Labour Minister Kate Wilkinson announced yesterday that Cabinet has agreed to a number of further amendments to Part 6A of the Employment Relations Act 2000.  Part 6A is aimed at providing continuity of employment for employees in the cleaning, catering, orderly and laundry industries when a business is restructured or sold.

Proposed changes to Part 6A include the following:

  • Small and medium businesses (those with fewer than 20 employees) will be exempt from the provisions of Part 6A if they are the incoming employer.  SME employers who take over an existing contract will not have the obligation to continue employment for all employees of the previous contractor.
  • A requirement for the outgoing employer to forward employees’ information to the incoming employer, such as employment agreements, PAYE, wage and time or leave records.
  • A process to help the employers agree how to apportion liabilities for accrued service-related entitlements of employees who are transferring.
  • A requirement that employees must decide to transfer to a new employer within five working days (or a longer timeframe if agreed between the outgoing and incoming employer).
  • Additional penalties and compliance orders for non-compliance with Part 6A, and provision for litigation in the District Court.

Ms Wilkinson also took the opportunity to reiterate the Government's intention (first announced in May this year) to amend the law around collective bargaining.  Specifically, the Government intends to legislate to:

  • return to the original position in the Employment Relations Act where the duty of good faith does not require the parties to conclude a collective agreement (repeal of s 33 of the existing Act).
  • allow employers to opt out of multi-employer bargaining;
  • allow for partial pay reductions in cases of partial strike action; and
  • remove the 30-day rule that forces non-union members to take union terms and conditions.
  • The proposed changes to Part 6A and to collective bargaining will be reflected in a Bill that will be introduced into the House later this year.  The Government also intends to:
  • amend provisions relating to the disclosure of information, following the Employment Court's recent decision in Wrigley v Massey University; and
  • empower the Employment Relations Authority to declare in certain circumstances that collective bargaining has ended.