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Submission on Employment Relations Amendment Bill 2018 Submission to the Education and Workforce Committee Date: 29 March 2018 Contact JOCK LAWRIE, EMPLOYMENT LAWYER DDI 03 474 6491 OR 0800 283 848 | E-MAIL JOCKL@NZNO.ORG.NZ | www.nzno.org.nz NEW ZEALAND NURSES ORGANISATION | PO BOX 2128 | WELLINGTON 6140
T://D102
2018-03/005
About the New Zealand Nurses Organisation
NZNO is the leading professional nursing association and union for
nurses in Aotearoa New Zealand. NZNO represents over 49,000 nurses,
midwives, students, kaimahi hauora and health workers on professional
and employment related matters. NZNO is affiliated to the International
Council of Nurses and the New Zealand Council of Trade Unions.
NZNO promotes and advocates for professional excellence in nursing by
providing leadership, research and education to inspire and progress the
profession of nursing. NZNO represents members on employment and
industrial matters and negotiates collective employment agreements.
NZNO embraces te Tiriti o Waitangi and contributes to the improvement
of the health status and outcomes of all peoples of Aotearoa New
Zealand through influencing health, employment and social policy
development enabling quality nursing care provision. NZNO’s vision is
Freed to care, Proud to nurse.
EXECUTIVE SUMMARY
New Zealand Nurses Organisation / Tōpūtanga Tapuhi Kaitiaki o Aotearoa
(NZNO) welcomes the opportunity to comment on the proposed
amendments to the Employment Relations Act 2000 (“ER Act 2000”) as put
forward by way of the Employment Relations Amendment Bill (2018) (“ER
Amendment Bill”).
NZNO has consulted members and staff in the preparation of this
submission.
NZNO is an affiliate of the New Zealand Council of Trade Unions / Te
Kauae Kamahi (“CTU”), and NZNO notes its support for the CTU
submission to this Select Committee where the present submission is silent
on any matter contained in the ER Amendment Bill (or not otherwise
inconsistent with the CTU submission).
NZNO wishes to be heard in person by the Select Committee on this
submission. NZNO will be represented before the Select Committee by the
named contact for this submission (and others to be confirmed once the
date and time for submission presentation has been confirmed).
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NZNO largely supports the amendments as proposed. NZNO views the
amendments as an important first step in restoring key minimum
protections for employees and strengthening collective bargaining / union
rights in the workplace.
DISCUSSION
1. Amendments to Part 4 (recognition and operation of unions)
1.1 Reference – Clause 4 ER Amendment Bill
The proposed section 18A (union delegates entitled to
reasonable paid time to represent employees) is a timely
amendment to facilitate representation of union members’
interests. NZNO member delegates have raised concerns with
NZNO due to employers limiting or impeding performance of
normal delegate activity. A large number of delegates are
currently forced to conduct delegate duties outside of work
hours or in their lunch breaks.
Section 18A will clarify – for both union delegates and
employers – reasonable parameters for union delegate activity
within the workplace and militate against unreasonable
pressure directed by employers towards union delegates.
1.2 Issue
Section 18A subsection (2) may operate so as to effectively
defeat the clear statement of entitlement under section 18A
subsection (1). Subsection (2) is stated to be a condition
precedent for any entitlement under subsection (1). Any
statutory ‘entitlement’ to undertake delegate activity during
normal work hours is (arguably) not engaged until one of the
two criteria under subsection (2) has been met.
Any employer wishing to negate or limit union delegate activity
during normal hours of work has the simple expedient available
of withholding agreement under subsection (2)(a) for such
activity to take place. (It may be relevant to ask how the
requirement for agreement as between employer and employee
in this context accords with the statutory objective of
acknowledging and addressing the inherent inequality of
power in employment relationships ((s3(a)(ii) ER Act 2000).)
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In the absence of agreement, the employee has to meet the
‘notification’ obligations under subsection (2)(b). An employer
claim alleging breach of the notification obligations may have
the practical effect of denying subsection (1) entitlements until
such time as the allegation has been resolved.
Subsection (2) would appear superfluous in any event given
that subsection (3) provides adequate employer ‘redress’ for
any reasonable concerns as may be held.
NZNO views the objective of clause 4 as being best addressed
by removal of section 18A subsection (2).
