Introduction
It is an implied term of all employment contracts that an employee has an obligation to perform the work provided and that an employer has an obligation to provide work. There are exceptions to that implied term, being that for the purpose of negotiating collective agreements employees are entitled to withdraw their services from the workplace and employers are entitled to lockout their employees. These exceptions are commonly known as the right to strike and lockout. Those rights are recognised in the Employment Relations Act 2000 ("ERA"). Part (8) of the ERA prescribes the procedures and limitations applying to the right to strike and lockout.
Part (8) of the ERA expressly states that the objectives of the strike and lockout provisions are to recognise the requirement that a union and an employer must deal with each other in good faith but that lawful strikes and lockouts are permitted. Additionally, where a strike or lockout is threatened in an essential service there will be an opportunity for a mediated solution to the problem.
What is a strike or lockout?
Defining a strike
A strike is defined as being the act of a number of employees who are or have been in the employment of the same employer or different employers in:
1 discontinuing that employment, whether wholly or partially or in reducing the normal performance of it; or
2 refusing or failing after such a discontinuance to resume or return to their employment; or
3 breaking their employment agreements; or
4 refusing or failing to accept engagement for work in which they are usually employed; or
5 reducing their normal output or their normal rate of work; and
6 is due to a combination, agreement, common understanding or concerted action made or entered into by the employees.
A strike does not include an employees' meeting authorised by their employer, employment agreement or by the ERA.
Defining a lockout
A lockout is defined as being the act of an employer in:
1 closing the employer's place of business, or suspending or discontinuing the employer's business or any branch of that business; or
2 discontinuing the employment of any employee; or
3 breaching some or all of the employer's employment agreements; or
4 refusing or failing to engage employees for any work for which the employer usually employ's employees; and
5 is done with the view of compelling employees, or to aid another employer compelling employees to accept terms of employment or comply with the demands made by the employer.
Lawful strikes and lockouts
A strike or lockout will only be lawful if it relates to bargaining for a collective agreement that will bind each of the employees concerned, or relates to an aspect of a collective agreement in respect of which the right to strike or lockout is available under a declaration made by the Court pursuant to section 202(2)(c); and is not otherwise unlawful under
section 103.
In addition to collective bargaining, strikes and lockouts are lawful if the employees or the employer concerned has reasonable grounds for believing that the strike or lockout, as the case may be, is justified on the grounds of safety or health.
Unlawful strikes and lockouts
A strike or lockout will be unlawful if it occurs while a binding collective agreement is in force, unless the strike or lockout is pursuant to a declaration by the Court or a related collective agreement is currently the subject of bargaining;
A strike or lockout will be unlawful if it occurs during bargaining for a proposed collective agreement unless at least 40 days have passed since the bargaining was initiated and the initiation of bargaining occurred after the collective agreement or related collective agreement had expired;
1 it relates to a personal grievance or dispute;
2 it relates to any freedom of association matter;
3 it relates to an essential service and the procedural requirements relating to essential services have not been complied with; or
4 it is in contravention of an order of the Court.
Action that may be taken during lawful strike and lockout
During a lawful strike or lockout no party is entitled to bring any action or proceedings:
1 which are founded on a tort;
2 for the grant of an injunction;
3 for a breach of employment agreement;
4 for a penalty; or
5 for the grant of a compliance order.
During a lawful strike or lockout striking or locked out employees may be suspended.
Suspension of employees
Suspension of striking employees and payment of wages
Employers are entitled to suspend striking employees without pay during a strike. An employer is also entitled to suspend non-striking employees without pay if as a consequence of the strike there is no work available for those employees. Suspended non-striking employees are entitled to apply for a compliance order or other remedies including recovery of wages against their employer. Employers must inform suspended employees of the relevant section of the ERA upon which they are suspended.
Payment of wages to locked out employees
Employers are not liable for employees' wages during a lockout unless the employer's participation of that lockout was unlawful.
Resumption of service of employees
When employees resume work at the end of their suspension because of a strike or lockout their services must be treated as continuous and they are to be given the rights and benefits that are conditional on continuous service.
Replacement of employees
During a lawful strike or lockout an employer may not replace any striking or locked out employee by engaging another employee to perform the duties and responsibilities of the striking or locked out employee unless the employer has reasonable grounds for believing that it is necessary on the grounds of safety or health. An employer who acts in contravention of that prohibition is liable to a penalty imposed by the authority in respect of each employee who is replaced.
Employer's record of strikes and lockouts
Employers must keep a record of any strike or lockout in the prescribed form, a copy of which must be given to the chief executive of the Department of Labour within one month after the end of the strike or lockout.
