The Employment Relations Act

The Employment Relations Act 2000

The purpose of the act is to build productive employment relationships and positive employment environments.  It governs all contracts of service between employees and employers, and establishes the institutional framework and procedures for the negotiation of agreements and the resolution of disputes.

The Employment Relations Act 2000 has “good faith” as its central principle. This means that employers, employees and unions must deal with one another honestly and openly.

Specifically, the Act:

• promotes good employment relations and mutual respect 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.

So what does this mean for me, the employer?

As an employer you must ensure that:

• Every employee has an employment agreement, and that
• the terms and conditions within the agreement were agreed upon in good faith.
• If you have any employment problems, you use the guidelines set out in the employment relations act.

What if I do not have an employment agreement for each of my employees?

Every employee employed after 2 October 2000 must have a written employment agreement. It can be either an individual agreement or a collective agreement. 

If you fail to have employment agreements you may be liable to a penalty of up to $10,000.00.

How do I create an employment agreement, and what should be included in it?

It can be difficult understanding what needs to be included in an employment agreement and how it should be structured.  Depending on whether the employee is full time, part-time or casual. 

Under the Employment Relations Act 2000, where there is no collective agreement the individual employment agreement must be in writing and must include:

• the names of the employer and the employee (to make clear who are the parties to the agreement)
• a description of the work (to make clear what the employee is actually expected to do)
• an indication of where the employee is to work
• an indication of arrangements relating to working hours
• wage rates or salary
• a plain language explanation of services is available to help sort out employment relationship problems.
• a requirement to pay at least time and a half for work on a public holiday
• for most employees, an employment protection provision that will still apply if the employer's business is sold, or transferred or the employee's work is contracted out.
  

Minimum rights in legislation

Some minimum terms and conditions of employment are imposed by legislation. These terms still apply, even if they have not been written into the collective or individual employment agreement. Employers and employees cannot agree to do away with any of these entitlements. They can, however, agree to better provisions if they wish.
The minimum legislative requirements cover the following:

• minimum wages
• annual leave
• public holidays
• sick leave
• bereavement leave
• parental leave
• leave for defence force volunteers

You can get more detailed information about minimum employment rights on the Employment Relations website (www.ers.dol.govt.nz/relationships).

What must not be in an employment agreement?

Employment agreements must not include anything that goes against any law.  Unlawful provisions in an employment agreement cannot be enforced.

What other issues can appear in individual employment agreements?

Holidays
There are holiday and leave rights that apply whether or not they are included in an employment agreements. The employer and employee can agree to apply better provision overall, but cannot agree to reduce any provision. 

Annual holidays
Employees are entitled by law to a minimum of four weeks' paid annual holidays after being in the job for a year, or to holiday pay for periods of employment less than one year.

Public holidays
The 11 public holidays in the Holidays Act apply unless the employer and employee agree to substitute other days.
If employees work on public holidays they must be paid at least time and a half for hours worked on a public holiday. If it is a day on which they would otherwise have worked they are also entitled to another day off as an alternative holiday (a day in lieu).

Sick leave
Employees are entitled by law to five days' sick leave after being in the job for six months, and for each subsequent twelve months. If the leave is not taken, it can accumulate up to a maximum of 20 days.

Bereavement leave
Employees are entitled by law to three days' bereavement leave after being in the job for six months, on the death of an immediate family member.
Additionally, the employee is entitled to one days' bereavement leave where the employer accepts that the employee has suffered a bereavement.

Help, I need to develop employment agreements for my staff!

Don't worry, help is here!

The department of labour website has a great tool for building employment agreements:

Employment Agreement Builder

 

onlinehr also offers a variety of employment agreement for you to use freely and adapt to suit your situation.  (see below)  Alternatively, we can develop and customise employment agreements to suit your workplace, quickly and easily.

Can you explain the term '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

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.

Useful Websites

If you require further information on the Employment relations act, go to:

http://ers.govt.nz/relationships/builder/index.asp

http://www.ers.dol.govt.nz/goodfaith/

Source:  http://ers.govt.nz/relationships/builder/guide.asp

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