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Employment Relations Amendment Bill passes third reading

By SmartPayroll | November 5, 2014

Among other changes, the Bill increases choice and flexibility in collective bargaining, with the Employment Relations Authority now able to declare whether collective bargaining has concluded.


“It extends the right to request flexible working arrangements to all workers, not just caregivers, and these requests can now be made from the first day of employment.


“Rest and meal break provisions are now more flexible, with the Bill enabling employers and employees to agree to the timing and duration of rest and meal breaks.”


The Bill also makes changes to the continuity of employment provisions, known as Part 6A in the Act, for more vulnerable sectors of workers such as cleaners.


“Flexible and balanced employment relations legislation is essential for business to grow while ensuring protections for workers are retained.


Amendments to the Employment Relations Act 2000

Significant changes are taking place to employment law in New Zealand and employees and employers need to know how those changes will affect them. Here is a summary of the main changes.


The Employment Relations Amendment Bill was passed on 30 October 2014. It will come into effect four months after receiving Royal Assent. The Bill aims to:


  • create and uphold an employment relations framework that increases flexibility and choice
  • ensure a balance of fairness between employees and employers
  • reduce regulation where needed and decrease compliance costs, in particular for small and medium-sized enterprises (SMEs)
  • ensure that businesses that value employee rights can continue to grow.


Changes in the bill target the following six main areas:


  • the collective bargaining framework (including strikes and lockouts)
  • flexible working arrangements
  • Part 6A (continuity of employment for specified employees)
  • the duty of good faith
  • rest and meal break rules
  • provisions for the Employment Relations Authority (the Authority)


Flexible work

The changes to flexible working arrangements aim to improve people’s participation in the labour market and to better reflect modern lifestyles. Flexible working arrangements help employees find the right work-life balance for them and their employer. The key changes are:


  • extending the statutory right that caregivers currently have, to request flexible working arrangements, to all employees
  • removing the requirement of six months’ prior employment with the employer, so employees can ask for flexibility from their first day on the job
  • removing the limit on the number of requests an employee can make in a year
  • reducing the timeframe within which an employer must respond to a request from 3 months to 1 (and requiring that the response be made in writing and include an explanation of any refusal).

Rest and meal breaks

The Bill makes the rest and meal break rules in the Employment Relations Act (the ER Act) more flexible. The Bill aims to balance the importance of rest and meal breaks with business continuity needs. The Bill says employees are entitled to reasonable rest and meal breaks to rest, eat, drink and take care of personal matters. The Bill enables employers and employees to negotiate, in good faith, rest and meal breaks that meet legal requirements and allow the business to work.

The Bill:


  • allows reasonable limits to be agreed or imposed as to when rest breaks and meal breaks can be taken
  • gives employers the ability to say when breaks will be taken, if they cannot agree with employees
  • gives employees the right to be reasonably compensated where the employer cannot reasonably give the employee rest and meal breaks
  • requires employers to pay employees for rest breaks
  • stops people contracting out of legal rest and meal breaks or the requirement to give compensation instead of breaks
  • does not overrule any other law that makes an employee take rest and meal breaks in a certain way.


Continuity of employment – Part 6A of the Employment Relations Act

In 2012, the Government completed a review of the continuity of employment provisions (Part 6A) in the ER Act. The review found that businesses found it difficult to put the law into practice. The problems came from transferring employees’ entitlements and information to a new employer. The Bill aims to fix these issues. The Bill will give more certainty and clarity to employers while keeping key benefits for affected employees. The main changes include:


  • setting timeframes during the election process including a timeframe for employees to choose to move to a new employer (elect to transfer)
  • requiring that the old employer give the new employer detailed information on each employee that is transferring
  • introducing a mechanism for apportioning liabilities for service-related entitlements between employers where the parties are unable to agree between themselves
  • giving the new employer protection from unjustified increases in employee costs or changes to terms and conditions of employment
  • exempting SMEs from having to take on employees affected by the work changing hands.


Good faith

This change amends the good faith provisions that require an employer to give an employee relevant information where they are proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of that employee’s employment. It aims to clarify what information employees are entitled to during restructures or other situations where their continued employment is at risk.


An employer must give the affected employee relevant confidential information about themselves. An employer does not have to give the affected employee confidential information about another employee if doing so would involve an unwarranted disclosure of the affairs of that person.


An employer does not have to give confidential information that legally must stay confidential, or where there is a good reason to keep the information confidential.


These changes do not affect an employer’s obligations under the Official Information Act 1982 or the Privacy Act 1993.


Employees should still know the identity of their accuser or the nature of allegations made against them unless there is good reason to keep this information confidential.


Collective bargaining

The changes to collective bargaining aim to increase choice and flexibility in the collective bargaining framework, reduce ineffective bargaining, and improve fairness and balance in bargaining requirements. The key changes are:


  • providing that the duty of good faith does not require parties to reach a collective agreement. Parties will be able to ask the Authority to declare that bargaining has ended
  • allowing employers to opt out of multi-employer bargaining from the start
  • removing the 30-day rule that gives non-union members who are new employees, the terms and conditions from the collective agreement
  • allowing proportionate pay reductions as a response to partial strikes
  • requiring advanced written notice of any proposed strikes and lockouts in all sectors.


Employment Relations Authority

The Bill introduces requirements for when and how the Authority must give determinations. At an investigation meeting’s conclusion, the Authority must (where practical):


  • give an oral determination, and a written record of that determination within 1 month, or
  • give an oral indication of the Authority’s preliminary findings to the parties (unless extra evidence is provided) and deliver a written determination within 3 months of the investigation meeting or when extra evidence is provided, whichever is later.


The Authority can only reserve its determination if there are good reasons why it is not practical to give either an oral determination or indication of preliminary findings. A reserved determination must be delivered within 3 months of either the investigation meeting or any extra evidence being provided, whichever is later.


The Authority can also decide matters without holding an investigation meeting. In these situations, the Authority must give a written determination within 3 months of receiving evidence from the parties.


The Chief of the Authority can extend these timeframes, if they are satisfied that there are exceptional circumstances.


Regardless of bill changes, SmartPayroll’s online payroll system makes it easy to track wages, annual leave and break times. Find out more about the benefits of using our payroll system here.