Employment Update – Week 4, June

Updated: Jun 25, 2019

Legislation -

New Code of Good Faith in Collective Bargaining

A new Code of Good Faith in Collective Bargaining has been introduced and came into effect on 6 May 2019. The previous Code, which was approved in 2015, has been revoked at the same time.

The Code is an important document as in accordance with s 39 of the Employment Relations Act 2000 (the Act); the Authority or Court may have regard to it in determining whether or not a union and an employer have dealt with each other in good faith when bargaining for a collective agreement.


Changes to the Code include the following:

  • Good faith obligations apply not only between an employer and union but also apply to the relationships between parties in multi-party collective bargaining, which includes employers in multi-employer collective agreement bargaining.

  • As there is now a requirement under s 54 of the Act to include rates of wages or salary payable to employees in collective agreements, the duty of good faith applies to all interactions between parties in collective bargaining about the rates of wages or salary payable to employees.

  • In accordance with a recent amendment to the Act, 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.

  • Not genuinely negotiating for rates of wages or salary payable to employees to be included in the collective agreement is now included as an example of undermining behaviour likely to be a breach of good faith.

  • Where there are areas of disagreement, the parties are expected to work together to identify the barriers to agreement and will give further consideration to their respective positions in the light of any alternative options put forward.

The new Code of Good Faith can be obtained at www.employment.govt.nz.


Case of Interest -

Engaging employee as “volunteer” invalidated trial period

An employer sought to employ a mechanic on a trial period from the moment he became legally entitled to work in New Zealand. The employment agreement provided the employment would commence from when the employee obtained his work visa. Accordingly, the trial period would also have commenced at this point. However, issues arose with the employee first being subject to an unpaid assessment followed by a five-week “familiarisation period” as a “volunteer” prior to getting his work visa. The Court took no issue with the short unpaid work assessment but rejected the claim that the employee was performing “work familiarisation” during the subsequent five-week period as a volunteer. Therefore, as the prior “volunteer” work was in fact prior employment, the trial period was rendered null and void.

The unpaid work assessment occurred between 2 and 4 May. With the employee’s concession that he had no expectation of payment during this period the Court found that no “employment” took place during that brief period. Subsequently, the employer provided the employee with an employment agreement containing a trial period which the employee countersigned on 6 May. From 10 May, while waiting for the visa to be granted, the employee attended the workshop daily.

The Court found the claim that the employee was “tagging along”, or was being shown the business operations over approximately five weeks, was unconvincing, especially when considering the period could have been longer if any further delay had been experienced in obtaining the visa. Although it was unlawful for the employee to be working, the Court considered that little turned on the visa status in determining whether “employment” had occurred. The issue was not the lawfulness of the work, but whether he actually worked as an employee during that time. During this period, the employee lived with one of the directors and was not charged for board or lodgings. The employer did not pay the employee wages during the “familiarisation” process but gave the employee some cash payments which the employer told the Court were gifts. The Court found that the fact the employee was looking for paid work when he was introduced to the employer, the length of time he was present on the premises, that he undertook tasks for the company and his regular attendance pattern all pointed towards him working as an employee.

The Court concluded that the employee was employed from 10 May 2016 onwards in the expectation that he would be paid. The result of this was that an employment relationship had been entered into before the commencement of employment had been contemplated (15 June) and therefore the trial period intended to apply from 15 June onwards was null and void.

This decision demonstrates the importance of ensuring an employee does not engage in “employment” before commencing under a trial period. When a person is performing work for an employer, that person can be deemed an employee if the relationship is one of employment in substance, even if it has been described as something else. Having employed someone prior to the commencement of a trial period will render it invalid.

It is important to note that since 6 May 2019 only employers with 19 or less employees have been able to enter into an employment agreement with a trial period. Larger employers are no longer entitled to enter into an employment agreement purporting to employ an employee on a trial period.

See Talbot Agriculture Ltd v Wate [2019] NZEmpC 31.


Health and Safety -

A PCBU must communicate with others onsite, 12 June 2019


Two companies working on a milking shed construction have been fined after workers from one company were injured as a result of an accident caused by workers from the other company. Neither company consulted with the other about the potential risks and hazards on the site.

The Health and Safety at Work Act 2015 requires a person conducting a business or undertaking (PCBU) to ensure the safety of its own workers as well as that of others (ss 36, 48), and to communicate and co-ordinate with other PCBUs working on a site (s 34).


Source: WorkSafe NZ


Reproduced by permission of Wolters Kluwer NZ


The friendly bossed team provide nationwide support to employers or employees/individuals for any employment relations issues. We are experts at resolving conflicts and disputes and do so quickly and sustainably so everyone can move forward.


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