Employment Relations Act And Employment Contracts Act In New Zealand

Comparison between Employment Relation Act 2000 and Employment Contracts Act 1991

Discuss about the Employment Relation Act.

In New Zealand’s history, The Employment Contracts Act 1991 proved to be the most successful legislation of industrial relations. In the eighties the labour market of New Zealand required a better legislation to cope with the economic changes.  Once taken as a failure Employment Contracts Act proved to be an example for all the further legislation passed in New Zealand. It was framed by keeping in mind the current situation and the requirements of the industrial legislation (Cake, 2014). After Employment Contract Act, the Employment Relations Act 2000 came into existence which is the main legislation of New Zealand governing employment relationships at present. This act provides a framework for unions and employers to negotiate and enter in a collective agreement, and for the negotiation between employers and employees to enter in individual agreements. Employment Relations Act also helps in resolving employment-related issues. Employment Relation Act provides a free mediation services for those who have already tried to solve issues themselves but do not reach on an agreement. If mediation doesn’t work then the case can be forwarded to the authorities and, if required then to the court (Anderson and Rasmussen, 2005).

Employment Contracts Act was the most flexible model of legislation for the labour market. Employment Contracts Act recognised that change was required in every phase of the market. To able to cope with the changing economic changes Employment Contracts Act was drafted with the objectives described in various parts. The Employment Relations Act 2000 was created to cover many topics like recruitment and selection of the right person for a job (Vieriu, 2016), negotiating employment agreements, formatting laws for the periods of trial and probation, regarding union membership, and training and development at the workplace. The key points or the objectives of Employment Contracts Act are encouraging voluntary unionism, creating flexible bargaining arrangement between the employees and the employers, providing power to employees to choose their own agent for bargaining, the change of status of industrial agreement into binding contracts, employees having decision-making power as to decide who will represent them in procedure of dispute solving, a right to have minimum wages, benefits, and conditions by the employees (De Cuyper and De Witte, 2010). When Employment Relation Act 2000 came into existence its main objective was to maintain a productive and fair relationship between employers and employees working for them and this was done by promoting good faith in all the degrees of the organisation’s environment and the employment relationship. The good faith notion is based on recognising that the building of employment relationship should be done on mutual trust, and confidence, and added to it a certain level of legal protection is also required (Tarquinio, 2016). An understanding of the degree of inequality in the power of relationship is to be mutually understood by the employers and the employees while negotiating the terms of the agreement. The integrity of individual choice needs to be respected during the negotiation. Reducing the need for judicial intervention by using the mediation method to solve all types of problems. Promotion of collective bargaining is also an important aspect of Employment Relation Act (Gangwisch, 2014).

Changes brought by Employment Contracts Act and Employment Relation Act

Changes are very important and the laws also need to change with the time as the situation demands. New Zealand’s employment system was regulated by Labour Relations Act before 1991 which was not sufficiently modern as per the requirement of the labour market. A new employment relation system was introduced in the year 1991 with a number of new changes (Smiley, 2015). The changes brought in the Employment Contracts Act were like flexibility, Employment Contracts Act use the countries having a flexible market have fewer unemployment problems. As the act passed the unemployment problem was solved with a great success. The Employment Contracts Act removed the compulsory union membership which was imposed on employees by the labour relations act. It made employees take their decision about joining a union of their choice. The provision of fair bargaining was introduced to achieve the best balance in efficiency, neutrality, and fairness (Isaacs, 2016). The idea of settling disputes at an enterprise level through mediation was introduced in Employment Contracts Act which resulted in a subsequent reduction in the number strikes happening in the country before the introduction of Employment Contracts Act. Employment Contracts Act clarified the situation and norms of personal grievances which made employers become freer to hire a new staff without any tension regarding personal grievances. This gave a right to the employees to be treated in a fair manner also employers were guided regarding their behaviour towards their employees. Employment Contracts Act clarified that the redundancy compensation need to be paid to the employee only when it is mentioned in the contract agreed between the employer and the employee. Though in a case of an unfair redundancy the employee has full right to raise his voice against it. Holiday Act which was designed in the 1940s was not to be followed by the Employment Contracts Act but the negotiated holidays, and working hours need to be mentioned in the agreement framed between the employers and the employees (Krivis, 2005).

