Employment Law Update

On 14 May 2012, Cabinet approved a number of changes to our employment law including some of those projected during National’s pre-election campaign. The motivation behind these changes, as stated by Labour Minister Hon. Kate Wilkinson, is to improve efficiencies by creating a more level playing field for both employers and employees. Some of these changes are outlined below.

The right of employees to request flexible working hours will be extended to all employees from the beginning of their employment term. Currently, an employee is only able to request flexible working hours if they have been employed for more than six months or if they are caregivers. Kate Wilkinson states that the change is intended to better reflect the changing dynamics of workplaces and “help employees find the work-life balance that works for them and their family”.

Unions are currently able to initiate bargaining from 60 days before a collective agreement expires. Employers on the other hand cannot initiate bargaining until 40 days prior to expiry. The 20 day advantage presently provided to unions is to be removed by allowing employers to initiate collective bargaining at the same time as the unions. This change has been motivated by concerns that such a head start could create an imbalance in bargaining.

Employers will no longer be required to provide new employees with the applicable collective agreement employment terms (as negotiated by their union) for the first 30 days of employment. Employers will instead be able to provide an individual employment agreement to new employees from the commencement of employment. Such change is aimed at providing individual employees with greater choice from the outset and the freedom to decide whether or not they wish to join a union.

Employers will no longer be required to conclude a collective agreement unless there are genuine reasons to do so; provided the requirement of bargaining in good faith is upheld. The motivation behind the change is to remove situations of unproductive and endless negotiations that may put businesses at risk.

Employers will also be able to opt out of multi-employer collective bargaining before negotiations for such agreements are commenced.

Unions and employers will be required to provide notice of an impending strike or lockout. Such notice is currently only required for industries that provide “essential services” such as healthcare. Partial strike action will also attract partial reduction in pay for employees.

While these changes are aimed at better aligning the power balance between employers and employees, there has been some concern over the practical implications of some of these changes. A workable balance will need to be struck to ensure the ideals are carried through into the everyday practice of employers.

The changes are expected to go before Parliament later this year followed by calls for public submissions. It will be interesting to see how these changes are received.