Employment Relations Law Reform Bill Government Bill Commentary As reported from the Transport and Industrial Relations Committee Recommendation The Transport and Industrial Relations Committee has examined the Employment Relations Law Reform Bill and recommends by majority that it be passed with the amendments shown. Introduction The Employment Relations Law Reform Bill amends the Employment Relations Act 2000, to enable it to better meet its key objectives of promoting fair, productive and effective employment relationships between employees, employers and unions. We carefully considered the following matters: o the commencement date o the duty of good faith o collective bargaining o multi-party bargaining o union access to workplaces and the ratification process o individual employment agreements o ``passing on'' collectively bargained terms and conditions o bargaining fees o protection of employees' interests in change of employer situations o the processes for resolution of employment relationship problems o code of good faith for the public health sector o equal pay. We received 354 substantive submissions and 7087 form submissions. In general, unions supported the intent of the bill, but considered that some provisions should be further strengthened. Employers were generally opposed to the bill because of concerns including increased costs to business, increased litigation and reduced incentives to invest. This commentary focuses on the principal amendments we recommend from our consideration of the bill. It does not detail the consequential and technical amendments that are necessary. Commencement date The bill, as introduced, provided for a commencement date of 4 October 2004. The majority recommends an amendment to clause 2 to provide for a new commencement date of 1 December 2004. The majority considers an extended commencement date is necessary to allow sufficient time for implementation of the changes introduced by this bill and to allow employers adequate time to make any necessary preparations before the amendments come into force. Clause 71 ensures that changes to the principal Act will not apply retrospectively. Any action performed before these changes come into force will be subject to the current law, not the Act as amended by this bill. Several of the provisions contained in clause 71, relating to good faith in collective bargaining or breaches of good faith by passing on terms and conditions of collective agreements, specify, however, that certain clauses will apply to some situations existing before as well as after the commencement of this bill. These provisions clarify and confirm provisions in the principal Act and do not impose additional obligations on parties to collective bargaining. Duty of good faith Definition of ``good faith'' The principle and promotion of good faith as the basis of productive employment relationships underpins the principal Act. The intent of new section 4(1A)(b), inserted by clause 6, is to clarify and strengthen the duty and application of good faith. Good faith in this bill is a broader concept than simply the common law obligations of mutual trust and confidence (the bill overturns the effect of the decision of the Court of Appeal in Baguley Coutts Cars Ltd v Baguley [2002] 2 NZLR 533. to the extent that it sought to limit good faith to the pre-existing common law obligations of mutual trust and confidence). The bill also provides for penalties and remedies for certain breaches of the duty of good faith and the consideration of this is outlined within this commentary. We have listened to and carefully considered submitters' concerns that the definition of ``good faith'' in the bill as introduced creates confusion and uncertainty and will not add value to employment relationships. The majority does not consider the definition of ``good faith'' in clause 6(1A)(b) to be sufficiently clear in expressing its intended meaning. In order to address concerns that the inclusion of the term ``supportive'' within this clause could require employers to place the employees' concerns and interests above their own, the majority recommends an amendment to remove the requirement for parties to an employment relationship to be supportive. The majority considers that the general requirement for parties to be supportive goes beyond established case law. The majority does not intend to disturb the existing case law requirement to be supportive in certain situations. For example, an employee may be expected to be supportive by not interpreting work rules so as to impede an employer's business. Likewise, an employer might be supportive by assisting employees with justifiable complaints about the work environment. The requirement to be supportive in case law is not as wide as the requirement to be supportive in the bill as introduced. Our intent is to avoid creating a general duty to be supportive and to avoid interfering with case law that imposes this duty in certain situations. Requirement to disclose information The majority recommends an amendment to proposed new sections 4(1A)(c) and 4(1B), as inserted by clause 6, to respond to submitters' concerns regarding the requirement for an employer to disclose information on proposed decisions that are likely to have an adverse effect on employment. Some submitted that this may require employers to consult employees on day-to-day operational matters, which would have an adverse effect on the employer's ability to conduct business. The amendment to this clause clarifies that the requirement for employers to consult their employees on decisions applies specifically to proposals that will, or are likely to, adversely affect the continuation of their employment. The majority does not believe employers should provide access to information that relates to routine operational decisions. This amendment is not intended to limit the employer's general duty to communicate and respond as part of good faith. To clarify further the requirements for an employer to disclose information when a proposed decision may adversely affect the continuation of employment, the majority recommends the insertion of new clause 6(1)(1C), to proposed new section 4A. This clause specifies that a good reason to maintain confidentiality of the information includes complying with statutory obligations such as the Securities Markets Act 1988, protecting the privacy of individuals or protecting the commercial position of an employer from being unreasonably prejudiced. The majority recommends this amendment to address submitters' concerns that the bill would require the disclosure of sensitive commercial information, or information that is subject to other obligations of confidentiality, but not to limit the employer's general duty to communicate as part of good faith. The majority considers these amendments will address submitters' concerns that the requirement to provide access to information that may have an adverse effect on the continuation of the employees' employment could, for example, increase costs, increase litigation, have a destabilising effect on workplace relations and undermine the sale or transfer of a business. Advising against collective bargaining or collective agreement The majority recommends an amendment to clause 6, that inserts new section 4(6), to clarify that it is a breach of good faith for an employer to advise or do anything else with the intention of inducing an employee not to be involved in collective bargaining or not to be covered by a collective agreement. The bill as introduced provided for a breach of good faith where an employer advises employees not to be involved in collective bargaining. The majority considers it necessary to amend the bill to recognise that employers may influence or curtail employees' rights to bargain collectively through behaviour other than simply providing advice. The majority has inserted that it is a breach of the duty of good faith as contained in section 4(1) of the principal Act for an employer to do anything with the intention of inducing an employee not to be involved in bargaining for a collective agreement, or to be covered by a collective agreement. The majority considers this will ensure that the bill's objective of promoting collective bargaining is upheld. Good faith in individual bargaining The majority recommends the insertion of clause 20A, to insert new section 60A into the principal Act, to clarify that the circumstances of the employer and the employee are relevant in determining whether the parties have acted in good faith over individual bargaining. This new clause ensures consistency between collective and individual bargaining, as section 32(4) of the principal Act provides that in considering whether a union and an employer have been dealing with each other in good faith during the bargaining process, the circumstances and background of a union and an employer are relevant. This includes the operational environment of the union and the employer, as well as the resources available to them. The majority considers that the duplication of this provision for individual bargaining provides for consistency and ensures that a disparity in the resources of the parties to the bargaining process will be taken into account. Such disparities will be taken into consideration where it has been asserted that there has been a breach of the obligation to act in good faith when a small business or individual may not have had sufficient resources available to them. The Employment Relations Authority in More v Commercial Helicopters Ltd More v Commercial Helicopters Ltd, (29 April 2003), Employment Relations Authority Auckland, AA 119/03, p. 7. noted the view expressed in Brooker's employment law Brooker's employment law, Brookers, Wellington, 2000-. that good faith is not an absolute concept, but is dependent on the quantum of representation of employees in the bargaining. As such, less may be expected of the small employer than of a larger employer with greater resources. Penalties for certain breaches of ``good faith'' The majority recommends the deletion of clause 6, proposed new section 4(7) and the subsequent addition of new section 4A, as inserted by clause 6A, to clarify that penalties are intended to address deliberate breaches of good faith. The majority considers that this will make explicit that a penalty for a breach of duty of ``good faith'' will be incurred when a party to an employment relationship fails to comply with the duty of good faith and the failure is deliberate, as well as being serious and sustained in nature. Collective bargaining Concluding a collective agreement The majority recommends an amendment to clause 12, which inserts new section 33, to clarify what could be considered a ``genuine reason'' not to conclude a collective agreement. Many submitters expressed concerns that the requirement to conclude a collective agreement unless there is a ``genuine reason'' not to, in the bill as introduced could, for example, lead to increased litigation, force employers into a multi-employer collective agreement (MECA) and increase compliance costs. There was also uncertainty about whether a genuine reason could be a genuinely held belief, or whether it was to be determined on a more objective basis. In order to address these concerns, the majority recommends an amendment to new section 33(1), as inserted by clause 12, to provide that a ``genuine reason'' not to conclude a collective agreement must be based on ``reasonable grounds''. Further, the majority considers a new section 33(2), as inserted by clause 12, necessary to specify that reasonable grounds do not include the opposition or objection in principle to collective bargaining or collective agreements. The majority considers that the inclusion of ``based on reasonable grounds'' clarifies that the approach is objective and does not include genuinely held beliefs that are not objectively reasonable. The majority wishes to ensure that opposition or objection in principle to collective bargaining or collective agreements does not prohibit the conclusion of a collective agreement. The majority also recognises that while parties to collective bargaining intend to reach a settlement and that while a settlement will normally result, there may be, in good faith, genuine reasons that are objectively founded preventing the conclusion of collective bargaining. Multi-party bargaining The majority recommends the deletion of clause 14, which requires attendance at the first meeting of multi-party bargaining for a collective agreement. Some submitters raised concerns that the provisions in clause 14 would force employers into multi-employer collective agreements, thereby potentially reducing the possibility for an employer to include terms and conditions in employment agreements that reflect the needs of his or her business, or discouraging regional development, for example. While clause 14 intended to promote effective and efficient bargaining for multi-union and multi-employer collective agreements, the majority has carefully considered the issues raised by submitters and recommends the deletion of this clause. The majority considers that clause 14 has contributed to a perception that employers will be compelled to enter into a multi-party collective agreement. In addition, it could potentially detract from the existing good faith obligations in section 32 of the principal Act (which include entering into a bargaining arrangement and to meet from time to time for the purposes of bargaining). These obligations apply to bargaining for MECAs, as well as bargaining for single-employer collective agreements. Clause 12, proposed new section 33, provides that the duty of good faith requires parties to conclude collective agreements unless there is a genuine reason not to. It does not distinguish between bargaining for a MECA and bargaining for a single-employer collective agreement. The particular circumstances of each case would determine whether or not an employer had a genuine reason for not concluding a MECA. The majority considers that many submitters have expressed concerns about proposed multi-employer collective agreement provisions which may not be applicable to them. MECAs generally allow employers to include site-specific provisions and/or agreements in the event where a collective agreement is applied to them. In addition, the majority considers that clause 18, proposed new section 56A, specifying how and when an employer or a union (not original parties to the collective agreement) may become party to a collective agreement subject to certain criteria, enables willing employers and unions to join pre-existing collective agreements. Proportionality of employees seeking a collective agreement Some submitters expressed concerns that proportionally few employees may force an employer into a single-employer collective agreement or a MECA. The proportion of the employer's employees who are union members is one matter that is relevant in determining whether an employer is bargaining in good faith, under section 32(3). However, the proportion of employees seeking coverage by a single-employer collective agreement or a MECA would not, in itself, constitute a genuine reason for not concluding the agreement. The substance of the proposed single- employer collective agreement or multi-employer collective agreement may, however, make its application onerous in situations where only a small proportion of an employer's workforce would be covered by the single-employer collective agreement or MECA. Under these circumstances, the employer may have a genuine reason not to conclude the agreement. Ratification process The majority recommends the deletion of clause 16, which amends section 51 of the principal Act and allows a union to sign a collective agreement without being required to comply with the ratification procedure, if the union has obtained prior authorisation from union members who would be bound by the agreement. The majority agrees with submitters' concerns that the current ratification process under section 51 acts as a safeguard. The intention of the clause was to provide flexibility for situations where a union might seek a mandate to settle, promoting effective bargaining. The majority considers, however, that this clause should be deleted, since the majority believes union members must have the ability to agree to final recommendations. Union access to workplaces Workplace discussions The majority recommends an amendment to clause 9, proposed new section 20(4), to limit the duration of paid workplace discussions (as distinct from formal paid union meetings) between employees and union representatives. The majority considers this addresses submitters' concern that union discussion-rights in the workplace must be limited and should not interfere unreasonably with business operations. The majority notes that the existing requirements in section 21 of the principal Act also place conditions on the exercise of union rights of entry. Individual employment agreements Passing on collectively bargained terms and conditions The intention of clause 19, which inserts sections 59A and 59B, as introduced, is to prevent the undermining of collective bargaining or collective agreements by making it a breach of good faith for an employer to pass on terms and conditions agreed in collective bargaining or collective agreements to other employees or unions in certain circumstances. Definition of ``reached'' in relation to a term or condition in bargaining The majority recommends an amendment to clause 19 to insert new section 59AA. This new section clarifies that, in new sections 59A and 59B, ``reached'', in relation to a term or condition in bargaining for a collective agreement, means a term or condition that the parties have agreed or accepted should be a term or condition of the collective agreement if the agreement is concluded and ratified. The majority considers that this definition will address any uncertainty about when a term or condition was ``reached'' in bargaining and therefore subject to the restrictions on passing on in new sections 59A(2) and 59B(2). Application where an employer is bargaining with more than one union Proposed new section 59B, as inserted by clause 19, provides that it is a breach of the duty of good faith to pass on, to another union, provisions agreed in other collective bargaining or another collective agreement in certain circumstances. Where the employer has reached agreement with one union, it may only be passed on to another union where the employer has no intent to undermine the collective bargaining or the passing on does not have the effect of undermining the collective bargaining. However, if no agreement has been reached on any provisions, then proposed new section 59B(2) does not apply. Alternatively, a provision can be passed on where a union has agreed that the employer can pass on the terms and conditions reached with them in the bargaining to other unions that will also be engaged in bargaining. Different sets of bargaining may have the same or similar outcomes We have carefully considered submitters' concerns that employers would be prevented from genuinely negotiating the same or similar terms and conditions for collective and individual agreements with the possible outcome that non- union employees could not be paid the same as or more than union employees. Some submitted that this would be discriminatory, having a potentially divisive effect on union and non-union employees in the workplace. The majority recommends, therefore, amendments to clause 19, proposed new sections 59A and 59B, clarifying that it is not a breach of the duty of good faith, in itself, for an employer to agree to terms and conditions in an individual agreement or a collective agreement that are the same or substantially the same as terms and conditions in another collective agreement. It must be clear, however, that employers and employees have bargained in good faith for these agreements. The majority wishes to clarify that the outcome of different sets of bargaining may be the same or similar, provided that the employers and employees bargained in good faith for the agreements. Thresholds for breaches of good faith The majority considers that the risk of undermining collective bargaining is higher during the bargaining process. As a result, the majority recommends an amendment to clause 19, proposed new sections 59A(2) and 59B(2), to provide for a lower threshold for a breach of good faith if the employer passes on a term or condition reached in bargaining where this is done with the intent or has the effect of undermining the bargaining during collective bargaining. Subsequent to the bargaining process, however, the threshold for a breach of the duty of good faith remains higher and depends upon whether the employer passed on a term or condition with the intent and effect of undermining the collective agreement. Bargaining fee arrangements A majority of the committee considers that the Employment Relations Law Reform Bill should be amended to allow for bargaining fee arrangements to be negotiated where it is agreed that the terms and conditions of a collective agreement are to be passed on to non-union members on individual agreements. We encourage the Minister of Labour to table a Supplementary Order Paper at an appropriate time after the tabling of the committee's report in Parliament to allow for such arrangements to take effect. We recommend that bargaining fee arrangements be based on the underlying principle that such arrangements are to be freely agreed to by both the employer and the union. We also recommend the following elements form the basis of any bargaining fee arrangement: o unions and employers must both agree on the inclusion of a bargaining fee arrangement in their collective agreements o affected employees should be able to determine whether the bargaining fee arrangement proposed by the union and the employer should take effect o non-union employees who do not want to pay a bargaining fee should be able to opt out of the arrangement. To ensure that the employer and union freely agree to such an arrangement, we recommend that strikes and lockouts over bargaining fee clauses should be unlawful, that employers and unions should not be able to use disagreement about a bargaining fee arrangement as a reason not to conclude a collective agreement and that the parties be required to conclude a collective agreement even if they cannot agree on including a bargaining fee arrangement in the agreement. Continuity of employment in restructuring situations The bill, in new Part 6A, as inserted by clause 30, establishes a two-tiered employee protection arrangement dealing with the continuity of employment if a business is restructured. Subpart 1, as inserted by clause 30, applies to employees specified in the new Schedule 1A inserted by clause 67 and subpart 2, as inserted by clause 30, applies to all other employees. Proposed new Schedule 1A, as inserted by clause 67, specifies the groups of employees to which subpart 1 of new Part 6A applies. The