1.3 Reference – Clause 6 ER Amendment Bill
The proposed repeal of section 20A ER Act 2000 is seen as a
very positive development. The requirement for NZNO to
obtain employer consent before entering a workplace for
purposes related to union members employment or union
business is at stark odds with the ER Act 2000 statutory
objectives of addressing the inherent inequality of power in
employment relationships and promoting collective bargaining
(s3(a)(ii) and (iii) ER Act 2000).
NZNO’s experience under section 20A is that some employers
in the health sector have utilised the provision to either defer or
deny access. While litigation addressing such deferral or denial
has been avoided to date, such behaviours have the potential
to sour the good faith employment relationship as between
NZNO members and their employers and militate against active
and constructive steps to establish and maintain a productive
employment relationship (s4(1A)(b) ER Act 2000).
2. Amendments to Part 5 (collective bargaining)
2.1 Reference – Clause 11
Proposed s33 provides statutory support for a meaningful
outcome following the collective bargaining process mandated
by s42 ER Act 2000.
2.2 Issue
Clause 11 is one of a number of clauses under the ER
Amendment Bill which promote collective bargaining,
including clause 13 which removes the ability for employers to
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opt out of multi-employer collective agreement (“MECA”)
bargaining following union initiation.
A concern with clause 11 is that despite the Bill’s attempt to
address upfront the issue of MECA opt-outs by repealing
SS44A – 44C ER Act 2000, clause 11 provides a ‘back door’ by
which employers may avoid the good faith bargaining
obligations as would otherwise apply following union initiation
for a MECA.
The Court’s previous application of the 2004 amendment to s33
ER Act 2000 is instructive. As noted by the authors of Lexis
Nexis [ERA33.4], the Employment Court, in both SFWU v
Auckland DHB [2007] 4 NZELR 697 and AUS v Vice-Chancellor
Auckland University [2005] ERNZ 224, emphasised that s33
made requirements of bargaining that were applicable only to
bargaining for collective agreements generally and did not
“particularise the expected nature of the bargaining or the
resultant agreement”. This approach appears to have been
approved by the Court of Appeal in EPMU v Witney
Investments [2007] 5 NZELR 435.
Therefore an employer might satisfy s33 obligations as
contemplated under clause 11 by seeking to bargain / conclude
a single-employer collective agreement (“SECA”),
notwithstanding union initiation for a MECA.
If the Government’s intention is to prevent employers opting out
of MECA bargaining then an amendment to clause 11, making
it express that the obligation to conclude relates back to the
type of bargaining contemplated under the s42 initiation notice,
is necessary in order to give purposive effect to that intention.
2.3 Reference – Clause 12
The restoration of a 20-day ‘head-start’ for unions to initiate
bargaining for ‘replacement’ collective agreements is a
welcome first step.
It honours the policy decision at the time that the ER Act 2000
was introduced that in the interests of promoting collective
bargaining occurring through an organised union, unions
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should have the first opportunity of initiating bargaining for the
renewal of a collective agreement1.
2.4 Issue
The 60 day initiation period under proposed section 41(3) does
not allow sufficient time to conclude bargaining for the renewal
of a collective agreement prior to the expiration date of that
agreement.
This is especially the case when the bargaining is for the
renewal of agreements containing comprehensive and detailed
terms and conditions, such as the District Health Boards / New
Zealand Nurses Organisation Nursing and Midwifery Multi-
Employer Collective Agreement (“DHB/NZNO MECA”). In
consequence, issues such as the commencement date for the
replacement collective agreement and the back dating of any
wage increase to the expiry of the previous collective
agreement can become significant obstacles to concluding a
collective agreement.
To better facilitate the objective of orderly collective bargaining
(s31(d) ER Act 2000) propose that the 60 day initiation period
be extended to 90 days (together with any necessary
consequential changes to the timeframes as provided under
s41 ER Act 2000).
2.5 Reference – Clause 13
NZNO supports the repeal of ss44A to 44C ER Act 2000 in
order to remove the ability of an employer to opt out of MECA
bargaining. The value of MECA bargaining within the health
sector is attested by reference to the following agreements–
(i) DHB/NZNO MECA
The Fair Pay campaign on behalf of NZNO members in
the early 2000s resulted in the 2004 DHB/NZNO MECA
which was a first step in the ongoing campaign to address
the historical undervaluing of the significant contribution
provided by nursing and health care assistant employees
in the DHB sector. The DHB/NZNO MECA, by
1 Department of Labour, Memorandum to Chair of the Employment and Accident
Insurance Legislation Select Committee, 8 May 2000
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addressing inequalities and providing national
standardisation of terms and conditions of employment,
has been a significant factor in the development of largely
productive employment relationships as between
employer and employee across all 20 DHBs nationwide
and contributed to improved recruitment and retention of
nurses within the DHB sector2.