Essential Services
Notice to strike
Employees employed in an essential service who participate in a lawful strike which will affect the public interest, including public safety or health, must give their employer and the chief executive of the Department of Labour within 28 days before the commencement of the strike a notice in writing specifying their intention to strike. Employees employed in an essential service described in Part A of Schedule 1 must give no less than 14 days' notice of their intention to strike. Employees employed in an essential service described in Part B of Schedule 1 must give no less than 3 days' notice of their intention to strike.
Strike notices must specify the nature of the proposed strike including whether the proposed action will be continuous, the place or places where the proposed strike will occur and the date on which the strike will begin. The notice must be signed by a representative of the employee's union and must specify the names of those employees who are striking unless it is given on behalf of all employees who are members of the union that is a party to the bargaining relating to a collective employment agreement that relates to the striking employees.
Notice to lockout
An employer engaged in an essential service that proposes to lawfully lockout employees and the proposed lockout will affect the public interest, including public safety or health, must give the employees' union or unions and the chief executive of the Department of Labour, within 28 days before the commencement of the strike, a notice in writing of the employer's intention to lockout. Employers engaged in an essential service described in Part A of Schedule 1 must give no less than 14 days' notice of its intention to lockout. Employers engaged in an essential service described in Part B of Schedule 1 must give no less than 3 days' notice of its intention to lockout.
Lockout notices must specify the nature of the proposed lockout, including whether it will be continuous, the place or places where the proposed lockout will occur, the date on which it will begin, and the names of the employees who will be locked out. The notice must be signed either by the employer or on the employer's behalf.
Chief executive of the Department of Labour to ensure mediation services provided
When the chief executive of the Department of Labour receives a notice of intention to strike or lockout mediation services must be provided as soon as possible to the parties of the proposed strike or lockout for the purpose of assisting the parties to avoid the need for the strike or lockout.
Conclusion
With the enactment of the ERA strikes and lockouts have once more come into effect as negotiating tools of employers and unions. While the ERA gives procedural guidelines for strikes and lockouts because these tools have been in the garden shed for some time it is advisable to get independent advice if your organisation is facing a strike or lockout.
Copyright The Lawlink Group Ltd 2000
Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.
The Auckland firm of Hesketh Henry represents clients in all aspects of employment law including the preparation of employment contracts, addressing health and safety issues, strategic and policy advice, litigation before the Employment Tribunal and Court and before the Court of Appeal.
Web site: Hesketh Henry
Email: rob.ferguson@heskethhenry.co.nz
September 2000
It is an implied term of all employment contracts that an employee has an obligation to perform the work provided and that an employer has an obligation to provide work. There are exceptions to that implied term, being that for the purpose of negotiating collective agreements employees are entitled to withdraw their services from the workplace and employers are entitled to lockout their employees. These exceptions are commonly known as the right to strike and lockout. Those rights are recognised in the Employment Relations Act 2000 ("ERA"). Part (8) of the ERA prescribes the procedures and limitations applying to the right to strike and lockout.
Part (8) of the ERA expressly states that the objectives of the strike and lockout provisions are to recognise the requirement that a union and an employer must deal with each other in good faith but that lawful strikes and lockouts are permitted. Additionally, where a strike or lockout is threatened in an essential service there will be an opportunity for a mediated solution to the problem.
What is a strike or lockout?
Defining a strike
A strike is defined as being the act of a number of employees who are or have been in the employment of the same employer or different employers in:
1 discontinuing that employment, whether wholly or partially or in reducing the normal performance of it; or
2 refusing or failing after such a discontinuance to resume or return to their employment; or
3 breaking their employment agreements; or
4 refusing or failing to accept engagement for work in which they are usually employed; or
5 reducing their normal output or their normal rate of work; and
6 is due to a combination, agreement, common understanding or concerted action made or entered into by the employees.
A strike does not include an employees' meeting authorised by their employer, employment agreement or by the ERA.
Defining a lockout
A lockout is defined as being the act of an employer in:
1 closing the employer's place of business, or suspending or discontinuing the employer's business or any branch of that business; or
2 discontinuing the employment of any employee; or
3 breaching some or all of the employer's employment agreements; or
4 refusing or failing to engage employees for any work for which the employer usually employ's employees; and
5 is done with the view of compelling employees, or to aid another employer compelling employees to accept terms of employment or comply with the demands made by the employer.
Lawful strikes and lockouts
A strike or lockout will only be lawful if it relates to bargaining for a collective agreement that will bind each of the employees concerned, or relates to an aspect of a collective agreement in respect of which the right to strike or lockout is available under a declaration made by the Court pursuant to section 202(2)(c); and is not otherwise unlawful under
section 103.
In addition to collective bargaining, strikes and lockouts are lawful if the employees or the employer concerned has reasonable grounds for believing that the strike or lockout, as the case may be, is justified on the grounds of safety or health.
