From 2 October 2000, all employers, employees and unions are required to work with the Employment Relations Act.

The goal of the Act is to build productive employment relations between employers, employees and unions.

This booklet is designed to answer immediate questions employers may have about how to work with the Act from 2 October 2000. It then introduces employers to the Employment Relations Service of the Department of Labour, which exists to provide information and help with any issues that arise, and provides information on how to contact them should that be necessary.

Employers should read this to get an overview of the Act. A more technical analysis of all aspects of the Act, Employment Rights and Obligations, can be ordered by telephoning 0800 800 863 or via the internet at www.ers.dol.govt.nz

The terms and conditions of all existing individual or collective employment contracts remain the same on 2 October. Any existing disputes or grievances between you and your employees continue to be dealt with under the rules of the Employment Contracts Act.

Changes to terms and conditions of employment only occur under the Employment Relations Act when they are negotiated between employers and employees or their unions. Similarly, the new Act applies only to disputes or grievances that occur on or after 2 October.

The immediate change from 2 October is that you, your employees and their unions are required to deal with one another in good faith. For most employers, this should not represent a major change. In addition, unions have certain rights of access to workplaces, explained below.

At the most basic level, good faith means you are not allowed to mislead or deceive your employees or their unions, and they are not allowed to mislead or deceive you. You have to respect the authority of your employees’ union and you can’t discriminate for or against anyone based on their union membership. Beyond these minimum requirements, common sense will usually be enough to determine what is "good faith" and what is not.

A Code of Good Faith is being developed by the New Zealand Employers’ Federation, the State Services Commission, the New Zealand Council of Trade Unions and the Government to provide guidance on the concept of "good faith" in collective bargaining. The code will be widely publicised and appear on the internet at www.ers.dol.govt.nz

Parties to an employment relationship may also find it useful to develop protocols to ensure everyone understands what others expect.

Under the Employment Relations Act, unions have a legal right to enter a workplace. This can be either for purposes related to the employment of its members or for legitimate union business. The latter includes seeking to recruit employees as union members and discussing union business with existing members.

To act in good faith under the Act, most employers have to accept union representatives entering workplaces, but the union also has to act in good faith. For example, unions must have regard to normal business operations and they have to give a reason for wanting to enter the workplace. To enter your workplace to recruit members they would have to believe, on reasonable grounds, that their membership rules cover at least one of your employees. If you do not think the union is acting in good faith you should say so.

More Information

Access to workplaces Sections 19 to 25 of the Employment Relations Act

Article on union access to an employer's premises

Just as under the Employment Contracts Act, you should take this seriously. The law relating to harassment and discrimination is not changing much. If you would have felt confident dealing with the complaint under the Employment Contracts Act, you should feel just as confident under the Employment Relations Act. The idea of the new Act is that people should be able to solve problems themselves in good faith.

However, if you are worried about your in-house capability to deal with the complaint, help is available from the Employment Relations Service.

How you set their pay and conditions depends on the new employee’s circumstances:

If the new employee belongs to a union that has a collective agreement covering the work they will be doing

In this case, the new employee must be employed under their union’s collective agreement. You may negotiate extra terms and conditions with the employee but they cannot be inconsistent with (i.e. less favourable than) the collective.

If the new employee is not a union member but there is a collective employment agreement covering the work they will be doing

To ensure that the employee has adequate information to decide whether to join the union and the collective you must inform them that there is a collective that covers their work, of their right to join the union and therefore the collective, and how to contact the union. They should also be given a copy of the collective agreement and, with the employee’s agreement, you should also inform the union that they have commenced work.

For the first 30 days, the new employee must be employed under the terms and conditions of the collective agreement, but you may also negotiate extra terms and conditions that are not inconsistent with the agreement. The objective is to give new employees time to decide whether they want to be a member of the union and be bound by the collective agreement, or whether they would prefer to continue on an individual employment agreement.

The Act includes provisions to protect this 30-day rule. Any additional terms and conditions you offer for the 30 days must sit comfortably alongside the collective agreement. You and your new employee are not allowed to reach an initial agreement that automatically changes after the 30 days.

During the 30 days your new employee may join the union, in which case they would join the collective agreement. If at the end of 30 days the employee has not joined the union they would continue on the individual employment agreement, which either party could then seek to vary.

If there is not a collective agreement covering the work the new employee will be doing

(Immediately after 2 October 2000 there will usually not be a collective agreement. This is because the law allowing the negotiation of agreements only comes into force on that day).

In this case, you need to provide the new employee with a draft individual employment agreement. You have to advise the employee that they are entitled to seek independent advice about the intended agreement, and you have to give them a reasonable opportunity to seek that advice. You then negotiate an individual employment agreement.

