The Employment Relations Bill: An Overview
THE EMPLOYMENT RELATIONS BILL: AN OVERVIEW
The overall objective of the Bill is to:
“build productive employment relationships through the promotion of mutual trust and confidence in all aspects of the employment environment.”
In order to achieve this, the Bill:
employment relationships must be built on good faith
acknowledges and addresses the inherent inequality of bargaining power in employment relationships;
promotes collective bargaining;
protects the integrity of individual choice;
promotes mediation as the primary problem-resolving mechanism; and
reduces the need for judicial intervention.
The Bill extends the definition of “employee” by enabling the employment institutions to decide whether people employed as independent contractors are, in fact, actually employees. It does this by requiring that the institutions give primary consideration to the reality of the relationship, rather than just the “label” given by the parties to it. In making these decisions, the Bill requires that the employment institutions give the most weight to:
the extent to which the employer exercises
control and direction over the activities of the
the degree to which the “contractor” forms an integral part of the employer’s business on an ongoing basis.
The least weight is to be given to the “label” given by the parties to their relationship.
The principle of good faith underpins the Bill. Put simply, good faith requires the parties to employment relationships including unions, employers and employees to deal with each other on the basis of fair dealing and mutual trust and confidence. This includes, but is not limited to, not directly or indirectly misleading or deceiving each other.
In respect of collective bargaining, the “core” good faith duties include, but are not limited to the obligations to:
consider and respond to any proposals made;
respect the role of the other party’s representative by not bargaining or communicating with those whom the representative acts for about employment conditions;
fairly represent the other party’s position in the negotiations to those on whose behalf the other party is acting; and
provide relevant information necessary for the purposes of negotiations
Code of Good Faith
The Bill also provides for the tripartite development of a Code of Good Faith, dealing with the specific application of the general principles in bargaining.
The Code is to be developed by a
group of at least one representative of union and employer
organisations, and an appointee of the Minister of Labour
who will chair the group
The group will have a specified period within which to propose the Code. If no Code is proposed, the Minister will be able to develop and recommend appropriate codification of good faith
Freedom of Association
The Bill provides for:
membership of unions, and
not allowing any person to exert undue influence in employment arrangements to influence the choice of whether to become or not become or stay a union member or to cease to be a union member.
Union membership is voluntary with
employees free to join, or not to join any union they
choose. Unions can represent both individuals and groups of
employees. To support their role unions will be able to
enter workplaces to:
negotiate or enforce employment agreements;
deal with safety and health matters affecting members;
provide information about unions; and
recruit new members.
The Bill also provides for at least 2 paid union meetings a year for union members.
In order to operate unions will be required to:
recognition by applying for registration to the Registrar of
be incorporated societies with at least 2 members; and have rules dealing with how collective agreements are ratified, how officers are elected, and the rights of members.
Registration will involve submission of a statutory declaration to the Registrar of Unions stating that the union is:
a democratic organisation
independent of employers; and
operated under appropriate rules (i.e. they are not discriminatory, undemocratic, unlawful).
Collective Agreements and Bargaining
Only registered unions and employers will be able to negotiate and enter into collective agreements (CAs).
Every CA must:
state the term of the agreement;
describe the coverage of the agreement;
make provision for variations to the agreement during its term;
be in writing; and
have a maximum term of 3 years.
All CAs will have an implied term (which may be varied or excluded by agreement) that employees bound by it will continue to be employed by the employer for the term of the agreement. This does not, however, limit or affect an employer’s right to dismiss an employee for just cause.
Where a CA expires, employees bound by it are deemed to be employed on individual employment agreements based on the expired CA.
The Collective Bargaining Process – Single union/employer bargaining
a collective agreement (CA) may be initiated by:
a union within 60 days of the expiry of an existing CA;
an employer within 40 days of the expiry of an existing CA; or
either party where there is no CA currently in place.
Good faith collective
bargaining, requires that parties:
meet, consider and respond to each other’s proposals;
respect the other party’s choice of representative; and
provide relevant information for the purposes of bargaining.
