Vital that bosses get workplace bill right

By BRIAN FALLOW

Employers face a range of new problems as a result of the Employment Relations Bill that returned to Parliament yesterday, says Employers Federation chief executive Anne Knowles.

"The bill creates a set of complicated employment rules with significant penalties if employers get it wrong," said Ms Knowles.

"The rules are also in many instances unclear and will only be clarified by expensive legal action." Collectively they would harm business growth.

For example, the obligation when hiring to give new employees the chance to seek advice would slow down employers' ability to react quickly to operational requirements and market opportunities.

"Another example is the extra costs and liabilities which will be imposed on employers who wish to sell a business or contract out work by the bill's requirement that no employee can be disadvantaged in these circumstances," said Ms Knowles.

Phillipa Muir, an employment law partner at Simpson Grierson, said there were still some significant areas of uncertainty but overall the revised bill was a real improvement on the original.

One of the most vexed of the "lightning rod" issues, on which the select committee was deluged with submissions, relates to the definition of employees as distinct from independent contractors.

In deciding whether someone is an employee, the courts and the new Employment Relations Authority will now consider all relevant factors, including the intention of the parties, in determining the "real" nature of the relationship.

Previously the bill singled out control and integration tests and discounted how the relationship was described in contracts.

Contractors will not find their status changed to employees by class actions unless they consent to be parties to such actions.

While contractors would not be made employees against their will, said Ms Muir, there was still a risk for employers in that a contractor could later claim to be an employee, which was not allowed under the present law.

"Deciding whether someone is an employee or a contractor will be up to the authority or the court to determine.

"At the moment it is up to the parties. If they agree and put it in writing, that's the end of it. It is still a major shift."

The continuity of employment clause has been dropped. It required an employer to continue to employ every employee bound by a collective agreement for the full term of the agreement unless it expressly provided otherwise.

Instead, collective agreements will have to contain a provision that sets out what happens if an employee's work is contracted out, transferred or sold "with a view to protecting employees from being disadvantaged."

Pheroze Jagose, of Chapman Tripp, said that might take the form of a straightforward clause which says there will be consultation or that the employer is entitled to deal with it as it sees fit.

"It just adds one more thing which has to be in the collective contract."

At the moment, collective contracts may or may not include redundancy provisions, but if they do not, the redundant employee has no right to compensation.

Union representatives will have a right of access to workplaces, at reasonable times, having regard for normal business operations, and complying with reasonable requirement for health and safety and security.

Philip Skelton, of Russell McVeagh, said some employers objected to union access for the purpose of recruitment. Those concerns would remain.

The amended bill drops the prohibition on employers communicating or negotiating directly with employees directly over terms and conditions of employment during the collective bargaining process.

"That is an important freedom given back to the parties," Ms Muir said.

The provisions on the disclosure of information have been watered down.

"The bill makes it clear there is still a right to information necessary to support or respond to a claim," said Labour Minister Margaret Wilson.

"If a party considers the information confidential, a mutually agreed third party will protect the confidentiality of the information."

On strikes and lockouts, there had been very little change, said Ms Muir.