The much anticipated Bill to amend New Zealand’s central workplace law, the Employment Relations Act 2000 (ERA), was introduced into Parliament on 26 April 2013.

For the most part the changes are as we described in our ALB article in February 2013, though some are more far-reaching than the Government announced originally.

The Bill also includes one new change.  It proposes that the Employment Relations Authority (the first instance tribunal) be required to deliver an oral decision or indication at the conclusion of the investigation meeting, followed by a written decision within three months.

Part 6A - Transfers of business

Employers with fewer than 20 employees will be exempt from the provisions in Part 6A of the ERA that enable certain employees to transfer their employment when their work is transferred (eg sale of business, outsourcing or change of outsourced provider). Part 6A will also be improved by:

  • Apportioning liability for the costs of transferring employees
  • Requiring employees to make their election within five days
  • Requiring the ‘transferring employer’ to provide better and more specific information to the ‘new employer’
  • Implying a warranty from the transferring employer to the new employer that it has not changed employees’ terms and conditions so as to adversely affect the new employer.

Duty of good faith and disclosure of information

Case law in 2010 imposed new disclosure requirements on employers proposing to terminate an employment relationship.  This included an obligation to disclose personal information about candidates for contestable positions in a restructuring.  The Bill proposes to bring the law into line with mainstream privacy law (the Privacy Act 1993).

The changes proposed by the Bill may also permit employers to withhold information that normally would be disclosed in a disciplinary process, such as the identities of a complainant or witness, or opinion material about an employee’s performance.

Collective bargaining

The proposed changes to collective bargaining are the most significant since those made by the last Labour Government in 2004, and favour employers.  They include the following:

  • The Bill removes the requirements to conclude a collective agreement and to continue bargaining where a deadlock has been reached.  While the parties’ general good faith obligations will still require some engagement – and some persistence - arguably employers will be able to resist a collective agreement now in principle, and be able to walk away from bargaining more readily.  The Bill will also allow the parties to apply to the Authority for a declaration that bargaining has concluded.
  • Both unions and employers will be permitted to initiate collective bargaining 60 days before a collective agreement expires.  Currently unions have a 20-day head-start.
  • Employers will have 10 days from receiving a bargaining initiation notice to opt out of multi-employer bargaining.  This will assist employers who do not want to be drawn into bargaining with parties such as their competitors or service providers.
  • The Bill repeals what is known as the ‘30-day rule’, which requires employers currently to apply the terms of the relevant collective agreement (if any) to new employees for the first 30 days of employment, even if they are not union members.  Employers will still be required to inform new employees about any relevant collective agreement, and to provide a copy and information about the union.
  • Advance written notice will be required for all strikes and lockouts, not just those in essential services.  Failure to provide notice will render the strike or lockout unlawful.  There is no minimum notice period, which will probably lead to very short notice periods in many cases.  Primarily, the new notice requirements will give employers greater certainty as to the existence of a strike and the employees who are on strike.
  • Two options are proposed for reducing the pay of employees on a ‘partial strike’ (eg a go-slow or refusal to do part of the job).  Employers may make a proportionate pay deduction by reference to the time on strike or a fixed 10% deduction.

Breaks

The Bill proposes that the current prescriptive requirements for 10 minute rest breaks and 30 minute meal breaks be replaced with more flexible provisions as to duration and timing.

Flexible working arrangements

The Bill extends the right to request flexible working arrangements to all employees, not just those who are responsible for dependants, shortens the employer’s timeframe for responding to a request from three months to one, enables employees to ask for flexible working arrangements from the start of their employment and removes the limit on the number of requests an employee can make.

Timing and next steps

The Bill has yet to be debated and to go through the Select Committee process, so is likely to change in some respects.  The new law may take effect before Christmas, but we expect that early 2014 is more likely.  Buddle Findlay is well placed to assist with any submissions to the Select Committee or advise on the proposed changes.