General / 25 November 2015

Employment law is set to change. Passed into law on 6 November 2014, the Employment Relations Amendment Act 2013 (“the Act”) will largely come into force on 6 March 2015. The following are some of the changes the Act makes that are likely to impact our employment relationships the most.  With more flexibility for employers and exemptions from several obligations for smaller business, the changes promise to be good for business.

Rest and Meal Break Provisions
At present breaks are very inflexible and prescriptive. The changes allow parties to negotiate working arrangements for breaks in good faith. Employers will be able to impose restrictions where reasonable and necessary having regard to the nature of the work. If an employee misses a break then the employer will have to provide compensatory measures instead. This could mean that the employee could either start later or finish earlier or receive a payment for their missed break.

Disclosing Information in Good Faith
The changes seek to clarify disclosure requirements and create more certainty for employers about what information must be provided in processes used in employment such as consultation during a restructuring or a disciplinary investigation. Currently, all information relevant to a proposed decision that may adversely affect an employer must be provided unless “good reason” exists not to. Employees who are about to be made redundant frequently request information about other employees who are likely to remain with the company. Employees facing dismissal might request the details of an anonymous complainant.

Come 6 March next year, unless a proposed decision was notified prior, employers will not be required to provide access to confidential information (information provided by parties in circumstances where they enjoyed a mutual understanding of secrecy) if:

it would disclose another’s affairs to an unwarranted extent,
breach a statutory requirement to maintain confidentiality (such as privacy or official information), or
another good reason exists not to (such as avoiding unreasonable prejudice to an employer’s commercial position).
Collective Bargaining
Most of the new law on collective bargaining will effectively apply now because come March it will apply to all bargaining, even if the bargaining began before the Act was passed.

Concluding a Collective Agreement
Previously the duty of good faith required bargaining parties to conclude a collective agreement unless a genuine reason based on reasonable grounds existed not to. Parties could also keep bargaining on other matters even if they came to a standstill or reached a deadlock on a matter. The new law expressly states that the duty of good faith does not require parties to enter into a collective agreement or agree on anything in a collective agreement. An employer will still breach the good faith requirements if they refuse to enter into a collective agreement and the employer refuses due to being opposed, or objects in principle, to bargaining for or being a party to a collective agreement.

Declaring Bargaining at an End
The changes allow the Employment Relations Authority (“ERA”) to determine that bargaining has concluded. A party bargaining for a collective agreement may apply to the ERA where they are unable to conclude a collective agreement due to bargaining difficulties. The ERA must consider whether parties have attempted to resolve the difficulties by mediation or facilitation and may direct more of the same.

If the ERA determines bargaining has concluded there must be a declaration to that effect and no party can initiate further bargaining later than 60 days after the date of the declaration, unless otherwise agreed. If the ERA determines that bargaining has not concluded, they can make a recommendation as to the process the parties should follow to resolve the difficulties and no party can apply for a further declaration that bargaining has ended unless they have followed the recommendation. If no recommendation is made, parties still can’t apply for a declaration again earlier than 60 days after the determination unless otherwise agreed.

A new section was added at the final stages of the Bill. The ERA must dismiss an application for determination that bargaining has concluded where the ERA is satisfied that the party seeking the declaration has failed to comply with good faith unless the party has rectified the failure. If the ERA is precluded from making a declaration, they may still make recommendations or directions about steps parties ought to take including how to fix any good faith failures.

Repeal of 30 day Rule
Previously, where a collective agreement covered work of new employees in a workplace, employee’s terms and conditions during the first 30 days were those in the collective agreement and any additional terms and conditions were individually agreed. Employers previously had to advise the new employee of the above and they were penalised if they failed to comply with the requirements. The 30 day rule has been repealed.

Noticing and Valuing Strikes
Currently parties can lawfully strike or lockout without notice in industries that do not require it (essential, passenger transport and schools). The changes make striking without notice, or prematurely, unlawful. Notice of a strike must be in writing and the notice must specify the nature/timeframes for the strike e.g. the start/end date and time, or specify an event which would mark the end of the strike/lockout.

Partially Paying Partial Strikes
Changes also allow for an employer to make specified pay deductions from an employee who participated in a partial strike. A partial strike is defined as an act where the employees continue to perform some work for their employer during the strike instead of wholly discontinuing their employment during the strike e.g. refusing to do particular tasks that form part of normal duties but continuing to perform the rest of the duties.

Continuity of Employment
Changes modify when and how vulnerable employees (cleaners, caregivers and caretakers) are affected by restructuring. There are exemptions for small to medium enterprises (organisations with 19 or fewer staff) so vulnerable employees do not have the right to transfer to an employer with 19 or fewer employees.  An employer who wished to be exempt must provide a warranty verifying its staffing total. Otherwise there will be an obligation on the outgoing employer to provide detailed information about the transferring employees to the incoming employer, clarification around the liability for service related entitlements and consequences for an outgoing employer who without good reason changes things to the detriment of the incoming employer e.g. landing the new employer with significant, unjustified pay rises given just before the transfer.

Working Flexibly
Currently an employee must have caring responsibilities and have been employed by their employer for at least six months before they can request a flexible working arrangement. The changes extend the right to request flexible working arrangements to all employees from the beginning of their employment relationship. The limit that employees can only have one request each period of 12 months will also be removed and the time that an employer has to consider requests will be reduced from three months to one month. Employees must make a request for flexible working arrangements in writing and the response from the employer must also be in writing.

Employment Relations Authority
The changes introduce rigid requirements on the nature and timing of determinations from the ERA. At the end of the investigation meeting the Member must, wherever practicable, give an oral determination or oral indication of its preliminary findings. The Member can only reserve its determination if they are satisfied that good reasons exist making it “not practicable”. A preliminary indication may be subject to additional information being received but there is a three month deadline.

We will keep you updated with the case law that emerges as the ERA and the Courts apply the Act and interpret the changes.

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