TEU submission on the Employment Relations Amendment Bill No 2

Posted By TEU on Sep 13, 2010 |

Submission of the Tertiary Education Union
Te Hautū Kahurangi o Aotearoa
To the Transport and Industrial Relations Select Committee
on the Employment Relations Amendment Bill No 2.

13 September 2010

For Further Information contact

Sharn Riggs

National Secretary

Phone (04) 801 5098

Email http://scr.im/sharnriggs


This submission to the Transport and Industrial Relations Select Committee is made on behalf of the Tertiary Education Union – Te Hautū Kahurangi o Aotearoa (TEU). The TEU is the professional association and industrial union representing 11,000 academic and general staff members who work in polytechnics, institutes of technology, universities, whare wānanga, private providers, other tertiary education providers, WEA, and REAPs.

Opposition to Employment Relations Amendment Bill (No 2)

The TEU is strongly opposed to the proposals in this Bill, which will not create more “flexibility, greater choice and ensure a balance for both employers and employees” as stated in the general policy statement of the Bill.  This amendment will further turn the balance of power away from employees, in particular young and vulnerable employees, and those employed in low unionised work sites. Basically, the bill will allow employers to dismiss employees without reason or justification, clearly contradicting the concept of ‘natural justice’ built up in New Zealand employment law over time through case law.  Additionally, this Bill seeks to restrict union access, which will only lead to unnecessary legal challenge and create a level of administration that is not required and  goes against the concept of freedom of association.  The proposed amendments to the current provisions around communication during bargaining are unnecessary as the current provisions are clear and several legal cases have further clarified this issue.

This submission should be read in conjunction with the over 200 individual submissions made by our members and TEU branches, across the country.

The TEU endorses the submission from the New Zealand Council of Trade Unions Te Kauae Kaimahi.

The TEU wishes to speak to this submission at the select committee.

1. Union Access

  1. The current union access clause in the Act does not require any changes and has worked well since it was introduced in 2000 under the Employment Relations Act (ERA).
  2. Clauses 6-8 of the Bill bring further restrictions on union access to work sites by requiring active consent of the employer.
  3. New Zealand case law is clearly established in this area. The right of unions to have access to workplaces is a fundamental aspect of employees’ rights to freedom of association and compliance with ILO conventions 87 and 98.
  4. The leading case in this area is Service and Food Workers Union v Southern Pacific Hotel Corporation 2 ERNZ 513.
  5. In that case, the Employment Court commented that under the Employment Contracts Act 1991, Parliament had concluded “that the freedom of association guaranteed by the Act could not be satisfactorily exercised without fully free access between employees and their representatives during the employees’ work hours and at their place of work” (p. 531).
  6. In the New Zealand context, the right of employees to join and form unions and the right of the unions to have access to members in workplaces are inseparable.
  7. Under the proposal a union request for access to a workplace need not be responded to by the employer until at least four days after it is made.  The proposed s.20A requires that the union both request and obtain the employer’s consent before accessing a workplace (s.20A(1)).
  8. Although consent may not be unreasonably withheld, the employer need not even respond to the request for two working days; and if the answer is “no” the employer has another two working days to give reasons.
  9. This places an unnecessary delay in the ability for an employee and a union to be in contact with each other and places an unnecessary bureaucratic burden on unions trying to organise.
  10. The proposed repeal of s.21(5) is also of serious concern.  Section 21(5) currently provides that nothing in subsections (1) – (4) of s.25 (which deals with conditions relating to access) allows an employer to unreasonably deny access.  The Courts have rightly interpreted this to mean that an employer should seek remedies against unions in the Authority, not in a “might is right” approach by denying access.  Section 21(5) should be left alone.  There is no sound policy reason to interfere with the subsection.
  11. The proposed changes will also lead to substantial and unnecessary and wasteful litigation as unions and employers attempt to exercise or limit the obligations and opportunities imposed by the Bill.  This is itself most undesirable.
  12. There is not a problem to be solved here. This is not only a union position. The government’s advisors in the Department of Labour clearly have the same view.
  13. Furthermore it finds, “There does not appear to be widespread evidence of union representatives exercising their current rights to enter workplaces in an inappropriate way.”
  14. Even more explicitly it argues, “The Department [of Labour] has no evidence to suggest that unions are not, in general, meeting this requirement, or that employers are dissatisfied with current arrangements and practices.”
  15. In evidence of this, the Department’s report on its consultation on Access states:
  16. The issue of union access is not a high priority for Business NZ and they indicated that they do not receive many complaints from employers regarding workplace access by unions. They do have some views on other aspects of union access provisions but these are not covered by this review.
  17. It concludes that “maintaining the status quo” is “the Department’s preferred option and is supported by Business NZ and the NZCTU”.
  18. TEU representatives respect the confidentiality, security, educational continuity, health and safety requirements of a work sites that our members are employed in.
  19. It is the TEU’s view that these restrictions will be used to disrupt recruitment of members, a fundamental function and right of unions.  The TEU has recent experience in two work sites where the union was recruiting.  This involved a number of union organisers visiting a site with the intention of approaching non-members and inviting them to join the union.  In these cases the union had displayed courtesy and notified the employer of the intention to carry out this project, prior to the visit.  At all times, the union complied with the existing provisions, and did not disrupt the operation of the workplace.  The TEU views this as an appropriate working of the existing provisions.
  20. Employers in non-unionised sites, in the tertiary education sector and in particular the private training providers, could use the period of notice of access to attempt to disrupt the recruitment of members.
  21. Where more than one union covers members in a workplace these powers could be used by an employer to favour one union.  This has been the TEU experience at one of the TEIs that we organise in, where there is a preference by the employer for the in-house union rather than TEU.
  22. We can only conclude that the amendments have been proposed either under pressure from a small anti-union employer lobby, or for purely ideological or political reasons, regardless of the evidence, the effect on the economy and employees, and New Zealand’s international obligations and reputation.

