The past restored - Employment Relations Amendment Bill 2018

Thursday 6 December 2018

Authors: Tim Clarke and Bronwen Norrie

​The much anticipated Employment Relations Amendment Bill 2018 passed its third reading on 5 December 2018, and is likely to become law before the end of 2018. The Bill reverses many of the changes that were gradually introduced by the National Government over the last nine years. The amendments primarily focus on returning bargaining power and independence to employees and unions by increasing the powers of the unions in collective bargaining. 

You can find our previous publication on the Select Committee report (released on 7 September 2018) on the Bill here​ and our initial publication on the primary details of the Bill here.

Further amendments from Select Committee report 

The amendments remain largely the same as those recommended by the Select Committee, with the following exceptions:​

  • Allowing union representatives reasonable access to enter a workplace.

  • Allowing union representatives to enter a workplace, without an employer's consent, if:

    • there is a collective agreement in place and the coverage clause covers the work to be done; or

    • bargaining has been initiated for a collective agreement and the intended coverage covers the work to be done.

  • Providing that a penalty be imposed on an employer if it refuses union representatives entry into the workplace.

  • Clarifying that opposition to concluding a MECA (Multi-Employer Collective Agreement) is a genuine reason not to conclude a collective agreement if it is based on reasonable grounds.​

Summary of changes​

The prohibition on larger businesses (of more than 20 employees) using 90-day trial periods remains. Several reasons were put forward for this change. First, larger employers have more resources (including human resource assistance) to make decisions when hiring new employees, or dealing with performance management and dismissal of current employees. Secondly, the effect of a poorly performing employee has less impact in a bigger business. For larger businesses, this change will mean reviewing and modifying their current employment agreements to ensure compliance.

Reinstatement is restored as the primary remedy in situations where an employee has successfully raised an unjustified dismissal claim. However, based on cases predating the 2011 amendment, this change is unlikely to have a significant impact on the rise in the number of employees being reinstated. That said, it may lead to an increase in the costs of settlements for employers who wish to avoid the risk of reinstatement. 

Prescriptive statutory rest and meal breaks are restored except in certain situations, such as companies providing essential services. This change will mostly impact businesses in the public sector.

The exemption of small to medium-sized employers from having to take on current employees when restructuring or transferring a business has also now been removed. In those situations, the Bill restores the right for existing employees to elect to transfer to the new employer on the same terms and conditions. This change was aimed at protecting “vulnerable employees” such as cleaners and caterers. Therefore, businesses who have these types of employees should be particularly aware of this amendment.

Most of the provisions in the Bill will come into effect on 6 May 2019. Businesses should ensure they comply with the amendments by this date. Our employment team are available and would be happy to assist with any issues that arise in relation to the amendments.​


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
  • Rachael Brown

    Partner Wellington
  • Liz Coats

    Senior Associate Auckland
  • Bronwen Norrie

    Solicitor Auckland
Related areas of expertise
  • Employment and workplace safety
  • Health and safety