligation of parties to bargain in good faith with the intention of reaching an agreement will remain.

If the Bill is enacted, parties will no longer be required to continue to bargain over issues when they have come to a standstill or have reached a deadlock about a matter. The Authority may declare that bargaining has concluded. In doing so, it will be required to take into account whether or not parties have used the dispute resolution processes available to them.

The Bill introduces grace periods to provide a break from bargaining and associated strike action, with the intention of reducing litigation. Parties will be unable to reinitiate bargaining for 60 days after a declaration that bargaining is over (unless parties agree to return to bargaining earlier). Further, where it is determined that bargaining has not concluded, parties must continue bargaining for at least 60 days before they can return to the Authority for a determination on whether bargaining has concluded (unless the Authority has recommended a particular process).

Further, the Bill repeals the "30 day rule" for new employees who are not union members. This will allow employers to offer individual terms and conditions that are less than those in the collective agreement. The rationale behind this amendment is to provide more flexibility to employers, on the basis that the 30 day rule prevents employers offering new employees terms and conditions inconsistent with (or less than) those in the collective agreement.

If the Bill is enacted, employers will be allowed to initiate bargaining for a collective agreement at the same time as a union. Currently, unions are able to initiate bargaining 20 days before employers. The amendment will provide employers and unions the same opportunity to initiate collective bargaining.

The Bill proposes that an employer should be permitting to opt out of bargaining for a MECA by giving notice in writing to the other parties within ten calendar days of receiving the notice of initiation. The current requirement to participate in MECA bargaining can be costly and do not always meet the needs of individual employers. This amendment is aimed to provide greater choice to employers.

The Bill also allows partial pay deductions for partial strikes. This means that employees may not be paid for time spent taking strike action against their employer. Parties will also be required to give written notice in a dvanced of intention to strike or lockout.

Part 6A - vulnerable workers

For information about the proposed changes to Part 6A of the Act, which relates to vulnerable workers, please see our Employment Update of 1 November 2012 entitled Cabinet announces part 6A amendment for vulnerable workers.

In summary, the Bill proposes the following amendments in relation to Part 6A:

  • an exemption for small to medium enterprises from certain parts of Part 6A;

  • requiring a timeframe for employees to elect to transfer;

  • requiring the outgoing employer to provide the incoming employer with detailed information on individual transferring employees;

  • apportionment of liabilities for service related entitlements between employers;

  • an implied outgoing employer warranty; and

  • allowing subcontractors to make information requests under subpart 2 of Part 6A.

Rest and meal breaks

The Bill proposes the following amendments in relation to rest and meal breaks for employees:

  • an employer may impose certain restrictions on an employee's breaks where it is reasonable and necessary having regard to the nature of the employee's work; and

where an employer and employee cannot agree on when the employee is to take his or her breaks or on the duration of the breaks, the employer may specify reasonable times and durations that, having regard to the employer's operational environment or resources and the employee's interests, enable the employer to maintain continuity of service or production.