groups included in the schedule are considered to be at risk because of factors such as a lack of bargaining power and whether they are employed in sectors that are frequently undergoing restructuring. Groups of employees The majority recommends an amendment to the list contained in Schedule 1A, as inserted by clause 67, to clarify that those working in the ``food catering services'' are to be included. The majority considers that the term ``food services'' included in the bill as introduced is too broad and should be deleted. The term ``food services'' could potentially include those working in more general food services such as restaurant chefs who would not be considered vulnerable employees, while ``food catering services'' restricts the scope to those involved in the preparation and delivery or serving of food to third parties for consumption in a catering situation. Process for changing the schedule of employees Clause 66, which inserts new section 237A, allows for the addition, omission or variation of the groups of employees included in schedule 1A. We received advice from the Regulations Review Committee on this clause. The Regulations Review Committee considered the provision contained in the bill that allows an amendment of Schedule 1A by Order in Council. The committee was concerned that additions, omissions and variations to the list of protected employees, as determined by Parliament, is a policy matter rather than a matter of implementation and detail. It therefore infringes the well-established principle that matters of policy and principle should be in primary legislation and regulations should only cover matters of implementation and detail. An empowering provision that provides for legislation to be amended by a regulation provides the Executive with the power to override Parliament. The Regulations Review Committee considers this type of power should be granted by Parliament rarely and with strict controls. In addition, the Regulations Review Committee considers that the criteria specified in new section 237A(3), inserted by clause 66, relating to the groups of employees that qualify as ``vulnerable'', are ``quite'' subjective. As a consequence, it may be difficult to ascertain whether the criteria are met. The majority agrees that the process to be followed in amending Schedule 1A should be more robust. The majority therefore recommends several amendments to ensure that all the following processes be followed prior to the Minister recommending changes to Schedule 1A: o parties who want changes to the list of vulnerable employees must make an application to the Minister of Labour specifying the grounds on which they believe that the criteria for changing the schedule have been met o the Department of Labour must assess whether the specified grounds in an application are valid and provide an assessment report to the Minister of Labour o the Department's report will provide the basis for consultation o the consultation process will include employers and employees and their representatives and be extended to include other parties as appropriate o the Minister must be satisfied that the criteria in subsection (3) are met. The majority recommends an amendment to the criteria outlined in subsection (3), as inserted by clause 66, to delete the requirement for employees to be employed in a labour intensive sector in low-paid work before they may be added to proposed new Schedule 1A. The majority considers that this does not recognise that some employees may not meet this test, yet should still be considered vulnerable. Definition of restructuring The majority recommends an amendment to new section 69B, as inserted by clause 30, to ensure that those in ``contracting in'' situations are covered by the definition of ``restructuring'' that applies to the specified categories of employees contained in Schedule 1A. The majority considers that the right to transfer should apply where a contractor's contract lapses and the person for whom the contractor is performing the work decides to undertake the work in-house. Application of provisions The majority recommends an amendment to new section 69C(c), as inserted by clause 30, to clarify that an employee specified in the groups contained in Schedule 1A has a right to transfer if their work is affected, even if that work is not specified in an employment agreement. The majority recommends an amendment to this clause to clarify that ``work'' performed by an employee is not limited to that specified in an employment agreement, as in many circumstances the work performed may not be specified. Consequently, the majority has amended proposed new section 69K(2)(b) to ensure consistency and provide that employees in subpart 2 (other employees) are deemed to be affected by the restructuring of a business in the event where they are not able to perform their work, even if that work is not specified in an employment agreement. Enforceability of technical redundancy The majority recommends the insertion of new section 69FA(1), as inserted by clause 30, to clarify that the continuity of employment provisions will not affect the enforceability of technical redundancy clauses in employment agreements. The majority considers that, in technical redundancy situations, the affected employees cannot be forced to transfer to the new employer, but if they choose not to transfer they will not be entitled to the redundancy entitlement in their employment agreements. As a result, the majority has amended this clause to clarify that Part 6A, as inserted by clause 30, will not affect the enforceability of technical redundancy provisions. In addition, the majority considers that Part 6A should not override section 77HA of the State Sector Act 1988, which deals with technical redundancy arising from the closing or merger of schools. As a result, the majority recommends an amendment to clause 30, proposed new section 69FA(2), to ensure that Part 6A does not limit or affect section 77HA of the State Sector Act 1988. Our intent is to ensure that an employee is able to transfer with existing terms and conditions. However, this does not prohibit employers from giving new employees more favourable terms and conditions than those in their previous employment agreement. Employee bargaining for alternative arrangements The majority recommends an amendment to clause 30, proposed new section 69E, requiring that ``alternative arrangements'' be put into writing. The majority wishes to ensure that an employee and an employer may take the opportunity to come to different arrangements in relation to the restructuring situation. The clause as introduced was intended to clarify that, before deciding whether to make an election to transfer, an employee can bargain with his or her employer for ``alternative arrangements'' and provided that there is agreement, the employee may subsequently elect not to transfer to the new employer. Both the employee and the employer are permitted to initiate bargaining and the majority wishes to ensure that the employee's right to bargain is not at the exclusion of an employer's right to do so. The majority considers that uncertainty may arise if alternative arrangements are not agreed to in writing and therefore recommends an amendment to this clause requiring such arrangements to be recorded in writing. Personal grievances Test of justification for dismissal Clause 37 inserts new section 103A and intends to promote a more balanced approach in personal grievance cases. The Court of Appeal's judgment in W & H Newspapers v Oram W & H Newspapers Ltd v Oram [2001], 3 NZLR. has been perceived as meaning that dismissal is justified provided that the employer thought the action was reasonable, or that the action constituted what a fair and reasonable employer could have done. Prior to this, the test for justification of dismissal related to what a fair and reasonable employer would have done. That approach focused on the actual action taken by the employer, in the circumstances and at the time. Consequently, the bill seeks to overturn the Oram decision and to return to case law established in the Court of Appeal prior to the decision. As the majority considers that the law should return to the more balanced approach that existed prior to the Oram decision, the majority recommends an amendment to this clause to reflect this. Consideration and balancing of legitimate interests The majority recommends an amendment deleting reference to the employer being required to consider and balance the legitimate interests of the employee and employer. The majority considers that this may cause uncertainty about employer obligations in dismissal or disciplinary decisions, particularly in regard to what might amount to legitimate interests. The deletion of proposed new section 103A(2), as inserted by clause 37, which refers to considering and balancing the legitimate interests of the employee and the employer, does not signal an intention to depart from references to considering and balancing the parties' respective employment relationship interests in case law. Balanced approach The majority recommends an amendment to proposed new section 103A(1), as inserted by clause 37, reinforcing that the test of justification is based on what ``a fair and reasonable employer would have done''. The majority considers this amendment will reinforce and promote the balanced approach required in personal grievance cases. Further, the majority believes it will address submitters' concerns that this clause lacked clarity. Payment of mediation settlements The majority recommends an amendment to new section 150A, as inserted by clause 51, to enable payments that are required by settlement in mediation to be made to solicitors on behalf of a party. The clause in the bill as introduced restricted payment to solicitors. The majority wishes to ensure that payments to solicitors on behalf of a party are not prohibited by this clause. Code of good faith for the public health sector Health sector code Clause 35 inserts a new Part 8A into the principal Act. The majority recommends an amendment to proposed new section 100D, providing for a code of good faith for the public health sector which is set out in Schedule 1, new Schedule 1AA to the principal Act. The majority also recommends the addition of proposed new section 100E to specify the requirements for amendment to, or the replacement of, the code of good faith for the public health sector. Submitters raised concerns that the requirement for the Minister of Health to approve a code of employment practice for the health sector would undermine the existing code of good faith for the public health sector developed by the New Zealand Council of Trade Unions and District Health Boards New Zealand. The majority considers that this code of good faith reflects the good faith objectives of this bill as the intent of this clause as introduced was to help reduce uncertainty over employers' obligations. The majority supports the inclusion of the code of good faith for the public health sector in the bill to reinforce the existing agreement between the New Zealand Council of Trade Unions and District Health Boards New Zealand in the public health sector. The majority recommends an amendment to Schedule 1, inserting new Schedule 1AA to the principal Act, which outlines a code of good faith for the public health sector based on the code agreed between the New Zealand Council of Trade Unions and District Health Boards New Zealand. The schedule will be able to be amended by Order in Council on the recommendation of the Minister of Labour, following a request by at least three-quarters of district health boards and unions who represent at least three-quarters of union members employed by district health boards. The Minister must then consult with the Minister of Health and relevant employers and employees. Clause 35, new section 100D, provides that it is a breach of good faith for a party covered by new Schedule 1AA to breach the code. This new clause also specifies that compliance with the code of good faith does not necessarily mean that the duty of good faith in section 4 of the principal Act has been complied with. Advice from the Regulations Review Committee We requested and received advice from the Regulations Review Committee about the addition of the code of good faith for the public health sector to the bill. We were informed that if a particular code is to be included in the primary legislation, the bill should reflect the usual constitutional principles applying to the distinction between primary and delegated legislation. We were also told that matters of policy and principle should be in primary legislation and regulations should only cover matters of implementation and detail. In addition, the committee stated that ``an empowering provision that enables the legislation to be amended by regulation provides the Executive with the power to override Parliament. The committee believes that this power should be granted by Parliament and with strict controls.'' Regulations Review Committee, Report, 25 August 2004. The majority considers, however, that the proposed new section 100E provides protections against unilateral action by the Minister of Labour. The Minister may not make a recommendation to amend or replace the code of good faith for the public health sector set out in Schedule 1AA unless all of the following requirements are met: o the Minister is requested to do so by not less than three-quarters of the district health boards o the Minister is requested to do so by unions representing not less than three-quarters of union members employed by district health boards o the Minister has consulted the Minister of Health and such other persons and organisations as he or she considers appropriate. The majority considers that these requirements provide sufficient protection so that the Minister will act in a consultative manner when amending or replacing the code of good faith for the public health sector. The majority considers that it is necessary to legislate for such a code of good faith in the public health sector to ensure that patient safety is maintained in times of industrial dispute in the public health sector. Equal pay This bill repeals the Equal Pay Act 1972 and the Government Service Equal Pay Act 1960 and replaces them with new provisions to ensure the right of all employees doing the same or substantially similar work to receive equal pay without discrimination on the basis of gender and the effective enforcement of that right. The bill does not intend to deal with the issue of pay equity (equal pay for work of equal value). We received 71 submissions opposing Part 2. Thirty-three submitters supported the intent of Part 2, but not the means to achieving it, while 3 submitters supported Part 2. While the majority considers new equal pay provisions to be necessary, the majority recommends the deletion of Part 2 from the bill and the retention of the current Equal Pay Act 1972 and the Government Service Equal Pay Act 1960. We carefully considered submitters' suggestions that as significant examination of pay equity is proceeding, it would be more appropriate to consider legislative amendments to address ``equal pay for the same or substantially similar work'' at a later stage, in conjunction with the pay and employment equity initiatives. While the majority believes that the equal pay provisions went some way to improving the current provisions in place, the majority understands submitters' concerns and has recommended the deletion of Part 2 accordingly. The majority looks forward to the development of robust equal pay and pay equity provisions being introduced in the future. Employment Relations Authority In order to avoid perceptions of bias by the Employment Relations Authority, the majority recommends an amendment to new section 50D, as inserted by clause 15, to ensure that the authority member who facilitates the collective bargaining must not be the same member who accepted the reference for facilitation. If a party objects, the authority member who makes a determination fixing the terms and conditions of the collective agreement under clause 15, proposed new section 50J, must not be the same member who facilitated the bargaining as provided for in new section 50J(7). The majority also recommends an amendment to new section 50C(c), as inserted by clause 15, to clarify that facilitation is available where protracted or acrimonious strikes or lockouts occur in the course of bargaining. Facilitation should only be used for serious and significant disputes. Other matters considered Religious exemption The majority does not recommend an amendment to the existing provisions for exemptions from union access rights on the grounds of religious beliefs. The Brethren sought to widen sections 23 and 24 of the principal Act. Section 23 provides that access to workplaces may be denied on religious grounds, provided that all employees are employed by an employer who holds a current certificate of exemption issued under section 24, none of the employees is a member of a union, and there are no more than 20 employees in the workplace. Section 24 provides that a certificate of exemption may be issued to an individual if the chief executive of the Department of Labour is satisfied that the employer is a practising member of a religious society or order, whose beliefs preclude membership of any organisation or body other than the religious society or order of which the employer is a member. The Brethren submitted that new Brethren schools operating as trusts, and businesses operating under a company structure, should be exempt from union access. In both cases, section 24(1) of the principal Act only allows an individual to gain a certificate of exemption and therefore excludes companies or trusts from gaining such a certificate as well. Union monopoly on collective bargaining Some submitters considered that unions should not have a monopoly on collective bargaining and that employees who are not union members should also be able to bargain collectively. The majority does not recommend amending the policy of the principal Act that allows only registered unions to undertake collective bargaining. The majority believes that the conditions for union registration do not create a serious obstacle to employees organising collectively or bargaining collectively. The majority considers that these conditions focus on ensuring that unions are accountable to their members, while also making it relatively uncomplicated to set up new unions. New Zealand National minority view New Zealand National is totally opposed to this bill. Employers were overwhelmingly opposed to the bill, making strong and substantive submissions. Their statements that this bill will harm employment and business investment have been largely ignored in the way this bill has been progressed by the majority in the select committee. New Zealand National believes the bill will have a strong detrimental and lasting effect on the New Zealand economy. Productivity and employment growth will be slowed, and ultimately there will be some impact on our growth figures. No Government that claims its goals are economic growth and increased productivity would introduce such a substantially misguided piece of legislation. The most consistent theme expressed by a majority of employers and business organisations was ``If it ain't broke don't fix it''. The overwhelming view expressed was that the current regime is working and the amendments proposed in this legislation will have nothing but a detrimental effect on our labour market. New Zealand National is particularly concerned at the following changes: Good faith The extension of the breach of good faith, so that it is a breach for an employer to advise or do anything with the intention of inducing an employee not to be involved in a collective or not to be covered by a collective. New Zealand National believes this will stop employers advising employees of the best options for their particular workplace. New Zealand National opposes the weakening of the threshold for a breach of good faith whilst the collective bargaining is continuing. Multi-party bargaining Whilst the select committee has recommended the deletion of clause 14, which required attendance at the first meeting of multi-party bargaining for a collective agreement, New Zealand National believes other clauses in the bill will effectively force employers into multi-party employment agreements. Collective bargaining The requirement to conclude collective agreement unless genuine reason not to has been grossly undermined by the insertion of new sections 33(1) and (2). These clauses mean that an employer may not object in principle to collective bargaining or collective agreements. Passing on The changes by the majority to clause 19 will, we believe, seriously limit the ability of an employer to pay the same rate to both union and non-union members. Further, the recommendation of the committee to introduce a bargaining fee through a Supplementary Order Paper during the committee stage of the House is opposed by New Zealand National. Vulnerable workers New Zealand National opposes the process of categorising workers as vulnerable. New Zealand National are very concerned that the Minister can create new categories of vulnerable workers through an Order in Council. New Zealand National opposes the changes to clause 6C, which have widened the definition of vulnerable workers from those just employed in a labour- intensive sector in low-paid work. Employers now face the risk that any employees may now be classified by a Minister of Labour, as vulnerable workers. This has the potential to wipe a huge amount of goodwill off the value of New Zealand business. Conclusion New Zealand National believes this bill provides unjustified preferences for unions in collective bargaining. It has the effect of progressively introducing the idea of compulsory unionism through a series of special union negotiating preferences. An employment regime that has good faith at its heart should allow real choice for employers and employees, so that they can freely choose their bargaining agent, without preferences being given to any particular type of organisation. The continuing elevation of unions runs counter to the fundamental value of allowing freedom of choice. New Zealand First minority view New Zealand First has some significant concerns in regard to the Employment Relations Law Reform Bill. We tend to share the view of many submitters who suggested ``it ain't broke so don't fix it''. New Zealand First does recognise though that many union members object to the ``passing on'' of conditions negotiated by their union to non-union workers. We are understanding of the frustration and the anger that this sometimes generates. We are of the view that a ``bargaining fee regime'' structured fairly might go some way to easing the problem. Equally so, we are aware of the difficulties employers face by having to treat unionised employees differently from non-union employees. This bill, we