New good faith code effective as of 6 May 2019
A revised Code of Good faith in Collective Bargaining (Code) came into force on 6 May 2019; the same date many of the other amendments under the Employment Relations Amendment Act 2018 came into effect. The Code assists the Employment Relations Authority and Employment Court in determining whether a union or an employer have dealt with each other in good faith during the bargaining process.
Agreeing a Bargaining Process
The parties must use their best endeavours to enter into an arrangement, preferably in writing, as soon as possible after initiation of bargaining, that sets out a process for conducting bargaining in an effective and efficient manner. Even if an arrangement cannot be agreed upon, parties must continue to bargain in good faith.
This section of the Code lists matters that should be considered in the arrangement. Some (but not all) are listed below:
- The representatives of either party
- The proposed frequency of meetings
- The manner in which areas of agreement are to be recorded
- The frequency of meetings and venue
- The timeframe for the bargaining process
- The process to apply if there is disagreement
- How good faith relations can take into account tikanga Māori (Māori customary values and practices) and/ or any cultural differences that might exist
The duty of good faith applies to all collective bargaining, including multi-party collective bargaining. The requirement in s 54 to include rates of wages payable to employees in collective agreements means that the duty of good faith applies to bargaining interactions about wage rates.
The duty of good faith requires parties bargaining for a collective agreement to conclude a collective agreement unless there is a genuine reason not to, based on reasonable grounds.
This section also discusses in depth what behaviour constitutes good faith, obligations on employers and unions, and communications between parties that are consistent with the duty of good faith.
Where the parties are experiencing difficulties in concluding a collective agreement they may agree to seek the assistance of a mediator. This could be a mediator provided by the Ministry of Business, Innovation and Employment’s mediation services. Parties should note that for strikes and lockouts in essential industries there are specific requirements in relation to the use of mediation services.
Where there are serious difficulties in concluding a collective agreement, a party may apply to the Authority for facilitation to assist in resolving those difficulties. The Authority will then decide whether the application for facilitation satisfies one or more of the grounds set out in the Act.
Breach of Good Faith
Where a party believes there has been a breach of good faith in relation to collective bargaining the party shall indicate any concerns about perceived breaches of good faith at an early stage to enable the other party to remedy the situation or provide an explanation.
Parties are able, in certain circumstances, to seek a penalty for a breach of good faith. The parties are also able to apply to the Authority to fix the provisions of the collective agreement to which the bargaining relates. An application may be made whether or not any penalty has been imposed for a breach of good faith.
Workplace Law Team
If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team:
Employment: Andrew Shaw, Fiona McMillan, Siobhan Rastrick, Hannah Martin, Alex Beal, Giuliana Petronelli, Ana Fruean
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ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Fiona McMillan
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