Employment Relations Act 2000: Rules Governing Terms And Conditions Of Employment

Individual Employment Agreement

Dsicuss about the Industrial Relations And Human Resource Management.

Part 6 of the Employment Relations Act 2000 specifically provides the rules which govern the terms and the conditions of the employment. Subsection 60(b) of the ERA provides new employees whose terms of the employment are not governed by the collective agreements sufficient information and adequate opportunities about entering into individual employee agreement (Employment Relations Act, 2018). The form and content of individual employment agreement has been provided in section 65 of the ERA 2000. It has been provided in subsection 65(2) of the ERA that an individual employment contract must contain:

• the names of the employers and employees
• description of the nature of work to be performed
• the place where the employee is to perform his work
• the agreed hours of work as specified in section 67c
• salary and wages to be paid to the employee in consideration
• explanation in simple and lucid language of the services that are available to the employees about the available services in relation to the resolution of the problems related to employment problems. In this section there is a reference of section 114 of the ERA 2000 which states that a personal grievance can be raised within a time period of ninety days.

All individual agreements in any employment set up needs to cover certain things and most of these clauses are a requirement by the employment relations act 2000 with one clause being a requirement of the holiday’s act 2003 (Benson, 2000). These clauses include;

Names of employer and employee

Description of work that has to be done by employee

Indication of the place where the employee is supposed to work

Indications of any arrangements relating to employment times at work

Salaries to be paid to employee

A statement covering an employee being paid half of their salary in case they work on a public holiday (Müller and Rüb, 2005)

Protection provisions for the employee in case of any restructuring situations and this covers issues like;

Matters to be negotiated by the new employer, process to be followed by the new employer while discussing matters affecting the employee and the kind of process that needs to be followed at the restructuring time in determination of any entitlements to the employee.

Explanation of the services available in a plain language in case of employment resolution relationships problems (Descolonges, 2006)

For a fixed term agreement the individual agreement clauses should include a statement indicating how the employment will end and the reason for ending such an employment. In a situation where one is working under probation/trail period a statement of fact about the trial period needs to be included.

As provided in section 52 of the Employment Relations Act that collective employment agreement comes into effect on the date specified in the agreement. However, if no date is specified in the employment contract, the contract comes into effect on the date on which such agreement had been signed by the last party or the person authorized to sign on behalf of the last party. In section 54 of the Employment Relations Act 2000, the form and the content of the employment collective agreement has been provided. It has been specifically provided in subsection 54(3) of the Employment Relations Act 2000 that the collective agreement must contain a coverage clause, must be written in simple and lucid language and must be available for the resolution of disputes Employment Relations Act, 2018). Such collective agreement must contain a reference of the time period of ninety days within which a personal grievance can be raised. Every employment collective agreement must contain a clause which states how the collective agreement can be varied. It has been further provided in subsection 3(b) that any clause in the agreement must not be contrary to the provisions of law.      

Collective Employment Agreement

These clauses are often negotiated and agreed upon between a registered union and an employer and its only binding to members of the union whose positions are covered by the coverage clauses in the agreement (Brewster et al., 2007).

Recognition clause: gives details on the kind of employees accepted by the employer as part of the bargaining unit ad are represented by the union. These employees are the only ones covered by the collective bargaining agreement. The recognition can be granted voluntarily by the employer or involuntarily after much pressure from the employee

Management rights clause: this clause specifies what is not subject to negotiation but only gives details of areas of operations in which the company is left to the discretion of the employer. In this clause the rights to promote, hire, fire, discharge employees, suspend, direct employees and establish policies for operation are solely given to the management team. However they are not absolute rights (Spooner, 2003). For instance if the union disagrees with the firing of an employee then there is room for negotiation

Dues check off- this clause deals with the idea of an employer deducting union dues from its members paychecks and remits the money to the union. This clause is enjoyed by unions because they don’t have to collect dues from their members on an individual level (IOE, 2007a). This prepares the employees mentally and they simply consider such deductions as part of the payroll taxes.

No strike/no lock out clause-this clause ensures that during the agreement time, the union will not hold any strikes and the employer will not lock the union members out of their work places. Its intention is to avoid work place shut downs (IOE, 2007b). This helps to eliminate mid-contract strikes while providing room for unions to air their grievances. If the contract expires without an amicable solution to the raised issues, union members are allowed to call for a strike.