Employment Relation Act took the place of Employment Contracts Act in 2000 with some new amendments. The changes that were added to the Employment Relation Act to improve the employment relation system were like providing work-life balance for employee, and the employer was introduce in the Employment Relation Act to enhance the working efficiency of the labour to achieve success in the labour market and participate with a change of the modern lifestyles. The practicality of rest and meal breaks was identified in Employment Relation Act and was introduced in it. The changes in the Employment Relation Act encouraged negotiation on the rest and meal breaks in good faith without compromising with the business flexibility and continuity. Employment Relation Act says that the employment should be continued if a business gets transferred to new employer due to any reason. The employers are finding difficult to transfer the whole data about the employees to the new employers. Thus, consideration over the proposed 6A part of Employment Relation Act being in process for the coming future (Latorre et al., 2016). Good Faith is the change brought in the Employment Relation Act to promote healthy employment relation between the employers and the employees. In the good faith condition, the employer has to give all the required information to the employee that can affect the working conditions of the employee. This information does not include any confidential information about the other person but only related to the employee. The introduction of collective bargaining in the Employment Relation Act was to increase the flexibility and choice in the bargaining system, improve fairness and balance and reduce ineffective bargaining in the bargaining requirements. The authority in the organisation which is hiring the employees should be made clear to the employee within a month of hiring in an oral or written form (Le, Gibson and Stillman, 2012).

Success of Employment Relation Act and Employment Contracts Act

While comparing the success of the attainment of the objectives set by either of legislation the Employment Contracts Act was quite successful. Though there is no clear data about its success and few economists have questions regarding the method of calculating success for the legislation, but still it brought a remarkable change in the employment relationship in New Zealand. The reintroduction idea of voluntary unionism was simple along with giving a right to choose their bargaining agents to the employees. It wasn’t the government right to tell employees to join any specific union whereas, the act stated that the government should make sure that employees can join the organisation they wish for. Success was also achieved from the move from national awards to enterprise bargaining. Modern economy demand diversity and “one size fit all” doesn’t work for it. The employers demanded their rights to have workplace as per their accordance not according to their competitors or the larger organisations. These changes were welcomed in the Employment Contracts Act, which leads to success for the act (Masui, 2013).

When it comes to Employment Relations Act, it was a well-planned legislation system designed as per the requirement of the current employment system. With time new amendments were done and new Employment Relation Act in coming years was introduced like Employment Relation Act 2004 and Employment Relation Act 2008. The welcoming of Employment Relation Act every year shows the success of the employment relationship act. The use of good faith to promote a healthy employment relationship between the employers and employees was well taken by the employees and the employers. The collective bargaining gave a chance to employees to feel the power they have in their hand. Work-life balance introduced in the Employment Relations Act provided time to employee and employers for their leisure time which helped in increasing their work efficiency (Morris, 2015). Employment Relation Act gave confidence to the employees regarding their job when there is a change of ownership. This improved the level of work commitment towards the organisation from the employees. The meal breaks introduced in Employment Relation Act was very beneficial for the employees as it gives a chance for them to get refreshed and work with more rigour. Collective Bargaining introduced in Employment Relation Act helped in reducing the rate of strikes and lockouts. According to the study, there is a fifty percent reduction of lockouts and strikes after the Employment Relation Act has come into power. It proved beneficial for both the employers and employees as they both do not lose the wages and profit during the time of lockouts and strikes. The power of union has also reduced considerably with the introduction of Employment RelationsAct. This gives a chance to the employees and the employers to negotiate their terms freely without any pressure from the union (Nolan, 2012).

The amendments made to Employment relation Act in 2008 were like a trial period of 90 days can be specified in the employment agreement, during this trial period an employees can be dismissed by the employer and an employee cannot bring personal grievance or other legal procedure in accordance to dismissal. The repeal for the breaks, feeding time, and other matters related was also included and repeal for personal grievances was added. There are few amendments that are being demanded in the employment relation system of New Zealand like the framework of the employment relations system need to be designed in such a way that it increases the flexibility and choice of the employees and the employers (Prowse, 2006). The act should make sure that the fairness balance is their between the employers and the employees. Wherever, needed the regulations should be reduced, and the compliance costs should also be decreased especially for the small and medium-sized enterprises. The act should encourage those organisations that are valuing the rights of their employees and following the act with full compliance. If these amendments are added to the employment act, then it will help in improvising the condition of the labour market as it is going to be beneficial for both the employees and employers. And as told above the flexible labour market has less unemployment problems as compared to the inflexible labour markets (Rasmussen, 2016).

Conclusion

 A labour market in any country is an important aspect for the growth of the country, it becomes the government’s duty to support the labour and give them the rights they are liable to. The employment relations systems like Employment Contract Act 1991 and Employment Relations Act 2000 are the legislation designed by the government to make sure that the employment relations system of the country is running smoothly and both the employees and the employers are happy with the rules and regulations are given in the act. These acts also help in giving lawful rights and benefits to the employees. This is done with the help of an agreement negotiated in between the employees and the employers. There is a remarkable difference between the negotiating procedures of Employment Contracts Act and Employment Relations Act, but the ultimate objective of both the acts is to promote the healthy employment relationship between the employers and the employees. The period in which both the act was regulating the employment relations of New Zealand they proved to be a success and when a change was required in the framework of either of the act then that change was introduced in it.  Hence, the summary of the essay concludes that both the employment relation act was a successful act in their period.

References

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