When an employee bound by a collective agreement quits their union but doesn’t resign from their job, they are immediately deemed to be employed under an individual employment agreement with the same terms and conditions as the collective agreement. You and they may then start negotiating to change the terms and conditions of employment.

However, the employee can’t union-hop. They can’t join another union and be part of its collective agreement until 60 days before the expiry of the first union’s collective agreement.

You have to negotiate in good faith, which means both you and the employee have to listen to the other’s point of view.

Beyond that, there is a requirement that if and when you reach an agreement the employer has to be confident that the employee is able to understand its provisions. Particular care has to be taken if the employee is young, sick or in emotional distress. Particular care must also be taken if the employee has a mental, educational or communication disability. You must also ensure the person has the opportunity to seek independent advice and doesn’t rely on your advice or the advice of someone acting on your behalf.

If and when you reach an agreement, it has to be in writing, and the following must be included:

Also, the agreement can’t contain anything illegal.

More Information

Section 65 of the Employment Relations Act

How to offer employment when there is no relevant collective agreement

Yes, as long as the nature of the work is genuinely fixed-term and you explain this to the employee at the outset. Fixed-term agreements can’t be used simply to make it easier to get rid of someone without using normal dismissal procedures. The process for establishing the rest of the employee’s agreement is identical to that outlined above.

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Section 66 of the Employment Relations Act

Yes, as long as you make this clear to the employee in your written employment agreement. Also, at the end of the trial or probationary period, you have to go through proper dismissal procedures if it doesn’t work out.

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Section 67 of the Employment Relations Act

Your employees have an absolute right to join or establish a union. No one can discriminate against them on the basis of their membership, or non-membership, of a union.

Because only a registered union is allowed to bargain for a collective agreement, the Act has clear rules about what constitutes a union. Among them, unions must operate independently of the employer and be democratic. If a society is registered as a union you must, if it asks you to, bargain with it for a collective agreement.

All involved must bargain in good faith. Briefly, steps in the bargaining process are:

Agree on a process

The first thing you have to do is use your best endeavours to agree, as soon as possible, on a process for an effective and efficient way to conduct the bargaining. This applies to the union, too, and includes them notifying you of how their members will ratify any agreement after settlement.

Begin bargaining

You and the union have to meet from time to time. You have to respect the role and authority of the union’s representatives or advocates, and you can’t try to undermine either them or the bargaining itself. This also applies the other way, the union has to respect you and your team.

Respond to claims and counter-claims

Each of you will put claims and counter-claims to the other. You have to consider and respond to everything the union puts to you and vice versa. But you don’t have to keep meeting about matters that you have already looked into. Nor do you have to waste time considering and responding to them again.

When you do consider and respond to a claim, you may be asked to provide information to back up your response, subject to certain conditions (see below).

Reach an agreement

There is no obligation to reach agreement, but if you do, the result is a collective agreement which binds any members of the union which negotiated it and are doing the work it covers.

You have to back up claims made when bargaining for a collective agreement. For example, if the union claims there is a risk of a labour shortage in its industry, you can ask for proof. This provision also applies to claims made by employers, perhaps claims that profits are expected to be tight the following year.

If you or the union want to see evidence supporting a claim the other has made, the request has to be in writing, it has to specifically identify the information sought and it has to specifically identify the claim it relates to. A reasonable timeframe must be given for the information to be supplied. This provision can’t be used for fishing expeditions.

If you or the union believe the information needs to be kept confidential, you should try to agree on an independent reviewer to protect the information and make a decision on that point.

If the reviewer agrees the information should be kept confidential, the reviewer will then report on whether it backs up the claim.

If the reviewer decides that some or all of the information does not need to be kept confidential, the reviewer will advise both parties and return the information to the party that provided it. That party should then, in good faith, provide the information to the other party.

Either way, the information can only be used for the bargaining process. It would be illegal for anyone to show the information to anyone else, such as the media or a competitor of the business.

Bargaining can become more complex if there is more than one union or more than one employer involved. It is likely you would want to seek advice from the Employment Relations Service, your local employers’ association, your lawyer or other employment relations advisor, or all three.

More than one union

If you are negotiating with more than one union for just one collective agreement, the unions have to deal with one another in good faith, and you have to deal with each of them in good faith.

More than one employer

This would mean the union was seeking a multi-employer collective agreement. For each employer a secret ballot would be held of members of the union. At each site, a majority of votes in favour of a multi-employer agreement would be required to give the union a mandate to seek such an agreement.

If that were achieved, you and the other employers would have to deal with one another in good faith. You couldn’t lie to one another or set out to undermine one another. If you did not have strong relationships with the other employers, you may want to seek advice.

