Employment Relations Amendment Bill passes first reading

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A package of proposed changes to the Employment Relations Act passed its first reading in parliament last week. The Labour Minister, Simon Bridges, told the House that the measures are aimed at improving the freedom of employers, while protecting workers’ rights.

In particular, the Minister is seeking the opinion of affected parties on Part6A, which deals with the transfer of employees to a new employer during a restructure. Diverse changes are outlined here, including the proposal that there should be a timeframe for employees to elect to transfer and an exemption for SMEs with fewer than 20 employees.

An election to transfer would have to be in writing, and signed by the employee, raising practical difficulties, according to Steve Wragg, senior associate with Kensington Swan. “You may be dealing with quite a large workforce and requiring all of them to sign and return election forms within a minimum of five working days in a restructuring situation, which is often quite complicated, risks employees losing their rights,” Wragg explained.

Another provision that would entail logistical issues is that which would require the outgoing employer to provide detailed information on the individual employees, Wragg said. “Difficulties arise …where you’ve got an outgoing contractor who’s lost a contract to provide services to a principal and an incoming contractor – it’s a hostile relationship, or it’s not an amicable relationship,” he said.

For Wragg, the most significant changes proposed include those around collective bargaining and the changes to the ERA process. The Bill suggests a return to the situation where the duty of good faith does not require parties to a collective agreement to conclude bargaining and would allow employers to opt out of multi-employer bargaining. The Council of Trade Unions (CTU) believes that such provisions contravene New Zealand’s obligations under the International Labour Organisation’s (ILO’s) conventions, and has proposed that MBIE officials seek advice from the ILO.

Changes to the ERA process, which would require the ERA member to give a determination at the end of hearing, or an indication as to their decision subject to receiving further information, could leave parties unsatisfied, according to Wragg. “One unintended consequence could be that people who really want to feel as though they’ve had justice done will be pushing to have their case heard in the Employment Court,” Wragg suggested.

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