Additional benefits for the health sector include productive
engagement between DHBs, NZNO and NZNO members
to implement Safe Staffing Healthy Workplaces for better
productivity and patient outcomes.
The current DHB/NZNO MECA has been accompanied
by–
the Health Sector Relationship Agreement (“HSRA”)
which provides the framework for bipartite
cooperation. The framework sets out a number of
goals including taking shared responsibility for
providing high quality health care and promoting
productive and effective relationships. The HSRA
steering committee is made up of DHB, NZNO and
Ministry of Health representatives. The committee
maintains a strategic overview of the sector and
supports a coordinated and structured approach to
communication as well as addressing issues as they
arise.
the Bi-Partite Action Group (“National BAG”) is
made up of DHB and union representatives. The
group advises and participates in the work
programme and other initiatives of the HSRA,
facilitates communication across DHBs, makes
recommendations for consistency and facilitates
disputes and problem resolution.
The DHB/NZNO Nursing and Midwifery MECA has
express support by way of the Code of Good Faith for the
Public Health Sector3. Clause 13 of the ER Amendment
2 Buchan J & North N (2008), Pay Jolt? The impact of the 2004/5 New Zealand
Nurses employment agreement, April 2008. NZNO; Wellington.
3 Clause 6(1) of Schedule 1B ER Act 2000
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Bill better aligns the statutory provisions with the Code of
Good Faith.
(ii) Primary Health Care Sector MECA
In the Primary Health Care sector, over 500 employers
have indicated support and preference for MECA
bargaining by agreeing to become a party to the Primary
Health Care MECA as negotiated between NZNO, the
New Zealand Medical Association and individual
employers. The fact that a MECA of this size has been
negotiated without recourse to any industrial action may
be seen as attesting to the value that the parties ascribe
to such form of bargaining.
3. Amendments to Part 8 (strikes and lockouts)
3.1 Reference – Clause 22
The proposed repeal of sections 95A and 95H of the ER Act
2000 removes an unfair restriction on collective action by union
members. As noted by the CTU:
“Employers are able to issue workers who partially withdraw their
labour (such as by refusing to answer the phones) with a letter saying
that their pay will be docked but not specifying how much money will
be taken. These letters can be intimidating documents and they will
tend to push workers towards full strikes. It is worth remembering that
according to the latest figures (which MBIE stopped recording in
2014), all forms of industrial action are at their lowest level since the
Second World War or earlier.” 4
Repeal may serve to reduce the likelihood of a complete
withdrawal of labour by NZNO members, thereby better
supporting continuity of care and healthy outcomes for those in
care.
3.2 Issue
NZNO notes concerns arising from the retention of s82A of the
ER Act 2000, as inserted by s7 of the Employment Relations
4 NZCTU submission Part I – Employment Relations Amendment Bill 2018,
clause 5.14
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(Secret Ballot for Strikes) Amendment Act 2012. While the
stated intention of the 2012 amendment was to protect the
interests of union members, the statutory provision provides
grounds for employer-initiated legal proceedings challenging
any proposed strike action under s86(1)(aa) ER Act 2000. In
Lyttleton Port Co Ltd v Maritime Union of New Zealand Inc
[2017] NZEmpC 6 the Employment Court addressed an
employer challenge to the legality of a strike ballot. Judge
Corkill stated:
“[42] In my view, although the primary thrust of the applicable
statutory provisions is to protect union members … an employer may
be said to have some interest in the secret ballot procedure, since
non-compliance with the statutory provisions will render the proposed
strike unlawful for the purposes of s86(1)(aa) – and thus disqualify it
from the protection afforded by s83 of the Act.”
An amendment to section 82(A) ER Act 2000 making it express
that any justiciable rights arising under the section are at the
suit of union members will better accord with the stated
intention of the 2012 amendment and assist to reduce
unnecessary litigation and enhance certainty.
4. Other amendments – amendments to Part 6 (individual
employees’ terms and conditions of employment)
4.1 Reference – Clause 29
The amendment to s67A is welcome insofar as it removes 90-
day trial period (colloquially ‘fire-at-will’) provisions for
workplaces of 20 or more employees. However by returning
the law to the position that applied as of 1 March 2009 under
the Employment Relations Amendment Act 2008, 90-day trial
periods continue to apply for those workplaces with fewer than
20 employees.
