General policy statement
This Bill amends the Employment Relations Act 2000 (the principal Act) to implement Government policy on casual and non-standard employment. It aims to help employees and employers clarify the employment arrangements of employees who are in employment described as
“as and when required”, including by providing a simpler, more cost-effective process for obtaining clarification. The Bill also strengthens the position of employees in a triangular employment relationship. A triangular employment relationship exists where an employer contracts the services of the employee to a third party (the controlling third party), and the controlling third party has the right to control the employee’s work. A provision is included in the Bill to allow codes of employment practice, which currently cover only matters under the principal Act, to give guidance on other employment related legislation.
The Bill will ensure that employees in a triangular employment relationship, who belong to a union but who are not bound by a collective agreement, will be employed by their employer on terms and conditions that are not inconsistent with the terms and conditions in a collective agreement between the same union and the controlling third party when performing work for the controlling third party.
The legislation will enable an employee or an employer to apply to the Employment Relations Authority or the Employment Court to join a controlling third party as a party to a personal grievance action taken by the employee. An employee must notify the controlling third party of the employee’s intention to make such an application within 90 days of the action alleged to amount to a personal grievance occurring, or coming to the employee's notice (whichever is the earlier). An employer must give a similar notice within 90 days of the grievance proceedings claim being raised with the employer. However, the controlling third party may consent to being given notice after the 90-day period has expired.
The Employment Relations Authority or the Employment Court may grant an application to join a controlling third party only if certain conditions are met. The Authority or Court must be satisfied that the notification described above has been given, or the employee has previously brought a personal grievance claim against the controlling third party, alleging that he or she or it is the employee’s employer, and the Authority or Court has determined that the person is not the employee’s employer. The Authority or the Court must also determine that there is a serious question to be tried as to whether the controlling third party may have contributed to the situation that the personal grievance relates to.
When a controlling third party has been joined to a personal grievance action, the Authority or the Court must also consider whether it is appropriate to direct the parties to use mediation or dispute resolution services to resolve the personal grievance. Dispute resolution services must be provided by the Department of Labour to parties in work-related relationships where a person is alleged to be a controlling third party.
If the Authority or the Court find that the employee has a personal grievance, and that the controlling third party has contributed to the grievance, the remedies that the Authority or the Court is able to award against the controlling third party are the same as those that may be awarded against an employer, with the exception of reinstatement. When awarding remedies, the Authority or the Court will be required to consider the extent to which the controlling third party and the employer each contributed to the situation giving rise to the grievance, and award remedies accordingly.
The Bill also provides that where an employer and employee are unable to come to a common understanding of the nature of the employee’s employment—whether or not the employee is employed on a fixed term agreement, and whether or not the employee's times of work are fixed (and if so, what they are)—then either party may request a Labour Inspector or the Employment Relations Authority to determine these matters for them. The Labour Inspector's or Authority's determination will provide certainty for the parties about what the terms and conditions of a casual employee's employment actually are. Currently, the power to make a determination of this nature is reserved to the Employment Relations Authority and the Employment Court.
The Bill provides factors, based on case law such as the Employment Court's decision in Barnes v Whangerei Returned Services Association (Inc)  1 ERNZ 626, that Labour Inspectors and the Authority must consider when determining the nature of the employment arrangement. Several factors must be considered: the employee's written employment agreement; whether the employment agreement complies with section 66 of the principal Act (relating to fixed term agreements); the employee's work patterns; whether the employee works for the employer only when work is available; any rosters or other system an employer uses to allocate work; whether the employer has expectations that the employee, on being requested, will be available for work; and any other relevant factors.
A determination will be binding on the parties, but a determination by a Labour Inspector is subject to a determination by the Authority.
The amendments will also permit codes of employment practice made under the principal Act to provide guidance on any of the following statutes: the Equal Pay Act 1972; the Holidays Act 2003; the Minimum Wage Act 1983; the Parental Leave and Employment Protection Act 1987; and the Wages Protection Act 1983.
Clause by clause analysis
Clause 1 is the Title clause.
Clause 2 is the commencement clause. The Bill is to come into force 6 months after it receives the Royal assent.
Clause 3 provides that the Bill amends the Employment Relations Act 2000.
Clause 4 amends section 5 to insert a definition of controlling third party.
Clause 5 inserts new section 65AA, which provides that when an employee, who is a member of a union, is performing work for a controlling third party, the employee's terms and conditions must not be inconsistent with a collective agreement to which the union and controlling third party are parties, and the coverage clause in which applies to the work performed by the employee for the controlling third party.
Clause 6 inserts new section 103B, which provides for applications to the Employment Relations Authority or the Employment Court to join a controlling third party to actions in relation to a personal grievance where the personal grievance relates to work performed by an employee for a controlling third party.
Clause 7 inserts new section 115A, which specifies the notice required to be given to a controlling third party before an application can be made under new section 103B to join the controlling third party to an action for a personal grievance.
Clause 8 inserts new section 123A, which provides remedies against a controlling third party joined to an action for a personal grievance where the Employment Relations Authority or the Employment Court determines that the controlling third party caused or contributed to the personal grievance.
Clause 9 amends section 144A to require the chief executive to provide dispute resolution services to parties in work-related relationships that are not employment relationships, where a party is alleged to be a controlling third party.
Clause 10 makes a consequential amendment to section 161 (which provides for the jurisdiction of the Employment Relations Authority) to insert a reference to new section 103B.
Other amendments to principal Act
Clause 11 inserts new section 65AAB, which provides that a Labour Inspector or the Employment Relations Authority may determine certain terms and conditions of employment where an employee and employer cannot agree on them. These are—
whether or not the employee is employed for a fixed term:
whether or not the employee's times of work are fixed:
if the employee's times of work are fixed, what the times of work are.
Clause 12 amends section 100A which provides for codes of employment practice. The amendments extend the scope of codes of employment practice to include matters under the Equal Pay Act 1972, the Holidays Act 2003, the Minimum Wage Act 1983, the Parental Leave and Employment Protection Act 1987, and the Wages Protection Act 1983.