The Employment Relations Act 2000 ("ERA") contains a number of provisions to manage the transition from the old legislation to the new. In general, disputes and grievances that arose before 2 October 2000 will be dealt with as if the new legislation had not been passed. There are however specific provisions to cover employment agreements with existing employees. Barry Dorking of Anderson Lloyd Caudwell's Dunedin office, considers the issues.

What happens with existing contracts?

Individual contracts

An existing individual contract continues to be enforceable "according to its tenor" and the statutory provisions relating to the conduct of individual bargaining do not apply unless the contract is being amended.

Individual contracts with a union member

An existing individual contract with a union member who is not currently a party to the collective contract, will continue to apply despite the fact that union members are otherwise automatically covered by their union's collective. An existing individual contract with a union member does not have to be consistent with the union collective contract.

After 2 October 2000, if a fixed term contract expires and is replaced with a new fixed term contract, that new contract will not be an "existing contract". Accordingly the union collective would automatically cover the union member and any individual contract must be consistent with the union collective. The only way to avoid this result is to negotiate an extension to the term of the existing contract (if the employee agrees) or for the employee to resign from the union. If the employee resigns from the union he or she will be employed on an individual contract that can be inconsistent with the union collective. Care should be taken to ensure that any action to resign from the union cannot be seen as breaching the prohibition on preferring non-union employees.

Collective contracts

An existing collective contract also continues to be enforceable "according to its tenor", but it will expire on the earlier of:
1. its stated expiry date; or
2. 31 July 2003; or
3. a date after 1 July 2001 if the parties agree, or if a majority of union members covered by the collective agree by secret ballot, which can be conducted either by the union or by the employer.

Note that the existing collective continues to bind non-union members until its stated expiry date

Dispute and grievance procedures

Dispute and grievance procedures in existing employment agreements are automatically varied to incorporate the new statutory dispute resolution regime.

What happens with existing disputes?

Existing disputes

Existing proceedings before the Court, Tribunal, Dispute Committee, or Grievance Committee continue as if the new legislation had not been passed. Causes of action that arose under the Employment Contracts Act will be dealt with as if the new legislation had not been passed. Temporary Employment Tribunal Members will be appointed as necessary to deal with such cases.

Conclusion

In other words, matters that arose before 2 October 2000 will be dealt with under the Employment Contracts Act. Provided you do not want to change an employee's terms and conditions, their employment contracts continue as they are. The situation is more complex with current union members who do not wish to be bound by the union collective contract.

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.

Barry Dorking is a partner in the Lawlink firm of Anderson Lloyd Caudwell. Barry specialises in employment law.

Web site: Anderson Lloyd Caudwell

Email: barry.dorking@andersonlloydcaudwell.com

September 2000