4.2 Issue
The retention of 90-day trial periods for small to medium
workplaces appears to be based on MOTU Economic Research
and Public Policy Trust analysis suggesting such workplaces
are more likely to hire employees if trial periods are available.
Yet NZNO’s view is that hiring decisions are driven by a
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number of factors, and that the statutory availability of trial
periods is unlikely to be determinative in the majority of cases.
Even if the MOTU Economic Research and Public Policy Trust
analysis is to be accepted, such analysis should be balanced
against the government’s own acknowledgement of the
significant distress the 90-day trial periods cause and the
chilling effect such trial periods may have on labour market
flexibility.
In the interests of fairness and reasonableness clause 29
should provide for the repeal of both ss67A and 67B of the ER
Act 2000.
5. Other amendments – amendments to Part 6D (rest breaks and
meal breaks)
5.1 Reference – Clauses 35 – 37
NZNO generally supports clauses 35 – 37 of the ER
Amendment Bill and repeats the observations as made by the
CTU in their submission5:
6.46 The reinstatement of prescribed rest breaks and meal breaks in
the ER Act restores basic employment rights and protections.
Ensuring that working people have guaranteed access to rest
and meal breaks in employment law is protecting a
fundamental employment and human right and ensuring a
basic standard of decent work. There should be very limited
circumstances where there is an exemption to this right.
6.47 Restoring the legal requirements of rest and meal breaks is
also consistent with the objects of the ER Act. In particular it
recognises the inherent inequality of power in employment
relationship.
6.48 Rest and meal breaks are very important in international labour
law. The very first ILO Convention in 1919 was the Hours of
Work (Industry) Convention. Currently there are 25 ILO
conventions and 14 recommendations in the area of working
5 NZCTU submission Part I – Employment Relations Amendment Bill 2018
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time, including hours of work, night work, paid leave, part time
work and workers with family responsibilities.
6.49 The removal of a right to rest and meal breaks in law was one
of the most controversial of the amendments made to the ER
Act by the National Government during its term of office. The
changes were strongly opposed by the CTU, by unions and
working people. Working people in workplaces up and down
the country were in disbelief that such a basic right would be
removed.
6.50 There was no basis to justify this legislative change. The
problem, which the then Minister of Workplace Relations, Hon
Kate Wilkinson, identified as the reason to change the law
(New Zealand Parliament, 2010) – a dispute in the aviation
industry with meal and rest breaks for air traffic controllers –
was settled before the enactment of the amended Act. But
solutions to that situation and other similar situations were
found within the then legislative framework. Though the
Minister said there were issues in other sectors no evidence of
this was substantiated.
6.51 As employment law expert, John Hughes wrote at the time,
In over three years since the original Part 6D [the previous
legislation] came into force, the current provisions have given
rise to no direct issues in the Employment Relations Authority
or the Employment Court, notwithstanding the ability of
either party to refer difficulties to mediation and thence to
further dispute resolution. Arguably, then, there is no
demonstrable need for legislation relaxing what is already a
reasonably flexible regime.
6.52 The argument was politically driven. The reason advanced,
while the law was being debated, was that rest and meal
breaks were prescriptive and there needed to be more
flexibility. That same argument may be raised again. It must
be unpacked and rejected.
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6.53 Arguing that there needs to be flexibility around rest and meal
breaks is saying that people’s needs for rest, nutrition and
psychosocial needs override business and service continuity
needs. Wherever possible, business continuity and service
needs should be arranged around the need for working people
to have their basic personal, health and safety needs met. Not
the other way around. The needs of business and continuity of
service are not and should not be more important than the
physical, psychological and health and safety needs of workers.
6.54 Rest breaks are also recognised as having a role in ensuring
worker productivity. Research undertaken in a car plant in
Swansea over a three year period found that the risk of
accidents during the last half-hour of a two hour period of work,
was double that for the first half-hour (Tucker, Folkard, &
Macdonald, 2003). On this basis the ILO concluded that
increasing the frequency of rest breaks of workers who operate
machinery could substantially reduce industrial accidents and
that frequent work breaks can improve work performance.
