Employment law - the changes

Why is the Employment Contracts Act being replaced?

Labour and the Alliance believe too many employers had a "take it or leave it" attitude to employment negotiations.

They say the new law tackles the inherent inequality of bargaining power.

What is the key difference with the new Employment Relations Bill?

The underlying concept of the bill is "good faith bargaining."

It has almost become a mantra of the bill's authors, former law professor and now Labour minister Margaret Wilson and her former law student and now associate minister, Laila Harre.

Other objectives are to promote collective bargaining, and mediation before costly legal procedures to solve disputes.

What is good faith bargaining?

It is about attitude and disclosure. The bill requires the parties to deal with each on the basis of "fair dealing and mutual trust and confidence." This includes not directly or indirectly misleading or deceiving each other.

It means the employer and union must consider and respond to each other's proposals and recognise each other's advocates.

More specifically, the bill says parties must "provide each other at the commencement of bargaining, during the bargaining as is necessary, and on request, information (including financial information and business planning and forecasting) that might reasonably be expected to be relevant to their participation in the bargaining."

What does that mean?

It means no employee should ever again hear an employer make an offer and say "take it or leave it" or "this is my first and final offer" or "I refuse to negotiate a collective contract with you."

But it might mean that an employer can say similar things with supporting financial evidence.

And "good faith bargaining" carries no obligation for the negotiations to succeed.

How will it really work?

No one knows for sure. But specific guidelines will be set in a Code of Good Faith, to be developed by representatives of unions, employers and the Government.

This will explain as specifically as possible what falls inside and outside the "good faith" parameters.

What will change when workers are offered a new job?

Employees starting a job in a workplace where a collective agreement exists will be given the right to join the collective or to be offered an identical individual contract.

They will then be given a month to decide whether to join the collective agreement - which also means they must join the union representing other members of the collective.

They may be approached by union representatives during that time, and may also separately negotiate other terms and conditions with the employer.

How will disputes be handled?

The Employment Tribunal will be abolished and replaced by a cost mediation service and an Employment Relations Authority.

Unlike the tribunal, the authority will have investigatory power to gather information, call evidence and investigate matters as it sees fit to get to the nub of the dispute and make a decision.

It will be able to order the parties to try to resolve their differences through mediation.

Parties unhappy with the outcome of a case considered by the authority can apply for a hearing in the Employment Court. The court will also be able to direct parties to mediate or go to the authority.

How has the right to strike changed?

Employees can now strike in support of a bid to negotiate a multi-employer contract. This was previously unlawful.

The right to strike also has some new conditions, billed as the quid pro quo in expecting employers to negotiate in good faith.

At present, workers in a collective agreement may strike when the collective expires in support of a new agreement.

Under the new law, a strike by parties to a collective contract will be legal only after the contract has expired and the parties have been negotiating for at least 40 days. Bargaining for a collective may be initiated by a union within 60 days of the contract expiring and by employers within 40 days of it expiring.

Will employers face restrictions during strikes?

Yes. A sort of "anti-scab" measure means employers will not be able to require employees not involved in the collective bargaining to do work otherwise done by the striking workers.

And they may not hire replacement employees to do the work -- unless they have to for health and safety reasons.

Does the bill extend coverage of employment law?

Effectively it will, by extending the definition of "employee."

It requires employment institutions of "independent contractors" to examine the reality of the relationship, not the label, to determine whether the workers are, in fact, "employees."

Why are the unions so pleased about the new legislation?

One of the stated objectives of the bill is to promote collective bargaining.

Unions will remain voluntary, but only unions can negotiate collective agreements. The union must meet accountability standards set by a Registrar of Unions. Unions may represent individuals and groups of workers.

The bill gives unions statutory right of access to workplaces for bargaining and all union business, including recruitment, as long as it does not unreasonably interfere with the employers' business.

The bill provides for at least two paid union meetings a year and paid trade union leave for training employees involved in union negotiation.

Why are employers so grumpy?

They feel the balance has been tipped too far in favour of workers.

They especially object to moves to stop them replacing striking workers, to make them disclose financial records in contract talks, to the right to strike for multi-employer contracts and to unions having the sole power to negotiate collective agreements.