believe, has the potential to exacerbate the situation. All employers want harmonious workplace relationships in their place of business. To be restricted from passing on wage increases could, in circumstances, create friction and a disunited workforce. This is not acceptable to employers. A simple solution would be to remove the monopoly unions have over collective contracts and allow non-union people to be freely able to negotiate a collective. There are other clauses in the bill which we believe have the potential to adversely impact on small employers. Whilst we acknowledge many of these clauses have been modified, many small employers question the need for them at all. The Government has frequently stated that the bill will have minimal, if any, effect on small to medium-sized business operations and therefore New Zealand First believes that they should be exempt from the majority coverage of this bill. New Zealand First questions the need for a code of good faith for the public health sector being written into this legislation by way of a schedule. We are particularly concerned that the code contains a ``Principles of the Treaty of Waitangi'' clause, which we see as unnecessary and is no way required, in order to meaningfully address the health concerns of Maori. ACT New Zealand minority view ACT New Zealand recommends to the House that the Employment Relations Law Reform Bill be rejected. It is ACT New Zealand's view that this bill will result in a significant deterioration in industrial relations, equity in the workforce, productivity, jobs and growth. The bill is not a ``fine tuning'' of the Employment Relations Act 2000. The proposed changes are comprehensive and will have a significant impact. Good faith The bill extends the meaning of good faith in employment relations beyond the common law obligations of ``mutual trust and confidence''. The new meanings will in our view cause much confusion and grounds for disputes. This contradicts the general principle that the law should be clear. It is wrong that citizens should be subject to fines for failing to follow law, the meaning of which is not clear, even to people of goodwill. It is also wrong that the State should, through the Employment Relations Authority, have the power to fix the terms and conditions of employment if there has been a breach of good faith in relation to the collective bargaining. Promotion of collective bargaining The bill seeks to promote collective bargaining. ACT New Zealand does not believe that the committee heard evidence, which in any way establishes that the State should promote collective bargaining. It seems an extraordinary abuse of state power that this bill states that is a breach of good faith for an employer to pass on to the non-union members the terms and conditions of a collective agreement. We think that the proviso that it is only a breach if the pass-on was to intentionally seek to undermine the collective is no safeguard. It is ACT New Zealand's view that these clauses really have the aim to promote trade union power and trade union membership. As nearly 90 percent of private sector employees have chosen not to join trade unions ACT New Zealand believes that Parliament should respect this free choice by citizens. The ACT party believes the claims of freeloading by non-union workers to be nonsense. And we suspect that if there is any freeloading it is probably by trade unions. The committee heard evidence from employers that employers proposed many new terms and conditions in employment. ACT New Zealand believes the whole freeloading argument is nonsense. We fail to see any reason why the State should force any employer into a multi-employer collective agreement. We are sympathetic to the evidence from employers that they do not wish to have to conduct wage bargaining with their competitors. We also understand the desire by employers to have had direct negotiations with their employees. The fact that the majority of workers do not belong to trade unions supports in our view the proposition that most employees would prefer to negotiate directly with their employer. Employment relationship resolution The bill makes a number of changes in the area of unjustified dismissals. ACT New Zealand's view is the bill will do nothing to halt the growth of wrongful dismissal claims. Continuity of employment The provisions of the bill requiring ``vulnerable'' employees to be given the right to transfer to the new employer on the same terms and conditions they have with the current employer will make the sale of businesses very difficult. We also believe that this clause will in practice turn out to be very unfair. Where, for example, a firm of cleaners has lost their contract because of unsatisfactory work and say, theft by employees, it is just wrong that these employees have their jobs guaranteed by the State. Conclusion We believe that the real purpose of this bill is a step towards national awards and compulsory trade unionism. The bill is based on the Marxist idea that there is unequal bargaining power between workers and employers. In the present situation of labour shortages it is employers who are at a disadvantage. At different times and at different places there will be either a buyers' or sellers' market for employment. A free and competitive employment market is desirable not just for employers but also for employees. The effect of this bill will be to make it more difficult for a New Zealander to offer a job to a fellow citizen. The bill also takes away from citizens their right to organise their lives as they wish. This is a piece of legislation with no redeeming features. Appendix Committee process The Employment Relations Law Reform Bill was referred to the committee on 11 December 2003. The closing date for submissions was 27 February 2004. We received and considered 354 substantive submissions from interested groups and individuals. We heard 202 submissions, which included holding hearings in Auckland, Christchurch and Dunedin. Hearing of evidence took 62 hours and 21 minutes and consideration took 9 hours and 14 minutes. We received advice from the Department of Labour. The Regulations Review Committee reported to the committee on the powers contained in clause 35, new section 100D and clause 66, new section 237A. Committee membership Hon Mark Gosche (Chairperson) Sue Bradford replaced Mike Ward for consideration of this bill Peter Brown Lianne Dalziel (from 3 March 2004) Helen Duncan (from 3 March 2004) Dave Hereora (until 2 March 2004) Lynne Pillay Hon Richard Prebble replaced Deborah Coddington for consideration of this bill Hon Roger Sowry replaced Gerry Brownlee until 12 August 2004 and replaced Dr Wayne Mapp from 13 August 2004 for consideration of this bill Hon Judith Tizard (until 2 March 2004) Hon Maurice Williamson Hon Paul Swain Employment Relations Law Reform Bill Government Bill Contents 1 Title 2 Commencement Part 1 Employment Relations Act 2000 3 Employment Relations Act 2000 called principal Act in this Part 4 Purpose 5 Object of this Act 6 Parties to employment relationship to deal with each other in good faith 6A New section 4A inserted 4A Penalty for certain breaches of duty of good faith 7 Interpretation 8 Prohibition on preference 9 Access to workplaces 10 Object of this Part 11 Good faith in bargaining for collective agreement 12 New section 33 substituted 33 Duty of good faith requires parties to conclude collective agreement unless genuine reason not to 13 When bargaining may be initiated 15 New heading and sections 50A to 50J inserted Facilitating bargaining 50A Purpose of facilitating collective bargaining 50B Reference to Authority 50C Grounds on which Authority may accept reference 50D Limitation on which member of Authority may provide facilitation 50E Process of facilitation 50F Statements made by parties during facilitation 50G Proposals made or positions reached during facilitation 50H Recommendation by Authority 50I Party must deal with Authority in good faith Determining collective agreement if breach of duty of good faith 50J Remedy for serious and sustained breach of duty of good faith in section 4 in relation to collective bargaining 16A Form and content of collective agreement 17 Application of collective agreement 18 New section 56A inserted 56A Application of collective agreement to subsequent parties 19 New heading and sections 59AA to 59B inserted Undermining collective bargaining or collective agreement 59AA Interpretation 59A Breach of duty of good faith to pass on, in certain circumstances, in individual employment agreement terms and conditions agreed in collective bargaining or in collective agreement 59B Breach of duty of good faith to pass on, in certain circumstances, in collective agreement provisions agreed in other collective bargaining or another collective agreement 20 Object of this Part 20A New section 60A inserted 60A Good faith in bargaining for individual employment agreement 21 Employer's obligations in respect of new employee who is not member of union 22 Terms and conditions of employment of new employee who is not member of union 23 New section 63A inserted 63A Bargaining for individual employment agreement or individual terms and conditions in employment agreement 24 Section 64 repealed 25 Terms and conditions of employment where no collective agreement applies 26 New section 65A inserted 65A Deduction of union fees 27 Fixed term employment 28 Probationary arrangements 29 Unfair bargaining for individual employment agreements 30 New Part 6A inserted Part 6A Continuity of employment if employer's business restructured Subpart 1---Specified categories of employees 69A Object of this subpart 69B Interpretation 69C Application of this subpart 69D Notice of right to make election 69E Employee bargaining for alternative arrangements 69F Employee may elect to transfer to new employer 69FA Agreements excluding entitlements for technical redundancy not affected 69G New employer becomes party to collective agreement that binds employee electing to transfer 69H Employee who transfers may bargain for redundancy entitlements with new employer 69I Authority may investigate bargaining and determine redundancy entitlements Subpart 2---Other employees 69J Object of this subpart 69K Interpretation 69L New collective agreements and new individual employment agreements must contain employee protection provision 69M When existing collective agreement or individual employment agreement must contain employee protection provision 69N Affected employee may choose whether to transfer to new employer 31 Interpretation 32 Minister to approve employment relations education 33 Calculation of maximum number of days of employment relations education leave 34 Eligible employee proposing to take employment relations education leave 35 New Part 8A inserted Part 8A Codes of employment practice and code of good faith for public health sector Codes of employment practice 100A Codes of employment practice 100B Amendment and revocation of code of practice 100C Authority or Court may have regard to code of practice Code of good faith for public health sector 100D Code of good faith for public health sector 100E Amendments to or replacement of code of good faith for public health sector 36 Object of this Part 37 New section 103A inserted 103A Test of justification 37A Exceptions in relation to discrimination 38 Definition of involvement in activities of union for purposes of section 104 39 Choice of procedures 40 Remedies 41 Arrears 42 Recovery of penalties 43 Power of Authority to order compliance 44 Further provisions relating to compliance order by Authority 45 Object of this Part 46 New section 144A inserted 144A Dispute resolution services 47 Provision of mediation services 48 Procedure in relation to mediation services 49 Settlements 50 Decision by authority of parties 51 New section 150A inserted 150A Payment on resolution of problem 52 Powers of Authority 53 Jurisdiction 54 Procedure 55 Referral of question of law 56 Removal to Court 57 Challenges to determinations of Authority 58 New section 179A inserted 179A Limitation on challenges to certain determinations of Authority 59 Decision 60 Restriction on review 61 Role in relation to jurisdiction 62 Application for review 63 New section 194A inserted 194A Application for review by certain employees 64 Powers of Labour Inspectors 65 Compilation of wages and time record 66 New section 237A inserted 237A Amendments to Schedule 1A 67 New Schedules 1A and 1AA inserted 68 Schedule 2 amended 4A Service outside New Zealand 69 Schedule 3 amended 5A Service outside New Zealand 70 Consequential amendments 71 Transitional provisions Part 3 Health and Safety in Employment Act 1992 96 Health and Safety in Employment Act 1992 called principal Act in this Part 97 Minister may approve occupational health and safety training Part 4 Human Rights Act 1993 98 Human Rights Act 1993 called principal Act in this Part 99 Section 64 repealed 100 New section 79A inserted 79A Choice of procedures 101 New section 92BA inserted 92BA Lodging of applications Schedule 1 New Schedules 1A and 1AA inserted in principal Act Schedule 2 Enactments amended The Parliament of New Zealand enacts as follows: 1 Title This Act is the Employment Relations Law Reform Act 2003. 2 Commencement This Act comes into force on {4 October} [1 December] 2004. Part 1 Employment Relations Act 2000 3 Employment Relations Act 2000 called principal Act in this Part In this Part, the Employment Relations Act 2000 2000 No 24 is called "the principal Act". 4 Purpose (1) This Part--- (a) amends the provisions of the principal Act, particularly in relation to--- (i) the duty of good faith; and (ii) collective bargaining; and (iii) the processes for resolution of employment relationship problems; and (b) provides, in the principal Act, protection to employees in situations where business undertakings are sold, transferred, or contracted out. (2) The purpose of the amendments referred to in subsection (1) is to promote and encourage behaviour that meets the object of the principal Act, of building productive employment relationships. 5 Object of this Act (1) Section 3(a) of the principal Act is amended by omitting the words "mutual trust and confidence", and substituting the words "good faith". (2) Section 3(a) of the principal Act is amended by repealing subparagraph (i), and substituting the following subparagraph: "(i) by recognising that employment relationships must be built not only on the implied mutual obligations of trust and confidence, but also on a legislative requirement for good faith behaviour; and". (3) Section 3(a)(ii) of the principal Act is amended by omitting the word "bargaining". 6 Parties to employment relationship to deal with each other in good faith (1) Section 4 of the principal Act is amended by inserting, after subsection (1), the following subsections: "(1A) The duty of good faith in subsection (1)--- "(a) is wider in scope than the implied mutual obligations of trust and confidence; and "(b) requires the parties to an employment relationship to be active and constructive in establishing and maintaining a productive employment relationship in which the parties are, among other things, responsive [and] communicative{, and supportive}; and "(c) without limiting paragraph (b), requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the {employment of his or her employees} [continuation of employment of 1 or more of his or her employees] to provide to the employees affected--- "(i) access to {relevant} information[, relevant to the continuation of the employees' employment,] about the decision; and "(ii) an opportunity to comment on the information to their employer before the decision is made. "(1B) Subsection (1A)(c) does not require an employer to provide access to confidential information if there is good reason to maintain the confidentiality of the information. New (majority) ----------------------------------------------------------------------- "(1C) For the purposes of subsection (1B), good reason includes--- "(a) complying with statutory requirements to maintain confidentiality: "(b) protecting the privacy of natural persons: "(c) protecting the commercial position of an employer from being unreasonably prejudiced." ----------------------------------------------------------------------- (2) Section 4(4) of the principal Act is amended by inserting, after paragraph (b), the following paragraphs: "(ba) bargaining for an individual employment agreement or for a variation of an individual employment agreement: "(bb) any matter arising under or in relation to an individual employment agreement while the agreement is in force:". (3) Section 4 of the principal Act is amended by adding the following subsection: "(6) It is a breach of subsection (1) for an employer to advise[, or to do anything with the intention of inducing,] an employee--- "(a) not to be involved in bargaining for a collective agreement; or "(b) not to be covered by a collective agreement." Struck out (majority) ======================================================================= "(7) A party to an employment relationship who fails to comply with the duty of good faith in subsection (1) is liable to a penalty under this Act if--- "(a) the failure is serious and sustained; or "(b) the failure was intended to undermine--- "(i) bargaining for an individual employment agreement or a collective agreement; or "(ii) an individual employment agreement or a collective agreement; or "(iii) an employment relationship. ======================================================================= New (majority) ----------------------------------------------------------------------- 6A New section 4A inserted The principal Act is amended by inserting, after section 4, the following section: "4A Penalty for certain breaches of duty of good faith A party to an employment relationship who fails to comply with the duty of good faith in section 4(1) is liable to a penalty under this Act if--- "(a) the failure was deliberate, serious, and sustained; or "(b) the failure was intended to undermine--- "(i) bargaining for an individual employment agreement or a collective agreement; or "(ii) an individual employment agreement or a collective agreement; or "(iii) an employment relationship; or "(c) the failure was a breach of section 59A or section 59B." ----------------------------------------------------------------------- 7 Interpretation (1) Section 5 of the principal Act is amended by repealing paragraph (a) of the definition of coverage clause, and substituting the following paragraph: "(a) in relation to a collective agreement,--- "(i) means a provision in the agreement that specifies the work that the agreement covers, whether by reference to the work or type of work or employees or types of employees; and "(ii) includes a provision in the agreement that refers to named employees, or to the work or type of work done by named employees, to whom the collective agreement applies." (2) Section 5 of the principal Act is amended by repealing the definition of dwellinghouse, and substituting the following definition: "dwellinghouse--- "(a) means any building or any part of a building to the extent that it is occupied as a residence; and "(b) in relation to a homeworker who works in a building that is not wholly occupied as a residence, excludes any part of the building not occupied as a residence". New (majority) ----------------------------------------------------------------------- (3) Section 5 of the principal Act is amended by omitting from the definition of homeworker the words "and, for the purposes of this definition, the definition of dwellinghouse does not apply". (4) So much of Schedule 1 of the Parental Leave and Employment Protection (Paid Parental Leave) Amendment Act 2002 as relates to the definition of homeworker in the principal Act is consequentially repealed. ----------------------------------------------------------------------- 8 Prohibition on preference Section 9 of the principal Act is amended by adding the following subsection: "(3) To avoid doubt, this Act does not prevent a collective agreement containing a term or condition that is intended to recognise the benefits--- "(a) of a collective agreement: "(b) arising out of the relationship on which a collective agreement is based." 9 Access to workplaces Section 20 of the principal Act is amended by adding the following subsections: Struck out (majority) ======================================================================= "(4) A discussion in a workplace between an employee and a representative of a union, who is entitled under this section and section 21 to enter the workplace for the purpose of the discussion, is not to be treated as a union meeting for the purposes of section 26. ======================================================================= New (majority) ----------------------------------------------------------------------- "(4) A discussion in a workplace between an employee and a representative of a union, who is entitled under this section and section 21 to enter the workplace for the purpose of the discussion,--- "(a) must not exceed a reasonable duration; and "(b) is not to be treated as a union meeting for the purposes of section 26. ----------------------------------------------------------------------- "(5) An employer must not deduct from an employee's wages any amount in respect of the time the employee is engaged in a discussion referred to in subsection (4)." 10 Object of this Part Section 31 of the principal Act is amended by inserting, after paragraph (a), the following paragraph: "(aa) to provide that the duty of good faith in section 4 requires parties bargaining for a collective agreement to conclude a collective agreement unless there is a genuine reason[, based on reasonable grounds,] not to; and". 11 Good faith in bargaining for collective agreement Section 32(1) of the principal Act is amended by inserting, after paragraph (c), the following paragraph: "(ca) even though the union and the employer have come to a standstill or reached a deadlock about a matter, they must continue to bargain (including doing the things specified in paragraphs (b) and (c)) about any other matters on which they have not reached agreement; and". 