Employment Relations Amendment Bill

HRINZ EMPLOYMENT RELATIONS AMENDMENT BILL SUBMISSION

HRINZ (Human Resources Institute of New Zealand Incorporated) is a not-for-profit membership organisation representing the interests of 4000 individual members. HRINZ members include those working in private and public sector organisations, as well as students and academics. HRINZ provides members with education and information services, conferences and seminars, publications, representation at government and official levels, and networking opportunities. This helps members to develop their professional skills and knowledge in the practice and teaching of human resource management.

HRINZ is making this submission on behalf of its members, all of whom are individual members as HRINZ does not offer corporate membership. HRINZ has canvassed member views via online discussion groups and an interactive webinar and the views and opinions expressed here reflect a broad spectrum of views from HR practitioners at all levels who work in large and small organisations across New Zealand. This submission represents the views of some but not all HRINZ members, and has been endorsed by the HRINZ Board, who are committed to support best people management practices in the workplace to ensure the health and wellbeing of all employees and thereby lift workplace productivity.

In general the proposals put forward in the ERA Amendment Bill have met with a positive response from HRINZ members who believe that there are many good changes that are being proposed but there are some areas where it was felt that further clarification or qualification was required. We have outlined below a number of specific areas we would like to bring to your attention for further consideration:

Concluding the collective bargaining process

It was felt that it is critical to maintain the element of good faith in bargaining. HRINZ’s submission supports the Bill’s proposition that the ability not to conclude collective bargaining should only occur after all reasonable attempts to conclude have been exhausted as this is essential to maintain the employment relationship and the need for surety around conditions of employment. There was a concern that the 60 day stand-down period between the Authority making a determination and either resuming bargaining or re-initiating further bargaining, might be too long and lead to more protracted bargaining in some cases if one or other party refuses to agree a different time period as provided for in the Bill.  We do not believe that this change to the Act will result in more employers rushing to seek determinations from the Authority to declare an end to the bargaining process.  Whilst the amendment Bill provides that both parties may agree a different time period, it would in our view make sense if the default 60 day period was shorter to prevent this process being used by either party to “unnecessarily protract” bargaining. In respect to the timing of the Authority releasing a determination on whether or not bargaining is concluded, it would be useful to establish a timeframe for the release of that determination if it is not able to be provided immediately.

Opting out of MECAs 

Generally members felt that the principle of being able to opt out of a MECA was positive as currently competitor organisations who are signed up to a MECA can sometimes feel conflicted by being “forced” to join in negotiations with their competitors.  The ten day opt out period where all parties involved need to be notified raised some queries about the practicality of this. HRINZ does however appreciate that this does align with the ten day period within which the employer needs to notify staff of the initiation of bargaining.  The similar timeframe may however lead to some confusion as the employer must notify employees of any initiation for a new collective within the ten days. The Bill is unclear as to whether that notice may also include the employer notifying its staff that it will be opting out of the MECA negotiations, or whether they must keep such notices separate.  Some clarity on the practicality of these steps would be appreciated by members for example, must each notification be kept separate, or  may the employer hold off notifying staff of the initiation to allow time to notify the union and other employer parties of its intention to opt out provided this is completed within 10 days?

Removing the 30 day rule

We are aware that the union view of this is that this could potentially lead to lower wages and inferior terms and conditions for employees, but our members’ views are that this would not happen with large employers and that the removal of this clause could offer employers the opportunity to offer different terms and conditions  to a potential employee with a specialised skillset who may not otherwise be attracted by the terms set out in a collective agreement and which are still aligned to service productivity requirements.  In our view unions will need to be more proactive about selling the benefits of joining a union and that this is to be encouraged so that employees can make informed decisions about joining a union.  

Flexible work for all

This was generally felt to be a positive recommendation but it was acknowledged that it could be challenging for some employers who might be bombarded with a raft of requests on an on-going basis. Some of our members feel that there should be a stand-down period between an employee’s requests to prevent ‘abuse’ of the ability to make more than one request in a year.  HRINZ suggests a stand-down period of three months during which a further request for flexible working cannot be made.  Whilst most large employers should be able to consider requests for flexible arrangements within a month there was some concern voiced  that a one month response time could be impractical for small businesses. 
  
Reduced pay for partial strike action

We are aware that this recommendation is being hotly contested from a union perspective but we believe the requirement to notify an employer about strike action allows the employer to make an informed decision about pay reduction for partial strikes. The challenge for employers with this clause is how best to calculate the proposed reduction: a 10% reduction will be easier for employers to administrate whereas the estimated proportional reduction will require comprehensive and careful documentation to ensure that a fair reduction has been calculated. 

