The Transport and Industrial Relations Select Committee has released its reports on the proposed amendments to the Employment Relations Act and Holidays Act. By and large, the initial changes to both Bills have been approved, but some further changes have been recommended.

In this Employment Law update, we examine some of the more substantial recommendations from the Select Committee, and the further amendments made to the Employment Relations Amendment Bill (No 2) and the Holidays Amendment Bill.

Employment Relations Amendment Bill (No 2)

Union Access

One of the more significant changes introduced by Select Committee relates to restrictions on union access to the workplace. Although the concept of employer consent will still be a key feature of union access, the Select Committee has recommended that the timeframes for an employer responding to a request for access (and providing reasons for any refusal), should be shortened to lessen the impact on unions.

Under the revised provisions, an employer's response to a union request for access to a workplace must be provided no later than the working day after the request is received. If the employer withholds consent, reasons for doing so must be given no later than the working day after the date of the decision. Therefore, the longest permissible time between an employer considering the request for access and providing written reasons for the decision, would be two working days after the request was received.

Extending the 90-day trial period to all workplaces

Despite significant opposition from the Labour and Green Parties, the provisions that would allow a 90-day trial period to apply to all employees, regardless of the size of the employer, still stand.

Test of justification - Section 103A

The Bill originally provided that the Authority was not to determine a dismissal to be unjustifiable because of "minor or technical" defects in the process. The word "technical" has been removed from the revised Bill, as it was felt this might otherwise cause interpretive difficulties for the courts, given it is not a term with an established meaning in employment law.

Employer must retain copy of individual employment agreement

The status of unsigned employment agreements has been clarified. A new clause in the Bill has been added so that where the parties have clearly not agreed on one or more of the terms and conditions of employment, an unsigned employment agreement will not comprise the employee's terms and conditions.

Holidays Amendment Bill

Discretionary payments

"Discretionary payments" are excluded from consideration of the calculation of "gross earnings". The definition of "discretionary payments" has been further clarified to ensure that it accords with the policy intent of the Bill, which is that a discretionary payment should be a payment an employer may choose to pay to an employee but is not bound to pay under the employee's employment agreement.

'Cashing Up' Annual Leave/Transferring Public Holidays

The Bill had proposed that an employee's request to have their fourth week of annual leave 'cashed up' (or to agree to transfer part or a whole public holiday) must be "informed and voluntary". However Select Committee has recommended that the terms "informed" and "voluntary" be removed, as they could lead to confusion and litigation. The policy intent behind this amendment to the Bill is that such requests or agreements must be "genuine", and the words "informed" and "voluntary" are not required to achieve this.

Next Steps

Both Bills will now have their third reading, after which it is anticipated they will receive the Royal Assent, most likely before Christmas. At this stage, the Bills are likely to come into force on 1 April 2011, excluding clause 10 of the Employment Relations Amendment Bill (No 2) (about employers retaining a signed copy of an agreement) which will come into force on 1 July 2011. We will keep you updated with any further developments.