12 New section 33 substituted The principal Act is amended by repealing section 33, and substituting the following section: "33 Duty of good faith requires parties to conclude collective agreement unless genuine reason not to "(1) The duty of good faith in section 4 requires a union and an employer bargaining for a collective agreement to conclude a collective agreement unless there is a genuine reason[, based on reasonable grounds,] not to. New (majority) ----------------------------------------------------------------------- "(2) For the purposes of subsection (1), genuine reason does not include opposition or objection in principle to bargaining for, or being a party to, a collective agreement." ----------------------------------------------------------------------- 13 When bargaining may be initiated Section 41(4) of the principal Act is amended by omitting the words "more than 1 union or more than 1 employer", and substituting the words "1 or more unions or 1 or more employers". Struck out (majority) ======================================================================= 14 New section 48A inserted The principal Act is amended by inserting, after section 48, the following section: "48A First meeting of multi-party bargaining for a collective agreement "(1) This section applies to bargaining for a collective agreement--- "(a) initiated by a notice given under section 45(5); or "(b) in respect of which bargaining may continue under section 47(6). "(2) Each union and each employer must attend, at least, the first meeting of the parties to the bargaining for a collective agreement. "(3) A union or employer complies with subsection (2) if a representative of the union or employer attends the meeting. "(4) The purpose of the meeting referred to in subsection (2) is--- "(a) for the parties to enter into an arrangement contemplated by section 32(1)(a); and "(b) to discuss such matters as the proposed coverage of the bargaining and arrangements for the representation of parties at subsequent meetings. "(5) Subsection (4) does not limit the matters that may be addressed at the meeting referred to in subsection (2). "(6) It is a breach of the duty of good faith in section 4 for an employer or a union to fail, without reasonable excuse, to comply with subsection (2)". ======================================================================= 15 New heading and sections 50A to 50J inserted The principal Act is amended by inserting, after section 50, the following heading and sections: "Facilitating bargaining "50A Purpose of facilitating collective bargaining "(1) The purpose of sections 50B to 50I is to provide a process that enables 1 or more parties to collective bargaining who are having serious difficulties in concluding a collective agreement to seek the assistance of the Authority in resolving the difficulties. "(2) Sections 50B to 50I do not--- "(a) prevent the parties from seeking assistance from another person in resolving the difficulties; or "(b) apply to any agreement or arrangement with the other person providing such assistance. "50B Reference to Authority "(1) One or more matters relating to bargaining for a collective agreement may be referred to the Authority for facilitation to assist in resolving difficulties in concluding the collective agreement. "(2) A reference for facilitation--- "(a) may be made by any party to the bargaining or 2 or more parties jointly; and "(b) must be made on 1 or more of the grounds specified in section 50C(1). "50C Grounds on which Authority may accept reference "(1) The Authority must not accept a reference for facilitation unless satisfied that 1 or more of the following grounds exist: "(a) that--- "(i) in the course of the bargaining, a party has failed to comply with the duty of good faith in section 4; and "(ii) the failure--- "(A) was serious and sustained; and "(B) has undermined the bargaining: "(b) that--- "(i) the bargaining has been unduly protracted; and "(ii) extensive efforts (including mediation) have failed to resolve the difficulties that have precluded the parties from entering into a collective agreement: "(c) that--- "(i) {the bargaining has been interrupted by} [in the course of the bargaining there has been] 1 or more strikes or lockouts; and "(ii) the strikes or lockouts have been protracted or acrimonious: "(d) that--- "(i) in the course of bargaining, a party has proposed a strike or lockout; and "(ii) the strike or lockout, if it were to occur, would be likely to affect the public interest substantially. "(2) For the purposes of subsection (1)(d)(ii), a strike or lockout is likely to affect the public interest substantially if--- "(a) the strike or lockout is likely to endanger the life, safety, or health of persons; or "(b) the strike or lockout is likely to disrupt social, environmental, or economic interests and the effects of the disruption are likely to be widespread, long-term, or irreversible. "(3) The Authority must not accept a reference in relation to bargaining for which the Authority has already acted as a facilitator unless--- "(a) circumstances relating to the bargaining have changed; or "(b) the bargaining since the previous facilitation has been protracted. "50D {Different members of Authority may accept reference and} [Limitation on which member of Authority may] provide facilitation A member of the Authority who facilitates collective bargaining {may} [must not] be the {same} member of the Authority who accepted the reference for facilitation {or a different member of the Authority}. "50E Process of facilitation "(1) The process to be followed during facilitation--- "(a) must be conducted in private; and "(b) is the process determined by the Authority. "(2) During facilitation, the collective bargaining that the facilitation relates to continues subject to the process determined by the Authority. "(3) During facilitation, the Authority--- "(a) is not acting as an investigative body; and "(b) may not exercise the powers it has for investigating matters. "(4) The provision of facilitation by the Authority may not be challenged or called in question in any proceedings on the ground--- "(a) that the nature and content of the facilitation was inappropriate; or "(b) that the manner in which the facilitation was provided was inappropriate. "50F Statements made by parties during facilitation "(1) A statement made by a party for the purposes of facilitation is not admissible against the party in proceedings under this Act. "(2) A party may make a public statement about facilitation only if--- "(a) it is made in good faith; and "(b) it is limited to the process of facilitation or the progress being made. "50G Proposals made or positions reached during facilitation "(1) A proposal made by a party or a position reached by parties to collective bargaining during facilitation is not binding on a party after facilitation has come to an end. "(2) This section--- "(a) applies to avoid doubt; and "(b) is subject to any agreement of the parties. "50H Recommendation by Authority "(1) While assisting parties to bargaining for a collective agreement, the Authority may make 1 or more recommendations about--- "(a) the process the parties should follow to reach agreement; or "(b) the provisions of the collective agreement the parties should conclude; or "(c) both. "(2) The Authority may give public notice of a recommendation in such manner as the Authority determines. "(3) A recommendation made by the Authority is not binding on a party, but a party must consider a recommendation before deciding whether to accept the recommendation. "50I Party must deal with Authority in good faith During facilitation, a party to bargaining for a collective agreement must deal with the Authority in good faith. "Determining collective agreement if breach of duty of good faith "50J Remedy for serious and sustained breach of duty of good faith in section 4 in relation to collective bargaining "(1) A party to bargaining for a collective agreement may apply, on the grounds specified in subsection (3), to the Authority for a determination fixing the provisions of the collective agreement being bargained for. "(2) The Authority may fix the provisions of the collective agreement being bargained for if it is satisfied that--- "(a) the grounds in subsection (3) have been made out; and "(b) it is appropriate, in all the circumstances, to do so. "(3) The grounds are that--- "(a) a breach of the duty of good faith in section 4--- "(i) has occurred in relation to the bargaining; and "(ii) was sufficiently serious and sustained as to significantly undermine the bargaining; and "(b) all other reasonable alternatives for reaching agreement have been exhausted; and "(c) fixing the provisions of the collective agreement is the only effective remedy for the party or parties affected by the breach of the duty of good faith. "(4) The Authority may make a determination under this section whether or not any penalty for a breach of good faith has been awarded under section {4(7)} [4A] in relation to the same bargaining and whether or not the breach is the same breach. "(5) The effect of a determination of the Authority fixing the provisions of a collective agreement is to make the collective agreement binding and enforceable as if it had been--- "(a) ratified as required by section 51; and "(b) signed by the parties under section 54(1)(b). "(6) Section 59 applies to the determination as if it were a collective agreement. "(7) If the bargaining for the collective agreement was subject to facilitation under sections 50A to 50I, the member of the Authority who {conducted the facilitation may also be the member of the Authority who} makes a determination under this section [must not be the member of the Authority who conducted the facilitation if a party to the bargaining objects]." Struck out (majority) ======================================================================= 16 Ratification of collective agreement (1) Section 51(1) of the principal Act is amended by omitting the words "has been ratified in accordance with the ratification procedure notified under subsection (2)", and substituting the following paragraphs: "(a) has been ratified in accordance with the ratification procedure notified under subsection (2); or "(b) is signed by the union in accordance with an authorisation given under subsection (3)". (2) Section 51 of the principal Act is amended by adding the following subsection: "(3) Before bargaining for a collective agreement or a variation of it is concluded, a union may, in accordance with the ratification procedure previously notified under subsection (2), seek the authorisation of the employees who will be bound by the collective agreement to sign the collective agreement or variation of it without having to comply with the ratification procedure." ======================================================================= New (majority) ----------------------------------------------------------------------- 16A Form and content of collective agreement Section 54(3)(a)(ii) of the principal Act is repealed. ----------------------------------------------------------------------- 17 Application of collective agreement Section 56 of the principal Act is amended by inserting, after subsection (1), the following subsection: "(1A) However, an employee who is bound by a collective agreement and who holds an under-rate worker's permit under section 8 of the Minimum Wage Act 1983 may be paid wages at the rate specified in the permit,--- "(a) while the permit is in force; and "(b) if the union that is a party to the collective agreement agrees." 18 New section 56A inserted The principal Act is amended by inserting, after section 56, the following section: "56A Application of collective agreement to subsequent parties "(1) An employer who is not a party to a collective agreement may become a party to the collective agreement if--- "(a) the agreement provides for an employer to become a party to the agreement after it has been signed by the original parties to the agreement; and "(b) the work of some or all of the employer's employees comes within the coverage clause in the agreement; and "(c) the employees referred to in paragraph (b) are not bound by another collective agreement in respect of their work for the employer; and "(d) the employer notifies all the parties to the agreement in accordance with subsection (5) that the employer proposes to become a party to the agreement. "(2) On the day after the day on which all parties to the collective agreement have been notified in accordance with subsection (5),--- "(a) the employer becomes a party to the collective agreement; and "(b) the collective agreement also binds and is enforceable by--- "(i) the employer: "(ii) employees--- "(A) who are employed by the employer; and "(B) who are or become members of a union that is a party to the agreement; and "(C) whose work comes within the coverage clause in the agreement. "(3) A union that is not a party to a collective agreement may become a party to the collective agreement if--- "(a) the agreement provides for a union to become a party to the agreement after it has been signed by the original parties to the agreement; and "(b) the union has members doing work that comes within the coverage clause of the collective agreement; and "(c) as a result of a secret ballot of those members, a majority of them who are entitled to vote and do vote are in favour of the union becoming a party to the collective agreement; and "(d) the union notifies all the parties to the collective agreement in accordance with subsection(5) that the union proposes to become a party to the agreement. "(4) On the day after the day on which all parties to the collective agreement have been notified in accordance with subsection (5),--- "(a) the union becomes a party to the collective agreement; and "(b) the collective agreement also binds and is enforceable by--- "(i) the union: "(ii) employees--- "(A) who are employed by an employer that is a party to the agreement; and "(B) who are or become members of the union; and "(C) whose work comes within the coverage clause in the agreement. "(5) For the purposes of this section, a party to a collective agreement is notified--- "(a) when the notice is given to the party; or "(b) if the notice is posted to the party, on the seventh day after the day on which the notice is posted. "(6) For the purposes of subsection (1)(b) and (1)(c), employees includes persons whom the employer might employ in the future." 19 New heading and sections {59A and} [59AA to] 59B inserted The principal Act is amended by inserting, after section 59, the following heading and sections: "Undermining collective bargaining or collective agreement New (majority) ----------------------------------------------------------------------- "59AA Interpretation In sections 59A and 59B, reached, in relation to a term or condition in bargaining for a collective agreement, means a term or condition that the parties have agreed or accepted should be a term or condition of the collective agreement if the agreement is concluded and ratified. ----------------------------------------------------------------------- "59A Breach of duty of good faith to pass on[, in certain circumstances,] in individual employment agreement terms and conditions agreed in collective bargaining or in collective agreement New (majority) ----------------------------------------------------------------------- "(1AA) It is not a breach of the duty of good faith in section 4 for an employer to agree that a term or condition of employment of an employee who is not bound by a collective agreement should be the same or substantially the same as a term or condition in a collective agreement that binds the employer. ----------------------------------------------------------------------- "(1) [However,] it is a breach of the duty of good faith in section 4 for an employer to {agree that a term or condition of employment of an employee who is not bound by a collective agreement should be the same or substantially the same as a term or condition in a collective agreement that binds the employer} [do so] if--- "(a) the employer does so with the intention of undermining the collective agreement; and "(b) the effect of the employer doing so is to undermine the collective agreement. New (majority) ----------------------------------------------------------------------- "(1A) It is not a breach of the duty of good faith in section 4 for an employer to agree that a term or condition of employment of an employee should be the same or substantially the same as a term or condition reached in bargaining for a collective agreement. ----------------------------------------------------------------------- "(2) [However,] it is a breach of the duty of good faith in section 4 for an employer {to agree that a term or condition of employment of an employee should be the same or substantially the same as a term or condition reached in bargaining for a collective agreement} [to do so] if--- "(a) the employer does so with the intention of undermining the collective bargaining; {and} [or] "(b) the effect of the employer doing so is to undermine the collective bargaining. "(3) It is not a breach of the duty of good faith in section 4 if anything referred to in subsection (1) or subsection (2) is done with the agreement of the union concerned. "(4) In determining whether subsection (1)(a) and (b) or subsection (2)(a) {and} [or] (b) applies, the following matters must be taken into account: "(a) whether the employer bargained with the employee before they agreed on the term or condition of employment: "(b) whether the employer consulted the union in good faith before agreeing to the term or condition of employment: "(c) the number of the employer's employees bound by the collective agreement or covered by the collective bargaining compared to the number of the employer's employees not bound by the collective agreement or not covered by the collective bargaining: "(d) how long the collective agreement has been in force: "(e) the application of section 63. "(5) Subsection (4) does not limit the matters that may be taken into account for the purposes of subsection (1)(a) and (b) or subsection (2)(a) {and} [or] (b). "(6) Every employer who commits a breach of the duty of good faith under this section is liable to a penalty under this Act. "59B Breach of duty of good faith to pass on[, in certain circumstances,] in collective agreement provisions agreed in other collective bargaining or another collective agreement New (majority) ----------------------------------------------------------------------- "(1AA) It is not a breach of the duty of good faith in section 4 for an employer to conclude a collective agreement that contains 1 or more provisions that are the same or substantially the same as provisions in another collective agreement to which the employer is a party. ----------------------------------------------------------------------- "(1) [However,] it is a breach of the duty of good faith in section 4 for an employer to {conclude a collective agreement that contains 1 or more provisions that are the same or substantially the same as provisions in another collective agreement to which the employer is a party} [do so] if--- "(a) the intention of the employer is to undermine the other collective agreement; and "(b) the effect of the employer doing so is to undermine the other collective agreement. New (majority) ----------------------------------------------------------------------- "(1A) It is not a breach of the duty of good faith in section 4 for an employer to conclude a collective agreement that contains 1 or more provisions that are the same or substantially the same as provisions reached in bargaining for another collective agreement. ----------------------------------------------------------------------- "(2) [However,] it is a breach of the duty of good faith in section 4 for an employer {to conclude a collective agreement that contains 1 or more provisions that are the same or substantially the same as provisions reached in bargaining for another collective agreement} [to do so] if--- "(a) the employer does so with the intention of undermining the other collective bargaining; {and} [or] "(b) the effect of the employer doing so is to undermine the other collective bargaining. "(3) It is not a breach of the duty of good faith in section 4 if anything referred to in subsection (1) or subsection (2) is done with the agreement of the parties to the other collective agreement or collective bargaining. "(4) In determining whether subsection (1)(a) and (b) or subsection (2)(a) or (b) applies, the following matters must be taken into account: "(a) whether the employer and union bargained before agreeing on the provision: "(b) whether the employer and union consulted, in good faith, the parties to the other collective agreement or collective bargaining: "(c) the number of the employer's employees bound by the collective agreement or covered by the collective bargaining compared to the number of the employer's employees bound by the other collective agreement or covered by the other collective bargaining: "(d) how long the other collective agreement has been in force. "(5) Subsection (4) does not limit the matters that may be taken into account for the purposes of subsection (1)(a) and (b) or subsection (2)(a) or (b). "(6) Every employer who commits a breach of the duty of good faith under this section is liable to a penalty under this Act." 20 Object of this Part (1) Section 60(c) of the principal Act is amended by inserting, after subparagraph (i), the following subparagraph: "(ia) required when entering into and varying individual employment agreements; and". (2) Section 60(c)(ii) of the principal Act is amended by inserting, after the words "consistent with", the words ", but not limited to,". New (majority) ----------------------------------------------------------------------- 20A New section 60A inserted The principal Act is amended by inserting, after section 60, the following section: "60A Good faith in bargaining for individual employment agreement "(1) The matters that are relevant to whether an employee and employer bargaining for an individual employment agreement are dealing with each other in good faith include the circumstances of the employee and employer. "(2) For the purposes of subsection (1), circumstances, in relation to an employee and an employer, include--- "(a) the operational environment of the employee and employer; and "(b) the resources available to the employee and employer." ----------------------------------------------------------------------- 21 Employer's obligations in respect of new employee who is not member of union (1) Section 62(1) of the principal Act is amended by repealing paragraph (a) and substituting the following paragraph: "(a) applies to a new employee who--- "(i) is not a member of a union that is a party to a collective agreement that covers the work to be done by the employee; and "(ii) enters into an individual employment agreement with an employer that is a party to a collective agreement that covers the work to be done by the employee; but". (2) Section 62 of the principal Act is amended by inserting, after subsection (1), the following subsection: "(1A) For the purposes of subsection (1), a collective agreement that includes a coverage clause referring to named employees, or the work done by named employees, to whom the collective agreement applies, must be treated as covering the work or type of work done by the named employees (whether done by those employees or any other employees)." (3) Section 62(3)(a) of the principal Act is amended by inserting, after the words "that binds more of the employer's employees", the words "in relation to the work the new employee will be performing". 