6.55 The current law has compensatory mechanisms for where
breaks cannot be taken – a monetary value, or an earlier finish
time or time off in lieu. Compensatory measures undermine the
whole purpose of rest and meal breaks: they are necessary for
well-being, health, safety and certainty that those needs are
met.
6.56 A break is not a break if is tacked on the start or the finish of
the working day. Equally it is not a break if it is some extra
dollars and cents in a worker’s bank account at the end of the
week.
6.57 In many instances, employers will say that rest and meal
breaks are not able to be taken because there are insufficient
staff to cover. Sometimes the problem is inadequate staffing.
This can in itself be a health and safety issue. Compensatory
measures should not be used as a means to avoid dealing
with short staffing.
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6.58 That rest and meal breaks impose a cost on employers must be
accepted because providing rest and meal breaks at work is
the fair, safe and decent thing to do.
6.59 There will of course be situations where certain industries and
sectors require provisions for dealing with emergencies and
unexpected situations which may impinge on rest and meal
breaks. But collective agreements are the suitable place to
agree such arrangements, and many have developed their own
practices and provisions on how working hours are arranged
and organised. These will include meeting the needs of the
workers but also recognising the nature of the industry. This is
good practice as the arrangements are agreed between
representatives of the workers and the employer.
6.60 This law restores a minimum floor protection. This is especially
critical for sectors where there are risks of abuse and
exploitation, where work is short term, precarious, or poorly
paid. In sectors where there is migrant labour, in the hospitality
industry and in some parts of the agriculture sector, workers
are commonly not in a position to argue for their rights.
…
6.62 The wording in the current Act and the interpretation of it leaves
employees open to abuse, with employers having the final say
on any disagreements. The Act currently says that the
employer and employee have to agree. However, when there is
no agreement, the employer decides. This fails to recognise the
inherent inequality in the employment relationship. It is another
example of indifference to the unequal power dynamic in the
employment relationship.
6.63 Having certainly about rest and meal breaks is the only form of
protection and assurance that many workers have. With the
increase in precarious employment there is an essential need
to ensure certainty in employment law. Access to regular
rest and meal breaks is a basic requirement of health, safety
and well-being at work.
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6.64 The CTU strongly supports the re-establishment of rest and
meal breaks in law in 2018.
6. Other amendments – amendments relating to remedy of
reinstatement
6.1 NZNO generally supports clause 39 of the ER Amendment Bill
which provides for the restoration of reinstatement as the
primary remedy where a dismissal is found to be unjustified.
The Court has long noted the value of the remedy of
reinstatement, particularly at times of a depressed economic
environment (NZ etc Food Processing IUOW v Napier Tanning
Co Ltd [1986] ACJ 149 at 152 (Horn CJ); Villegas v Visypak
(NZ) Ltd [2010] 8 NZELR 362); and also warned that the routine
award of compensation instead of reinstatement is to create a
system for licensing unjustifiable dismissal (Ashton v Shoreline
Hotel [1994] 1ERNZ 421).
It is noted that for members of NZNO the value of reinstatement
can be especially important. Given that dismissal for cause
automatically triggers a professional nursing registration
investigation, nurses are effectively in double jeopardy of the
livelihoods (De Bruin v Canterbury District Health Board [2012]
NZEmpC 110). Reinstatement may be key to NZNO members’
ongoing participation in the labour market.
6.2 Issue
Retention of the ‘practicable and reasonable’ test for
reinstatement (as provided for by way of the Employment
Relations Amendment Act 2010) creates an impediment to the
timely resolution of personal grievance claims. Such a dual test
“invokes a broad enquiry into the equities of the parties’ cases
so far as the prospective consideration of reinstatement is
concerned”, (Angus v Ports of Auckland Ltd No.2 [2011] 9
NZELC 94, 015 at [65]). This can result in employers seeking
to put forward evidence relating to the claimant that might be
viewed by an objective observer as akin to ‘character
assassination’. This would seem to be at odds not only with
generally accepted notions of good faith behaviour but also with
the statutory objective of building productive employment
relationships (s3(a) ER Act 2000).
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NZNO proposes that the test under s125(2) ER Act 2000 be
limited to practicability.
CONCLUSION
7. In conclusion NZNO states that the amendments put forward by the
Employment Relations Amendment Bill are an important first step in
restoring key minimum protections for employees and strengthening
collective bargaining / union rights in the workplace and recommends
the proposals for further amendment as set out [1] – [6] above.
Jock Lawrie
NZNO Employment Lawyer
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