2.      Communication during the bargaining

  1. Clause 9 of the Bill supposedly clarifies the situation around communication during bargaining by adding a new subsection to section 32 of the ERA.
  2. The law in this area has been the subject of several cases and the current law does not require Parliament to interfere with the current law, which was clarified by the Court of Appeal in Christchurch City Council v Southern Local Government Officers Union (2007) 4 NZELR 63.
  3. The proposed justification for the change – namely to “improve employers’ ability [sic] to undertake normal and essential business functions” – demonstrates that the authors of the legislation have insufficient knowledge of the current law.  There has never been any suggestion – by anybody – that the current law prevents normal and essential communication about business functions.  It is simply impossible to predict the consequences of the proposed freeing up of the employers’ right to communicate about bargaining, except to say that much wasteful and expensive litigation will flow from the new subsection (6) proposed for s32.
  4. There is no evidence that there is a problem with the law. In most cases TEU and employer representatives make clear statements about communication during bargaining, under the bargaining process agreements that are agreed and signed by the parties prior to entering the bargaining.
  5. This change will encourage employers to attempt to persuade their employees to ignore the advice of their union representatives or to try to undermine their credibility

3.      Extension of the 90-day trial period

  1. The TEU was and remains opposed to the introduction of this provision in the current Act and  believes the extension of the 90 days’ provision to all work sites in sections 67 A and 67B of the Bill to be fundamentally unjust and contrary to the concept of good faith within an employment relationship. The good faith provisions (which work both ways between employers and employees) establish a duty to be communicative and responsive in the employment relationship. This amendment removes any requirement to fulfil that duty by giving the employer the right to end an employment relationship for no stated reason.
  2. Sections 67A and 67B remove longstanding protections and access to dispute resolution and to justice.
  3. It also cuts across the responsibilities of employers in the state sector to be ‘good employers’. according to s56 of the State Sector Act 1988:
  4. A good employer is defined in the State Sector Act as “an employer who operates a personnel policy containing provisions generally accepted as necessary for the fair and proper treatment of staff in all aspects of their employment.”
  5. All chief executives of Public Service departments are required to operate personnel policies that comply with good employer principles. The State Services Commission is responsible for promoting personnel policies and standards, and monitors their achievement in the Public Service.
  6. The claimed intentions of this provision according to the explanatory note to the Bill are improving labour market flexibility, encouraging employers to take on new staff, encouraging employers particularly to take on new staff from disadvantaged groups.
  7. The evidence to date is that it has failed on all three objectives. (DoL)
  8. Labour market flexibility” appears to be equated with ease of hiring and firing. The explanatory note says that “employers will have the confidence to hire new employees without facing a personal grievance on the grounds of dismissal should the employment relationship be terminated within the trial period”
  9. We strongly object to this statement as this will eradicate the longstanding and valued natural justice rights of employees: the rights to fair and equitable treatment and to appeal against treatment they consider is unjust.
  10. Employers could already have “the confidence to hire new employees without facing a personal grievance on the grounds of dismissal should the employment relationship be terminated within the trial period” before the 90-day trial was introduced in April 2009. All they needed to do was to use the existing probationary provisions of s 67 the ERA, which allow for employers and employees to agree to probationary periods.
