Simon Menzies, a partner with Harkness Henry in Hamilton, discusses collective agreements under the Employment Relations Act.
Introduction
The Employment Relations Act 2000 ("ERA") modifies the use of collective agreements compared to the Employment Contracts Act 1991. Main points to note are:
1. Collectives will be called "collective agreements" and not "collective employment contracts".
2. Multi-union/multi-employer collective agreements are permitted.
3. Only members of a union may belong to a collective agreement. All other employees will be subject to an individual employment agreement.
There are a number of requirements governing how and when collectives may be negotiated, whom they bind, and what information they must contain. The following is a summary of the relevant provisions.
Initiating bargaining
Who may initiate bargaining for a collective agreement?
Either the union or the employer may initiate bargaining for a collective agreement. However, the employer can only initiate bargaining if the employer is or was a party to an applicable collective agreement or contract with the union.
When bargaining may be initiated
The union or the employer may initiate bargaining for a collective agreement at any time if there is no applicable collective agreement in force. However, the employer can only initiate bargaining if the employer was a party to an applicable collective agreement with the union.
If there is an applicable collective agreement in force, bargaining may be initiated either:
1. by the union no earlier than 60 days before the expiry of the collective agreement, or
2. by the employer no earlier than 40 days before the expiry of the collective agreement.
These time frames are extended if the following situation arises:
1. there is more than one applicable collective agreement in existence covering the same type of work; and
2. the agreement binds more than one union or more than one employer or both; and
3. the employers and unions are intended to be parties to the bargaining.
In such circumstances bargaining may be initiated either:
1. by a union 120 days before the expiry of the last applicable collective agreement, or 60 days before the expiry of the first applicable collective agreement, whichever date is later; or
2. by an employer 100 days before the expiry of the last applicable collective agreement, or 40 days before the expiry of the first applicable collective agreement, whichever date is later.
How is bargaining initiated?
Bargaining is initiated by a union or employer by giving the other intended party (or parties) a notice which complies with the following:
1. It is in writing and signed by the union or the employer giving the notice.
2. It identifies each of the intended parties to the collective agreement.
3. It identifies the intended coverage of the collective agreement.
Employee's attention to be drawn to initiation of bargaining
An employer that initiates bargaining or receives a notice to initiate bargaining must advise employees of the existence, coverage, and intended parties to the bargaining. The employer need only advise those employees whose work would be covered by the intended coverage clause.
An employer must advise the employees of the bargaining as soon as possible but within ten days of initiating bargaining or receiving a notice to initiate bargaining.
When is bargaining initiated?
Bargaining for a collective agreement is initiated:
1. If there is only one employer and one union involved, on the day on which the bargaining notice is given.
2. If there is more than one employer or one union, on the day on which the last bargaining notice is given.
Consolidating union bargaining
If an employer has received bargaining notices from more than one union covering the same type of work, the employer can require the unions to consolidate their bargaining. If the unions consolidate their bargaining for a single collective agreement, bargaining is initiated on the day on which the unions agree to consolidate their bargaining.
Multi-party bargaining
Multi-union/Multi-employer collective agreements
If a union (or unions if more than one) propose to initiate bargaining with more than one employer, the union must hold a secret ballot to determine its members' views.
If the result of the ballot supports multi-employer bargaining, the bargaining notice referred must include the following additional information in respect of each employer:
1. The name of the employer.
2. The number of the employer's employees who are members of the union.
3. The number of those members who voted.
4. The number of members who voted in favour of bargaining for a single collective agreement.
If an employer (or employers if more than one) initiates bargaining with one or more unions for a single collective agreement, the union must hold a secret ballot of its members to determine the members' views on the proposed parties to the bargaining. The union need only carry out a secret ballot if it considers that a majority of its members would disagree with bargaining for a single collective. The union(s) must advise the employer(s) of the result.
Secret ballots are not necessary where the intended parties and scope of the collective agreement remain the same as an existing collective agreement.
A secret ballot cannot be held any earlier than 60 days before a union is entitled to initiate bargaining if a collective agreement is already in force. If there is no applicable collective agreement then a secret ballot may be held at any time.
A simple majority determines the result of a secret ballot.
Parties joining bargaining after it begins
A union or employer may become a party to bargaining after the bargaining has been initiated if any of the following requirements are met:
1. in the case of a union seeking to become a party, a majority of the members by a secret ballot agree; or
2. in the case of an employer wanting to become a party, the union considers that the majority of its members would be in favour or the result of a secret ballot, supports the joining of the employer; and
3. the parties to the bargaining consent to the new party joining the bargaining.
