Changes affecting all employers come into force today

Friday 6 March 2015

Authors: Tim Clarke and Grace Stacey-Jacobs

​An Act to amend the Employment Relations Act 2000 (ERA) comes into force today. The changes will affect all employers.

Overall, the amendments promote flexibility and choice in the workplace and aim to reduce compliance costs for SMEs. To take advantage of some of the changes, employers should review their template individual employment agreements and policies to ensure that they are consistent with the legislative amendments.

We summarise the key changes below.

Provision of confidential information under duty of good faith

The duty of good faith no longer requires employers who are proposing to make a decision which will have an adverse effect on the employment of an employee to provide that employee with access to confidential information where it:

  • would unwarrantedly disclose the affairs of another identifiable individual;

  • is subject to a statutory requirement to maintain confidentiality; or

  • is necessary, for any other good reason, to maintain the confidentiality of the information – for example, to avoid unreasonable prejudice to the employer’s commercial position.

Information will only be considered to be confidential where there is a mutual understanding of secrecy. This amendment represents the Government’s response to the Mass​ey decision of 2011 on the redundancy selection process. In that case, the Employment Court held that the need for an employee affected by a restructure proposal to be given access to another candidate’s information overrode any privacy concerns.

Rest and meal breaks

Paid rest and meal breaks are no longer prescribed by the ERA. Rather, there is now a broad requirement that employers provide paid breaks which provide an employee with a reasonable opportunity for rest, refreshment, and attention to personal matters. The rest and meal breaks must only be subject to restrictions, if any, that are reasonable and necessary having regard to the nature of the employer’s work (or are reasonable and agreed to by the parties), and relate to:

  • the employee continuing to be aware of his or her work duties or continuing to perform some of his or her work duties, during the break;

  • the circumstances when a break may be interrupted; or

  • the employee taking their break at a specified place within the workplace.

However, paid breaks do not need to be provided where the parties agree that employees will be provided with compensatory measures. Such measures must be reasonable – for example, the equivalent amount of time off work at an alternative time.

Unless an employment agreement is varied to take advantage of this change, it is important that employers continue to comply with any contractual term in their employment agreements which entitle employees to certain paid breaks.

Flexible working arrangements

All employees, not just those with caring responsibilities, are now able to request flexible working arrangements from their employers. Employees are entitled to make such a request at any time, and employers must respond to the employee in writing no later than one month after receiving the request.

If an employer refuses the request, the employer must state the ground for the refusal and explain the reason for that ground. The acceptable grounds for refusal are specified in the ERA, and include an employer’s inability to reorganise work among existing staff, detrimental impact on quality or performance, and burden of additional costs.

Protected employees

Employers with 19 or fewer employees are now exempt from Part 6A of the ERA, which provides protections to employees in specified categories (including catering, cleaning, caretaking, laundry or orderly work) whose work is to be outsourced or contracted out to a new person or entity. Exempt employers must provide other relevant parties to a transaction with a warranty that it is exempt.

Collective bargaining

A number of changes have been made to the ERA which will affect collective bargaining and employers with unionised workforces. The changes are as follows:

  • The “30-day rule” has been repealed and new employees can now be placed on individual employment agreements from the commencement of their employment.

  • The statutory advantage afforded to unions to initiate bargaining has been repealed, and employers are now able to initiate bargaining at the same time as a union.

  • The duty of good faith no longer requires an employer and union bargaining for a collective agreement to conclude that agreement, or to continue bargaining when there is a deadlock in negotiations.

  • All unions must now give employers notice in writing of any intended strike or lockout action, (not just those unions whose members work in essential services). Employers are now also able to make pay deductions to an employee’s wages as a result of partial strikes.

  • Employers are now also entitled to opt out of multi-employer bargaining by giving notice.

Authority determinations

The Employment Relations Authority is now required to provide either an oral determination or an indication of its findings at the conclusion of an investigation meeting, and must provide its written determination within three months. Timely determinations will assist in reducing the stress and disadvantage to both parties awaiting determination of an employment dispute. Such timeframes will not apply to Employment Court decisions.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Tim Clarke

    Partner Auckland
  • Rob Towner

    Partner Auckland
  • Rachael Brown

    Partner Wellington
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