Subcontracting clause: it offers room to discuss when it’s appropriate for an employer to hire a different company to do work on its behalf. Unionized employers in most cases prefer having work done in a less expensive and more efficient manner by using the subcontracting technique. However most unions seek to have this clause out of their CEA because they know it comes with job losses and other inconveniences (Gibb, 2005).

Union security clause: this clause secures the existence of a union at an employment place. It requires all members working at a certain work station to pay some dues and commit to remain members to the union for the period they are with the company.

Negotiation Process for Collective Agreements

Thus, after discussing and analyzing both the types of employment agreements, it can be stated that collective agreements contain a coverage clause which is binding upon all the members of the union and the employer, it also contains a clause which provides how a collective agreement can be varied which are not provided in individual employment contract. A collective employment agreement contains the date on which the agreement gets expired. However, an individual employee contains the name of the employer and employees, the description of the work, hours of work and salary or wages to be paid to the employees which are not provided in collective employment agreements.    

In IEA the agreement is between an individual and the employer while in CEA the agreement is between a union representing an employee and the employer

In IEA there is no union involved as it is the case with CEA. Dues check off does not apply in the IEA as it is in the CEA. Since in the IEA it’s a sole agreement between a worker and employer, there is no room for strikes of any manner as it is with CEA. The CEA does not cover the benefits that come with working on a public holiday as it is the case with IEA which offers the employee half their salary incase they report to work on such days (Ng, 2001)

Strategy, preparation, research, development of an employer bargaining agenda/claims

This is the first step to establishing a CEA and takes the longest period of time (at least 3 weeks to even one year) depending on corporation among the negotiating parties. At this stage the employer gets armed with the kind of bargaining that best suits its needs. It’s at this stage that bargaining options that are legal and practical to organization are established (UNI, 2005). Background information has to be gathered in advance and be fed into the strategic consideration for effective participation in the bargaining exercise.

After the strategy has been laid down and the employer is in agreement with setting up a CEA the next step is negotiation (Alexander and Lewer, 1998). This phase may take close to 10 days because everyone on the negotiation table needs to be satisfied with the terms of the agreement. It’s at this stage that every doubts and issues that are unclear are sorted out to arrive at satisfying points. This negotiation may bring on board experts in the area of employment agreements ad organizations already embracing such an agreement so as to shed light on the relevance of it and how it can be implemented for the benefit of both employer and union members.

Clauses Included in Collective Agreements

After the negotiations a written agreement has to be done so that none of the parties falls short of the agreement in future (Christopherson and Lillie, 2005). It’s gone for future references in case of disputes. This is written with the guidance of various employment clauses in the presence of lawyers for both parties to ensure only what was agreed upon is what is put down in writing. This may take 3 days as well to ensure no mistakes are done and proper editing and correction has been done.

Once the agreement has been written, it then goes through the implementation process which delivers the end results of the negotiations (Hammer, 2005). Implementation is a process with a time limit of 5 days as changes and discussion may keep coming up which need adjustments. However with clear agreements implementation is a process that should be very smooth with fewer hurdles.

This ensures that the agreement is functional by effectively monitoring its operations. It offers one a chance to make amendments to nay part of the agreement that is not working well. In the monitoring phase one needs to note;

What is working well, what is not working well, opportunities for change and what the employees in the union thinks can work well in the agreement (Abbott, 2007)

This is important since the law states that an agreement needs to have an expiry date with stated duration and so renegotiation is not avoidable in any manner. A fresh step of negotiation for its replacement needs to be in place. This should be approached in the same way the first one was. It makes use of the same lessons and strategic considerations that worked for the first agreement.

This process is less hectic and does not involve a lot of steps. It’s quite simple and may take a period of between minutes and utmost one week. For the one week period an employer may give a prospective employee time to go read the terms, reflect on them and if agreeable the worker can sign the document (Charlwood and Terry, 2007). It all works under the duty of good faith between the agreeing parties. The process involves;

Giving the employee a copy of the proposed agreement

Tell the employee that they have the right to seek any independent advice about the agreement giving a reasonable opportunity to get it and finally

Considering any issues raised by the employee and responding to them before having both of them sign the agreement (Bourque, 2005)

Ports of Auckland Ltd. (POAL) entered in to a collective bargaining agreement with Maritime Union of New Zealand (MUNZ). 

The Ports in consideration have linked a two part strategy which involved:

• Signing a collective agreement with the Union
• Laying off the members of the Union and replacing them with them with the contractors.

