Significant changes to the Employment Relations Act are likely to progress following endorsement by majority of the Education and Workforce Committee.

The Amendment Bill, introduced earlier in the year, proposes to amend the Employment Relations Act by introducing greater union and employee rights, and increasing what it describes as more fairness between employees and employers. You can read more about the proposed changes in our previous update.

The Committee, which has called for and heard public submissions on the Bill, released its report on 7 September 2018. By majority, the Committee recommends that the Amendment Bill is passed into law with a number of amendments.

The amendments include:

  • Specifying that employees undertaking union activities must be paid at the same rate of pay as if the employee was performing their ordinary duties;
  • Detailing how an employer would meet their union information-sharing obligations in practice. This includes:
    • Inserting new grounds under which employers may refuse to provide union information to employees;
    • Providing that the union is obliged to provide information to the employer in the form they want it to be passed along to employees; and
    • Providing that employers will be required to share new employee information with unions unless employees object by signalling their intention to join or not join a union.
  • Requiring that collective employment agreements include at least the minimum rates for the work, or types of work, done by employees bound by the collective agreement, and also requiring an indication of how rates could increase during the term of the agreement.
  • Clarifying that parties will be able to negotiate terms and conditions that are more favourable than those included in the collective agreement during the "30-day period" (when employees who are not union members are given the same terms and conditions they would receive if they were part of a collective agreement).
  • With respect to trial periods, specifying that "small-to-medium sized employers" are employers with fewer than 20 employees at the beginning of the day on which the relevant employment agreement is entered.
  • In relation to the prescribed rest and meal break requirements, specifying that an employer engaged in the protection of New Zealand's national security may be exempt from providing the prescribed rest and meal breaks.
  • Clarifying the way financial compensation in lieu of breaks should be calculated for employees that are paid variable rates.
  • Inserting a provision allowing the Minister to recommend additions, deletions, or amendments to the categories of "vulnerable employees".
  • Inserting a definition of wages which clarifies that wages include the amounts payable for time, piece work or commission.
  • Clarifying that minor or technical errors will not invalidate strike notices.

You can read the Committee's report here.

The Bill is now set to progress to a second reading where the amendments recommended by the Committee will be voted on by Parliament. The Bill can still be defeated at this stage, however, with support from Labour, the Green Party and NZ First, this is unlikely.

If the Bill is passed into legislation, the shift in balance towards greater employee and union rights will raise challenges for many employers. For example, the effects of a more rigid rest and meal break regime together with new calculations for how breaks are paid may cause difficulties for some. Therefore, it is crucial that employers start considering and preparing for the potential impact of the legislative changes on their businesses.

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