22 Terms and conditions of employment of new employee who is not member of union (1) Section 63(3) of the principal Act is amended by inserting after the words "employer's employees", the words "in relation to the work the employee will be performing". (2) Section 63 of the principal Act is amended by adding the following subsection: "(6) For an employee who holds an under-rate worker's permit under section 8 of the Minimum Wage Act 1983, the terms and conditions under subsection (2) are subject to the terms of the permit relating to the wages to be paid." 23 New section 63A inserted The principal Act is amended by inserting, after section 63, the following section: "63A Bargaining for individual employment agreement or individual terms and conditions in employment agreement "(1) This section applies when bargaining for terms and conditions of employment in the following situations: "(a) under section 61(1), in relation to additional terms and conditions to the applicable collective agreement: "(b) under section 61(2), in relation to--- "(i) additional terms and conditions to the collective agreement on which the individual employment agreement is based; and "(ii) variations to the individual employment agreement in subparagraph (i): "(c) under section 63(2), in relation to additional terms and conditions for the first 30 days of an individual employment agreement: "(d) under section 63(5), in relation to variations to terms and conditions of an individual employment agreement after the 30-day period: "(e) in relation to terms and conditions of an individual employment agreement for an employee if no collective agreement covers the work done, or to be done, by the employee: "(f) where a fixed term of employment, or probationary or trial period of employment, is proposed: "(g) under section 69L or section 69M in relation to employee protection provisions in individual employment agreements: "(h) under section 69H in relation to redundancy entitlements with a new employer. "(2) The employer must do at least the following things: "(a) provide to the employee a copy of the intended agreement, or the part of the intended agreement, under discussion; and "(b) advise the employee that he or she is entitled to seek independent advice about the intended agreement, or any part of the intended agreement; and "(c) give the employee a reasonable opportunity to seek that advice; and "(d) consider any issues that the employee raises and respond to them. "(3) Every employer who fails to comply with this section is liable to a penalty imposed by the Authority. "(4) Failure to comply with this section does not affect the validity of the employment agreement between the employee and the employer. "(5) The requirements imposed by this section are in addition to any requirements that may be imposed under any provision in this Act. "(6) For the purposes of subsection (1)(e), a collective agreement that includes a coverage clause referring to named employees, or the work done by named employees, to whom the collective agreement applies, must be treated as covering the work or type of work done by the named employees (whether done by those employees or any other employees). "(7) In this section employee includes a prospective employee." 24 Section 64 repealed Section 64 of the principal Act is repealed. 25 Terms and conditions of employment where no collective agreement applies Section 65 of the principal Act is amended by adding the following subsection: "(3) To determine for the purposes of subsection (1) whether the work of an employee is covered by a collective agreement that binds the employer, a collective agreement that includes a coverage clause referring to named employees, or the work or type of work done by named employees, to whom the collective agreement applies, must be treated as covering the work or type of work done by the named employees (whether done by those employees or any other employees)." 26 New section 65A inserted The principal Act is amended by inserting, after section 65, the following section: "65A Deduction of union fees "(1) An individual employment agreement [of an employee who is a member of a union] is to be treated as if it contains a provision that requires {an} [the employee's] employer to deduct, with the consent of {an} [the] employee {who is a member of a union}, the employee's union fee from the employee's salary or wages on a regular basis during the year. "(2) An individual employment agreement may exclude or vary the effect of subsection (1). "(3) Union fees deducted from an employee's salary or wages [under subsection (1)] must be paid to the union concerned in accordance with any arrangement agreed with the union." 27 Fixed term employment Section 66 of the principal Act is amended by adding the following subsections: "(4) If an employee and an employer agree that the employment of the employee will end in a way specified in subsection (1), the employee's employment agreement must state in writing--- "(a) the way in which the employment will end; and "(b) the reasons for ending the employment in that way. "(5) Failure to comply with subsection (4), including failure to comply because the reasons for ending the employment are not genuine reasons based on reasonable grounds, does not affect the validity of the employment agreement between the employee and the employer. "(6) However, if the employer does not comply with subsection (4), the employer may not rely on any term agreed under subsection (1)--- "(a) to end the employee's employment if the employee elects, at any time, to treat that term as ineffective; or "(b) as having been effective to end the employee's employment, if the former employee elects to treat that term as ineffective." 28 Probationary arrangements Section 67 of the principal Act is amended by adding as subsections (2) and (3) the following subsections: "(2) Failure to comply with subsection (1)(a) does not affect the validity of the employment agreement between the parties. "(3) However, if the employer does not comply with subsection (1)(a), the employer may not rely on any term agreed under subsection (1) that the employee serve a period of probation or trial if the employee elects, at any time, to treat that term as ineffective." 29 Unfair bargaining for individual employment agreements Section 68(2)(d) of the principal Act is amended by omitting the expression "64", and substituting the expression "63A". 30 New Part 6A inserted The principal Act is amended by inserting, after Part 6, the following Part: "Part 6A "Continuity of employment if employer's business restructured "Subpart 1---Specified categories of employees "69A Object of this subpart The object of this subpart is to provide protection to specified categories of employees if their employer proposes to restructure its business so that their work is to be performed for a new employer and, to this end, to give employees a right--- "(a) to elect to transfer to the new employer on the same terms and conditions of employment; and "(b) subject to their employment agreements, to bargain for redundancy entitlements from the new employer if made redundant by the new employer for reasons related to the restructuring of the previous employer's business; and "(c) if redundancy entitlements cannot be agreed with the new employer, to have the redundancy entitlements determined by the Authority. "69B Interpretation In this subpart, unless the context otherwise requires,--- "new employer, in relation to the restructuring of an employer's business, means--- "(a) the person who undertakes, or proposes to undertake, the employer's business (or part of it) for the employer; or "(b) the person to whom the employer's business (or part of it) is, or is to be, sold or transferred; or Struck out (majority) ======================================================================= "(c) the new person (referred to in paragraph (a)(iii) of the definition of restructuring) who is to carry out work on behalf of the other person ======================================================================= New (majority) ----------------------------------------------------------------------- "(c) the person who is to carry out the work after the termination of a contract or arrangement referred to in paragraph (a)(iii) of the definition of restructuring ----------------------------------------------------------------------- "redundancy entitlements includes redundancy compensation "restructuring, in relation to an employer's business,--- "(a) means--- "(i) entering into a contract or arrangement under which the employer's business (or part of it) is undertaken for the employer by another person; or "(ii) selling or transferring the employer's business (or part of it) to another person; or Struck out (majority) ======================================================================= "(iii) the termination of a contract or arrangement under which the employer carried out work on behalf of another person if the work is to be carried out on behalf of the other person by a new person; but ======================================================================= New (majority) ----------------------------------------------------------------------- "(iii) the termination of a contract or arrangement referred to in subparagraph (i) if the work carried out under the contract or arrangement is to be carried out by another person, whether by a new person or by the person for whom the employer carried out the work; but ----------------------------------------------------------------------- "(b) to avoid doubt, does not include--- "(i) in the case of an employer that is a company, the sale or transfer of any or all of the shares in the company; or "(ii) any contract, arrangement, sale, or transfer entered into, made, or concluded while the employer is adjudged bankrupt or in receivership or liquidation. "69C Application of this subpart This subpart applies to an employee if--- "(a) Schedule 1A applies to the employee; and "(b) the business of the employee's employer is being, or is proposed to be, restructured; and "(c) as a result, the employee is, or will be, no longer required by his or her employer to perform the work, or part of the work, {specified in his or her employment agreement} [performed by the employee]; and "(d) the type of work performed by the employee (or work that is substantially similar) is, or is to be, performed by employees of the new employer. "69D Notice of right to make election "(1) Before an employer's business is restructured, the employer must, in complying with section 4(1A)(c), provide the employees affected with--- "(a) a reasonable opportunity to exercise the right to make an election under section 69F(1); and "(b) the date by which the right to make the election must be exercised. "(2) If an employer's business is restructured within the meaning of paragraph (a)(iii) of restructuring in section 69B, then the person who terminates the contract or arrangement must give the employer sufficient notice of the restructuring to enable the employer to comply with subsection (1). "69E Employee bargaining for alternative arrangements "(1) To avoid doubt, an employee may, after his or her employer has complied with section 69D and before deciding whether to elect to transfer to the new employer, bargain with his or her employer for alternative arrangements. Struck out (majority) ======================================================================= "(2) If the employee and employer agree on alternative arrangements, the employee may not subsequently elect to transfer to the new employer. ======================================================================= New (majority) ----------------------------------------------------------------------- "(2) If the employee and employer agree on alternative arrangements,--- "(a) the alternative arrangements must be recorded in writing; and "(b) if paragraph (a) is complied with, the employee may not subsequently elect to transfer to the new employer. ----------------------------------------------------------------------- "69F Employee may elect to transfer to new employer "(1) An employee to whom this subpart applies may, before the date provided to the employee under {section 69D(b)} [section 69D(1)(b)], elect to transfer to the new employer. "(2) If an employee elects to transfer to the new employer, then to the extent that the employee is no longer required to perform work for his or her employer, the employee--- "(a) becomes an employee of the new employer on and from the specified date; and "(b) is employed on the same terms and conditions by the new employer as applied to the employee immediately before the specified date, including terms and conditions relating to whether the employee is employed full-time or part-time; and "(c) is not entitled to any redundancy entitlements under those terms and conditions of employment from his or her previous employer because of the transfer. "(3) The employment of an employee who elects to transfer to the new employer is to be treated as continuous, including for the purpose of service-related entitlements whether legislative or otherwise. "(4) To avoid doubt, this section does not affect the employment agreement of an employee who elects not to transfer to the new employer. "(5) In this section, specified date means--- "(a) a date agreed by the employee and his or her previous employer; but "(b) if no date is agreed, the date on which the restructuring of the previous employer's business takes effect. New (majority) ----------------------------------------------------------------------- "69FA Agreements excluding entitlements for technical redundancy not affected "(1) To avoid doubt, this subpart does not limit or affect any terms and conditions of employment under which the employee's entitlement to redundancy entitlements is excluded where the employee may transfer to the new employer but elects not to do so. "(2) This subpart does not limit or affect section 77HA of the State Sector Act 1988. ----------------------------------------------------------------------- "69G New employer becomes party to collective agreement that binds employee electing to transfer "(1) This section applies if--- "(a) an employee who elects to transfer to a new employer is a member of a union and bound by a collective agreement; and "(b) the new employer is not a party to the collective agreement that the union is a party to. "(2) On and from the date on which the employee becomes an employee of the new employer, the new employer becomes a party to the collective agreement, but only in relation to, and for the purposes of, that employee. "69H Employee who transfers may bargain for redundancy entitlements with new employer "(1) This section applies to an employee if--- "(a) the employee elects, under section 69F(1), to transfer to a new employer; and "(b) the new employer proposes to make the employee redundant for reasons relating to the restructuring; and "(c) the employee's employment agreement--- "(i) does not provide for redundancy entitlements in that circumstance; or "(ii) does not expressly exclude redundancy entitlements in that circumstance. "(2) The employee is entitled to redundancy entitlements from his or her new employer. "(3) If an employee seeks redundancy entitlements from his or her new employer, the employee and new employer must bargain with a view to reaching agreement on appropriate redundancy entitlements. "69I Authority may investigate bargaining and determine redundancy entitlements "(1) If an employee and his or her new employer fail to agree on redundancy entitlements under section 69H(3), the employee or new employer may apply to the Authority to investigate the bargaining relating to the matter. "(2) After concluding the investigation, the Authority must determine--- "(a) if, in the Authority's view, it is possible for the bargaining to continue, how further bargaining should occur; or "(b) if, in the Authority's view, further bargaining is not warranted, the redundancy entitlements due to an employee. "(3) In determining the redundancy entitlements under subsection (2)(b), the Authority may take into account 1 or more of the following matters: "(a) the redundancy entitlements (if any) provided in the employee's employment agreement for redundancy in circumstances other than restructuring: "(b) the employee's length of service with his or her previous employer and new employer: "(c) how much notice of the redundancy the employee has received: "(d) the ability of the new employer to provide redundancy entitlements: "(e) the likelihood of the employee being re-employed or obtaining employment with another employer: "(f) any other relevant matter that the Authority thinks fit. "Subpart 2---Other employees "69J Object of this subpart The object of this subpart is to provide protection to employees to whom subpart 1 does not apply if their employer restructures its business so that their work is to be performed for a new employer and, to this end, to require their employment agreements to contain employee protection provisions relating to negotiations between the employer and new employer about the transfer of affected employees to the new employer. "69K Interpretation "(1) In this subpart, unless the context otherwise requires,--- "employee means an employee to whom Schedule 1A does not apply "employee protection provision means a provision--- "(a) the purpose of which is to provide protection for the employment of affected employees if their employer's business is restructured; and "(b) that includes--- "(i) a process that the employer must follow in negotiating with a new employer about the restructuring to the extent that it relates to affected employees; and "(ii) the matters relating to the affected employees' employment that the employer will negotiate with the new employer, including whether the affected employees will transfer to the new employer on the same terms and conditions of employment; and "(iii) the process to be followed at the time of the restructuring to determine what entitlements, if any, are available for employees who do not transfer to the new employer "new employer, in relation to the restructuring of an employer's business, means the person--- "(a) who undertakes, or proposes to undertake, the employer's business (or part of it) for the employer; or "(b) to whom the employer's business (or part of it) is, or is to be, sold or transferred "restructuring, in relation to an employer's business,--- "(a) means--- "(i) entering into a contract or arrangement under which the employer's business (or part of it) is undertaken for the employer by another person; or "(ii) selling or transferring the employer's business (or part of it) to another person; but "(b) to avoid doubt, does not include--- "(i) the termination of a contract or arrangement under which the employer carried out work on behalf of another person; or "(ii) in the case of an employer that is a company, the sale or transfer of any or all of the shares in the company; or "(iii) any contract, arrangement, sale, or transfer entered into, made, or concluded while the employer is adjudged bankrupt or in receivership or liquidation. "(2) For the purposes of this subpart, an employee is an affected employee if--- "(a) the business of the employee's employer is being, or is proposed to be, restructured; and "(b) as a result, the employee is, or will be, no longer required by his or her employer to perform the work {specified in his or her employment agreement} [performed by the employee]; and "(c) the type of work performed by the employee (or work that is substantially similar) is, or is to be, performed by employees of the new employer. "69L New collective agreements and new individual employment agreements must contain employee protection provision Every collective agreement and every individual employment agreement entered into on or after the commencement of this section must contain an employee protection provision to the extent that the agreement binds employees to whom this subpart applies. "69M When existing collective agreement or individual employment agreement must contain employee protection provision "(1) Every collective agreement and every individual employment agreement in force immediately before the commencement of this section must be varied to include an employee protection provision to the extent that the agreement binds employees to whom this subpart applies. "(2) Subsection (1) must be complied with by the earliest of the following: "(a) 12 months after the commencement of this section; or "(b) when the collective agreement or individual employment agreement is next amended; or "(c) if an employer's business is restructured, before the restructuring occurs. "69N Affected employee may choose whether to transfer to new employer If an employer, in relation to the restructuring of the employer's business, arranges for an affected employee to transfer to the new employer, the affected employee may--- "(a) choose to transfer to the new employer; or "(b) choose not to transfer to the new employer." Struck out (unanimous) ======================================================================= (2) Section 54(3)(a)(ii) of the principal Act is repealed. ======================================================================= 31 Interpretation Section 71 of the principal Act is amended by repealing the definition of eligible employee, and substituting the following definition: "eligible employee, in relation to a union or an employer, means an employee who is a member of a union". 32 Minister to approve employment relations education Section 72(1) of the principal Act is amended by omitting the words "by notice in the Gazette,". 33 Calculation of maximum number of days of employment relations education leave (1) Section 74(1) of the principal Act is amended by inserting, after the words "by the employer as at", the words "the 30th day before". (2) The heading to the first column to the table in section 74(1) of the principal Act is amended by inserting, after the words "as at", the words "the 30th day before". 34 Eligible employee proposing to take employment relations education leave Section 78 of the principal Act is amended by inserting, after subsection (3), the following subsection: "(3A) To avoid doubt, a representative of an eligible employee may comply with subsection (1) on behalf of the eligible employee." 