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Recent Amendments to Employment Law - Autumn 2005

Anecdotal evidence suggests that many employers have struggled to keep abreast of recent changes to employment law. If you are an employer, do you know that many of those changes have required amendments to individual employment agreements?

Key dates that need to be noted by employers are 1 April 2005 and 1 December 2005. Why?

The Holidays Act 2003

The ramifications of the Holidays Act have been widely discussed by the media and most employers will now be familiar with its provisions. The date by which all existing employment agreements must be amended in line with the Holidays Act was 1 April 2005.

Turner Hopkins advises those employers who have not yet taken steps to amend their employees’ agreements to contact us as a matter of urgency. The amendments required are not as onerous as they may seem. We are able to provide those amendments in a form which can be considered by employer and employee, signed by both parties,and simply affixed to the employee’s current agreement.

Employment Relations Act Amendments

Less well-known are the amendments to the Employment Relations Act, which came into force on 1 December last year.

The amendments aim to better support the key objectives of collective bargaining and good faith and provide effective processes for resolving relationship problems. They also aim to protect employees by the inclusion of an “employee protection clause” in individual employment agreements. This will become effective if the employee’s job is affected by the sale or transfer of their employer's business or if their work is contracted out.

Agreements must be amended to include these provisions by 1 December 2005 (or when the agreement is next amended, if before 1 December 2005).

However, if you are considering restructuring your business, please note that all existing employees’ agreements need to be amended prior to restructuring (which includes sale, transfer, or contracting out of the business).

How Do the Employment Relations Act Amendments Affect my Business?

The four main areas of change are summarised below:

  1. Duty of Good Faith – The meaning of this term has been widened and there is now a legislative requirement for good faith behaviour, withpenalties for failure to comply. Employers and employees need to be “active and constructive in establishing and maintaining a productive employment relationship”. This includes being “responsive and communicative”. There is a statutory requirement on an employer to consider any issues that employees (and prospective employees) raise in relation to bargaining for an individual agreement or any variation of one, and to respond to them.
  2. Employee Protection Provision – In situations where an employer’s business is being sold, transferred, or contracted out, employers are now required to follow a consultation process with employees in advance of the sale, transfer, or contracting out. In addition, employers must make arrangements with the purchaser of their business in relation to existing employees.
  3. Collective bargaining – it is now actively promoted rather than simply permitted.
  4. The processes for resolving employment relationship problems have been widened and now include:
    • Dispute resolution services are now provided through the Department of Labour to independent contractors (independent contractors are not employees).
    • Procedures that allow mediators to address any party to a matter without the representative of that party being present and to express their views to one or other party with or without their representative being present, on the substance and process of the matter.
    • Allowing employers to pay awards made against them by way of instalment, if financial circumstances require it.
    • Ensuring that any payment goes straight to the other party and not to their representative, unless their representative is a solicitor.

The employee protection clause is not required if the employees fall within the definition of ‘vulnerable employees’, namely those providing cleaning, food catering, caretaking or laundry services in specified sectors (i.e. schools, hospitals or residential care sectors, airports, public service). These types of employees have special protections set out in the Act in the event of a restructuring.

What do I need to Do?

It is most important for employers to note the dates by which these amendments should be included in individual employment agreements.

To assist employers in meeting their obligations, Turner Hopkins have prepared appropriate documentation to cover the provisions of both the Holidays Act and the amendments to the Employment Relations Act. The clauses can then be discussed between employer and employee, signed by both parties, and then annexed to the employee’s current agreement.

This will ensure that employers have complied with the requirements of the amended Employment Relations Act and the Holidays Act. We strongly urge that all employers obtain a copy of these clauses.

If you would like to discuss this, or any employment matter, please call Michael Robinson, Claire O’Donnell, or Helen Wendelborn of Turner Hopkins – we will be pleased to help.

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