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 The New Zealand industrial relations system was historically based on the principle of collective bargaining, with trade unions and employer representatives negotiating minimum employment terms and conditions on an annual basis. For almost 100 years, since the passage of the Industrial Conciliation and Arbitration Act 1894, the New Zealand labour market was dominated by trade unions. These trade unions have had statutory recognition, compulsory membership and monopoly rights to represent employees. Industrial relations, union structure, industrial action and grievance procedures were governed by statute. In 1991, the Employment Contracts Act 1991 made trade union membership entirely voluntary and removed monopoly bargaining rights. It imposed a contractual regime similar to contract law in general, but it made no reference to unions. Employment Relations Act 2000 The Employment Relations 2000 (ER Act) replaced the Employment Contracts Act 1991. It once again recognised unions and focused on the relationship of employment rather than on the employment agreement itself. The ER Act includes a key principle that parties to employment relationships must deal with each other in good faith. This applies in all dealings and particularly in relation to bargaining between employer and employee or employer and union and then ongoing dealings between the parties. Although there are certain minimum statutory conditions, the majority of terms and conditions of employment can continue to be negotiated directly between an employer and an employee or an employer and a registered union on behalf of a group of employees. Union membership is voluntary. The ER Act promotes collective bargaining by unions. A collective agreement is the desired form of employment relationship. A collective agreement is a contract between an employer and a union. An individual that is a member of a union may however negotiate extra individual terms provided that they are not inconsistent with the collective agreement. Bargaining in good faith does not mean that the parties must agree on any provision but it does require the parties to conclude a collective agreement unless there are genuine reasons not to. The ER Act contains provisions for new employees that are not union members, which can operate to include them in a collective agreement that covers their work. The ER Act recognises the right to strike but limits the circumstances in which a strike will be lawful. Unions have the right to enter and access workplaces at reasonable times, as long as this is for the purposes of union-related business. A union may enter the workplace to hold meetings that are not formal union meetings as long as it does not unreasonably interfere with the normal operation of the business and does not exceed a reasonable duration. Contractors Work may be performed by contractors who operate on an independent basis. However, where the relationship is in substance, actually one of employer and employee, the employer will be liable for all employee entitlements and for any unjustified dismissal. The statutory test for defining whether someone is an employee or a contractor is not just an examination of the agreement but extends to the real nature of the relationship. Fixed Term Agreements Fixed term agreements are permitted but are regulated. At the time of entering the agreement an employer must have genuine reasons based on reasonable grounds for bringing the agreement to an end and this must be recorded in the agreement. Trial Periods Trial periods are permitted but are regulated. They cannot be used to avoid having to justify a dismissal or as a pre-condition for employment. Minimum Code The minimum code describes a number of minimum statutory entitlements for employees. It is made up of the following Acts and provisions: The ER Act provides remedies for unjustified dismissal and unjustified actions during employment such as warnings, discrimination and harassment; The Human Rights Act 1993 prohibits discrimination on a wide range of grounds, including sex, race and disability. It also prohibits sexual harassment; The Minimum Wage Act 1983 establishes minimum wages for workers, including youth rates and an adult wage; The Equal Pay Act 1972 prohibits unequal payment for work of substantially the same type for men and women; The Holidays Act 2003 provides sick leave, bereavement leave, annual holidays of three weeks per annum (to increase to 4 weeks from an employee’s first anni-versary after 1 April 2007) and recognises statutory holidays such as Christmas and Easter; The Parental Leave and Employment Protection Act 1987 provides up to 14 weeks paid parental leave (which is linked to the levels of the minimum wage), and can be increased up to 52 weeks, although the outstanding 38 weeks remain unpaid. The period of paid parental leave is funded by the New Zealand government and can be taken by either parent on the birth or adoption of a child. In most situa-tions the employer must keep the employee’s position open and a temporary re-placement may be obtained; The Wages Protection Act 1983 prohibits any deductions from an employee's wages, except for tax and other government deductions, without the employee's written consent; and The Privacy Act 1993 governs how personal information is collected, stored, used and disclosed, rather than a general right to privacy. Problem Resolution Workplace disputes include disputes over pay and entitlements, over warnings and discipline and “personal grievances” which are lawsuits brought by employees based on unfair actions by the employer, such as unjustified dismissal. These are broadly labelled “employment relation problems”. Reinstatement of the employee to their previous position is the primary remedy for a personal grievance for unjustified dismissal. Workplace disputes are mostly resolved through mediation by the Mediation Service or by investigation by the Employment Relations Authority. Health And Safety in Employment Act 1992 The primary purpose of the Health and Safety in Employment Act 1992 (Health and Safety Act) is to encourage employers to take responsibility for the management of the health and safety of their employees at work. There is a general duty on employers to take all practical steps to ensure health and safety in the workplace. These steps include providing and maintaining a safe work environment, maintaining facilities for the safety of employees, ensuring machinery and equipment is designed and set up to be safe for employees, ensuring that employees are not exposed to hazards (which include stress and fatigue, as well as physical hazards), and developing procedures for dealing with emergencies. Employers must ensure that their employees are capable of operating machinery or plant which they may be required to use as part of their job. Employers are required to investigate and record any accident at work, preserve the accident scene where practicable and notify the relevant government authority as soon as possible. A breach of the Health and Safety Act may result in significant penalties, including imprisonment. Redundancy Genuine redundancy of a position is a legitimate cause for termination. Redundancy occurs where the employee's position is superfluous to the needs of the business. There must be genuine business reasons for the redundancy. The employer must not declare the employee "redundant" for other reasons such as poor performance, incompatibility or misconduct. The employer is usually expected to consult with the employees, a union or both before a decision is made. An employer must show that there was a genuine reason for the position being superfluous, that an adequate notice period was given, and that all contractual compensation entitlements have been paid. If the relevant employment agreement states that the employee is entitled to redundancy compensation (usually assessed on the basis of a certain number of weeks' pay per year of past service with an employer) then this must be paid. If there is no redundancy compensation entitlement in an he employment agreement, then the employer has no obligation to pay redundancy compensation. One of ways a redundancy may arise is on the sale or transfer of a business. The ER Act deals specifically with this situation. Affected employees are divided into two parts: Vulnerable employees (who are generally those employed in the cleaning or the food catering services); and Other employees. Vulnerable employees have a right to transfer to a new employer on the same terms and conditions, bargain for redundancy with the new employer if made redundant by the new employer for reasons associated with the restructuring of the previous employer's business and, if redundancy entitlements cannot be agreed, to have them determined by the Employment Relations Authority. For employees that are not vulnerable employees, an employer must negotiate with a purchaser about the prospect of employing its employees. An employee protection provision relates to negotiations between the employer and the new employer about the transfer of affected employees to the new employer. Such a provision must now be included in all employment agreements. Injury Prevention, Rehabilitation And Compensation Act 2001 New Zealand's compensation system for personal injury is unique. The Injury Prevention, Rehabilitation and Compensation Act 2001 continues a no-fault accident scheme that has been in place in New Zealand since 1974. Compensation for work and non-work injuries is provided by the New Zealand government through the Accident Compensation Corporation. The effect of this system is that no person has the right to sue for personal injuries suffered in New Zealand, except in very limited cases. |
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