In December 2018 the Employment Relations Amendment Act passed through the final stages of law making and was granted Royal Assent. This article deals with some of the significant changes made by the Act, most of which will take effect in May 2019.

The purpose of the changes is to, ‘restore key minimum standards and protections for employees, and to implement a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. The changes are intended to introduce greater fairness in the workplace between employees and employers, in order to promote productive employment relationships.’ In attempting to achieve this purpose, the Act has made significant changes to New Zealand’s industrial landscape.

Collective bargaining and unions

There are a raft of changes to the law governing collective bargaining. Overall these strengthen the position of unions. These include:

  • Bargaining for collective agreements must be concluded unless there are ‘genuine reasons based on reasonable grounds’ for it not to be.
  • The ability to opt-out of Multi-employer Collective Agreements (MECA) has been removed and there is a duty to conclude bargaining for a MECA, again except where there are ‘genuine reasons based on reasonable grounds’ for it not to be..
  • Collective agreements must provide rates of pay, and union representatives gain a limited right to enter workplaces without consent, provided the employees are covered by, or bargaining towards, a collective agreement.
  • The 30-day rule will be restored, so new employees will need to be employed under terms consistent with the collective agreement for the first 30 days of employment.

Trial Periods

Businesses employing 20 or more employees will not be able to utilise the 90-day trial period. However, these businesses will still be able to utilise probationary periods, and we recommend they do so. A carefully worded probationary period can greatly assist an employer assessing an employee’s skills during the initial stages of their employment.

Personal grievances

Reinstatement has been restored as the primary remedy for a personal grievance where requested by the employee bringing the claim. Reinstatement is the re-employment of the employee in their previous position, or in a position no less advantageous to the employee. The authority may provide for reinstatement in addition to any other remedies it sees fit, if it is practicable and reasonable to do so.

Rest and meal breaks

Set rest and meal breaks are being reintroduced, stepping away from the flexibility of the current legislation. The number and timing of rest breaks will depend on the number of hours worked. For example, an employee working for eight hours would be entitled to two 10 minute rest breaks and one 30 minute meal break. The parties can agree at the timing of the breaks, but failing agreement the Act provides set timing. There are limited exceptions to these changes.

Amendments to protections for vulnerable workers

Part 6A of the Employment Relations Act deals with protections for vulnerable workers. Currently, businesses with 20 or more employees are exempt from the requirement to transfer employees in vulnerable industries on their current terms and conditions of employment where their work is restructured. The change removes this exemption, so the provisions will apply to all businesses, regardless of size.

Practically this means that employees in the specified category, whose work is to be performed by another person due to a restructure (including a sale of the business), have the right to transfer their employment to that other person/organisation on the same terms and conditions.

Our advice

Employers should consider the technical amendments made by the Employment Relations Amendment Act to ensure compliance. This will involve reviewing your employment agreements, policies, procedures, and practices and amending as required.

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.