Government announces sweeping employment law changes

1.00pm

Major changes to employment law were announced today designed to strengthen good faith bargaining, protect workers when businesses change hands and prevent employers undermining conditions of the Employment Relations Act.

Labour Minister Margaret Wilson introduced the legislation, which is the long-awaited result of a review of the Act.

She said there would be no return to compulsory unionism, compulsory arbitration or the national awards system.

"The approach remains one of free choice, flexibility and fairness to all, to reflect the diversity of workplace arrangements in the labour market and to support a more innovative economy," she said.

"I consider they represent a good balance of practical and realistic measures that will strengthen the Act and further promote positive employment relations."

Ms Wilson said the opinions of the business sector and the unions had been carefully considered.

"I doubt the changes will meet all of the preference of either group," she said.

"I could probably write the script for the spinners of doom."

One of the most difficult issues the review dealt with was the situation of workers when a business is sold, or their work contracted out.

To solve this, a special category of vulnerable workers will be established and they will be given the right to transfer on the same terms and conditions.

If they are made redundant, and do not have a redundancy clause in their contract, they will be able to make a case for a payout.

The vulnerable employee category involves businesses which change hands often, and employees find themselves with a new boss but on less pay and worse conditions.

They are:

* cleaning services or food services;

* laundry services or orderly services for the age related residential care sector;

* laundry services for the education and health sectors;

* orderly services for the health sector;

* caretaking for the education sector.

There will be no general requirement to protect workers, but all employment agreements will have to "address what processes would be followed" if a business is sold or work is contracted out.

Other important changes in the Employment Relations Law Reform Bill, which will be dealt with by Parliament next year, are:

* It will be a breach of good faith by employers to "intentionally seek to undermine" a collective agreement by passing on its terms and conditions to employees on individual contracts.

"Free riding is unfair to union members who do the hard work of negotiating, and it's unfair to people on individual agreements because they miss out on having genuine negotiations," briefing papers on the bill say.

However, terms and conditions can be passed on if employers, employees and their union agree to it.

* Good faith provisions are being strengthened, and for the first time penalties can be imposed for breaching those provisions.

The bill makes it clear that "good faith" means more than common law obligations of mutual trust and confidence, and that fair dealing also applies to people on individual contracts.

When anyone starts a job, they have the right to see the proposed employment agreement, get advice on it, and a response to any questions they ask about it.

Existing financial penalties in the Act (up to $5000 for an individual and $10,000 for an organisation) will apply for breaches of good faith but those breaches will have to be "serious and sustained".

* Employees should have a genuine choice between individual and collective employment agreements, and everyone should have "real" negotiations with their employer.

The bill contains a set of provisions designed to make it easier for employees to be part of a collective, and to bring negotiations to a conclusion.

If employees are interested in a multi-employer collective, the employers or their representatives have to attend at least one meeting to talk about it.

"Unfortunately, some employers completely ignore such requests," the papers say.

* The Equal Pay Act 1972 will be updated to "affirm and require" employers to respond in good faith to equal pay queries.

Employees and employers will be able to ask Labour Department inspectors to investigate queries, and an inspector can take a case to the Employment Relations Authority if it appears discrimination has occurred.

"It's long been the case that, all other factors being equal, men and women who do the same job within an organisation are entitled to the same pay," the briefing papers say.

This provision is about getting the same rate of pay for the same job. It is not about equal pay for work of equal value (pay equity).

* The free mediation services created under the Act will be fine-tuned and will be available to people such as contractors who are not under strictly-defined employment agreements. Mediators will be able to fast track minor or straightforward problems.

* Personal grievance provisions will be changed to make it clear that the legal test should be objective and based on what a fair and reasonable employer would do in a particular situation.

"This change is being made because case law has been widely interpreted to mean that only the employer's perspective counts," the papers say.

Ms Wilson told reporters she thought the protection of vulnerable workers was the most important change.

She considered most of the changes were "technical" and designed to make the Act work the way it was supposed to.

"This is not a re-write...this is part of normal, good law making which is an obligation of the Government," she said.

"There is no anticipation this will increase collective negotiating.

"It will give employers certainty and clarity."

The Service and Food Workers Union (SFWU) said history had been made by today's announced changes to the Employment Relations Act and that vulnerable workers would be protected.

The union's national secretary Darien Fenton said the workers who would be protected were some of the least visible in society.

"They clean the buildings we work in, they provide meals for people in hospitals, airports and food halls, they ensure the grounds and buildings in schools, polytechs and universities are clean and maintained."

Those workers faced a constant lack of job security, Ms Fenton said in a statement.

Under the new legislation, they would no longer face the loss of employment or the possible reduction in conditions every time a contract company lost a contract.

"Employers can still restructure their business, but will not be able to use the contract change point as a device to push through changes in an unfair way," Ms Fenton said.

"Our union is happy to see the Government has kept its word and will put in place a legislative protection."

- NZPA

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