POAL made an offer to the MUNZ members to ensure the collective agreement was settled and this was based on four key points (NZCTU and MUNZ, 2012);

Retention of the current collective agreement document and only making minimal changes to the existing terms and conditions of employment and add a few provisions

Consolidation and amendment of the existing work arrangements in two schedules that are appended i.e. engineering schedule and terminal operations schedule

Introduction of a code of practice meant for work allocation so as to manage the daily operations of the company

Re-tabling and reviewing the proposal on operations redundancy which was dated 20 December 2011 and this was meant to serve as a basis for consideration of agreed number of redundancy that is voluntary.

Some of the key aspects proposed by POAL in the provisions of the CA presented in its 12 April 2012 report included; 10% straddle performance bonus, increased pay rate of up to 10% when one is straddle driving, new role of container lasher which should be permanent and carryover of the shift leave, grandfathered entitlement and superannuation .

In the claims POAL seeks to combine schedules for employees in the rail and shuttle, road office, casuals, stevedoring and single terminal operations schedule.

However, the collective bargaining agreement between POAL and MUNZ raised many disputes. Such disputes had originated due to the difference in the objectives of POAL and MUNZ. The objective of POAL was to increase the margin of profit by reducing salary or wages to be paid to the workers. The POAL justified their view by stating that employees need to be more flexible. However, on the other hand MUNZ aimed to protect the rights of the workers under the Employment Relations Act 2000. The POAL initially tried breaking down of the workers’ unions by offering them monetary benefits and with retirement plans. The ulterior motive of POAL was to tear down some of the conditions and terms of employment. The MUNZ initially was in great favor of the increased efficiency that had been achieved by the workers in relation to unloading and loading cargo. However, later MUNZ sought the inclusion of new collective agreement of ‘protection of the rights of the employees against the POAL.

Some of the key prospects of the provisions of the collective agreement which was presented as a revised collective agreement proposal on 12^th April 2012 are enumerated as follows:

• Hike of pay rates by 10%. $30 per hour to be for straddle driving
• Hike of 10% Straddle performance bonus
• A new role which is permanent for container lasher
• An updated agreement of ‘safe and fair’ terms and conditions of employment
• Guaranteed 160 hour work shift for full time workers and 96 hours work shift for part time workers as per four week roster cycle.
• Minimum of ten hour breaks between shifts
• Transfers between shifts
• Removal of clause of consecutive shifts
• Removal of union agreement of compensation for redundancy particularly for employees who resign
• Amending the clause of Right of Access as updated to the provisions of the ERA 2000

However, POAL does not make any offer to MUNZ on the claims of MUNZ which seek to:

• Extension of coverage of collective agreement
• Making the day of Christmas a non working day
• Give priority to part time employees to do extra shifts before considering to engage casuals
• Make subject to mutual agreement the right to contract out

In their struggle to settle the CA, MUNZ made several efforts to renegotiate for a fair deal which aims at balancing flexibility, employment security and improved productivity in a manner that does not impact negatively on the health and safety of the union members (NZCTU and MUNZ, 2012). The union rejected the attempt of Port to dismiss their workforce and make a contract to outside people. The employer refused to agree to a CEA which protects permanent employment of staff which the union strongly rejects. The position and claims of the union are as listed

Hours of work-the union needs a balance between predictability and flexibility regarding the shift hours, overtime working which they need penalties to be removed, roster restrictions removed, breaks and briefing times reduced.

Duties and utilization-the union needs the employer to increase the use of part time permanent workers, retaining the restrictions on the employment of all casuals and provision for full time work of the part timers that are permanent before the employer makes use of casual workers

Time off-the union needed one weekend off and one day off per week for its members

Regarding health and safety-the union wants the matter to do with fatigue to be sorted by use of regular duty roster which clearly states when to start work and close with enough breaks in between.

MUNZ also wanted the CA to have a provision which prevents contracting out and retention of Christmas day as a no working day for the members

They made use of a facilitator from employment relations authority to settle their arguments plus lawyers of either party

There was breach of good faith by POAL as claimed by MUNZ in situations where the employer engaged fixed term employees. MUNZ had previously been requested by POAL to make changes to terms and conditions of employment so as to increase flexibility of labor in addressing unpredictability of the working hours and the container vessel requirements. Despite all these changes, the employer never made references to fixed term agreements and it later sought to obtain in the 2012 CA using means that were not agreed upon in the bargaining. This therefore undermines the benefits of the CA to the union members. The good faith obligations were thus breached by POAL by failing to consult the union before engaging the fixed term employees (NZCTU and MUNZ, 2012)

This is an agreement that was critically negotiated and took quite a long time for it to be implemented. The CA was however agreed upon and implemented by all the involved parties who found satisfaction in the provisions there in (DW, 2018). Some of the claims of the Fonterra Ingredients collective agreement included the following:

• Fonterra offered a 5% hike in addition to a 2.55 of lump-sum payment
• There was no fixed work for the employees. If there was no work, the workers were sent back home.
• The ability of freely use the man power and the resources at different places

Ability to use staff in different places to maximize on resource utilization in the company

Adoption of multi-site operator instead of moving people around as it was previously. This will involve use of volunteer workers to ‘rove’ and be recognized financially

Establishment of joint DWU/Fonterra equal roster committee to sought out roster issues.

