Good Faith

Good faith 

In December 2004, the Employment Relations Act 2000 introduced some changes around the way employers, employees and unions conduct their relationships with each other.  "Good Faith" was now used as the basis for employment relationships.   

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Good faith

The Employment Relations Act 2000 has "good faith" as its central principle. Employers, employees and unions must deal with each other honestly and openly. Specifically, the Act:

• promotes good employment relations and good faith behaviour, which includes mutual obligations of trust and confidence between employers, employees and unions
• sets the environment for individual and collective employment relationships
• sets out requirements for the negotiation and content of collective and individual employment agreements
• provides prompt and flexible options for resolving problems in employment relationships.

There are also some specific provisions for good faith in collective bargaining.

Good faith in employment relationships

 The ultimate goal of the Employment Relations Act is to build productive employment relations.

 Employers, employees and unions will always seek change to employment relationships as needs and conditions change. New issues will always arise in the workplace.

 The goal of the Act is for employers, employees and unions to make changes and work through issues themselves, by dealing with one another in good faith, which includes mutual obligations of trust and confidence.

 At all times, the benefits of collective bargaining – as well as the right to individual choice – should be respected.

The Big Picture: Good Faith

While employers and employees may have a range of different interests, they have a common interest in the viability and success of the business.

 If sensible people deal with one another in good faith, then most differences should be able to be resolved amicably.

Good faith applies to...

... all parties in an employment relationship. It's not just a requirement on employers.

 Employees and unions must also act in good faith towards employers. Unions and their members have to deal with one another in good faith.

Good faith applies when...

...any matter under a collective or individual agreement arises. It applies at all times between an employer and employee. It applies when unions consult their members, seek to visit a workplace or hold a secret ballot. It applies when employers consider proposals that may affect employees or make them redundant. It applies to bargaining for collective agreements and individual agreements and variations to them.

Good faith is...

... being active and constructive in establishing and maintaining productive relationships. It's about how people and organisations treat one another every day, including being responsive and communicative.

At the most basic level, good faith is about telling the truth. It means employers, employees and unions are not allowed to do anything that misleads or deceives one another. Good faith goes further than this.

New employees...

When a new employee starts work, they need to be given time to seek advice before signing an employment agreement. That agreement must be given to them in writing. Employers can't use fixed-term agreements simply to get around normal disciplinary or dismissal processes. There has to be a genuine reason for the fixed term and the reason for that term needs to be included in the written employment agreement.

Trial periods...

If an employer wants to offer a probationary period or a trial period at the start of employment, they have to put this in writing and still follow normal disciplinary or dismissal processes if it doesn't work out.

Unions' rights...

If employees decide to join a union or set one up, the employer must treat their union representatives with respect.

An employer must not advise an employee or seek to induce them not to be covered by collective bargaining or a collective agreement.

When union representatives want to visit a workplace for reasons allowed under the Act, the employer shouldn't give unreasonable excuses why this is an inconvenient time or try to deduct pay fom employees who have discussions with union representatives. At the same time, the union should be reasonable about not interfering in the normal operations of the business and should restrict discussions to a reasonable duration.

Collective bargaining...

When bargaining for a collective agreement, employers and unions must meet. They must seriously consider each other's proposals and respond to those proposals.

Where possible, quality information should be provided to back up claims. At the same time, neither party should keep raising the same issues over and over again even though they have already been considered and rejected by the other side.

Good faith does not stop the parties from expressing facts or reasonable opinions about the other side or from seeking to bargain for terms that suit them. But it does require the parties to keep bargaining on other issues even if they are deadlocked on one matter and to conclude a collective agreement unless there is a genuine reason based on reasonable grounds not to. A genuine reason does not include a party’s opposition or objection in principle to collective bargaining or being covered by a collective agreement, nor is a dispute over whether the collective agreement should include a bargaining fee clause a genuine reason.

 Source:  http://ers.govt.nz/goodfaith/

© Crown copyright [2005]

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