Malley & Co – Employment law changes

John SingletonRead the published version in Canterbury Today

In April the Government introduced a bill aimed at amending the Employment Relations Act 2000. What are some of those changes, and how do they affect employers and employees?

Changes to good faith bargaining

Currently, if employers propose to restructure their business and make employees redundant, they must give affected employees extensive access to confidential information – unless there is good reason to keep the it confidential, such as to avoid their commercial position from being unreasonably prejudiced.

The bill restricts this obligation. It exempts the employer from providing confidential information in several circumstances, such as when the information is about another employee. This means an employer can protect the privacy of other employees.

Removal of duty to conclude a collective agreement

Currently, unions and employers bargaining for a collective agreement both have to conclude a collective agreement, unless there are genuine reasons why they cannot.

The bill removes this obligation and provides the right to seek a determination of the Employment Relations Authority that bargaining is concluded. If the Authority determines that bargaining is concluded then no further bargaining can take place for a further 60 days without agreement of both sides.

These provisions will reduce the power to strike or lockout.

Workplace flexibility

Currently, an employee’s right to flexible work arrangements are quite prescribed.

The bill removes the restrictions and allows an employee to request flexible working arrangements at any time and the employer must respond within one month.

These provisions reinforce employees’ rights to flexible working arrangements.

Vulnerable employees

Currently, the act defines and provides vulnerable employees the right to continue doing their job or contract when a new party buys the business they are already employed by or contracted with. 

The bill exempts companies with fewer than 20 employees.

This amendment makes it easier for a company with fewer than 20 employees to sell its business if it has vulnerable employees or contractors on its books.

Rest breaks

At present, employers must provide employees with paid rest breaks and one unpaid 30-minute meal break if their work period is between six and eight hours. The timing of rest and meal breaks is flexible and can follow any arrangement agreed between employer and employee.

The bill states employees must be given a reasonable opportunity for rest and refreshment during work time. However, that the right to a rest break or meal break is no longer entrenched if the employer and employee agree on compensation, such as time off work or payment of money instead of the break.

These provisions introduce flexibility to some occupations in which, because of the nature of the job, it is not reasonable to expect the employer to provide rest or meal breaks.

Multi-employer collective agreements (MECAS)

Multi-party bargaining is usually initiated by notice from a union or unions, or from an employer or employers, provided certain strict time frames are met. MECAS often bind several employers and unions to one collective agreement.

The bill will allow an employer to opt out of bargaining for a MECA, by giving written notice no later than 10 days after receiving notice from a union or unions. The opt-out notice will have immediate effect and mean the employer is no longer bound to bargain.

It is my opinion that the combined effect of some of the legislative changes will be to reduce the power of unions in the bargaining process.

Because employers will be allowed to opt out of multi-employer bargaining, the unions will lose a significant strategic industry-based bargaining tool. Because the duty to conclude a collective agreement is being removed, employers will have an added strategic advantage in being able to obtain a determination that bargaining is suspended for at least 60 days.  I predict an interesting electoral campaign.

John Shingleton is general manager of Malley & Co Lawyers and the partner responsible for employment law. For more information see www.malley.co.nz