By: N/A
Published: 5/02/2014
The Transport and Industrial Relations Select Committee reported back on the Employment Relations Amendment Bill just prior to Christmas. 

As detailed in our earlier article, Changes to Employment Legislation . The Bill provides for a number of significant changes to several areas of New Zealand's employment law regime.  In particular:
  • Good faith requirements when providing information
  • Collective Bargaining
  • Flexible Working Arrangements
  • Part 6A: Continuity of employment
  • Rest and meal breaks
  • Strikes and lockouts
  • Employment Relations Authority
A copy of the Report can be found here: http://www.parliament.nz/resource/0002060295.  In summary, the majority of the Select Committee has recommended that the Bill be passed into law.  In addition, the majority of the Select Committee has also recommended a number of further amendments to the Bill.

We summarise some of the amendments recommended by the majority of the Select Committee.

The Bill will need to go through further readings in Parliament before it becomes law.  At the time of writing it is unknown when the Bill will be referred to the House for its second reading.  We will keep you informed with any updates and amendments along the way.
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Good Faith Requirements and the Disclosure of Information

Currently, section 4 of the Employment Relations Act requires an employer to provide an employee with relevant information if a decision is being made that might affect their continued employment.  This has seen an influx of requests for information by lawyers and advocates in the course of dealing with employment isues.  The Bill seeks to limit this requirement, by specifying certain confidential information that an employer may withhold.

For clarification, the Select Committee has recommended a number of tweaks.  First, the Select Committee has recommended that an employer not be required to provide access to confidential information about an identifiable person other than the affected employee if it would involve an unwarranted disclosure of the affairs of that individual.  This amendment is based on the approach under the Privacy Act 1993 and seeks to strike strikes a balance between providing natural justice and recognising that some situations demand a particular sensitivity. 

Secondly, the Select Committee recommends removing new proposed provisions that would give employers grounds for withholding evaluative or opinion material, or information identifying the person who compiled it.  Where a person's employment is at risk, the Select Committee considered that the need for that employee to be privy to that information about themselves outweighs confidentiality regarding the person who supplied the material, and is consistent with the overriding duty of good faith. 

The Select Committee also recommends providing clarification of "confidential information", to ensure that the phrase means information that is provided in the circumstances where there is mutual understanding of secrecy.  This is to bring consistency with the judgment of the Employment Court in Massey University v Wrigley, which had a key influence in this area.  It would remove the employer's sole discretion as to what could be withheld as confidential. 

Collective Bargaining

Clauses 7-9 of the Bill would remove the requirement that parties bargaining for a collective agreement conclude the agreement unless there is a genuine reason, based on reasonable grounds, not to.  Parties will still be required to deal with each other in good faith, but the Amendment Bill aims to avoid stalemate bargaining, that is costly for both sides.

However, the Select Committee recommends amending clause 9 of the Bill to clarify that an employer is not complying with the duty of good faith where they refuse to conclude a collective agreement simply because they object in principal to collective bargaining or collective agreements.

The Select Committee has also recommended making amendments to improve the legislation's workability and to align the amendments with the existing sections of the Employment Relations Act.  These amendments refer to the notification to employees about initiation of bargaining, opting out of bargaining, determining that bargaining has concluded, and the continuation of a collective agreement.

Part 6A – Continuity of Employment

The Bill currently provides that small and medium sized enterprises should not be constrained to take on staff from a previous employer in the situation of a restructure.  This position is in light of a review of Part 6A of the Employment Relations Act, which found that smaller businesses have difficulty absorbing the financial risks associated with such restructures and transfers. 

The Bill amends Subpart 1 of Part 6A of the Act to exempt employers (together with any associated person), who have 19 or fewer employees, from the Act's requirement that "vulnerable" employees must be allowed to transfer to the new employer following a restructuring. 

The Select Committee has recommended several changes to these provisions, including amending the Bill to provide clarification regarding the type of employees to whom the subpart is intended to apply, what employers are exempt (including dealing with franchisors and franchisees), and providing penalties for non-compliance.

Conclusion

At the time of writing it is unknown when the Bill will be referred to the House for its second reading.  In any event, we will keep you informed with any updates.
 
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