Amendments to the Employment Relations Act 2000 (March 2015)
Significant changes have been made to employment law in New Zealand and employees and employers need to know how those changes will affect them. Here is a summary of the main changes.
The Employment Relations Amendment Act 2014 came into effect on 6 March 2015. The changes aim to:
- create and uphold an employment relations framework that increases flexibility and choice
- ensure a balance of fairness between employees and employers
- reduce regulation where needed and decrease compliance costs, in particular for small and medium-sized enterprises (SMEs)
- ensure that businesses that value employee rights can continue to grow.
Changes target the following six main areas:
- flexible working arrangements
- rest and meal break rules
- Part 6A (continuity of employment for specified employees)
- good faith
- the collective bargaining framework (including strikes and lockouts)
- Employment Relations Authority (the Authority)
Flexible working arrangements
The changes to flexible working arrangements aim to improve people’s participation in the labour market and to better reflect modern lifestyles. Flexible working arrangements help employees find the right work-life balance for them and their employer. The key changes are:
- extending the statutory right that caregivers currently have, to request flexible working arrangements, to all employees
- removing the requirement of six months’ prior employment with the employer, so employees can ask for flexibility from their first day on the job
- removing the limit on the number of requests an employee can make in a year
- reducing the timeframe within which an employer must respond to a request from three months to one (and requiring that the response be made in writing and include an explanation of any refusal).
Rest and meal breaks
There are changes to the rest and meal break provisions in the Employment Relations Act (the ER Act). These seek to balance the importance of rest and meal breaks with the need for breaks to be practical for each workplace. The changes replace the current strict rules with a more general right for employees to have rest and meal breaks to give them a reasonable opportunity to rest, eat, drink and deal with personal matters. The new provisions encourage employers and employees to negotiate, in good faith, rest and meal breaks that meet the legislation, without compromising business continuity and flexibility.
The changes say:
- when employers can make reasonable restrictions on rest and meal breaks
- employers can specify when breaks are taken, if employees and employers cannot agree on when and how long breaks should be
- that an employer is exempt from giving breaks – when employees agree to reasonable compensation or where the employer cannot reasonably give the employee rest and meal breaks
- that reasonable compensatory measures are to be provided when an employer is exempt from the requirements to provide breaks
- rest breaks must be paid
- any other law that requires an employee to take rest and meal breaks takes priority over the rules in the Act.
Employees and employers can’t contract out of the right to rest and meal breaks - an employment agreement that required an employee to take no breaks, and did not provide compensatory measures, would exclude an employee’s entitlements and therefore have no effect. In other words, an employee either gets a break or a compensatory measure; the employer cannot fail to give either.
Continuity of employment – Part 6A of the Employment Relations Act
In 2012, the Government completed a review of the continuity of employment provisions (Part 6A) in the ER Act. The review found that businesses found it difficult to put the law into practice. The problems came from transferring employees’ entitlements and information to a new employer. The changes aim to fix these issues by giving more certainty and clarity to employers while keeping key benefits for affected employees. The main changes include:
- setting timeframes during the election process including a timeframe for employees to choose to move to a new employer (elect to transfer)
- requiring that the old employer give the new employer detailed information on each employee that is transferring
- introducing a mechanism for apportioning liabilities for service-related entitlements between employers where the parties are unable to agree between themselves
- giving the new employer protection from unjustified increases in employee costs or changes to terms and conditions of employment
- exempting SMEs from having to take on employees affected by the work changing hands.
This change amends the good faith provisions that require an employer to give an employee relevant information where they are proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of that employee’s employment. It aims to clarify what information employees are entitled to during restructures or other situations where their continued employment is at risk.
An employer must give the affected employee relevant confidential information about themselves. An employer does not have to give the affected employee confidential information about another employee if doing so would involve an unwarranted disclosure of the affairs of that person.
An employer does not have to give confidential information that legally must stay confidential, or where there is a good reason to keep the information confidential.
These changes do not affect an employer’s obligations under the Official Information Act 1982 or the Privacy Act 1993.
Employees should still know the identity of their accuser or the nature of allegations made against them unless there is good reason to keep this information confidential.
Collective bargaining framework
The changes to collective bargaining aim to increase choice and flexibility in the collective bargaining framework, reduce ineffective bargaining, and improve fairness and balance in bargaining requirements. The key changes are:
- providing that the duty of good faith does not require parties to reach a collective agreement. Parties will be able to ask the Authority to declare that bargaining has ended
- allowing employers to opt out of multi-employer bargaining from the start
- removing the 30-day rule that gives non-union members who are new employees, the terms and conditions from the collective agreement
- allowing proportionate pay reductions as a response to partial strikes
- requiring advanced written notice of any proposed strikes and lockouts in all sectors.
Employment Relations Authority
The changes introduce requirements for when and how the Authority must give determinations. At an investigation meeting’s conclusion, the Authority must (where practical):
- give an oral determination, and a written record of that determination within one month, or
- give an oral indication of the Authority’s preliminary findings to the parties (unless extra evidence is provided) and deliver a written determination within three months of the investigation meeting or when extra evidence is provided, whichever is later.
The Authority can only reserve its determination if there are good reasons why it is not practical to give either an oral determination or indication of preliminary findings. A reserved determination must be delivered within three months of either the investigation meeting or any extra evidence being provided, whichever is later.
The Authority can also decide matters without holding an investigation meeting. In these situations, the Authority must give a written determination within three months of receiving evidence from the parties.
The Chief of the Authority can extend these timeframes, if they are satisfied that there are exceptional circumstances.