Consolidation of bargaining
If an employer receives bargaining notices from two or more different unions and the notices relate in whole or in part to the same type of work, the employer can request the unions to consolidate their bargaining. The employer must do this within 40 days after receiving the first notice.
Within 30 days of receiving the request, the union must:
1. agree to the request; or
2. withdraw its bargaining notice.
If a union fails to respond to an employer's request, the union is treated as if it had withdrawn its bargaining notice.
If the unions agree to the request, bargaining is consolidated into bargaining for a single collective agreement.
Ratification of collective agreement
Ratification of collective agreement
At the commencement of bargaining, the union must advise the other parties of its ratification procedure.
A union must not sign a collective agreement or a variation unless it has been ratified.
Term and content of collective agreements
Commencement and expiry of collective agreements
A collective agreement commences on:
1. the commencement date specified in the agreement; or
2. if there is no commencement date in the agreement, the date on which the last party to the agreement signs the agreement.
Different provisions within the agreement can come into force on different dates if specified.
A term of a collective agreement is a maximum of three years.
The agreement may continue in force for a further 12 months beyond its expiry date provided the union has initiated collective bargaining before its expiry.
Form and content of collective agreement
In order for a collective agreement to have effect it must be:
1. in writing; and
2. signed by each union and employer that is a party to the agreement.
A collective agreement will consist of any provisions the parties agree on, and must also contain the following:
1. A coverage clause.
2. A clause dealing with the rights and obligations of the employees and employer if any of the employees work were to be contracted out or the business or part of the business were to be sold or transferred (this clause is to ensure that employees are protected from being disadvantaged).
3. An explanation of the services available for the resolution of employment relationship problems (in plain language).
4. A reference to the period of 90 days in which a personal grievance must be raised.
5. A clause providing how the agreement can be varied.
6. The expiry date.
The agreement must not contain anything that is contrary to law or inconsistent with the ERA.
Unless the agreement provides otherwise, it will be implied that the employer is required to deduct the employee's union fee from the employee's salary or wages on a regular basis, with the employee's consent.
Who does a collective agreement bind?
A collective agreement binds and is enforceable by:
1. the union(s);
2. the employer(s); and
3. the employees whose employer is a party to the agreement, and who are or become members of a union that is a party to the agreement, and whose work comes within the coverage clause in the agreement.
If the registration of a union is cancelled, the collective agreement continues to bind the employer(s) and members of the union.
If the union's registration is cancelled as a result of it amalgamating with one or more other unions, the collective agreement binds the amalgamated union.
What agreement will bind the employee if the employee is a member of more than one union?
If an employee is a member of more than union, the employee will be bound by only one collective agreement covering the work done by the employee. The agreement will be the one resulting from the bargaining first initiated.
Employee resigns from the union
What happens if an employee resigns from the union?
If an employee who is bound by a collective agreement resigns as a member of the union but continues in employment, the employee may not be subject to bargaining for another collective agreement or bound by any other collective agreement until 60 days before the expiry of the collective agreement from which the employee resigned.
On resigning from the union the employee will be employed under an individual employment agreement based on the collective agreement. The employer and employee may negotiate any additional terms and conditions whether or not such terms and conditions are consistent with the collective agreement.
Copy of agreement to be delivered to Department of Labour
Copy of collective agreement to be delivered to chief executive
The parties to a collective agreement must ensure that a copy of their agreement and any documents referred to or incorporated in the agreement are delivered to the chief executive of the Labour Department as soon as practicable after it is entered into.
The Official Information Act 1982 does not apply to collective agreements delivered to the chief executive.
The information will be used for statistical and analytical purposes.
Terms and conditions of employment
The terms and conditions of employment for an employee who is bound by an applicable collective agreement will include the terms of the collective agreement and any additional terms and conditions that the employee and employer agree to, provided such terms are not inconsistent with a collective agreement.
If the collective agreement expires or the employee resigns from the union, the employee will be employed under an individual employment agreement based on the collective agreement, as well as any other terms and condition agreed to between the parties.
Terms and conditions of employment for employee who does not belong to a union
In the event that a collective agreement binds the employer and covers the scope of work the employee will be carrying out, but the employee is not a member of the union, the employer must inform the employee:
1. that the collective agreement exists and covers work to be done by the employee; and
2. that the employee may join the union that is a party to the collective agreement;
3. how to contact the union; and
4. that if the employee joins the union, the employee will be bound by the collective agreement; and
5. that during the first 30 days of the employee's employment, the employee's terms and conditions of employment will comprise the terms and conditions in the collective agreement, and any additional terms and conditions agreed to between the employee and employer, provided they are not inconsistent with the collective agreement.