Changes to be made on paid not worked (PNW) where all the three PNW are given 126 hours per salary year and cannot be used on public holidays.

Proposed changes to the temp clause for sites that are small and flush periods used by contractor

Better recording of truck numbers was also noted

With this case the workers union was in agreement with most of the suggestions by its employer but had a few claims that needed to be sorted out which included;

Transport issues-reported fatigue by drivers which represent serious health and safety issues to both the drivers and public

Retention of aged drivers by the company which was causing the company to face an ageing workforce that looks for alternative favorable roster options

Extension of paid parental leave from 12 weeks to 16 weeks

Allocating long service holidays 42 hours just like other holiday weeks

Increase of secondary caregiver leave from 5 working days to 14 calendar days

Proposed increased allowance to those working in the freezer with an addition of $ 276 per hour Payment of night shift allowances once a worker swaps to day time shift was an issue raised by the union where some of its members miss out on this payment once they swap.

Workers brought in by labor hire companies were missing out on being given the hours they had been called for and a minimum number of hours for such workers was missing

Increased notice for stat holiday hours which was granted (DW, 2018).

All the negotiations were done in the presence of an advocate who facilitated proper discussions between the union representatives and the employer

This CA was discussed under good faith grounds and nothing was breached. The workers were in agreement with the suggestions of the employer which most focused on improved dairy productions and service delivery. The employer also considered all the suggestions by the workers union and made them available in the CEA with an aim of safeguarding the welfare of the staff for good service delivery. This explains why the CEA was voted in for implementation by 100% of the stakeholders (DW, 2018

To a larger extent, the process does not comply with the ERA 2000 because Sharon was not flexible enough to allow Judy some more time to consult with her lawyer, however she accepted to have a meeting with Judy to discuss the agreement. Considering the fact that Judy was not satisfied with the provisions of the agreement and Sharon forcing her into signing the agreement or offer the job to someone else the whole process did not comply with ERA 2000

Yes they did use some strategies to settle the IEA and this was meeting and negotiating the terms provided in the agreement. Despite Judy being unsatisfied at least there was room for negotiation where they came halfway to the agreement of some of the issues. Judy however was not given time to consult and involve her lawyer which could be another good strategy in solving the matter

None of the party acted in good faith because on the part of Judy, she is forgetting that organizations are different and operate with different provisions and so she wants to force her previous provisions into this new employer’s provision. Judy also failed to act in good faith by editing and adding false information to the article she downloaded. The article states that ‘the average leave for sales staff was four weeks annual leave and one week’s long service leave after five year’s service….’ Instead she edited it to read ‘….after two years of service…’

On the part of Sharon she failed to act in good faith by not allowing more time for negotiations instead forced Judy to sign the agreement or she gives the job to someone else. She was also not comfortable with Judy consulting her lawyer in any way

Such processes need willingness before one embarks on them, none of the party should come to the negotiating table with their own rules and stick by them without being ready to think about what the other party has to say

The process was done without any mediator or facilitator and this explains why the two could not come up with satisfying conclusions for the both of them. In such situations the employee often ends up being exploited by the employer as it was the case with Judy

Conclusion

Negotiation of an employment agreement is one thing that should not be taken slightly by all the involved parties. This is because it forms the basis on which an institution operates. It also sets good working relationships between the employer and employee. It’s always advised that every involved party works in good faith so as to develop a good and functional agreement. To avoid any exploitation especially in the IEA it’s good to have a facilitator or mediator in the meeting. From the three cases in this study it’s evident that working in good faith as it was the case with Fonterra ingredients shortens the process and satisfies all those involved. Thus, it can be stated that there are different approaches to negotiate employment agreements. However, such negotiation of the employment agreement must be done in accordance with the provisions of the Employment Relations Act 2000. The above examples of POAL, MUNZ and Fonterra Ingredients have exhibited the different strategies used in negotiating and employment agreement.

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