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Employment Law Changes Need Major Overhaul

Employment Law Changes Need Major Overhaul If Bill To Become Workable

“The “all stick” and “no carrot” approach of the Government’s proposed employment relations law changes is a giant leap “back to the future,” won’t work and ultimately will be unenforceable.” – Michael Barnett, chief executive Auckland Chamber of Commerce.

The Auckland Chamber of Commerce is seeking 20 major changes to the Bill, topped by a call for the Bill’s tough prescriptive provisions compelling businesses to negotiate with unions under a threat of heavy penalties to be balanced by providing an environment for some freedom of choice.

“Withdrawing the Bill would be the most practical and pragmatic step Government could take,” said Mr Barnett. “But if they decide to press on, the Chamber’s submission recommends a host of changes in an effort to make the Bill workable.”

The Chamber’s proposed changes range from removing contradictions in the Bill’s purpose, reducing the high costs businesses will face and protecting vulnerable small-medium businesses. The full list of changes and their justification in detail are set out in the Chamber submission which can be viewed at /submission.

Changes sought by the Chamber include:

Changing the purpose of the Bill to give legislative recognition to the fact that good faith is an integral feature of every business enterprise, and has many forms of positive expression beyond those specifically identified in the Bill.

Making a change to the purpose of the Bill to:

Acknowledge the mutual dependency of parties in employment relationships and the need for parties to employment relationships to act in good faith to ensure best outcomes for all parties. Acknowledge that the interests of all parties to employment relationships are advanced by the existence of productive, efficient and (in the private sector) profitable enterprises.


“A major omission of the Bill is lack of recognition that without any form of legislative encouragement or coercion, many enterprises have in recent years transformed employment relationships for the better by embracing many variations of good faith practices – equal employment opportunities (EEO), work-life balance, harmonising work and family life,” said Mr Barnett. That is, by a business itself redefining best management practice, it is possible to achieve a balanced and positive relationship between employers and employees. The Bill ignores the fact that for most businesses the process of achieving a better balance in relationships between employers and employers doesn’t depend on the promotion of unions and collective bargaining.

Give recognition to the importance of SMEs to the growth of the economy by softening the requirement to act in good faith to include regard to the resources, size and developmental stage of the employer's enterprise.

Amend the collective bargaining provisions to reflect the “voluntary” intent benchmark of the ILO Article 4 convention on collective bargaining.

“These changes would provide for situations where, having made a reasonable attempt at bargaining, and the parties cannot agree, the employer should not be compelled to participate further,” said Mr Barnett.

A series of amendments are suggested designed to simplify the regulatory requirements, reduce paper work and slash the compliance costs

In the interests of fairness and consistency, the Chamber recommends that employer costs under the legislation should also be able to be recovered, as they can be by unions and employees.

The Chamber suggests that employment relations education leave entitlements include employers, not just employees and unions.

“If the aim is to build bridges between employers and employees with unions, surely common sense dictates that all parties undertake mutual education about industrial relations objectives and, especially, to protect/ enhance the commercial viability of their own businesses.”

The Chamber requests that the penalties regime be clarified.


The Bill creates the impression that employers face heavy fines for breaches, but the fine print implies that fines will only be for "serious and sustained failure of good faith" and/or "acrimonious/ protracted" events; that is, they are ‘a last resort’, after mediation.

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