The employer must also give the employee a copy of the collective agreement, and, if the employee agrees, inform the union as soon as practicable that the employee has entered into an individual employment agreement with the employer.
If there is more than one collective agreement binding the employer and covering the work to be done by the employee, the employer must:
1. Adopt the collective agreement that binds more of the employer's employees than any of the other collective agreements as the agreement that is the basis of information given to the employee.
2. Inform the employee of the existence of the other agreements.
An employer who fails to comply with these provisions is liable to a penalty.
Breach of agreement
What is an employer's liability for breach of a collective employment agreement?
An employer who breaches an employment agreement may be liable for the following:
1. a penalty; and/or
2. a compliance order; and/or
3. a personal grievance complaint.
Cancelling or varying agreement
Orders cancelling or varying collective agreements
The Employment Court is not authorised to cancel or vary collective agreements. However, the Court may make an order:
1. suspending some aspect of the agreement; and
2. directing the parties to the collective agreement to re-open bargaining with regard to the suspended aspect of the agreement.
The Court may order the parties to use mediation. The Court may also declare that the parties are, or are not, to have the right to strike or lockout while bargaining in accordance with the order.
Transitional provisions
Collective employment contracts pursuant to the Employment Contracts Act 1991 will continue in force subject to the following:
1. The contract will expire on its expiry date or, no later than 31 July 2003.
2. The union or employer may conduct a secret ballot of employees belonging to the collective contract and the union to determine whether the employees favour the contract expiring at an earlier date, but no earlier than one 1 July 2001.
In the event of the employees who are union members agreeing by secret ballot to terminate the collective contract at an earlier date, the collective employment contract will not expire in respect of employees who are not union members.
The grievance and disputes procedures referred to in collective employment contracts will have no force on the commencement of the ERA. Instead, the collective employment agreements will be subject to the problem resolution regime provided for in the ERA.
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.
Simon Menzies is a partner in the Lawlink firm of Harkness Henry. Simon has worked extensively in all aspects of litigation, and has a special interest in employment law.
Web site: Harkness Henry
Email: simon.menzies@harkness.co.nz
September 2000
Introduction
The Employment Relations Act 2000 ("ERA") modifies the use of collective agreements compared to the Employment Contracts Act 1991. Main points to note are:
1. Collectives will be called "collective agreements" and not "collective employment contracts".
2. Multi-union/multi-employer collective agreements are permitted.
3. Only members of a union may belong to a collective agreement. All other employees will be subject to an individual employment agreement.
There are a number of requirements governing how and when collectives may be negotiated, whom they bind, and what information they must contain. The following is a summary of the relevant provisions.
Initiating bargaining
Who may initiate bargaining for a collective agreement?
Either the union or the employer may initiate bargaining for a collective agreement. However, the employer can only initiate bargaining if the employer is or was a party to an applicable collective agreement or contract with the union.
When bargaining may be initiated
The union or the employer may initiate bargaining for a collective agreement at any time if there is no applicable collective agreement in force. However, the employer can only initiate bargaining if the employer was a party to an applicable collective agreement with the union.
If there is an applicable collective agreement in force, bargaining may be initiated either:
1. by the union no earlier than 60 days before the expiry of the collective agreement, or
2. by the employer no earlier than 40 days before the expiry of the collective agreement.
These time frames are extended if the following situation arises:
1. there is more than one applicable collective agreement in existence covering the same type of work; and
2. the agreement binds more than one union or more than one employer or both; and
3. the employers and unions are intended to be parties to the bargaining.
In such circumstances bargaining may be initiated either:
1. by a union 120 days before the expiry of the last applicable collective agreement, or 60 days before the expiry of the first applicable collective agreement, whichever date is later; or
2. by an employer 100 days before the expiry of the last applicable collective agreement, or 40 days before the expiry of the first applicable collective agreement, whichever date is later.
How is bargaining initiated?
Bargaining is initiated by a union or employer by giving the other intended party (or parties) a notice which complies with the following:
1. It is in writing and signed by the union or the employer giving the notice.
2. It identifies each of the intended parties to the collective agreement.
3. It identifies the intended coverage of the collective agreement.
Employee's attention to be drawn to initiation of bargaining
An employer that initiates bargaining or receives a notice to initiate bargaining must advise employees of the existence, coverage, and intended parties to the bargaining. The employer need only advise those employees whose work would be covered by the intended coverage clause.
