What is the Employment Relations Act 2000?
The Employment Relations Act 2000 (referred to as the ERA or the Act) is the principal piece of legislation governing the employment relationship between employers and employees in New Zealand. Its primary objective is to build productive employment relationships through the promotion of good faith behaviour, the encouragement of collective bargaining, and the effective resolution of employment relationship problems [Source: Employment Relations Act 2000, s 3].
The Duty of Good Faith
A fundamental principle underpinning the ERA is the duty of good faith. Good faith requires employers and employees to be active and constructive in their employment relationships. This duty is mutual, meaning both parties must act honestly, openly, and without misleading each other [Source: Employment Relations Act 2000, s 4]. It applies to all aspects of the employment relationship, including entering into, conducting, and concluding employment agreements, and when resolving employment relationship problems [Source: Employment Relations Act 2000, s 4(1A)].
Employment Agreements
The ERA mandates that all employees must have a written employment agreement [Source: Employment Relations Act 2000, s 61]. An employment agreement is a contract between an employer and an employee that sets out the terms and conditions of their employment. These can be either individual employment agreements (between a single employer and employee) or collective employment agreements (between an employer and a union representing a group of employees) [Source: Employment Relations Act 2000, s 60].
Employment agreements must contain specific information, including the names of the parties, a description of the work to be performed, the place of work, the ordinary hours of work, and the wages or salary payable [Source: Employment Relations Act 2000, s 63]. Employers are also required to provide new employees with a written copy of the proposed agreement and give them a reasonable opportunity to seek independent advice before signing it [Source: Employment Relations Act 2000, s 66].
Resolving Employment Relationship Problems
The ERA establishes a comprehensive process for resolving employment relationship problems, which are defined as any problem relating to or arising out of an employment relationship [Source: Employment Relations Act 2000, s 103]. Both employers and employees are expected to try and resolve problems directly between themselves in the first instance [Source: Employment Relations Act 2000, s 104].
If a problem cannot be resolved directly, several mechanisms are available:
- Mediation Services: The Ministry of Business, Innovation and Employment (MBIE) provides free mediation services. A mediator is an impartial third party who helps the employer and employee communicate and reach a mutually acceptable resolution [Source: Employment Relations Act 2000, s 105]. Settlements reached through mediation can be recorded in writing and are legally binding [Source: Employment Relations Act 2000, s 108].
- Employment Relations Authority (Authority): If mediation is unsuccessful, either party may apply to the Employment Relations Authority. The Authority is an independent body that investigates employment relationship problems and makes determinations based on the merits of the case, applying the law [Source: Employment Relations Act 2000, s 113]. Its determinations are legally binding.
- Employment Court: The Employment Court is a specialist court that hears challenges to determinations made by the Authority, and also deals with more complex or significant employment law matters [Source: Employment Relations Act 2000, s 133]. Appeals from the Employment Court can, in some circumstances, proceed to the Court of Appeal and the Supreme Court.
Unjustified Dismissal and Disadvantage
Employees have the right not to be unjustifiably dismissed (fired) or subjected to unjustifiable disadvantage in their employment. An action by an employer is considered unjustified if a fair and reasonable employer could not have acted in the same way or done the same thing in all the circumstances at the time the dismissal or action occurred [Source: Employment Relations Act 2000, s 103A].
If an employee's dismissal is found to be unjustified, the Authority or Court can order various remedies, including reinstatement (getting the job back), reimbursement of lost wages, and compensation for humiliation, loss of dignity, and injury to feelings [Source: Employment Relations Act 2000, s 123].
Strikes and Lockouts
The ERA also sets out the legal framework for strikes (when employees stop work or refuse to perform certain work) and lockouts (when employers prevent employees from working). The Act distinguishes between lawful and unlawful strikes and lockouts, primarily based on whether they relate to the negotiation of a collective employment agreement [Source: Employment Relations Act 2000, Part 8, s 81, s 84]. Generally, strikes and lockouts are lawful only during the bargaining period for a collective agreement and if proper notice is given [Source: Employment Relations Act 2000, s 81(1)].
Relationship with Other Employment Law
While the ERA provides the overarching framework for employment relationships, other New Zealand laws specify minimum entitlements and specific protections. These include the Minimum Wage Act 1983, the Holidays Act 2003, the Equal Pay Act 1972, and the Parental Leave and Employment Protection Act 1987. Disputes arising from these other Acts often fall under the resolution processes established by the Employment Relations Act 2000.
When to Seek Independent Legal Advice
Anyone involved in an employment relationship problem, or seeking to understand their specific rights and obligations under the Employment Relations Act 2000, should consider seeking independent legal advice. Information about free legal assistance is available from Community Law Centres throughout New Zealand, and general information can be found on the Ministry of Business, Innovation and Employment (MBIE) website.