Employment Relations proposals announced – what does it mean for your business?

The Government has announced plans to amend the Employment Relations Act 2000 which could affect all New Zealand businesses if given the go-ahead later this year. 

The Bill, which was released at the end of January, documents a number of changes to the Act with a view of providing greater protections to workers.  

Businesses should be aware the changes are only proposals at this stage and have yet to be approved. This article highlights these changes and what it could mean for organisations.

What is the purpose of the Bill? 

The Bill was put forward by Minister for Workplace Relations and Safety, Hon Iain Lees-Galloway, to 'restore key minimum standards and protections for employees, and to implement a suite of changes to promote and strengthen collective bargaining and union rights in the workplace'.  

He said: "The changes are intended to introduce greater fairness in the workplace between employees and employers, in order to promote productive employment relationships." 

What are the proposed changes? 

The changes focus primarily on employee rights and union rights. Although there are some new initiatives, a number of the changes reverse those that were enacted by the former government. 

Changes to rights for employees: 

  • Restoring statutory rest and meal breaks 

Rest and meal breaks would be compulsory in the majority of cases and subject to a very limited exception for workers in essential services, such as air traffic controllers. Many businesses will have already retained these breaks in accordance of the previous Act, however the key issue will be when the prescribed breaks are taken.

  • Limiting 90-day trials to employers with fewer than 20 employees 

Currently, any size business within any industry can employ a new employee on a trial period for up to the first 90 calendar days of their employment. The Bill proposes to change this so the 90-day trial would only apply to businesses with fewer than 20 employees.

Employers with 20 or more employees would be able to use probationary periods, providing they meet the conditions that apply. Employers would have to ensure this is in writing within the employment agreement and aware that employees can still raise grievances.

More information about probationary periods can be found here: www.employment.govt.nz/starting-employment/trial-and-probationary-periods/probation-periods/ 

  • Restoring reinstatement as the primary remedy to unfair dismissal 

Reinstatement is moving to a primary remedy for employees who seek this course of action. Previously used on a discretional basis, the Bill states that if an employee is found to have a personal grievance and the remedies sought include reinstatement, then the Authority must provide reinstatement wherever practicable and reasonable. 

  • Further protections for employees in the 'vulnerable industries' 

The Bill seeks to increase protections for groups of people (cleaners, caretakers, etc.) who are considered to be at greater risk when a business is sold, transferred or restructured.

Employees would be given more time to consider the transfer and employers would have to provide further information about transfer costs and allow them to access any personal data under the Privacy Act.

Changes for businesses with unions and under collective agreements

The following proposed changes only apply to organisations where a union represents employees within the workplace and collective agreements apply.

  • Union access without employer consent 

Unions will still be subject to requirements to access the workplace at reasonable times without disturbing day-to-day business, health and safety. 

  • Restoration of the 30 day rule 

All new employees will be employed under the relevant collective agreement for the first 30 days; following this period the employer and employee may negotiate changes to the individual employment agreement. 

  • Repeal of partial strike specified pay deductions 

Employers will not be able to deduct wages for low level industrial action. 

  • Restoration of the duty to conclude bargaining unless there is a genuine reason not to  

In the duty of good faith, parties involved in a collective agreement will be required to conclude bargaining unless there is a genuine reason, based on reasonable grounds, not to. This is complemented by the repeal of the process to have bargaining declared concluded by the Authority 

  • Restoration of the earlier initiation time frames for unions in collective bargaining  

Unions will be able to initiate bargaining 20 days prior to when employers can begin bargaining.  

  • Removal of the MECA opt out where employers can refuse to bargain for a multi-employer collective agreement  

Currently, employers have 10 days from initiation of bargaining to give written notice if they choose to opt-out of a multi-employer collective agreement. The Bill seeks to repeal the MECA opt-out option and processes that were inserted on 6th March 2015. 

New proposals: 
  • Currently, employees have up to 12 months to raise a workplace issue with their union; the Bill seeks to increase this period to 18 months after an issue arises.

  • Employers will have to include rates of wages or salary in collective agreements.

  • Employers will need to provide reasonable paid time for union delegates to represent other workers. 

  • Employers may be required by the union to provide prospective employees with specified information about unions in the workplace and relevant forms to become a member.
  • New protections against discrimination on the basis of being a union member. 

When will the changes come into effect? 

The Bill went before the Government's Education and Workforce Select Committee on Wednesday 14th February and is now open to public submissions. You can have your say on the proposed changes to the Bill here: https://www.parliament.nz/en/pb/sc/make-a-submission/  

Next steps for your business 

Although employers are not yet required to take action, we recommend being vigilant and ready for change. Keep up to date with plans through our newsletter, website and social media. 

This blog is not intended as legal advice but is intended to alert you to current topics of interest. For further advice about responding to the Employment Relations changes please call Viv Patterson on 021 223 2128 or email v.patterson@eqconsultants.co.nz.