An employer must advise the employees of the bargaining as soon as possible but within ten days of initiating bargaining or receiving a notice to initiate bargaining.
When is bargaining initiated?
Bargaining for a collective agreement is initiated:
1. If there is only one employer and one union involved, on the day on which the bargaining notice is given.
2. If there is more than one employer or one union, on the day on which the last bargaining notice is given.
Consolidating union bargaining
If an employer has received bargaining notices from more than one union covering the same type of work, the employer can require the unions to consolidate their bargaining. If the unions consolidate their bargaining for a single collective agreement, bargaining is initiated on the day on which the unions agree to consolidate their bargaining.
Multi-party bargaining
Multi-union/Multi-employer collective agreements
If a union (or unions if more than one) propose to initiate bargaining with more than one employer, the union must hold a secret ballot to determine its members' views.
If the result of the ballot supports multi-employer bargaining, the bargaining notice referred must include the following additional information in respect of each employer:
1. The name of the employer.
2. The number of the employer's employees who are members of the union.
3. The number of those members who voted.
4. The number of members who voted in favour of bargaining for a single collective agreement.
If an employer (or employers if more than one) initiates bargaining with one or more unions for a single collective agreement, the union must hold a secret ballot of its members to determine the members' views on the proposed parties to the bargaining. The union need only carry out a secret ballot if it considers that a majority of its members would disagree with bargaining for a single collective. The union(s) must advise the employer(s) of the result.
Secret ballots are not necessary where the intended parties and scope of the collective agreement remain the same as an existing collective agreement.
A secret ballot cannot be held any earlier than 60 days before a union is entitled to initiate bargaining if a collective agreement is already in force. If there is no applicable collective agreement then a secret ballot may be held at any time.
A simple majority determines the result of a secret ballot.
Parties joining bargaining after it begins
A union or employer may become a party to bargaining after the bargaining has been initiated if any of the following requirements are met:
1. in the case of a union seeking to become a party, a majority of the members by a secret ballot agree; or
2. in the case of an employer wanting to become a party, the union considers that the majority of its members would be in favour or the result of a secret ballot, supports the joining of the employer; and
3. the parties to the bargaining consent to the new party joining the bargaining.
Consolidation of bargaining
If an employer receives bargaining notices from two or more different unions and the notices relate in whole or in part to the same type of work, the employer can request the unions to consolidate their bargaining. The employer must do this within 40 days after receiving the first notice.
Within 30 days of receiving the request, the union must:
1. agree to the request; or
2. withdraw its bargaining notice.
If a union fails to respond to an employer's request, the union is treated as if it had withdrawn its bargaining notice.
If the unions agree to the request, bargaining is consolidated into bargaining for a single collective agreement.
Ratification of collective agreement
Ratification of collective agreement
At the commencement of bargaining, the union must advise the other parties of its ratification procedure.
A union must not sign a collective agreement or a variation unless it has been ratified.
Term and content of collective agreements
Commencement and expiry of collective agreements
A collective agreement commences on:
1. the commencement date specified in the agreement; or
2. if there is no commencement date in the agreement, the date on which the last party to the agreement signs the agreement.
Different provisions within the agreement can come into force on different dates if specified.
A term of a collective agreement is a maximum of three years.
The agreement may continue in force for a further 12 months beyond its expiry date provided the union has initiated collective bargaining before its expiry.
Form and content of collective agreement
In order for a collective agreement to have effect it must be:
1. in writing; and
2. signed by each union and employer that is a party to the agreement.
A collective agreement will consist of any provisions the parties agree on, and must also contain the following:
1. A coverage clause.
2. A clause dealing with the rights and obligations of the employees and employer if any of the employees work were to be contracted out or the business or part of the business were to be sold or transferred (this clause is to ensure that employees are protected from being disadvantaged).
3. An explanation of the services available for the resolution of employment relationship problems (in plain language).
4. A reference to the period of 90 days in which a personal grievance must be raised.
5. A clause providing how the agreement can be varied.
6. The expiry date.
The agreement must not contain anything that is contrary to law or inconsistent with the ERA.
Unless the agreement provides otherwise, it will be implied that the employer is required to deduct the employee's union fee from the employee's salary or wages on a regular basis, with the employee's consent.
Who does a collective agreement bind?
A collective agreement binds and is enforceable by:
1. the union(s);
2. the employer(s); and
3. the employees whose employer is a party to the agreement, and who are or become members of a union that is a party to the agreement, and whose work comes within the coverage clause in the agreement.