Unlawful strikes and lockouts
A strike or lockout will be unlawful if it occurs while a binding collective agreement is in force, unless the strike or lockout is pursuant to a declaration by the Court or a related collective agreement is currently the subject of bargaining;
A strike or lockout will be unlawful if it occurs during bargaining for a proposed collective agreement unless at least 40 days have passed since the bargaining was initiated and the initiation of bargaining occurred after the collective agreement or related collective agreement had expired;
1 it relates to a personal grievance or dispute;
2 it relates to any freedom of association matter;
3 it relates to an essential service and the procedural requirements relating to essential services have not been complied with; or
4 it is in contravention of an order of the Court.
Action that may be taken during lawful strike and lockout
During a lawful strike or lockout no party is entitled to bring any action or proceedings:
1 which are founded on a tort;
2 for the grant of an injunction;
3 for a breach of employment agreement;
4 for a penalty; or
5 for the grant of a compliance order.
During a lawful strike or lockout striking or locked out employees may be suspended.
Suspension of employees
Suspension of striking employees and payment of wages
Employers are entitled to suspend striking employees without pay during a strike. An employer is also entitled to suspend non-striking employees without pay if as a consequence of the strike there is no work available for those employees. Suspended non-striking employees are entitled to apply for a compliance order or other remedies including recovery of wages against their employer. Employers must inform suspended employees of the relevant section of the ERA upon which they are suspended.
Payment of wages to locked out employees
Employers are not liable for employees' wages during a lockout unless the employer's participation of that lockout was unlawful.
Resumption of service of employees
When employees resume work at the end of their suspension because of a strike or lockout their services must be treated as continuous and they are to be given the rights and benefits that are conditional on continuous service.
Replacement of employees
During a lawful strike or lockout an employer may not replace any striking or locked out employee by engaging another employee to perform the duties and responsibilities of the striking or locked out employee unless the employer has reasonable grounds for believing that it is necessary on the grounds of safety or health. An employer who acts in contravention of that prohibition is liable to a penalty imposed by the authority in respect of each employee who is replaced.
Employer's record of strikes and lockouts
Employers must keep a record of any strike or lockout in the prescribed form, a copy of which must be given to the chief executive of the Department of Labour within one month after the end of the strike or lockout.
Essential Services
Notice to strike
Employees employed in an essential service who participate in a lawful strike which will affect the public interest, including public safety or health, must give their employer and the chief executive of the Department of Labour within 28 days before the commencement of the strike a notice in writing specifying their intention to strike. Employees employed in an essential service described in Part A of Schedule 1 must give no less than 14 days' notice of their intention to strike. Employees employed in an essential service described in Part B of Schedule 1 must give no less than 3 days' notice of their intention to strike.
Strike notices must specify the nature of the proposed strike including whether the proposed action will be continuous, the place or places where the proposed strike will occur and the date on which the strike will begin. The notice must be signed by a representative of the employee's union and must specify the names of those employees who are striking unless it is given on behalf of all employees who are members of the union that is a party to the bargaining relating to a collective employment agreement that relates to the striking employees.
Notice to lockout
An employer engaged in an essential service that proposes to lawfully lockout employees and the proposed lockout will affect the public interest, including public safety or health, must give the employees' union or unions and the chief executive of the Department of Labour, within 28 days before the commencement of the strike, a notice in writing of the employer's intention to lockout. Employers engaged in an essential service described in Part A of Schedule 1 must give no less than 14 days' notice of its intention to lockout. Employers engaged in an essential service described in Part B of Schedule 1 must give no less than 3 days' notice of its intention to lockout.
Lockout notices must specify the nature of the proposed lockout, including whether it will be continuous, the place or places where the proposed lockout will occur, the date on which it will begin, and the names of the employees who will be locked out. The notice must be signed either by the employer or on the employer's behalf.
Chief executive of the Department of Labour to ensure mediation services provided
When the chief executive of the Department of Labour receives a notice of intention to strike or lockout mediation services must be provided as soon as possible to the parties of the proposed strike or lockout for the purpose of assisting the parties to avoid the need for the strike or lockout.
Conclusion
With the enactment of the ERA strikes and lockouts have once more come into effect as negotiating tools of employers and unions. While the ERA gives procedural guidelines for strikes and lockouts because these tools have been in the garden shed for some time it is advisable to get independent advice if your organisation is facing a strike or lockout.
Copyright The Lawlink Group Ltd 2000
Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.
The Auckland firm of Hesketh Henry represents clients in all aspects of employment law including the preparation of employment contracts, addressing health and safety issues, strategic and policy advice, litigation before the Employment Tribunal and Court and before the Court of Appeal.
Web site: Hesketh Henry
Email: rob.ferguson@heskethhenry.co.nz
September 2000
July, 2001
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