Employment Relations Changes

12 March 2018

Labour’s election campaign featured numerous promises to tilt employment standards back in favour of employees. The Labour government introduced has now a Bill to amend the Employment Relations Act and make good on those promises.

Labour’s changes to employment law are intended to introduce greater fairness in the workplace between employees and employers, in order to promote productive employment relationships. The Bill is now before the Select Committee. Time is still available for members of the public to make submissions before the 30 March 2018 deadline. 

Many of the changes will wind the clock back to earlier employment standards. The Bill will require all employees, other than essential services, to be given rest breaks and meal breaks. Reinstating the employee back into the job they lost will be the primary remedy for unjustified dismissal claims. 90 day trial periods will only be available to employers with less than 20 employees as small employers are deemed to need this safeguard the most. 

The role of unions will be greatly increased. Unions will be able to initiate collective bargaining before employers. Union representatives will be able to access the employer’s premises without needing to first gain consent. Employers who refuse union representatives access to the workplace will face a penalty. New employees will automatically work under the terms and conditions of an applicable collective agreement for the first 30 days of employment.

Employers will no longer be able to make partial wage deductions for partial strike action. Employers will again be obliged to conclude bargaining for collective agreements in the absence of a genuine and reasonable ground not to and will not be able to apply to the Employment Relations Authority to conclude bargaining. Employers will also be unable to opt out of bargaining for multi-employer collective agreements (MECAs).

The Bill also contains some new proposals. Collective agreements must contain pay rates and provide for progressive, tenure-based pay increases. Employers must allow employees who are union delegates to use reasonable paid time to represent other employees on union matters. Employers must provide prospective employees with information about unions in the workplace and a form to indicate whether they want to join. There will also be greater protection against discrimination for union members, as discrimination because of involvement in union activities in the previous 18 months will be unlawful.

Changes beyond this Bill will continue to roll out throughout 2018. It is understood the government will soon convene a working party on how ‘Fair Pay Agreements’ would work. Introducing Fair Pay Agreements would arguably be the most significant change to employment relations in nearly two decades. The intention is for employers and unions within an industry to agree to industry-wide minimum conditions such as wages, allowances, weekend and night rates, hours of work and leave arrangements. Fair Pay Agreements would have to set standards that are above the minimum set out in legislation and are intended to prevent the ‘race to the bottom’ where good employers are undercut by some bad employers in their industry who reduce costs through low wages and poor conditions.

Of course the new government has already increased parental leave to 22 weeks starting from July 2018. A further increase to 28 weeks will take effect on 1 July 2020.

The Labour Party has certainly had a busy first few months in office. It will be interesting to see these changes in action if the Employment Relations Act Amendment Bill is passed. Although workplaces are no longer unionised in the way they used to be the government seems to view unions as the best way to improve working conditions. The Bill seeks to really change the dynamic between unions and employers. Perhaps this Bill will be the start of a new era of industrial relations where unions are again key players in setting employment standards.

A full copy of the Bill and the explanatory note can be found here.