Amendments to the Employment Relations Act 2000 (Adapted from: http://www.dol.govt.nz/er/services/law/legislationreviews/er-amendment-bill-2014.asp)

The Employment Relations Amendment Act 2014 will come into effect on 6 March 2015.

The six main areas targeted by this Act are:

  1. Flexible working arrangements
  2. The rules around rest and meal break
  3. The continuity of employment for specified employees
  4. The duty of good faith in relation to releasing personal information during restructures
  5. The collective bargaining framework, including strikes and lockouts
  6. Requirements for the Employment Relations Authority in giving its determinations

Just a couple of points to raise at this stage:

  • Re: the changes to rest and meal break provisions: It is important to note that, even when the new Amendments come into force in a few weeks’ time, any existing rest and meal break provisions in employment agreements will continue, unless employer and employee agree to amend, in good faith, their Individual or Collective Agreement accordingly.
  • Re: changes to Part 6A: The amendments to this part of the Act may seem simple enough at face value, however the possible ramifications and complications are extensive, especially due to the use of multiple sub-contractors commonly found in these industries.

Therefore if you are considering contracting in, contracting out, subcontracting or selling part of your business and your business is in the Catering or Cleaning industries, you are strongly advised to seek expert advice prior to proceeding.

1. Flexible work
The changes to flexible working arrangements aim to improve people’s participation in the labour market and to better reflect modern lifestyles. Flexible working arrangements help employees find the right work-life balance for them and their employer.

  • Extending the statutory right to all employees to request flexible working arrangements. Currently only caregivers have this right
  • Employees can ask for flexibility from their first day on the job. This removes the requirement of six months’ prior employment with the employer before an employee could make a flexible work request
  • There is no limit on the number of requests an employee can make in a year. Current provisions restrict employees to only one request per year
  • The employer must respond to a request for flexible working within 1 month. This must be done in writing and with an explanation of any refusal. This is reduced from the current 3 months’ provision

2. Rest and meal breaks
The amendments make the rules around rest and meal breaks in the Employment Relations Act more flexible. They aim to balance the importance of rest and meal breaks with business continuity needs. Employees are still entitled to reasonable rest and meal breaks to rest, eat, drink and take care of personal matters but the amendments now allow employers and employees to negotiate, in good faith, rest and meal breaks that meet legal requirements and allow the business to work.

  • The Act allows reasonable limits to be agreed or imposed as to when rest breaks and meal breaks can be taken and it gives employers the ability to dictate when breaks will be taken, if they cannot agree with employees. This replaces a rather prescriptive determination of when breaks are to be taken
  • It gives employees the right to be reasonably compensated where the employer cannot reasonably give the employee rest and meal breaks.

However the Act still:

  1. requires employers to pay employees for rest breaks
  2. stops people contracting out of legal rest and meal breaks or the requirement to give compensation instead of breaks
  3. does not overrule any other law that makes an employee take rest and meal breaks in a certain way

3. Continuity of employment – Part 6A of the Employment Relations Act (Protection of Vulnerable Workers)
Part 6A of the ERA affords protection to the employment of specific categories of workers in what are termed ‘vulnerable’ positions, mainly in the catering and cleaning industries. In 2012, the Government completed a review of the actual application in practice of this part of the Act and concluded that businesses found it difficult to put the law into practice. The problems came from transferring employees’ entitlements and information to a new employer. The Amendments aim to fix these issues and to give more certainty and clarity to employers while keeping key benefits for affected employees.

The main changes include:

  • The new Act exempts SMEs employing 19 or fewer employees from having to take on employees affected by the work changing hands or meet their entitlements. Currently all restructures involving vulnerable workers would be subject to part 6A, irrespective of size
  • The Amendments set timeframes for employees to choose whether or not to move to a new employer (elect to transfer) during a restructure involving vulnerable workers
  • The Amendments require that the old employer give the new employer detailed information on each employee that is transferring. It also introduces a mechanism for apportioning liabilities for service-related entitlements between employers where the parties are unable to agree between themselves
  • The Act now provides the new employer protection from unjustified increases in employee costs or changes to terms and conditions of employment. This takes away the possibility of outgoing employer to increase wages or to move poor performers to the affected areas just prior to the affected areas

4. Good faith
This change amends the good faith provisions that require an employer to give an employee relevant information if the employer is proposing to negatively affect an employee’s employment. It aims to clarify what information employees are entitled to during restructures or other situations where they may lose their jobs.

  • An employer must give the affected employee relevant confidential information about the affected employee themselves
  • An employer does not have to give the affected employee confidential information about another employee
  • An employer does not have to give confidential information that legally must stay confidential, or where there is a good reason to keep the information confidential
  • Employees should still know the identity of their accuser or the nature of allegations made against them unless there is good reason to keep this information confidential.

These amendments seek to address the current situation whereby an employee may demand to see information that may be confidential, including evaluative or opinion material, on the premise that it is being used to make a decision about their employment.

These changes do not affect an employer’s obligations under the Official Information Act 1982 or the Privacy Act 1993.

5. Collective bargaining
The changes to collective bargaining aim to increase choice and flexibility in the collective bargaining framework, reduce ineffective bargaining, and improve fairness and balance in bargaining requirements.

The key changes are:

  • Under the new amendments, the duty of good faith during Collective Bargaining does not require parties to reach a collective agreement and the parties will be able to ask the Employment Authority to declare that bargaining has ended. Currently parties to a collective agreement (CA) are required to conclude bargaining unless there are genuine grounds for them not to do so.
  • Employers are now allowed to opt out of a Multi-Employer Collective Agreement (MECA) bargaining from the start if they have decided not to be a party to that MECA. Currently an employer is required to attend bargaining and consider, and respond to, claims for a MECA. This sometimes has brought employers in competitive markets to bargain together.
  • Under the new Act employers will no longer have to offer new employees, who are not union members, the same terms and conditions of the collective agreement for their first 30 days of employment. The existing 30-day rule gives non-union members who are new employees, the terms and conditions from the collective agreement. These employees will then need to opt out and sign an Individual Employment Agreement if they do not wish to form part of the collective.
  • The new Act allows proportionate pay reductions as a response to partial strikes. This will allow for more flexibility on what terms and conditions employers are able to offer to new employees.
  • The new Act requires advanced written notice of any proposed strikes and lockouts in all sectors

6. Employment Relations Authority
This Amendment to the ERA is intended to help to ensure that the Employment Relations Authority issues its determinations in a timelier manner. It introduces requirements for when and how the Authority must give determinations. The Chief Executive of the Authority can extend these time frames, if satisfied that there are exceptional circumstances.

At an investigation meeting’s conclusion, the Authority must (where practical):

  • Give an oral determination, and a written record of that determination within 1 month, or
  • Give an oral indication of the Authority’s preliminary findings to the parties (unless extra evidence is provided) and deliver a written determination within 3 months of the investigation meeting or when extra evidence is provided, whichever is later
  • The Authority can only reserve its determination if there are good reasons why it is not practical to give either an oral determination or indication of preliminary findings. A reserved determination must be delivered within 3 months of either the investigation meeting or any extra evidence being provided, whichever is later.

The Authority can also decide matters without holding an investigation meeting. In these situations, the Authority must give a written determination within 3 months of receiving evidence from the parties.