35 New Part 8A inserted The principal Act is amended by inserting, after section 100, the following Part: "Part 8A "Codes of employment practice [and code of good faith for public health sector] New (majority) ----------------------------------------------------------------------- "Codes of employment practice ----------------------------------------------------------------------- "100A Codes of employment practice "(1) The Minister may, by notice in the Gazette, approve 1 or more codes of employment practice. "(2) The notice in the Gazette may, instead of setting out the code of employment practice being approved,--- "(a) provide sufficient information to identify the code; and "(b) specify the date on which the code comes into force; and "(c) state where copies of the code may be obtained. "(3) Before the Minister approves a code of employment practice, the Minister must consult, or be satisfied that there has been consultation, with such persons and organisations as the Minister thinks appropriate, including relevant employer and employee interests. "(4) The purpose of a code of employment practice is to provide guidance on the application of this Act--- "(a) generally; or "(b) in relation to particular types of situations; or "(c) in relation to particular parts or areas of the employment environment. "100B Amendment and revocation of code of practice A code of practice may be amended or revoked in the same manner as the code is approved. "100C Authority or Court may have regard to code of practice The Authority or the Court may, in determining any matter within its jurisdiction, have regard to a code of employment practice that--- "(a) was in force at the relevant time; and "(b) in the form in which it was then in force, related to the circumstances before the Authority or the Court. Struck out (majority) ======================================================================= "100D Codes of employment practice relating to the health sector "(1) The Minister of Health must, by notice in the Gazette, approve a code of employment practice that provides for matters relating to the health and safety of patients, employees, and the public during strikes and lockouts in the health sector. "(2) Sections 100A(2) to (4), 100B, and 100C apply, with all necessary modifications, to a code approved under this section as if the code were approved under section 100A. "(3) A person breaches the duty of good faith in section 4 if--- "(a) the code applies to the person; and "(b) the person does not comply with the code. ======================================================================= New (majority) ----------------------------------------------------------------------- "Code of good faith for public health sector "100D Code of good faith for public health sector "(1) Schedule 1AA contains a code of good faith for the public health sector. "(2) The code--- "(a) applies subject to the other provisions of this Act and any other enactment; and "(b) in particular, does not limit the application of the duty of good faith in section 4 in relation to the public health sector. "(3) Compliance with the code does not, of itself, necessarily mean that the duty of good faith in section 4 has been complied with. "(4) It is a breach of the duty of good faith in section 4 for a person to whom the code applies to fail to comply with the code. "(5) This section does not prevent a code of good faith approved under section 35 or a code of employment practice approved under section 100A applying in relation to the public health sector. "(6) However, in the case of any inconsistency, the code set out in Schedule 1AA prevails over a code approved under section 35 or section 100A. ----------------------------------------------------------------------- New (majority) ----------------------------------------------------------------------- "100E Amendments to or replacement of code of good faith for public health sector "(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, amend or replace the code of good faith for the public health sector set out in Schedule 1AA. "(2) The Minister must not make a recommendation under subsection (1) unless--- "(a) requested to do so by--- "(i) not less than three-quarters of district health boards; and "(ii) unions who represent not less than three-quarters of union members employed by district health boards; and "(b) the Minister has consulted the Minister of Health and such other persons and organisations as he or she considers appropriate." ----------------------------------------------------------------------- 36 Object of this Part Section 101 of the principal Act is amended by inserting after paragraph (a), the following paragraph: "(ab) to recognise that employment relationship problems are more likely to be resolved quickly and successfully if the problems are first raised and discussed directly between the parties to the relationship; and". 37 New section 103A inserted The principal Act is amended by inserting, after section 103, the following section: "103A Test of justification For the purposes of section 103(1)(a) and (b), the question of whether a dismissal or an action was justifiable must be determined, on an objective basis, by considering whether the employer's actions, and how the employer acted, {was fair and reasonable to both parties} [were what a fair and reasonable employer would have done] in all the circumstances at the time the dismissal or action occurred. Struck out (majority) ======================================================================= "(2) For the purposes of subsection (1), the employer must have considered and balanced the legitimate interests of the employee and the employer." ======================================================================= New (majority) ----------------------------------------------------------------------- 37A Exceptions in relation to discrimination Section 106(1) of the principal Act is amended by adding the following paragraph: "(m) section 70 (which relates to superannuation schemes)." ----------------------------------------------------------------------- 38 Definition of involvement in activities of union for purposes of section 104 Section 107 of the principal Act is amended by inserting, after paragraph (b), the following paragraph: "(ba) had participated in a strike lawfully; or". 39 Choice of procedures Section 112 of the principal Act is amended by adding the following subsections: "(3) If an employee applies to the Authority for a resolution of the grievance under subsection (1)(a), the employee may not exercise or continue to exercise any rights in relation to the subject matter of the grievance that the employee may have under the Human Rights Act 1993. "(4) If an employee makes a complaint under subsection (1)(b), the employee may not exercise or continue to exercise any rights in relation to the subject matter of the complaint that the employee may have under this Act." 40 Remedies (1) Section 123 of the principal Act is amended by inserting, after paragraph (c), the following paragraph: "(ca) if the Authority or the Court finds that any workplace conduct or practices are a significant factor in the personal grievance, recommendations to the employer concerning the action the employer should take to prevent similar employment relationship problems occurring:". (2) Section 123 of the principal Act is amended by adding, as subsection (2), the following subsection: "(2) When making an order under subsection (1)(b) or (c), the Authority or the Court may order payment to the employee by instalments, but only if the financial position of the employer requires it." 41 Arrears Section 131 of the principal Act is amended by inserting, after subsection (1), the following subsection: "(1A) The Authority may order payment of the wages or other money to the employee by instalments, but only if the financial position of the employer requires it." 42 Recovery of penalties (1) Section 135 of the principal Act is amended by inserting, after subsection (4), the following subsection: "(4A) The Authority or the Court may order payment of a penalty by instalments, but only if the financial position of the person paying the penalty requires it." (2) Section 135 of the principal Act is amended by repealing subsection (5), and substituting the following subsection: "(5) An action for the recovery of a penalty under this Act must be commenced within 12 months after the earlier of--- "(a) the date when the cause of action first became known to the person bringing the action; or "(b) the date when the cause of action should reasonably have become known to the person bringing the action." 43 Power of Authority to order compliance Section 137(1)(a)(xi) is amended by omitting the expression "19K", and substituting the expression "19G". 44 Further provisions relating to compliance order by Authority Section 138 of the principal Act is amended by inserting, after subsection (4), the following subsection: "(4A) If the compliance order relates in whole or in part to the payment to an employee of a sum of money, the Authority may order payment to the employee by instalments, but only if the financial position of the employer requires it." 45 Object of this Part (1) Section 143 of the principal Act is amended by inserting, after paragraph (d), the following paragraph: "(da) recognise that the person who provides mediation services can manage any mediation process actively; and". (2) Section 143 of the principal Act is amended by inserting, after paragraph (f), the following paragraph: "(fa) ensure that investigations by the specialist decision-making body are, generally, concluded before any higher court exercises its jurisdiction in relation to the investigations; and". 46 New section 144A inserted The principal Act is amended by inserting, after section 144, the following section: "144A Dispute resolution services "(1) Nothing in this Act prevents the chief executive from providing dispute resolution services to parties in work-related relationships that are not employment relationships. "(2) Services provided in accordance with this section proceed on the basis specified in writing by the chief executive." 47 Provision of mediation services Section 145 of the principal Act is amended by repealing subsection (1), and substituting the following subsection: "(1) The chief executive, by way of general instructions under section 153(2) and (3),--- "(a) may decide how the mediation services required by section 144 are to be provided; and "(b) may, in order to promote fast and effective resolutions, treat matters presented for mediation in different ways." 48 Procedure in relation to mediation services (1) Section 147(2) of the principal Act is amended by inserting, after paragraph (a), the following paragraph: "(ab) may offer mediation services on the basis that, prior to the commencement of a mediation, the parties have agreed--- "(i) that the services will be limited to a specified time; and "(ii) if the problem is not resolved within the specified time, the parties will resolve the problem by using the process in section 150 (with any necessary modifications); and". (2) Section 147 of the principal Act is amended by adding the following subsection: "(3) To avoid doubt, the person who provides the services also decides the procedures that will be followed, which may include--- "(a) addressing any party to the matter without any representative of that party being present: "(b) expressing to any party his or her views on the substance of 1 or more of the issues between the parties--- "(i) with or without any representative of the party being present: "(ii) with or without any other party or parties to the matter being present: "(c) expressing to any party his or her views on the process the party is following or the position the party has adopted about the employment relationship problem--- "(i) with or without any representative of the party being present: "(ii) with or without any other party or parties to the matter being present." 49 Settlements (1) Section 149(3) of the principal Act is amended by inserting, after paragraph (a), the following paragraph: "(ab) the terms may not be cancelled under section 7 of the Contractual Remedies Act 1979; and". (2) Section 149 of the principal Act is amended by adding the following subsection: "(4) A person who breaches an agreed term of settlement to which subsection (3) applies is liable to a penalty imposed by the Authority." 50 Decision by authority of parties Section 150 of the principal Act is amended by adding the following subsection: "(4) A person who breaches a term of a decision to which subsection (3) applies is liable to a penalty imposed by the Authority." 51 New section 150A inserted The principal Act is amended by inserting, after section 150, the following section: "150A Payment on resolution of problem "(1) Any payment by 1 party to another, required by any agreed terms of settlement under section 149(3) or decision under section 150(3), must be paid directly to the other party and not to a representative of that party, and the party receiving the payment may not receive, or agree to receive, payment in any other manner. "(2) For the purposes of this Act, a payment that does not comply with subsection (1) is to be treated as if the payment has not been made. Struck out (majority) ======================================================================= "(3) Subsection (1) does not apply if the party to whom the payment is required is receiving or has received legal aid for the mediation services under the Legal Services Act 2000." ======================================================================= New (majority) ----------------------------------------------------------------------- "(3) Subsection (1) does not--- "(a) apply if the party to whom the payment is required to be made is receiving or has received legal aid under the Legal Services Act 2000 for any matter related to the employment relationship problem giving rise to the mediation; or "(b) prevent a payment being made to the other party's solicitor." ----------------------------------------------------------------------- 52 Powers of Authority Section 160(1)(c) of the principal Act is amended by inserting, after the words "any time before", the words ", during, or after". 53 Jurisdiction (1) Section 161(1) of the principal Act is amended by inserting, after paragraph (c), the following paragraphs: "(ca) facilitating bargaining under sections 50A to 50I: "(cb) fixing the provisions of a collective agreement under section 50J:". (2) Section 161(1) of the principal Act is amended by inserting, after paragraph (d), the following paragraph: "(da) investigating bargaining under section 69I and, if necessary, determining redundancy entitlements under that section:." (3) Section 161(2) of the principal Act is amended by omitting the words "subsection (1)(d) or subsection (1)(f)", and substituting the words "subsection (1)(ca), (cb), (d), (da), and (f)". 54 Procedure Section 173 of the principal Act is amended by inserting, after subsection (2), the following subsections: "(2A) The Authority may exercise its powers under section 160(1) in the absence of 1 or more of the parties. "(2B) However, if the Authority acts under subsection (2A), the Authority must provide to an absent party--- "(a) any material it receives that is relevant to the case of the absent party; and "(b) an opportunity to comment on the material before the Authority takes it nto account. "(2C) To avoid doubt, subsections (2A) and (2B) do not limit the powers of the Authority to make ex parte orders." 55 Referral of question of law Section 177 of the principal Act is amended by adding the following subsection: "(4) Subsection (1) does not apply--- "(a) to a question about the procedure that the Authority has followed, is following, or is intending to follow; and "(b) without limiting paragraph (a), to a question about whether the Authority may follow or adopt a particular procedure." 56 Removal to Court Section 178 of the principal Act is amended by adding, the following subsection: "(6) This section does not apply--- "(a) to a matter, or part of a matter, about the procedure that the Authority has followed, is following, or is intending to follow; and "(b) without limiting paragraph (a), to a matter, or part of a matter, about whether the Authority may follow or adopt a particular procedure." 57 Challenges to determinations of Authority Section 179 of the principal Act is amended by adding the following subsection: "(5) Subsection (1) does not apply--- "(a) to a determination, or part of a determination, about the procedure that the Authority has followed, is following, or is intending to follow; and "(b) without limiting paragraph (a), to a determination, or part of a determination, about whether the Authority may follow or adopt a particular procedure." 58 New {sections 179A and 179B} [section 179A] inserted The principal Act is amended by inserting, after section 179, the following sections: Struck out (majority) ======================================================================= "179A Cross-challenges to determinations of Authority "(1) A party to a matter before the Authority that is subject to an election under section 179 may make a cross-challenge to the relevant determination--- "(a) in the prescribed manner; and "(b) within the prescribed time. "(2) If the election is withdrawn or abandoned, the cross-challenge may continue to proceed before the Court. "(3) For the purposes of this Act, a cross-challenge under subsection (1) must itself be treated as an election under section 179. ======================================================================= "179A Limitation on challenges to certain determinations of Authority "(1) This section applies to a determination of the Authority made--- "(a) for the purposes of sections 50A to 50I; or "(b) under section 50J. "(2) A party may not elect, under section 179(1), to have the matter heard by the Court unless the matter is whether 1 or more of the grounds in section 50C(1) or section 50J(3) exist." 59 Decision Section 183 of the principal Act is amended, by adding, as subsections (2) and (3), the following subsections: "(2) Once the Court has made a decision, the determination of the Authority on the matter is set aside and the decision of the Court on the matter stands in its place. "(3) Despite subsection (2), a person may apply for review of the determination of the Authority under section 194." 60 Restriction on review Section 184 of the principal Act is amended by inserting, after subsection (1), the following subsection: "(1A) No review proceedings under section 194 may be initiated in relation to any matter before the Authority unless--- "(a) the Authority has issued final determinations on all matters relating to the subject of the review application between the parties to the matter; and "(b) (if applicable) the party initiating the review proceedings has challenged the determination under section 179; and "(c) the Court has made a decision on the challenge under section 183." 61 Role in relation to jurisdiction Section 188(4) of the principal Act is amended by repealing subsection (4), and substituting the following subsection: "(4) It is not a function of the Court to advise or direct the Authority in relation to--- "(a) the exercise of its investigative role, powers, and jurisdiction; or "(b) the procedure--- "(i) that it has followed, is following, or is intending to follow; or "(ii) without limiting subparagraph (i), that it may follow or adopt." 62 Application for review Section 194(2) of the principal Act is amended by inserting, after the words "rule of law,", the words "but subject to section 184(1A),". 63 New section 194A inserted The principal Act is amended by inserting, after section 194, the following section: "194A Application for review by {State services} [certain] employees "(1) This section applies to any exercise, refusal to exercise, or proposed or purported exercise of a statutory power or statutory power of decision by an employer {in the State services under any of the provisions of Parts V, VI, VII, or VIIA of the State Sector Act 1988} if that exercise, refusal to exercise, or proposed or purported exercise of the statutory power or statutory power of decision is or gives rise to an employment relationship problem. "(2) When subsection (1) applies, the {State services} employee or former {State services} employee concerned--- "(a) must use the employment relationship problem-solving provisions in this Act to deal with the problem; and "(b) may not bring an application for review in relation to the problem in the Court or the High Court." 64 Powers of Labour Inspectors Section 229(3) of the principal Act is amended by inserting, after the words "is liable", the words ", in an action brought by a Labour Inspector,". 65 Compilation of wages and time record Section 232(4) of the principal Act is amended by inserting, after the words "is liable", the words ", in an action brought by a Labour Inspector,". 66 New section 237A inserted The principal Act is amended by inserting, after section 237, the following section: "237A Amendments to Schedule 1A "(1) The Governor-General may, by Order in Council, amend Schedule 1A to add to, omit from, or vary the categories of employees. Struck out (majority) ======================================================================= "(2) An Order in Council must not be made under subsection (1) unless--- "(a) made on the recommendation of the Minister; and "(b) the Minister--- "(i) has consulted such employers, employees, and the representatives of such employers and employees, as the Minister considers appropriate; and "(ii) is satisfied that the criteria in subsection (3) are met. ======================================================================= New (majority) ----------------------------------------------------------------------- "(2) An Order in Council must not be made under subsection (1) unless made on the recommendation of the Minister. "(2A) The Minister must not make a recommendation under subsection (2) unless the Minister--- "(a) has received from any person or organisation a request to amend Schedule 1A that specifies the grounds on which it is believed that the criteria in subsection (3) are met; and "(b) has received a report from the Department that assesses the request; and "(c) has provided the Department's assessment to, and has consulted, such employers, employees, the representatives of such employers and employees, and such other persons and organisations, as the Minister considers appropriate; and "(d) is satisfied that the criteria in subsection (3) are met. ----------------------------------------------------------------------- "(3) The criteria are--- "(a) whether the employees concerned are employed in a sector in which the restructuring of an employer's business occurs frequently: "(b) whether the restructuring of employers' businesses in the sector concerned has tended to undermine the employees' terms and conditions of employment. "(c) whether the employees concerned--- Struck out (majority) ======================================================================= "(i) are employed in a labour intensive sector in low paid work; and ======================================================================= "(ii) have little bargaining power. "(4) In this section, restructuring has the same meaning as in subpart 1 of Part 6A." 67 New Schedules 1A [and 1AA] inserted The principal Act is amended by inserting, after Schedule 1, the Schedules 1A [and 1AA] set out in Schedule 1. 