Good faith bargaining does not imply an obligation to settle a CA or make concessions.
Parties may negotiate over the
content and form of CAs until:
agreement is reached over a CA to propose for ratification; or
negotiations for a CA are abandoned, including where the scope of negotiations changes because multi-party negotiations are entered.
Process - Multi-party bargaining
The rules for single party bargaining apply to multi-party bargaining unless multiple CAs are being joined together.
Parties seeking multi-party bargaining must initiate bargaining together.
Multiple CAs may be joined together
Unions within 120 days of the expiry, so long as at least one CA is within 60 days of expiry;
Employers within 100 days of the expiry, so long as at least one CA is within 40 days of expiry.
Unions may be required to ballot their members to ensure that members at each enterprise agree to be joined in multi-party bargaining.
Good faith requirements apply throughout negotiations between unions as well as between unions and employers.
Employees’ Terms and Conditions of Employment
The Bill provides rules for determining terms and conditions for different groups of employees at the commencement of employment as follows:
Collective agreements (CAs) set the terms and conditions of union members who undertake the work covered by the coverage clause of the CA. Any employee who joins the union and falls within the coverage clause of the agreement will have their terms and conditions set by the CA.
Additional terms and conditions can be negotiated on an individual basis, provided that they are not inconsistent with the terms and conditions of any applicable CA.
Where employees are not covered by any CA, then they are free to negotiate whatever terms and conditions are mutually agreed to with their employer. However, new employees in that situation must be given written information about their terms and conditions and an opportunity to take advice before agreeing to them.
When a new employee commences work that is covered by an existing CA their terms and conditions will be based on the CA, for the first 30 days of their employment. New employees can also negotiate additional terms and conditions that are not inconsistent with the applicable CA during the first 30 days of their employment.
After the 30 day period, if the employee has not joined the union, the employee may agree with their employer to any changes to their terms and conditions.
Fixed term agreements
Fixed term agreements are allowed, but employees whose employment ceases at the end of such an agreement will be treated as having been unjustifiably dismissed unless the employer establishes that there were genuine operational reasons for ceasing the employment.
Employment Relations Education Leave
The Bill makes provisions for employment relations education leave as follows:
entitlement to paid employment relations education leave
(EREL) is provided for employees bound by, or negotiating
EREL is intended to improve employees’ knowledge about employment-related matters and help support good faith behaviour and co-operation in the workplace.
EREL is a collective entitlement held and administered by unions and allocated to employees. The leave entitlement will be calculated according to a formula contained in the Bill, and paid for by employers.
Courses for which EREL may be taken will need to be approved by the Minister of Labour or the Minister’s delegates.
A State-funded contestable fund will be established to fund the development and provision of approved employment relations education programmes which may be delivered by unions, employers or other providers.
Unions will be required to make an annual report on the leave allocation and approved programmes and uptake.
Strikes and lockouts
Under the Bill:
Employees will be able to lawfully strike in pursuit of single or multi-party collective agreements (CAs) but only after the expiry of an existing CA and where the parties have been negotiating for at least 40 days.
Employers will have the ability to lock-out employees in the same circumstances.
Industrial action relating to health and safety matters may be taken at any time.
During industrial action employers will not
be able to lawfully:
dismiss affected employees;
lock out employees not involved in the collective bargaining; or
require employees not involved in the collective bargaining to perform work which would otherwise be performed by the affected employees, or hire replacement employees to perform this work, unless there are safety and health reasons to do so.
Where strike action occurs, and normal work is unavailable as a result of the strike an employer may suspend non- striking employees without pay.
The current list of essential services and 3 and 14 day notice requirements will be retained.
However, the issue of whether notice is required will depend on whether there are public interest grounds, including public health and safety, involved in the industrial action.
Where there are public interest grounds involved, there will be a requirement to give notice before the strike or lockout occurs (either 3 or 14 days notice, depending on the service).
strikes and lockouts in essential services will only be
possible where the required notice has been given
the employer (for strikes) or the union (for lockouts);
the Chief Executive of the Department of Labour so that mediation services can be provided, during the notice period, before the strike or lockout occurs.
