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Employment Relations Changes

16 September 2004

Unintended Consequences From Rushing Through Employment Relations Changes

The latest version of the Employment Relations Law Reform Bill reflects some significant change from the first version as a result of the normal Select Committee process. The commentary explaining the changes alone stretches to 20 pages.

Paul Winter CEO of EMA Central says, “We are very concerned that government does not intend to consult further on these very significant and detailed changes because of a self imposed deadline that the new legislation must commence on 1 December 2004”.

The recent introduction of the Holidays Act is a classic example of why important and significant changes should not be rushed through like this. The Holidays Act came in on the 1st of April this year, and already amendments are being made to correct unintended consequences arising out of a similar process of change by a Select Committee without further consultation.

These unintended consequences could have been avoided if there had been a further consultation process before the new Act was put in place. EMA Central believes that the redrafted Employment Relations law Reform Bill contains similar unintended consequences and here are some examples identified by one of our Managing Consultants Angela Walker.

Does government really intend that every time a rest home or hospital has to employ a casual for a day to cover a caregiver or nurse who is sick, they will have to draw up a new employment agreement for that casual – every single time the casual comes back? This is what the fixed term provisions will require under the current wording in our view.

Is it intended that if a business stops contracting out its cleaning because of shoddy work and decides to employ cleaners in-house instead, the business will not only have to take on those cleaners that were doing the shoddy job, but will have to become a party to the cleaning contractor's collective agreement as well? Including being tied in to a multi employer collective agreement?

Does government really think it is a good idea that a contractor who knows they are going to lose their contract can put up the rights, negotiate a huge redundancy deal for their staff, and then pass the whole lot on to their unsuspecting successor – who had no idea about those costs when they put in a bid for the job?

Has government considered that the new pass on provisions would mean that anything agreed or accepted as part of a collective agreement being negotiated, can not be "passed on" to non union staff if there is any possibility it could be regarded as having the effect of undermining that collective bargaining? How will undermining bargaining be tested – the numbers of union members falling? Technically, these provisions mean that employers might need to discuss with a union what the non members are being offered – or be restrained from offering the same deal for fear of falling foul of the new provisions.

“Government, please slow down and be sure these complex changes are really worded to achieve your intentions and don’t cause unexpected consequences”, requests Mr. Winter.



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