68 Schedule 2 amended Schedule 2 of the principal Act is amended by inserting, after clause 4, the following clause: "4A Service outside New Zealand Any document relating to a matter before the Authority may be served out of New Zealand--- "(a) by leave of the Authority; and "(b) in accordance with regulations made under this Act." 69 Schedule 3 amended Schedule 3 of the principal Act is amended by inserting, after clause 5, the following clause: "5A Service outside New Zealand Any document relating to a matter before the Court may be served out of New Zealand--- "(a) by leave of the Court; and "(b) in accordance with regulations made under this Act." 70 Consequential amendments The enactments specified in Schedule 2 are amended in the manner indicated in that schedule. 71 Transitional provisions (1) The amendments made by this Act do not apply to anything done or any matter arising before the commencement of this Act. (2) However, subsection (1) applies subject to subsections (3) to (22). (3) The definition of coverage clause in section 5 of the principal Act (as substituted by section 7(1) of this Act) applies to a collective agreement whether it comes into force before or after the commencement of this Act. (4) Section 9(3) of the principal Act (as added by section 8 of this Act) applies to a collective agreement whether it comes into force before or after the commencement of this Act. (5) Section 20(5) of the principal Act (as added by section 9 of this Act) applies whether the discussion took place before or after the commencement of this Act. (6) Section 32(1)(ca) (as inserted by section 11 of this Act) applies whether the bargaining started before or after the commencement of this Act. (7) Section 33 of the principal Act (as substituted by section 12 of this Act) applies whether the bargaining started before or after the commencement of this Act. (8) Sections 50A to 50J of the principal Act (as inserted by section 15 of this Act)--- (a) apply whether the bargaining started before or after the commencement of this Act; but (b) do not apply in relation to grounds that exist before the commencement of this Act. (9) Section 56(1A) of the principal Act (as inserted by section 17 of this Act) applies whether an employee's employment started before or after the commencement of this Act. (10) Section 56A of the principal Act (as inserted by section 18 of this Act) applies whether the collective agreement came into force before or after the commencement of this Act. (11) Section 59A(1) of the principal Act (as inserted by section 19 of this Act) applies whether the collective agreement came into force before or after the commencement of this Act. (12) Section 59A(2) of the principal Act (as inserted by section 19 of this Act) applies whether the bargaining started before or after the commencement of this Act. (13) Section 59B(1) of the principal Act (as inserted by section 19 of this Act) applies whether the collective agreement came into force before or after the commencement of this Act. (14) Section 59B(2) of the principal Act (as inserted by section 19 of this Act) applies whether the bargaining started before or after the commencement of this Act. (15) Section 65A of the principal Act (as inserted by section 26 of this Act) applies whether the individual employment agreement started before or after the commencement of this Act. (16) Section 78(3A) of the principal Act (as inserted by section 34 of this Act) applies whether the employer was told of the proposal to take employment leave before or after the commencement of this Act. (17) Section 149(3)(ab) of the principal Act (as substituted by section 49 of this Act) applies to the agreed terms of settlement whether the agreed terms of settlement are signed before or after the commencement of this Act. (18) Section 149(4) of the principal Act (as inserted by section 49 of this Act) applies whether the agreed terms of settlement are signed before or after the commencement of this Act. (19) Section 150(4) of the principal Act (as inserted by section 50 of this Act) applies whether the decision was signed before or after the commencement of this Act. (20) Section 194A of the principal Act (as inserted by section 63 of this Act),--- (a) applies whether the exercise, refusal to exercise, or proposed or purported exercise of the statutory power of decision was made before or after the commencement of this Act; but (b) does not apply if an application or proceedings of the type referred to in section 194(1) have been started. Struck out (unanimous) ======================================================================= Part 2 Equal pay Subpart 1---Preliminary provisions 72 Purpose The purpose of this Part is to address gender-based discrimination in pay by--- (a) requiring, in relation to the same or substantially similar work, an employer to provide equal pay--- (i) to each of his or her employees who performs the work: (ii) in the case of an employer who is a party to a multi-employer collective agreement, to each of his or her employees when compared to other employees who are bound by that agreement and who perform the work for another employer; and (b) providing processes for the resolution of equal pay queries that focus on resolution by the parties themselves in the first instance: (c) providing for Labour Inspectors to conduct equal pay investigations. ======================================================================= Struck out (unanimous) ======================================================================= 73 Employer and employee obligations under this Part When dealing with each other under this Part, an employer and each employee employed by the employer must deal with each other in good faith. ======================================================================= Struck out (unanimous) ======================================================================= 74 Interpretation (1) In this Part, unless the context otherwise requires,--- comparable employee, in relation to a relevant employee, means a person who--- (a) is not of the same sex as the relevant employee; and (b) performs work that is the same as, or substantially similar to, the work performed by the relevant employee; and (c) does not receive a special rate of pay; and (d) is either--- (i) employed by the same employer as the relevant employee; or (ii) employed by another employer, if the employee and the relevant employee are bound by the same multi-employer collective agreement enforcement action means proceedings taken by a Labour Inspector on behalf of an employee--- (a) to recover arrears of equal pay under section 88; or (b) to recover a penalty under section 89; or (c) for a compliance order under section 137 of the Employment Relations Act 2000 equal pay means a rate of pay--- (a) for work that is the same or substantially similar; and (b) in which there is no element of differentiation between male employees and female employees based on the sex of the employees multi-employer collective agreement means a collective agreement that is binding on--- (a) 1 or more unions; and (b) 2 or more employers; and (c) 2 or more employees pay, in relation to an employee,--- (a) means salary or wages actually and legally payable to the employee; and (b) includes--- (i) productivity and incentive-based payments: (ii) overtime, bonuses, or other special payments: (iii) allowances, fees, commission, and every other emolument or benefit whether in 1 sum or several sums and whether paid in money or not personal information has the same meaning as in section 2(1) of the Privacy Act 1993 relevant employee means an employee who--- (a) makes an equal pay query; or (b) is the subject of an equal pay investigation special rate of pay means a rate of pay that--- (a) is special to an employee because of the employee's particular skills, knowledge, experience, or other attributes; and (b) does not involve discrimination in relation to the employee or any other employee based on the sex of the employee. (2) In this Part,--- (a) the terms Authority, employee, employer, employment agreement, and Labour Inspector have the same meaning as in section 5 of the Employment Relations Act 2000; and (b) any other term or expression that is used but not defined in this Part, but that is defined in the Employment Relations Act 2000, has the same meaning as in that Act. ======================================================================= Struck out (unanimous) ======================================================================= 75 Application This Part applies to all employers and employees, including the Crown and its employees. ======================================================================= Struck out (unanimous) ======================================================================= Subpart 2---Duty to provide equal pay 76 Employer must provide equal pay (1) An employer must provide equal pay to each of his or her employees who performs the same or substantially similar work. (2) For the purposes of subsection (1), if the employer is a party to a multi-employer collective agreement, the employer must provide equal pay to his or her employees when compared to other employees who are bound by that agreement and who perform the same or substantially similar work. (3) In determining whether employees carry out the same or substantially similar work, regard must be had to, among other things, the extent to which--- (a) the work or class of work requires the same, or a substantially similar, degree of skill, knowledge, effort, and responsibility; and (b) the conditions under which the work is performed are the same or substantially similar. (4) Subsection (1) does not prevent an employer from paying an employee a special rate of pay if the circumstances of the employee justify it. Compare: 1972 No 118 s 3(1)(a) ======================================================================= Struck out (unanimous) ======================================================================= Equal pay queries 77 Employee may make equal pay query (1) An employee may ask his or her employer whether he or she is receiving equal pay (an equal pay query). (2) In considering an equal pay query under subsection (1), the employer must compare the pay received by the relevant employee with that paid to a comparable employee identified by the employer. ======================================================================= 78 Employer's response to equal pay query (1) An employer must provide a written response to the relevant employee about his or her equal pay query within 20 working days after the query is made. (2) The response must confirm whether or not the relevant employee, to the best of the employer's knowledge, is receiving equal pay. (3) The response must not disclose the identity of the comparable employee used by the employer as the basis for assessing the pay received by the relevant employee. (4) However, if the response contains any information that may indirectly disclose the identity of the comparable employee or other personal information about that employee, the disclosure of that information is authorised by this Part. (5) This section does not apply if the equal pay query is referred to a Labour Inspector under section 79. ======================================================================= Struck out (unanimous) ======================================================================= 79 Process for considering equal pay query if employer does not employ a comparable employee (1) This section applies to an employer who--- (a) is a party to a multi-employer collective agreement; and (b) considers, in relation to an equal pay query made under section 77, that he or she does not employ an appropriate comparable employee. (2) The employer must refer the employee's equal pay query to a Labour Inspector for consideration and response. (3) Sections 81 to 83 apply to a query referred to a Labour Inspector under this section as if it were an equal pay investigation. ======================================================================= Struck out (unanimous) ======================================================================= 80 Employer must ensure employee receives equal pay (1) This section applies if the employer's response under section 78 confirms that the employee has not been receiving equal pay. (2) The employer must, as soon as possible (but not later than 1 month after the response),--- (a) comply with the duty to pay the employee equal pay; and (b) pay to the employee the arrears of pay for the period during which the employee was not receiving equal pay. ======================================================================= Struck out (unanimous) ======================================================================= Equal pay investigations 81 Labour Inspector may conduct equal pay investigation (1) A Labour Inspector may conduct an equal pay investigation if--- (a) an employee who is not satisfied with the employer's response under section 78 to his or her equal pay query requests it; or (b) an employer has referred an equal pay query to the Labour Inspector under section 79; or (c) the Labour Inspector thinks fit. (2) In conducting the investigation, the Labour Inspector must compare the pay received by the relevant employee with that paid to a comparable employee identified by the Labour Inspector. ======================================================================= Struck out (unanimous) ======================================================================= 82 Labour Inspector may require information (1) For the purposes of conducting an equal pay investigation, an employer must, if required by a Labour Inspector, provide the Labour Inspector with access to--- (a) a copy of the relevant employee's--- (i) employment agreement: (ii) job description: (b) any information about the classification of the relevant employee's work: (c) a copy of the employer's wages and time records kept under section 130 of the Employment Relations Act 2000 or any other enactment: (d) any rules or policies relating to pay scales, progression in the workplace, or job structure or any other information (not being personal information) that the Labour Inspector considers to be relevant in assessing the pay received by the relevant employee. (2) A Labour Inspector may also require the employer of a comparable employee to provide access to any of the information referred to in subsection (1) in relation to the comparable employee. (3) If an employer is required to provide access to information under subsection (1) or subsection (2), the employer must comply with that requirement within the time specified by the Labour Inspector. (4) A Labour Inspector may also discuss with any other employee the nature of the work done by that employee, if the employee--- (a) is employed by the same employer as the relevant employee; or (b) is bound by the same multi-employer collective agreement as the relevant employee. ======================================================================= Struck out (unanimous) ======================================================================= 83 Labour Inspector must report findings to employer and employee (1) A Labour Inspector must provide a written report of his or her findings, as a result of the investigation, to--- (a) the relevant employee; and (b) the relevant employee's employer. (2) The Labour Inspector's report to the relevant employee must inform the relevant employee whether or not he or she is receiving equal pay. (3) The Labour Inspector's report to the employer must inform the employer--- (a) whether or not the relevant employee is receiving equal pay; and (b) if the relevant employee is not receiving equal pay,--- (i) of the reasons for the Labour Inspector's finding that the employer is not providing equal pay (which may include information about a comparable employee that the Labour Inspector received under section 82); and (ii) how the employer must comply with the duty to provide equal pay. (4) If the Labour Inspector's report confirms that the relevant employee has not been receiving equal pay, the employee's employer must, as soon as possible (but not later than 1 month after the Labour Inspector's report),--- (a) comply with the duty to pay the employee equal pay; and (b) pay to the employee the arrears of pay for the period during which the employee was not receiving equal pay. (5) The Labour Inspector's report under subsection (2) or subsection (3) must not disclose the identity of the comparable employee used by the Labour Inspector as the basis for assessing the pay received by the relevant employee. (6) However, if the report contains any information that may indirectly disclose the identity of the comparable employee or other personal information about that employee, the disclosure of that information is authorised by this Part. ======================================================================= Struck out (unanimous) ======================================================================= Other matters 84 Labour Inspector may make recommendations A Labour Inspector may make recommendations to an employer about--- (a) the duty to provide equal pay generally; or (b) the duty to provide equal pay in relation to any of the employer's employees. ======================================================================= Struck out (unanimous) ======================================================================= 85 Confidentiality of information To avoid doubt,--- (a) a Labour Inspector must not disclose any personal information that the Labour Inspector has received under this Part except as authorised by this Part or in accordance with the Privacy Act 1993: (b) an employer or employee must not disclose any personal information he or she receives under this Part except in accordance with the Privacy Act 1993. ======================================================================= Struck out (unanimous) ======================================================================= Subpart 3---Enforcement and other matters Enforcement 86 Choice of procedures (1) If the circumstances giving rise to an enforcement action under this Part are such that an employee would also be entitled to make a complaint under the Human Rights Act 1993 or pursue a personal grievance under the Employment Relations Act 2000, the employee may take only 1 of the following steps: (a) if the matter is not otherwise resolved, the employee may take enforcement action under this Part; or (b) the employee may make, in relation to the matter, a complaint under the Human Rights Act 1993; or (c) the employee may, if the grievance is not otherwise resolved, apply to the Authority for the resolution of the grievance under the Employment Relations Act 2000. (2) For the purposes of subsection (1),--- (a) an employee takes enforcement action under this Part when proceedings in relation to the matter are commenced by a Labour Inspector with the knowledge or consent of the employee: (b) an employee makes a complaint under the Human Rights Act 1993 when proceedings about that complaint are commenced by the complainant or the Commission. (3) If an employee takes enforcement action under this Part, the employee may not exercise or continue to exercise any rights in relation to the subject matter of the enforcement action that the employee may have under the Human Rights Act 1993 or the Employment Relations Act 2000. (4) If the employee makes a complaint under the Human Rights Act 1993, the employee may not exercise or continue to exercise any rights in relation to the subject matter of the complaint that the employee may have under this Part or the Employment Relations Act 2000. (5) If the employee applies to the Authority for the resolution of the grievance under the Employment Relations Act 2000, the employee may not exercise or continue to exercise any rights in relation to the subject matter of the grievance the employee may have under this Part or the Human Rights Act 1993. ======================================================================= Struck out (unanimous) ======================================================================= 87 Enforcement action may only be taken by Labour Inspector A Labour Inspector is the only person who may take enforcement action under this Part. ======================================================================= Struck out (unanimous) ======================================================================= 88 Proceedings to recover arrears of equal pay (1) A Labour Inspector may take proceedings on behalf of an employee to recover arrears of equal pay that the employee is entitled to under this Part. (2) Section 131 of the Employment Relations Act 2000 applies, with any necessary modifications, to proceedings taken under subsection (1). ======================================================================= Struck out (unanimous) ======================================================================= 89 Penalty for non-compliance (1) An employer who fails to comply with this Part is liable--- (a) if the employer is an individual, to a penalty not exceeding $5,000: (b) if the employer is a company or other body corporate, to a penalty not exceeding $10,000. (2) Section 135 of the Employment Relations Act 2000 applies, with any necessary modifications, to actions for the recovery of a penalty under subsection (1). ======================================================================= Struck out (unanimous) ======================================================================= 90 Action may be completed by other Labour Inspector An enforcement action initiated or taken under this Part by a Labour Inspector may be completed by another Labour Inspector. ======================================================================= Struck out (unanimous) ======================================================================= Other matters 91 Powers of Labour Inspector For the purposes of this Part, every Labour Inspector has, in addition to any powers conferred by this Part, all the powers that a Labour Inspector has under the Employment Relations Act 2000. ======================================================================= Struck out (unanimous) ======================================================================= 92 Labour Inspector must comply with principles of natural justice A Labour Inspector, in exercising his or her functions or powers under this Part, must comply with the principles of natural justice. ======================================================================= Struck out (unanimous) ======================================================================= 93 Authority must protect confidentiality of information The Authority must not, to the extent that is practicable, disclose any personal information--- (a) received by it in the course of proceedings for an enforcement action taken under this Part; or (b) in issuing a determination in relation to any enforcement action taken under this Part. ======================================================================= Struck out (unanimous) ======================================================================= 94 Repeals The following Acts are repealed: (a) Equal Pay Act 1972 (1972 No 118): (b) Government Service Equal Pay Act 1960 (1960 No 117). ======================================================================= Struck out (unanimous) ======================================================================= 95 Employment Relations Act 2000 amended The Employment Relations Act 2000 is consequentially amended in the manner indicated in Schedule 3. ======================================================================= Part 3 Health and Safety in Employment Act 1992 96 Health and Safety in Employment Act 1992 called principal Act in this Part In this Part, the Health and Safety in Employment Act 1992 1992 No 96 is called "the principal Act". 