The Bill encourages the provision of information and other services as the primary means of resolving problems in employment relationships in a speedy, informal and flexible way.
It also recognises that some problems will eventually require specialist decision-making, but that this should not necessarily be made overly formal and legalistic.
The Bill enhances current personal grievance rights and remedies for all employees. Reinstatement is the primary remedy. Discrimination provisions have been aligned with the Human Rights jurisdiction.
Any probationary arrangements agreed to between new employees and their employers must be specified in the relevant individual employment agreement or collective agreement, and must not be inconsistent with the personal grievance procedures (i.e. failure to continue the employment of a probationer must still be justifiable).
The Bill provides for the delivery of a comprehensive range of mediation services by the Department of Labour that can be applied across the whole range of employment disputes or problems.
Mediation will be the first port of
call for dispute resolution before any decision-making forum
Mediation will cover any service or intervention that can make a difference. Mediators will have wide discretion to assist the parties resolve their problems in a speedy, informal and accessible way. This will include the ability, where the parties agree, to conclude mediated settlements with no further rights of appeal.
Employment Relations Authority
The Bill establishes the Employment Relations Authority (ERA) as a specialist, low level investigatory body.
the role of the ERA is to
investigate employment problems in a speedy, informal and
ERA members will have the power to gather information, call evidence and investigate matters as they see fit in order to get to the key issues in dispute, and make pragmatic determinations about them
the ERA will be able to order the parties to try to resolve their differences through mediation before it proceeds to deal with any matter, where this is seen as appropriate in the circumstances
disputes involving dismissal that are not resolved at mediation may only be referred to the ERA. This will, in effect, remove the common law action for wrongful dismissal.
Where the parties are dissatisfied with a determination of the ERA they may apply for a hearing in the Employment Court. This will not be in the form of an appeal, but where appropriate may involve a full judicial hearing of the original problem.
The Court will have the
power to direct the parties to mediation, or direct the
matter to the ERA where appropriate
Any appeals from the decision of the Employment Court will be able to be heard by the Court of Appeal, on points of law
Collective bargaining and collective agreements
Outlined below is a schematic of the general provisions applying to collective bargaining.
Either a union or an employer; or
Two or more unions, or two or more employers jointly, after they have agreed how bargaining will be managed;
A union may only initiate bargaining for a CA if at least 2 members would be bound by the CA being bargained for. Employers may not initiate if there has not previously been a CA.
How to initiate
Initiator gives notice of intention to conduct bargaining to each other party.
Notice must identify:
- all parties involved
- coverage of the proposed CA
- expiry date of any existing CA
Notice from a union must also contain the names of members who will be covered by the proposed CA and are employees of the employer.
Notice must be provided to all employees who may be affected by the bargaining.
Timing of initiation
Where there is no existing CA between the parties, a notice to initiate bargaining may occur at any time.
If a CA already exists:
A union may initiate within 60 days of the CA's expiry;
An employer may initiate within 40 days of the CA's expiry.
If there is more than applicable CA binding more than one union or more than one employer:
- a union may not initiate bargaining earlier than the later of either 120 days of expiry of the last applicable CA, or within 60 days of expiry of the first applicable CA
- an employer may not initiate bargaining within 100 days of expiry of the last applicable CA, or within 40 days of expiry of the first applicable CA
Addition of parties to collective bargaining
Additional parties allowed to join the bargaining by agreement of existing parties. Agreed procedural bargaining arrangements apply to new members.
Effect of initiation
Timeframes about bargaining commencement and strike-free periods date from the time an initiation notice has been given.
Good faith requirement applies. Parties to agree to process that ensures effective bargaining.
Collective agreements in force
CA in force upon ratification and signed by authorised representatives of each party.
CA must not remain in force for longer than 3 years.
All collective agreements must be lodged with the Department of Labour.
The CA will be binding on the union and employer concerned and the union members whose work comes within the coverage clause in the CA