Most Read Contributor in New Zealand, September 2016
Changes to collective bargaining and to the duty of good
faith are at the heart of the package of amendments the Government
plans to make to the Employment Relations Act 2000.
The reforms, which substantially deliver on
National's election policy commitments, are planned to take
effect in the second half of next year.
Duty of good faith
The duty of good faith in section 4 of the Act will be amended
to clarify that employers are not required to provide an employee
with confidential personal information about another person, or
evaluative material about the employee concerned, where the
employer is proposing to make a decision that will, or is likely
to, affect an employee's continued employment.
This will limit the effect of the Employment Court's
controversial Massey University1 decision and
will bring the Employment Relations Act largely back into line with
the Privacy Act 1993. It is a welcome move, although employers will
continue to have significant good faith obligations in
restructuring, dismissal, and sale of business situations.
The intended changes to collective bargaining have been widely
publicised and include:
removing the requirement for parties to conclude a collective
employment agreement, and enabling the Employment Relations
Authority to declare that collective bargaining is at an end in
removing the requirement for all new employees to be employed
on the terms of any applicable collective agreement for the first
30 days of their employment
allowing employers to opt out of multi-employer bargaining,
allowing proportionate pay reductions where employees take
partial strike action.
Missing from the mix is National's 2008 policy commitment to
provide non-union workers with the right to bargain and enter into
Part 6A – continuity of employment in a
The provisions protecting "vulnerable employees"
(principally cleaners and food service workers) in business sale
and restructuring situations will also be rewritten. Many of these
changes will fix known loopholes, and will create a more workable
The changes include:
information-sharing requirements between the old and new
a process requiring old and new employers to agree how to
apportion liability for accrued employee entitlements (and a
default arrangement which will apply where there is no
requiring employees to confirm whether they will transfer to a
new employer within five working days (unless a longer timeframe is
providing that small and medium businesses (those with fewer
than 20 employees) will not have to comply with Part 6A, if they
are the incoming employer, and
introducing an implied warranty, with remedies in the District
Court, confirming that the old employer has not harmed or
disadvantaged the new employer's business (for example, by
inflating employee entitlements before the transfer).
1Vice-Chancellor of Massey University v
Wrigley & Kelly  NZEmpC 37
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
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