97 Minister may approve occupational health and safety training Section 19G(1) of the principal Act is amended by omitting the words ", by notice in the Gazette,". Part 4 Human Rights Act 1993 98 Human Rights Act 1993 called principal Act in this Part In this Part, the Human Rights Act 1993 1993 No 82 is called "the principal Act". 99 Section 64 repealed Section 64 of the principal Act is repealed. 100 New section 79A inserted The principal Act is amended by inserted after section 79, the following section: "79A Choice of procedures "(1) If the circumstances giving rise to a complaint under Part 2 are such that an employee would also be entitled to pursue a personal grievance under the Employment Relations Act 2002, the employee may take 1, but not both, of the following steps: "(a) the employee may make in relation to those circumstances a complaint under this Act: "(b) the employee may, if the grievance is not otherwise resolved, apply to the Employment Relations Authority for the resolution of the grievance under the Employment Relations Act 2000. "(2) To avoid doubt, a complaint referred to in subsection (1) includes, but is not limited to, a complaint about sexual harassment or racial harassment. "(3) For the purposes of subsection (1)(a), an employee makes a complaint when proceedings about that complaint are commenced by the complainant or the Commission. "(4) If an employee makes a complaint under subsection (1)(a), the employee may not exercise or continue to exercise any rights relating to the subject matter of the complaint that the employee may have under the Employment Relations Act 2000. "(5) If an employee applies to the Employment Relations Authority for a resolution of the grievance under subsection (1)(b), the employee may not exercise or continue to exercise any rights relating to the subject matter of the grievance that the employee may have under this Act." 101 New section 92BA inserted The principal Act is amended by inserting, after section 92B, the following section: "92BA Lodging of applications Proceedings before the Tribunal are to be commenced by the lodging of an application in the prescribed form." Schedule 1 s 67 New Schedules 1A [and 1AA] inserted in principal Act Schedule 1A ss 69C, 237A Employees to whom subpart 1 of Part 6A applies Employees who provide the following services in the specified sectors, facilities, or places of work: (a) cleaning services, food [catering] services, caretaking, or laundry services for the education sector (being the public and private pre-school, primary, secondary, and tertiary educational institutions): (b) cleaning services, food [catering] services, orderly services, or laundry services for the health sector (being any hospital, as defined by the Hospitals Act 1957 and any hospital within the meaning of the Mental Health (Compulsory Assessment and Treatment) Act 1992): (c) cleaning services, food [catering] services, orderly services, or laundry services in the age-related residential care sector: (d) cleaning services or food [catering] services in the public service (as defined in Schedule 1 of the State Sector Act 1988) or local government sector: (e) cleaning services or food [catering] services in relation to any airport facility or for the aviation sector: (f) cleaning services or food [catering] services in relation to any other place of work (within the meaning of the Health and Safety in Employment Act 1992). New (majority) ----------------------------------------------------------------------- Schedule 1AA s 100D Code of good faith for public health sector 1 Application (1) This code applies to the following parties to an employment relationship in the public health sector: (a) district health boards: (b) employees of district health boards: (c) unions whose members are employees of district health boards: (d) other employers to the extent that they provide services to district health boards or the New Zealand Blood Service: (e) employees of the employers referred to in paragraph (d) to the extent that they are engaged in providing services to district health boards or the New Zealand Blood Service: (f) unions whose members are employees referred to in paragraph (e): (g) the New Zealand Blood Service: (h) employees of the New Zealand Blood Service: (i) unions whose members are employees of the New Zealand Blood Service. (2) However, to avoid doubt, subclause (1)(d) and (e) applies in relation to the provision of services only if the services are provided to a district health board or the New Zealand Blood Service in its role as a provider of services. (3) Before a district health board or the New Zealand Blood Service enters into an agreement or arrangement with another employer for the provision of services to the district health board or the New Zealand Blood Service, the district health board or the New Zealand Blood Service must notify the employer that this code will apply to the employer in relation to the provision of those services. (4) However, failure to comply with subclause (3) does not affect the validity of an agreement or arrangement referred to in that subclause. 2 Purpose The purpose of this code is--- (a) to promote productive employment relationships in the public health sector: (b) to require the parties to make or continue a commitment--- (i) to develop, maintain, and provide high quality public health services; and (ii) to the safety of patients; and (iii) to engage constructively and participate fully and effectively in all aspects of their employment relationships: (c) to recognise the importance of--- (i) collective arrangements; and (ii) the role of unions in the public health sector. 3 Interpretation In this code, unless the context otherwise requires,--- good employer has the same meaning as in section 6(1) of the New Zealand Public Health and Disability Act 2000 health professional means--- (a) an employee who provides services to patients as a health practitioner (as defined in section 5 of the Health Practitioners Competence Assurance Act 2003); and (b) any other employee who works in a recognised clinical discipline providing services for the purpose of assessing, improving, protecting, or managing the physical or mental health of individuals or groups of individuals industrial action means a strike or a lockout life preserving services means--- (a) crisis intervention for the preservation of life: (b) care required for therapeutic services without which life would be jeopardised: (c) urgent diagnostic procedures required to obtain information on potentially life-threatening conditions services--- (a) has the same meaning as in section 6(1) of the New Zealand Public Health and Disability Act 2000; and (b) to avoid doubt,--- (i) includes cleaning services, food catering services, laundry services, and orderly services; but (ii) does not include building construction services. General 4 General requirements (1) In all aspects of their employment relationship, the parties must--- (a) engage constructively; and (b) participate fully and effectively. (2) In their employment relationship, the parties must--- (a) behave openly and with courtesy and respect towards each other; and (b) create and maintain open, effective, and clear lines of communication, including providing information in a timely manner; and (c) recognise the role of health professionals as advocates for patients; and (d) make time to meet as and when required--- (i) to address not only the industrial issues between the parties but also issues facing the public health sector, the employer, and the employees; and (ii) to search for solutions that will result in productive employment relationships and the enhanced delivery of services; and (iii) to ensure that any change is managed effectively; and (e) recognise the time and resource constraints that may affect their ability to participate fully, and make allowances for those constraints. (3) To enable employees and their unions to comply with subclause (1), employers must ensure that appropriate steps are taken in their workplaces to encourage, enable, and facilitate employee and union involvement. (4) The parties must use their best endeavours to resolve, in a constructive manner, any differences between them. (5) Subclauses (2) to (4) do not limit subclause (1). 5 Obligation to be good employer Every employer must be a good employer. 6 Collective bargaining and collective agreements (1) The parties must support collective bargaining, including multi-employer collective agreements, where it is practical and reasonable to do so. (2) The parties must, as far as practical and reasonable, support the definition of coverage that best recognises the parties' commitment to collective employment arrangements. 7 Principles of the Treaty of Waitangi The parties must recognise and support Part 3 of the New Zealand Public Health and Disability Act 2000 which, in order to recognise the principles of the Treaty of Waitangi and with a view to improving health outcomes for Maori, provides mechanisms to enable Maori to contribute to decision-making on, and to participate in the delivery of, health and disability services. Collective bargaining 8 Agreement on clinical expert or other suitable person As part of the arrangement required under section 32(1)(a), the parties must make every endeavour to agree on a clinical expert or other suitable person for the purposes of clause 13(1). 9 Specific things employers must not do during collective bargaining During collective bargaining employers must not--- (a) communicate directly with union members in relation to the collective bargaining; or (b) negotiate with employees who are not union members with a view to undermining or influencing the collective bargaining; or (c) attempt to discourage employees from joining or remaining with the union; or (d) contract out services with a view to undermining or influencing the collective bargaining; or (e) terminate or fail to renew a contract with another employer who is providing public health services through its employees, with a view to undermining or influencing any collective bargaining between the other employer and its employees. 10 Mutual obligations (1) During collective bargaining each party must--- (a) give thorough and reasonable consideration to the other's proposals; and (b) not act in a manner that undermines the other or the authority of the other; and (c) not deliberately attempt to provoke a breakdown in the bargaining; and (d) where appropriate, consider ways in which they may take into account tikanga Maori (Maori customary values and practices) in the bargaining. (2) If agreement cannot be reached or the collective bargaining is in difficulty, the parties must give favourable consideration to attending mediation without delay, and must consider third party decision-making. (3) The parties must recognise that collective bargaining and collective agreements need to--- (a) provide for the opportunity for participation of union officials, delegates, and members in decision-making where those decisions may have an impact on the work or working environment of those members; and (b) provide for the release of employees to participate in decision-making where appropriate, acknowledging the key role of union delegates in the collective representation of union members; and (c) provide for union delegates to carry out their roles, including the time needed for communication and consultation with members, and for union delegate education. Patient safety 11 General obligation for employers to provide for patient safety during industrial action During industrial action, employers must provide for patient safety by ensuring that life preserving services are available to prevent a serious threat to life or permanent disability. 12 Contingency plans (1) As soon as notice of industrial action is received or given, an employer must develop (if it has not already done so) a contingency plan and take all reasonable and practicable steps to ensure that it can provide life preserving services if industrial action occurs. (2) If an employer believes that it cannot arrange to deliver any life preserving service during industrial action without the assistance of members of the union, the employer must make a request to the union seeking the union's and its members' agreement to maintain or to assist in maintaining life preserving services. (3) The request must include specific details about--- (a) the life preserving service the employer seeks assistance to maintain; and (b) the employer's contingency plan relating to that life preserving service; and (c) the support it requires from union members. (4) A request must be made by the close of the day after the date of the notice of industrial action. (5) As soon as practicable after the employer has made a request but not later than 4 days after the date of the notice of industrial action, the parties must meet and negotiate in good faith and make every reasonable effort to agree on--- (a) the extent of the life preserving service necessary to provide for patient safety during the industrial action; and (b) the number of staff necessary to enable the employer to provide that life preserving service; and (c) a protocol for the management of emergencies which require additional life preserving services. (6) An agreement reached between the parties must be recorded in writing. 13 Adjudication (1) If the parties cannot reach agreement under clause 12(5) they must, within 5 days after the date of the notice of industrial action, refer the matter for adjudication by a clinical expert or other suitable person as agreed under clause 9. (2) The adjudicator must conduct the adjudication in a manner he or she considers appropriate and must--- (a) receive and consider representations from the parties; and (b) in consultation with the parties, seek expert advice if the adjudicator considers that it is necessary to do so; and (c) attempt to resolve any differences between the parties to enable them to reach agreement and, if that is not possible, make a determination binding on the parties; and (d) provide a determination to the parties as soon as possible but not later than 7 days after the date of notice of industrial action. (3) The parties must use their best endeavours to give effect to the determination. (4) The parties must bear their own costs in relation to an adjudication. Public comments 14 Recognition of employees' right to make public comments (1) Employers must respect and recognise the right of their employees to comment publicly and engage in public debate on matters within their expertise and experience as employees. (2) However, this clause applies subject to clauses 15 to 17. 15 Employee must first raise matter with employer Before an employee exercises the right specified in clause 14(1) in relation to the operations of his or her employer, the employee must first--- (a) raise the matter with his or her employer; and (b) provide a reasonable time for his or her employer to respond. 16 When employee may make public comments about employer's operations If the employee is dissatisfied with his or her employer's response or there is no response from his or her employer, the employee may exercise the right specified in clause 14(1) if the employee makes it clear that he or she is--- (a) speaking in a personal capacity; or (b) speaking on behalf of a union with its authority to do so. 17 Confidentiality When exercising the right specified in clause 14(1), an employee must not breach patient confidentiality or professional confidentiality. 18 Rights of union not affected To avoid doubt, clauses 14 to 16 do not prevent a union from making public comments or engaging in public debate on any matter relating to the public health sector. Continuity of employment 19 Outsourcing or direct provision of services (1) This clause applies if--- (a) an employer is a district health board or the New Zealand Blood Service; and (b) the employer obtains services from its employees; and (c) the employer engages or arranges for another employer to provide some or all of those services--- (i) to the employer (outsourcing); or (ii) direct to patients (direct provision). (2) The employees referred to in subclause (1)(b) who are affected by the outsourcing or direct provision are entitled to be employed by the other employer on the same terms and conditions as applied to the employees immediately before the outsourcing or direct provision took effect. 20 Change in provider of outsourced services (1) This clause applies if--- (a) a district health board or the New Zealand Blood Service has outsourced (within the meaning of clause 19(1)(c)(i)) the provision of services to it by another employer; and (b) the agreement or arrangement under which the other employer provides those services comes to an end; and (c) the district health board or the New Zealand Blood Service makes an agreement or arrangement with a new employer to provide some or all of those services to it. (2) The employees of the employer referred to in subclause (1)(b) who are affected by the outsourcing are entitled to be employed by the other employer on the same terms and conditions as applied to the employees immediately before the agreement or arrangement referred to in subclause (1)(b) came to an end. 21 Obligation to notify provisions of clauses 19 and 20 (1) Before a district health board or the New Zealand Blood Service enters into an agreement or arrangement with a new employer to which clause 19 or clause 20 applies, it must notify the employer of the provisions of clause 19 or clause 20, whichever applies in the circumstances. (2) However, failure to comply with subclause (1) does not affect the validity of an agreement or arrangement referred to in that subclause. (3) This clause is in addition to clause 1(3). Remedying breaches of good faith 22 Notice of breach If a party believes that another party has breached the duty of good faith in section 4, it must bring this to the attention of the party in breach at an early stage. 23 Obligation of party in breach A party in breach must--- (a) if the breach can be made good, make good the breach by making every endeavour to restore the other party to the position the other party was in before the breach; or (b) if the breach cannot be made good, provide an explanation to the other party. Transitional 24 Transitional (1) This code does not apply to anything done or any matter arising before the commencement of the code. (2) However, subclause (1) applies subject to subclauses (3) and (4). (3) Subclause (1) does not prevent the code applying in relation to--- (a) a collective agreement entered into before the commencement of the code; or (b) bargaining for a collective agreement that began before the commencement of the code. (4) Clause 20 applies even though the agreement or arrangement referred to in clause 20(1)(b) was entered into before the commencement of the code. ----------------------------------------------------------------------- Schedule 2 s 70 Enactments amended Arts Council of New Zealand Toi Aotearoa 1994 (1994 No 19) Repeal clause 13 of the First Schedule. Commerce Act 1986 (RS Vol 31 p 71) Repeal section 18C. Government Superannuation Fund Act 1956 (RS Vol 21 p 209) Repeal clause 50 of Schedule 4. Judicature Amendment Act 1972 (RS Vol 40 p 870) Insert in section 3A, after the words "Employment Court", the words "and High Court". Museum of New Zealand Te Papa Tongarewa Act 1992 (1992 No 19) Repeal clause 6 of the First Schedule. New Zealand Superannuation Act 2001 (2001 No 84) Repeal clause 50 of Schedule 3. Social Welfare (Transitional Provisions) Act 1990 (RS Vol 32 p 883) Repeal clause 15 of the Third Schedule. State Sector Act 1988 (RS Vol 33 p 715) Add to section 30E the following subsection: "(3) This section overrides Part 6A of the Employment Relations Act 2000." Struck out (unanimous) ======================================================================= Schedule 3 s 95 Amendments to Employment Relations Act 2000 Section 104(1) Insert, after the words "section 107," the words "or by reason directly or indirectly of that employee exercising his or her rights under Part 2 of the Employment Relations Law Reform Act 2003 in terms of section 107A,". New section 107A Insert, after section 107: "107A Definition of exercising rights under Equal Pay Act 2003 for purposes of section 104 For the purposes of section 104, an employee exercises his or her rights under Part 2 of the Employment Relations Law Reform Act 2003 if--- "(a) the employee makes an equal pay query under section 77 of the Act; or "(b) the employee requests that a Labour Inspector conduct an equal pay investigation under section 81(1)(a) of the Act; or "(c) a Labour Inspector takes enforcement action on behalf of the employee under that Act." Section 137 Add to subsection (1)(a): "(xii) section 76, 78, 80, 82, or 83(4), of the Employment Relations Law Reform Act 2003; or". Add to subsection (4): "(c) a Labour Inspector designated under this Act who alleges that there has been non-observance or non-compliance of the kind described in subsection (1)(a)(xii)." Section 161(1)(m) Add: "(vi) under section 89 of the Employment Relations Law Reform Act 2003:". Section 223(1)(b) Omit the words "Equal Pay Act 1972" and substitute the words Part 2 of the Employment Relations Law Reform Act 2003". Section 234 Omit from subsection (1) the words "or holiday pay", and substitute the words ", holiday pay, or equal pay". Omit from subsection (2) the words "minimum wages or holiday pay or both", and substitute the words "1 or more of the minimum wages, holiday pay, or equal pay". Omit from subsection (3) the words "minimum wages or holiday pay or both", and substitute the words "1 or more of the minimum wages, holiday pay, or equal pay". Insert in subsection (4), after the item relating to the term "company", the following item: "equal pay means equal pay payable under Part 2 of the Employment Relations Law Reform Act 2003". Section 236 Omit from subsection (4)(c) the words "Equal Pay Act 1972" and substitute the words "Part 2 of the Employment Relations Law Reform Act 2003". Add: "(5) Despite anything in this Act or any other enactment, actions in relation to the Part 2 of the Employment Relations Law Reform Act 2003 may be taken only by a Labour Inspector." ======================================================================= Legislative history 4 December 2003 Introduction (Bill 92-1) 11 December 2003 First reading and referral to the Transport and Industrial Relations Committee