There was a view expressed that the ability to reduce pay for partial strikes was appropriate where the duty is a required duty (ie a non-discretionary activity/function the employee is required to undertake) rather than a discretionary function. There need to be safeguards in place to ensure that reduction in pay is linked to the non-performance of that duty as this is what the employee is paid to perform.   

This clause raised a query about “on call” employees and whether they are exempted from a pay reduction for partial strikes if they regularly perform “on call” work? Most collectives include some penal payment for being on-call.  Is it the intention of the Bill that such penal payments constitute a ‘special payment’ and therefore exclude refusing to be on-call from being classified as a partial strike action? Our members felt that clarification of what constitutes a ‘special payment for performing that work’ would be helpful.  As it is currently worded our members felt the proposed amendment (in respect to refusing to do on-call work being excluded as a form of partial strike) was a potentially grey area which would require a test case to provide clarity and definition.  

Clause 6A – transfer of employees
  
Our members generally felt that these were positive recommendations where it would now be easier for a new employer to have clarity about potential employees in a transfer situation. It provides for more transparency and more current information about an employee so that the new employer can make a more informed decision about taking on a potential employee. It was also felt that this clause benefits existing employers and employees.

There was a view that the proposed changes would be of greater benefit to a small business which would now have the mandate to take on (or not) an employee who wishes to transfer.  The small business would have no obligation to take on an outgoing contractor’s employees which could result in increased redundancies.

Larger organisations,  in industry sectors where winning/losing contracts on a regular basis is the norm, would face the prospect of being undercut by smaller businesses who do not have to offer more than the minimum wage. 

There was concern expressed that the proposed changes in this clause could create legal loop holes for smaller organisations that do not fulfil their obligations under Clause 6A. Clear timeframes need to be outlined as currently industry norm is applied as to when information should be sent/received. 

There was also a concern raised about the implications of this clause with regard to franchise operations where they would be regarded as one entity for the purposes of calculating the total number of employees which is contrary to the World Franchise Council resolution that “the relationship between a franchisor and franchisee is based on legal independence”. Such a definition would fundamentally undermine the franchise system in NZ.  It also creates a potentially unfair differential between franchised and non-franchised organisations when tendering for work as franchised organisations could be restricted by the proposed amendment but the same rules would not apply to non-franchised organisations. 
  
Disclosure of information

Our members view this as an excellent amendment which applies common sense and allows free and frank discussions to ascertain the suitability of a candidate for employment.

Compensation for rest/meal breaks

Our members have real concern about this clause and queries included whether it was necessary to amend the current state which makes provision for paid rest/meal breaks and whether the proposed amendment might be too broad and potentially subject to abuse from smaller employers who do not always seek proper advice on such matters. We appreciate the spirit of this clause is to make provision for smaller employers with smaller workforces to apply greater flexibility to breaks and ensure continuity for business output but  there was general concern that this could expose smaller employers to serious Health and Safety risks and possibly increased claims for stress at work. There was also a concern that some employees could abuse this clause to gain compensation rather than take a much needed rest.  Given NZ’s poor track record of Health and Safety in the workplace, HR practitioners were extremely reluctant to support this clause.  

There was a view that breaks should remain mandated in terms of an overall entitlement as breaks are essential for sustained productivity and focus but that there should be flexibility applied, dependent on the complexity of the role and requirements for safety and the organisation’s circumstances that support it not being able to provide the rest or meal break.  

Speeding up ERA decisions

The principle of speeding up the decision making process for the ERA was applauded by our members.  However, there was concern about Authority members making a decision on the day of the hearing.  Our members felt there is an increased risk of flawed decision making from tired Authority members feeling pressured at the end of a long day where clear judgement could be clouded and poor decisions made. While our members would support quick decisions on straight forward hearings we would favour a more measured timeframe. We would prefer to see the ability to give an “on the day” decision based on the complexity of a case and that in general those more complex cases, where there was a wealth of information to be absorbed, be subject to no greater than the three month time period for issuing a determination  proposed in the Bill, but preferably within one to two months.
  
Our members believe it is essential to make a considered decision as an immediate (but flawed) decision could lead to increased dissatisfaction with ERA decisions which in turn would lead to more appeals to the Employment Court, extending both the time and cost of litigation. A decision on the day also reduces the opportunity to research and confirm the law.  As stated above, we would prefer to see more flexibility here with the premise that prompt determinations are to be encouraged in straightforward cases but that there is the opportunity to deliberate for longer in more complex cases. We believe that if there is clear communication about this all parties involved will accept this.