Simon Bridges

19 MARCH, 2014

Employment Relations Amendment Bill – Second Reading Speech

Mr Speaker, I move that the Employment Relations Amendment Bill be now read a second time. I thank the members of the Transport and Industrial Relations Committee, and particularly its chair David Bennett, for their thorough consideration of this Bill.

Mr Speaker, this Bill implements the Government’s policies aimed at increasing flexibility and fairness in our employment relations framework.

The Select Committee has recommended that the Bill proceed with a number of amendments, and I agree with the changes proposed, some of which I will touch on today.

The Bill changes the duty of good faith so that it no longer requires parties to conclude a collective agreement. The Employment Relations Authority may declare whether collective bargaining has concluded. The aim is to reduce overly protracted bargaining, and give some certainty and balance to the collective bargaining framework.

United Future Leader Peter Dunne expressed concern that the Bill as amended could embolden employers or employees to merely ‘go through the motions’ of negotiation then walk away from collective bargaining simply because they oppose, or object to the direction negotiations are going or being party to a collective agreement. They could then ‘call in’ the Employment Relations Authority to declare the end to bargaining. He therefore wanted the inclusion of stronger provisions in the Bill to enable the Authority to be fully satisfied parties engaged in collective bargaining had done so in good faith.

To address this concern about possible ‘surface bargaining’, I propose to introduce an amendment to the Bill, a new Section 50KA, so that the Authority cannot declare bargaining concluded if parties have not complied with the duty of good faith. Where the Authority is precluded from making a declaration or determination under this Section, however, the Authority can issue orders, recommendations or directions to bargaining parties who have failed to observe good faith about what steps ought or must be taken to rectify the failure.

I thank the Hon Peter Dunne for his intervention and believe this amendment makes for a more balanced and resilient piece of legislation.

The Committee has also recommended other technical changes in relation to collective bargaining to improve the workability of the law.

The Bill exempts employers, and their associated persons, who have 19 or fewer employees from the requirement to take on those employees who are eligible to transfer to a new employer under Part 6A of the Act. Part 6A requires that eligible employees be allowed to transfer to a new employer following a restructure.

This exemption responds to the review of Part 6A which found that small to medium sized businesses have difficulty absorbing the financial risk associated with such transfers.

I acknowledge the concerns of some submitters regarding this part of the Act.

The Committee carefully considered the provisions and weighed up the diverse views on the issue to find an appropriate balance. They have recommended, and I agree, that the Bill be amended to alter the definition of “associated person” to exclude a franchisor where the franchisee bids for and manages the contract independently of the franchisor.

That means that small to medium sized franchisees that operate with a high degree of independence from the franchisor, and therefore share characteristics of SMEs in many respects, are able to access the exemption.

The Bill also clarifies that any failure of an outgoing employer to fulfil their obligations in relation to employees who are eligible to transfer to a new employer after a restructuring under Part 6A will not affect an employee’s entitlement to transfer to the new employer, or obligations that the new employer has.

The Committee has also recommended changes that ensure that, in each type of restructuring situation, employers wanting to give a warranty as an exempt employer can obtain sufficient information about the identity and contact details of the person they need to give the warranty to.

The Bill relaxes the current over-prescriptive and often unworkable provisions in the Act around rest and meal breaks to ensure the requirements are practical and can be complied with in all workplaces.

Some submitters were concerned that the changes would have a negative impact on health and safety. The Committee has considered these issues carefully and have noted the Bill does not override any requirements for breaks under other legislation, notably the Health and Safety in Employment Act. I agree that the Bill continues to protect the rights of employees while improving the workability of the law.

The Bill gives employers the ability to respond to partial strikes with specified pay deductions. This gives employers an additional, much more proportionate choice when responding to partial strikes than simply locking out or suspending workers.

A range of submitters requested greater certainty in the Bill as to what constitutes a partial strike. The Committee has recommended improving the clarity of the definition and I support this change.

The Bill introduces requirements on the nature and timing of determinations by the Employment Relations Authority to help improve the timeliness of their decisions. The Bill as introduced required the Authority to give an oral determination, or an oral indication of its preliminary findings, at the conclusion of an investigation meeting. The Authority would then be required to record oral determinations in writing, and in the case of oral indications provide written determinations, within three months unless there were exceptional circumstances.

Some submitters were concerned the changes could lead the Authority to making hasty decisions. The Committee has suggested several enhancements that should allay these fears, including allowing for reserved determinations, and amending and clarifying timeframes and content for different types of determinations.

The Bill amends the requirement for an employer to provide an employee with relevant information if a decision were being made that might affect their continued employment.

The balance between providing natural justice, and recognising that some situations require particular sensitivity, has been improved by the Committee recommendations. The Bill now provides that an employer is not required to allow access to confidential information regarding individuals other than the employee concerned, if it would result in an unwarranted disclosure of information about another individual.

The Committee has also recommended amending the Bill so that it no longer provides a basis for employers to withhold certain evaluative and opinion material from the employees concerned. In addition, the Committee has recommended that an employer cannot withhold information just because it is in a document that also contains confidential information.

Mr Speaker, the changes recommended by the select committee reflect a balanced and careful consideration of the wide range of comments received from submitters on this Bill. Flexible and balanced employment relations legislation is essential for business to grow while ensuring protections for workers are retained. I believe this Bill, with the improvements recommended by the Committee, strikes this balance.

Mr Speaker, I commend this Bill to the House.

ENDS

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