Employment Relations Act 2000
New Employees and Collective Agreements

The Employment Relations Act ("ERA") becomes law on 2 October 2000. This radically changes many aspects of employment law, including the law relating to collective employment contracts (called "Collective Agreements" under the new Act). What effect will these changes have?

Only unions and employers may negotiate a Collective Agreement. Employees have no right to negotiate a Collective Agreement unless they do so through a union. Only unions and employers will be parties to a Collective Agreement. Individual employees will not have party status.

Once negotiated, a Collective Agreement will cover all employees who are members of the union party to the Agreement, and whose work comes within the coverage clause in the Collective Agreement. Any employee can elect to be employed on the Collective Agreement at any time if their work falls within the coverage clause and they join the union.

Employees who resign from the union within the 14 days of the commencement of negotiations will not be covered by the Collective Agreement eventually entered into. Anyone who resigns more than 14 days after negotiations have commenced, or during the currency of a Collective Agreement will be prohibited from negotiating, or becoming bound by, another Collective Agreement earlier than the 60th day before the Collective Agreement that they were previously employed on expires. This effectively means that such employees will continue to be employed pursuant to the Collective Agreement. If a new employee's work is within the coverage clause of an existing Collective Agreement and that employee joins the union, then his or her terms and conditions of employment will be those set out in the Collective Agreement.

If a new employee's work is within the coverage clause of a Collective Agreement, but he or she does not join the union, then for the first 30 days the terms of the existing Collective Agreement will apply. After that time, the parties are free to negotiate an Individual Agreement. An employer is required to notify new employees of: The existence of a Collective Agreement which covers the type of work to be performed by the employee; The fact that the employee can join the union, and thereby be covered by the Collective Agreement; The name of the Union and how to contact it; and The fact that during the first 30 days of employment the employee's terms and conditions of employment cannot be inconsistent with the applicable Collective Agreement.

All Collective Agreements must be for a maximum of 3 years, and must contain an expiry date.

If a Collective Agreement expires, an employee continues to be employed on the same terms and conditions as set out in the expired Agreement. However, parties are permitted to negotiate changes if they wish. Changes may be inconsistent with the terms of the expired Collective Agreement.

Once a Collective Agreement has expired, a union may at its option, enforce a Collective Agreement for a period not exceeding 12 months if bargaining for a new Collective Agreement as continuing. There is no equivalent right for an employer to roll the Collective Agreement over for another 12 months.

The ERA does not state what happens if no replacement Collective Agreement has been negotiated at the end of 12 months. Presumably, employees will be employed on an individual agreement based on the terms of the expired Collective Agreement as currently occurs under the Employment Contracts Act.

Section 66 of the ERA requires an employer that is a party to a Collective Agreement to continue to employ every employee covered by the Collective Agreement while it is current or during any period that it is enforceable by the union. Parties may exclude or vary this by inserting specific provisions into the Collective Agreement providing for early termination. However, section 66 may be a trap for those who are ignorant of this.

Section 66(4) preserves the employer's right to dismiss an employee for "just cause" during the currency of a Collective Agreement. However, it is not clear whether "just cause" extends to redundancy. If it does not, then unless the employer has varied section 66, he or she will lose his or her right to restructure during the currency of the Collective Agreement. This could potentially be for a period of up to 4 years.

Section 81 of the ERA provides that employers and employees may enter into a fixed term "individual employment agreement". There is no corresponding right for collective employment agreements, so it is unclear whether a Collective Agreement can provide for fixed term engagements. However, it is likely that Collective Agreements will be able to contain such provisions.

Unless fixed term engagements are specifically provided for in a Collective Agreement, then employers will not be able to employ employees for a fixed period if an employee's work is within the coverage clause of the Collective Agreement. This is because if an employee's work is within the coverage clause of a Collective Agreement, then the Collective Agreement covers him or her for the first 30 days of his or her employment. Furthermore, the employee may at any time elect to be covered by the Collective Agreement (and thereby obtain permanent employment status) by simply joining the union.

More ERA Resources

How to offer employment when there is no union	Article on new employees and collective agreements
Difference between employee and self employed contractor	Article on union access to an employer's premises

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