You also need to be aware that employees can strike for a multi-employer agreement.

More than one union and more than one employer

In this case, all the unions have to deal with one another in good faith and all the employers have to deal with one another in good faith. The complexity of this situation means you will almost certainly want to seek advice.

As long as you have acted in good faith, nothing happens. There is no requirement under the law to agree.

Either party - or both - may decide to ask our mediators to help. The mediators could provide information that might solve part of the disagreement. Or they could meet the parties individually or separately. Or they could hold a series of different types of meetings. They would try to design a process tailored to your particular circumstances.

In the end, though, our mediators are just that. They are not arbitrators. It is the parties’ responsibility to try to solve the problem.

The process for striking or locking out has not changed significantly. Strikes and lockouts over bargaining are only allowed if either the collective agreement has expired or the parties are bargaining for a collective for the first time and the parties are more than 40 days into negotiations for a new one. By that stage, you should be receiving advice from the Employment Relations Service, your local employers’ association, your lawyer or other employment relations advisor, or all three.

Rules for hiring replacement workers during a strike have changed and the right to strike in support of a multi-employer agreement has been introduced.

Strikes and lockouts cost employers lost profit and suspended employees lost wages. If all parties act in good faith, this should usually be able to be avoided.

The first thing you should do is tell them so and discuss the issues. If that doesn’t work, you may want to contact the Employment Relations Service, your local employers’ association, your lawyer or other employment relations advisor, or all three. They will be able to offer advice.

What if my employees or their union reckon I’m being unreasonable, and not acting in good faith?

They should tell you so you can consider what they have to say and discuss it with them. They may also want to contact the Employment Relations Service or someone else for help.

These are unchanged. The Employment Relations Service operates a Labour Inspectorate to assist employers and employees in observing statutory minimum terms and conditions of employment such as holidays and minimum wages.

One change is that the Inspectorate is now able to serve demand notices for underpaid minimum wages and holiday pay. Like instant fines for speeding, you can deal with these and put the matter to rest. Alternatively, you have seven days to comment on the demand notice to the Inspector who served it. If you are not happy after that, you can appeal to the Employment Relations Authority and, if necessary, on to the Employment Court.

Yes. All employers are required to allow union members to attend two union meetings per calendar year, of no longer than two hours each (in the year 2000 they are allowed one meeting after 2 October).

The Act also contains provisions for employees to take paid education leave to attend employment relations courses. The courses have to be approved by the Minister of Labour and help improve relations between employers, employees and unions.

The union allocates the education leave to its members depending on the number of members involved in collective bargaining that the union has in your workplace.

Your employees have to give you at least 14 days’ notice of their intention to take this leave and it can’t unreasonably disrupt your business.

Yes, as long as the contractor is happy to be a contractor. If not, they should discuss this with you. It is possible for them to ask the Employment Court to decide whether they are a genuine contractor and not an employee. The Court is able to look at the real nature of the relationship and rule that they are in fact an employee.

More Information

Section 6 of the Employment Relations Act

Difference between employee and self employed contractor

Directors can be liable for unpaid minimum wages or holiday pay only if they personally directed or authorised the default of these payments, and the company has no money or assets.

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Section 234 of the Employment Relations Act

When issues or problems arise in any aspect of the employment relationship, you, your employees or their union may seek outside help. Briefly, there are four levels of help available:

Information

The Employment Relations Service can provide information that may help to clarify an aspect of the situation and allow the parties to sort out their disagreements by themselves.

Mediation

Other times, some or all of the parties may ask us to mediate. Our mediators can operate informally, by coming to the workplace, by meeting the parties separately or together, or through a series of different meetings. We aim to help the parties to see what the issues are, where they agree and disagree, and what the options are for moving forward. The idea is to provide advice that is free, fair and flexible and tailor a process to meet particular circumstances.

Sometimes, everyone’s best efforts at mediation won’t resolve an issue. The parties may agree to ask our mediators to make a binding decision.

Investigation

If a mediation process fails, the Employment Relations Authority is available to formally investigate the issues and make a ruling. It can’t make a ruling about whether you, your employees or their union should agree in a bargaining situation. That is the responsibility of the parties.

Court

Should all this fail, the Employment Court continues to be available to all parties.

The easiest way to obtain further information on the Employment Relations Act and the Employment Relations Service, is to view their website at www.ers.dol.govt.nz

When you need additional information on bargaining or about an issue that has arisen in your workplace, the Employment Relations Service can be contacted by phone on 0800 800 863 or email at info@ers.dol.govt.nz

They will help you decide which of their services - their mediators, the Authority or the Inspectorate - is most appropriate to address your issue.

This booklet originally published by the Employment Relations Service in PDF format. Converted to HTML by Ace Payroll.