If the registration of a union is cancelled, the collective agreement continues to bind the employer(s) and members of the union.
If the union's registration is cancelled as a result of it amalgamating with one or more other unions, the collective agreement binds the amalgamated union.
What agreement will bind the employee if the employee is a member of more than one union?
If an employee is a member of more than union, the employee will be bound by only one collective agreement covering the work done by the employee. The agreement will be the one resulting from the bargaining first initiated.
Employee resigns from the union
What happens if an employee resigns from the union?
If an employee who is bound by a collective agreement resigns as a member of the union but continues in employment, the employee may not be subject to bargaining for another collective agreement or bound by any other collective agreement until 60 days before the expiry of the collective agreement from which the employee resigned.
On resigning from the union the employee will be employed under an individual employment agreement based on the collective agreement. The employer and employee may negotiate any additional terms and conditions whether or not such terms and conditions are consistent with the collective agreement.
Copy of agreement to be delivered to Department of Labour
Copy of collective agreement to be delivered to chief executive
The parties to a collective agreement must ensure that a copy of their agreement and any documents referred to or incorporated in the agreement are delivered to the chief executive of the Labour Department as soon as practicable after it is entered into.
The Official Information Act 1982 does not apply to collective agreements delivered to the chief executive.
The information will be used for statistical and analytical purposes.
Terms and conditions of employment
The terms and conditions of employment for an employee who is bound by an applicable collective agreement will include the terms of the collective agreement and any additional terms and conditions that the employee and employer agree to, provided such terms are not inconsistent with a collective agreement.
If the collective agreement expires or the employee resigns from the union, the employee will be employed under an individual employment agreement based on the collective agreement, as well as any other terms and condition agreed to between the parties.
Terms and conditions of employment for employee who does not belong to a union
In the event that a collective agreement binds the employer and covers the scope of work the employee will be carrying out, but the employee is not a member of the union, the employer must inform the employee:
1. that the collective agreement exists and covers work to be done by the employee; and
2. that the employee may join the union that is a party to the collective agreement;
3. how to contact the union; and
4. that if the employee joins the union, the employee will be bound by the collective agreement; and
5. that during the first 30 days of the employee's employment, the employee's terms and conditions of employment will comprise the terms and conditions in the collective agreement, and any additional terms and conditions agreed to between the employee and employer, provided they are not inconsistent with the collective agreement.
The employer must also give the employee a copy of the collective agreement, and, if the employee agrees, inform the union as soon as practicable that the employee has entered into an individual employment agreement with the employer.
If there is more than one collective agreement binding the employer and covering the work to be done by the employee, the employer must:
1. Adopt the collective agreement that binds more of the employer's employees than any of the other collective agreements as the agreement that is the basis of information given to the employee.
2. Inform the employee of the existence of the other agreements.
An employer who fails to comply with these provisions is liable to a penalty.
Breach of agreement
What is an employer's liability for breach of a collective employment agreement?
An employer who breaches an employment agreement may be liable for the following:
1. a penalty; and/or
2. a compliance order; and/or
3. a personal grievance complaint.
Cancelling or varying agreement
Orders cancelling or varying collective agreements
The Employment Court is not authorised to cancel or vary collective agreements. However, the Court may make an order:
1. suspending some aspect of the agreement; and
2. directing the parties to the collective agreement to re-open bargaining with regard to the suspended aspect of the agreement.
The Court may order the parties to use mediation. The Court may also declare that the parties are, or are not, to have the right to strike or lockout while bargaining in accordance with the order.
Transitional provisions
Collective employment contracts pursuant to the Employment Contracts Act 1991 will continue in force subject to the following:
1. The contract will expire on its expiry date or, no later than 31 July 2003.
2. The union or employer may conduct a secret ballot of employees belonging to the collective contract and the union to determine whether the employees favour the contract expiring at an earlier date, but no earlier than one 1 July 2001.
In the event of the employees who are union members agreeing by secret ballot to terminate the collective contract at an earlier date, the collective employment contract will not expire in respect of employees who are not union members.
The grievance and disputes procedures referred to in collective employment contracts will have no force on the commencement of the ERA. Instead, the collective employment agreements will be subject to the problem resolution regime provided for in the ERA.
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.
Simon Menzies is a partner in the Lawlink firm of Harkness Henry. Simon has worked extensively in all aspects of litigation, and has a special interest in employment law.
Web site: Harkness Henry
Email: simon.menzies@harkness.co.nz
September 2000
July, 2001
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