New Zealand: Employment Relations Amendment Bill – changes afoot

Last Updated: 13 June 2013

As published in the Auckland District Law Society Law News

The passing of the Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Act 2013, which 'Mondayises' Waitangi Day and ANZAC Day, has already brought change in the area of employment law in 2013, specifically in the area of public holidays. Those changes are good news for those employees who work Monday to Friday, which includes many readers of Law News.

Further development in the area of employment law has been signalled by the introduction of the Employment Relations Amendment Bill. As most people are either employees or employers themselves, the changes have relevance beyond practitioners in the employment jurisdiction.

The important changes can broadly be broken down into the following categories:

  • Collective bargaining;
  • Flexible working arrangements;
  • Rest and meal breaks;
  • Continuity of employment for vulnerable employees;
  • The provision of information in a restructuring situation; and
  • Employment Relations Authority (ERA) processes and procedures.

The latter two categories are the more 'surprising' inclusions in the Bill.

It is not possible to outline the proposed changes in detail in this article, nor to look specifically at what the changes are trying to achieve, why and whether they will in fact do so. At first instance it is important to understand the changes that are on the horizon. Submissions on the Bill can be made to the Transport and Industrial Relations Select Committee.

Collective bargaining

Collective bargaining has attracted attention in the last 18 months, largely through the protracted dispute at the Ports of Auckland. Against that background, it was hardly surprising that a number of changes were proposed in this area. These are numerous and include the following:

  • At present, the law requires the parties to collective bargaining to conclude an agreement. The proposed change removes that requirement. Instead, the parties will be able to apply to the ERA for a declaration as to whether bargaining has concluded, and the Bill includes a process for the Authority to determine whether bargaining has concluded;
  • At present, if a new employee is hired whose work is covered by the coverage clause of the existing collective agreement, that employee must be offered the terms and conditions of the collective agreement for the first 30 days of their employment. The Bill proposes the removal of that requirement. That means employers will be able to offer all new employees whatever terms they deem appropriate;
  • There has been case law about whether an employer must participate in multi-employer collective bargaining if that is initiated. A change is proposed which will mean that an employer is not obliged to do so;
  • A change is proposed to allow employers to partially reduce the pay of employees who are party to partial strikes. When this change was first flagged, the potential difficulty in assessing how an employer can apportion parts of an employee's salary was identified. The Bill has addressed this concern by providing for either a proportionate pay reduction formula, or a fixed deduction of 10%;
  • All parties will be required to provide advance written notice of a strike or lockout; and
  • The timeframes for unions and employers to initiate bargaining will be aligned.

Commentators are considering whether the proposed changes will strengthen the position of employers in regard to collective bargaining. Obviously the intention is that greater clarity will be provided in respect of issues that have required judicial intervention in the past and it is hoped that the changes will help to avoid protracted disputes like the Ports of Auckland dispute.

Flexible working arrangements

Currently New Zealand follows the UK in that the right to request flexible working hours under the Act is only available to those employees who are responsible for the care of another person. Employees will no doubt welcome the proposed amendment, which extends to all employees the right to request flexible working arrangements.

However, in practice this change will just put in place a statutory right to request flexibility (there is still no statutory obligation to provide it). Even under the current legislation, forward-thinking employers are already considering requests for flexible working arrangements from all employees, not just those with caring responsibilities

Rest and meal breaks

Another issue which has required judicial intervention in the past is that of rest and meal breaks. The Act currently specifies when breaks ought to be taken during a period of work, but despite the best intentions of both parties that is often not possible, particularly in sole charge situations. The proposed change will allow the parties to the employment relationship to negotiate break times in good faith and will give greater flexibility, a move that will be welcomed by many.

Continuity of employment

Changes are proposed to part 6A and here we see another differentiation based on the size of the employer (trial periods could initially only be implemented by employers with fewer than 20 employees). It is proposed that incoming employers with 19 or fewer employees will be exempt from the part 6A requirements. As New Zealand has a considerable number of employers in this small to medium sized category, this is a significant change.

Provision of information

In regard to the provision of information, the floodgates were arguably opened by the Employment Court's decision in Vice Chancellor of Massey University v Wrigley [2011] ERNZ 138. The Bill proposes a change to the duty of good faith such that an employer in this situation is not obliged to provide an affected employee with access to confidential information if the information is:

  • about another identifiable individual; or
  • evaluative or opinion material compiled for the purpose of making a decision about the continuity of the employee's employment; or
  • about the identity of the person who supplied the evaluative or opinion material.

The proposed changes will be welcomed by employers, many of whom have struggled with this requirement post-Wrigley.


The Employment Relations Authority is also facing changes with the Bill proposing a requirement that the Authority must either provide an oral determination at the end of an Investigation Meeting, followed by a written determination within 3 months, or provide an oral indication of its findings, subject to the provision of additional evidence, to be followed by a written determination within 3 months.

Given the Authority was set up to offer low level, cost-effective and prompt access to justice for parties to an employment relationship, such changes are consistent with the Authority's mandate.

It is pleasing to see areas requiring past judicial intervention being addressed. Of course, the ultimate test is whether the proposed changes will in fact address the issues.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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