By: Amanda Douglas
Published: 2/07/2013
2013 looks to be the year that the Government will implement many of its pre-election policies.  On 26 April 2013, the Employment Relations Amendment Bill ("the Bill") was introduced by the Minister of Labour.  The Transport and Industrial Relations Select Committee has now called for submissions on the Bill.  The Bill signals significant changes within the following categories of employment law:
  1. Continuity of Employment;
  2. The Duty of Good Faith and the Disclosure of Information;
  3. Flexible Work Arrangements;
  4. Rest Break and Meal Break Provisions;
  5. Collective Bargaining; and
  6. Employment Relations Authority Processes and Procedures.
Below, Amanda Douglas, Partner, provides a brief outline of the changes that are on the horizon.  Submissions close on 25 July 2013, with the Select Committee expected to report back by 5 December 2013.
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Continuity of Employment

The Bill proposes changes to Part 6A of the Employment Relations Act 2000 (the "ER Act") which deals with continuity of employment.  Currently, the ER Act separates employees into vulnerable employees (cleaners, food catering sectors, orderly services in the aged-care sector etc.) and other employees.  As the current law stands, an incoming employer or contractor is required to take on any vulnerable employees if those employees elect to transfer to that new employer.

The Bill propose to introduce an exemption to this right of transfer based on the size of the employer.  In particular, incoming employers with 19 or less employees will be exempt from the Part 6A requirements. 

However, this exemption only applies to vulnerable employees.  As proposed, the position will remain the same in relation to other employees – that employee protection provisions are contained in employment agreements regarding negotiation of an employee's transfer to a new employer on a sale of business or change in contracting arrangements.

This distinction may place small to medium sized businesses in a position of advantage in tender situations as they will face less compliance costs.  However, others may argue that this proposed change removes legislative protection for the more vulnerable of employees, which may not be consistent with the original intent of Part 6A.

Further, the Bill proposes administrative amendments to Part 6A, such as the requirement for an outgoing employer to forward individual employee information, timeframes being placed upon employees as to whether they may elect to transfer, and the addition of penalties and compliance orders for non-compliance with the provisions for Part 6A.

Finally, with respect to Part 6A, the Bill also proposes to enable employers to negotiate an agreement on the apportionment of liabilities for transferring employees' entitlements and provides a default apportionment formula where agreement is not reached.

The Duty of Good Faith and the Disclosure of Information

The Bill has identified that the floodgates were opened by the Employment Court's decision in Vice Chancellor of Massey University v Wrigley1.  This decision is authority for the proposition that unsuccessful job candidates may have access to evaluative information about themselves and other candidates as part of the good faith obligations under the ER Act.  This position creates competing obligations for employers under the Privacy Act 1993 and the ER Act.  There were also concerns about the application of this decision to restructuring and/or redundancy situations, as well as when dismissal for serious misconduct was being considered.

The Bill signals a change to the duty of good faith such that an employer is not obliged to provide an affected employee with access to confidential information if the confidential information is:
  1. About another identifiable individual; or
  2. Evaluative or opinion material compiled for the purpose of making a decision about the continuity of the employee's employment; or
  3. About the identity of the person who has applied the evaluative or opinion material.
This proposed change is intended to align the good faith requirements in the ER Act more closely with the privacy principles and withholding reasons in the Privacy Act 1993 and the Official Information Act 1982.  The proposed change seeks to provide a balance between employees having access to relevant information to allow an informed comment on a situation affecting their employment and also an individual's right to have his or her personal information kept private. 

Flexible Work Arrangements

The Bill also proposes to extend the right to request flexible work arrangements to all employees, rather than just those with caring responsibilities.  The proposed change will impose a limit on the number of employee requests within 12 months.  In addition, the time frame for an employer to consider a request will also be reduced from 3 months to 1 month.

Rest Break and Meal Break Provisions

The Bill seeks to recognise the importance of rest breaks and meal breaks to rest, eat, drink, and deal with personal matters, but also recognises that these break provisions need to be practical in their workplace.

The Bill encourages employers and employees to negotiate, in good faith, rest breaks and meal breaks that comply with the legislation without compromising business continuity.  As a result, rest breaks could be timed to suit service or production continuity.

The Bill provides an exception if employers give compensatory measures, such as an equivalent amount of time off.  For example, this might include a late start or early finish.

Collective Bargaining

At present, the ER Act requires that parties to collective bargaining conclude an agreement.  The Bill signals a return to the position where a duty of good faith does not require parties to collective bargaining conclude a collective agreement.  Rather, parties will be able to apply to the Employment Relations Authority for a declaration as to whether collective bargaining has concluded.   It appears that this proposed change has been accelerated in light of the Ports of Auckland employment relations dispute from 2012. 

Secondly, the Bill proposes to remove what is colloquially known as the 30 day rule.  Under the current law, if an employee is hired whose work is covered by a coverage clause in an existing collective agreement, the employee must be offered the same terms and conditions as the collective agreement for the first 30 days of their employment.  The proposed removal of this 30 day rule means that employers will be able to offer all new employees the terms that they deem to be appropriate within individual employment agreements.

Thirdly, the Bill also signals a proposal to allow employers to partially reduce the pay of employees who are party to partial strikes.  The Bill proposes to deal with this by providing either a proportionate pay reduction formula or a fixed reduction formula of 10%.  As the proposal stands, written notification will be required before any deduction is made.  Further, the Bill also signals that all parties involved in either a strike or a lock out will be required to be provided advanced written notice.

Finally, the Bill also signals that the timeframes for Unions and employers to initiate the bargaining will be better aligned.

Employment Relations Authority Processes and Procedures

The Bill also proposes changes to introduce timelines to support the stated objective that the Employment Relations Authority delivers speedy information, and practical justice.

In particular, at the conclusion of an investigation meeting, the Employment Relations Authority will be required to provide either:
  1. An oral determination, followed by a written determination within 3 months; or
  2. An oral indication of the ERA's findings to the parties, subject to any additional evidence, which must be followed by written determination within 3 months.
Conclusion

The changes are still in Bill form.  The Select Committee will now consider submissions which must be lodged by 25 July 2013.  Please contact one of our Employment Law team members if you would like more information, or, you wish to lodge a submission on the Employment Relations Bill.


1 Vice Chancellor of Massey University v Wrigley [2011] ERNZ 138
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