Employment Relations Amendment Bill - Implications for employers

Susan Hornsby-Geluk, Managing Partner of Dundas Street employment lawyers discusses the implications of the recent Employment Relations Amendment Bill...

On 5 December 2018 the Employment Relations Amendment Bill ("the Bill") passed its third reading.

Since the Bill was first introduced in Parliament on 29 January 2018, it has faced an uphill battle due to a number of philosophical disagreements between Labour and NZ First. However, after managing to strike a compromise, we can now summarise with some certainty the key changes to be introduced.

The following changes are designed to strengthen unions' bargaining power:

• Unions no longer require consent to enter workplaces where there is either a collective agreement between its members and the employer, or the Union has initiated bargaining for one. Unions will also be entitled to access workplaces for purposes related to the health and safety of employees who are not members of the union, if the employee requests the assistance of the union.
• Employers will be required to provide reasonable paid time for union delegates to represent other workers.
• Employers will be required to pass on information about unions in the workplace to prospective employees as well as provide greater protections against discrimination of employees on the basis of being a union member.
• The Bill restores the requirement to reach agreement in collective bargaining, "unless there is a genuine reason not to". A genuine reason may include opposition to concluding a multi-employer collective agreement if it is based on reasonable grounds.
• There is now a requirement for collective agreements to include the rates of wages or salary payable (which could be pay ranges or methods of calculation).
• The Bill reintroduces the requirement that all new employees be covered by the applicable collective agreement for the first 30 days of their employment irrespective of union membership.

In addition, the following changes are designed to strengthen employees' rights in the workplace:

• 90-day trial periods have been removed for all but small businesses with fewer than 20 employees.
• Protections for all vulnerable workers during restructuring have been restored.
• The Bill reintroduces the right to rest and meal breaks, with the exception of some industries, where it is not practicable.
• There is now a definition of wages in section 5.
• Reinstatement has been restored as the primary remedy for unjustified dismissal.

How do these changes differ to what was originally proposed?

Following the Select Committee report on 7 September 2018, a number of changes were made, including:

• An amendment was made to the 30-day rule to allow employees to agree additional terms which are "no less favourable" than the collective agreement.
• The requirement that collective agreements must include the rates of wages or salary payable to employees covered by the agreement was amended so that the obligation can be met by including minimum rates of wages or salary payable. An additional obligation was added, which is that the collective must include how the rate of wages or salary may increase during the term of the agreement.
• Where an employee is entitled to "reasonable paid time" for undertaking union activities, they must be paid at least the same rate as they would usually be paid for performing their position.

Labour and New Zealand First were each required to make number of compromises to get the Bill across the line. Key amongst those related to union access to workplaces, and the ability for employers to opt out of multi-employer collective agreements ("MECAs"). Originally under the Bill, employers were not able to opt out of MECAs, the final Bill provides that opposition to concluding MECAs is a genuine reason not to conclude a collective agreement, if based on reasonable grounds.

The original Bill also sought to repeal the requirement that unions obtain the consent of employers before entering the workplace. This has been scaled back, and now consent is required except where there is a collective agreement in force between the employer and the union, or where the Union has initiated bargaining for a collective agreement with the employer.

When do these changes come into effect?

The majority of the changes come into effect the day after royal assent, except the following changes which come into force on 6 May 2019:

• The payment of reasonable paid time for union delegates to represent employees;
• The requirement that collective agreements be concluded, unless there is a genuine reason not to;
• The requirement that rates of wages and salary be included in collective agreements;
• The requirements to provide information about unions to new employees;
• The removal of trial periods for all but small businesses;
• The provisions related to vulnerable employees; and
• The changes to rest and meal breaks.

About Dundas Street employment lawyers

Dundas Street is a leading specialist Employment Law firm with clients nationwide. The firm is led by Managing Partner Susan Hornsby-Geluk, and Partners, Blair Scotland and Ros Webby. Dundas Street was formed in April 2013 as the continuation of an existing practice run by Susan and Blair.

Susan is a pragmatic and strategic adviser and business partner. She is ranked amongst New Zealand's leading employment lawyers and is regularly called in to advise on complex and high profile disputes.

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