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 The previous Code, which was approved in 2015, has been revoked at the same time.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