  11. Some of the collective agreements which TEU is a party to do have probationary clauses.  All of these clauses include provisions for support, training and monitoring for new staff in the work site.  They also include fair, transparent and reasonable assessments during these periods.  These requirements are fundamental to a genuine probation that is fair and reasonable.
  12. The proposed provisions do not have the same obligations on the employer to treat employees in a fair and reasonable way.
  13. The protections of natural justice are key in any employment relationship as was made clear by the  Employment Court in Greens Industries Limited v Barton (EC, Auckland AC 55/04, 8 October 2004), which stated that the requirements of procedural fairness are satisfied if the employer:
    • conveys its concerns to the employee;
    • provides an appropriate opportunity for the employee to comment; and
    • considers the explanation in a fair manner.
  14. We submit this is hardly a great burden for a reasonable employer. Yet the 90 day provision will remove even these minimal requirements. In essence the current probationary provision preserves a right for employees to be heard, and for their views to be considered fairly.
  15. In addition the test for justification of dismissal in section 103A of the Act requires an objective test “in the circumstances” which could include how long they have been employed among other matters.
  16. The legislation, as it currently relates to workplaces of under 20 employees, is in practice encouraging poor personnel management practices, including failing to supervise employees adequately, failing to give them feedback to enable them to improve their performance, and using dismissal rather than good interview and employment practices to address the quality of the appointment process.
  17. The following comments are from individual TEU members that express their concerns about the 90 day fire at will extension:
  18. This Bill is a mechanism that allows for poor employment practices by employers. Currently employers do need to try and recruit the right person. By this we mean a person with the skills and attributes required for the job. It is not unreasonable in our view that employers should take care in the selection process. This Bill encourages unscrupulous, careless or foolish employers to employ anybody as a stop gap measure until by a process of elimination (by size, shape, skills, or whatever) they dismiss employees until they find one that they think they like.
  19. Employers currently have rights that allow for fixed-term appointments. They can offer casual employment and they can employ people on probation. The problem for employers in times of high employment is that people do not want fixed-term or casual employment. Therefore employers need to do better. This Bill allows an employer to advertise and promise a full-time job that is much more attractive to a prospective employee while all the time only really wanting the person for a short time. Within the 90-day period the new employee can be sacked without cause or right of appeal. This Bill allows a back door way of fixed-term employment without admitting it. This Bill introduces a new category of ‘precarious work’.
  20. One argument in support of this Bill is that it will reduce casual work or fixed-term appointments. We find this hard to understand. Firstly the Bill actually allows employers to treat any employment as ‘de facto’ fixed-term or casual. The right without fear of appeal to dismiss an employee means even though an employee might believe they are being employed on a permanent basis, the employer can dismiss them at any time within the first 90 days. Secondly if an employer genuinely needs a fixed-term appointment then he or she (if honest) will employ that way. The difference is that, whereas now the employer ‘promises’ work for the term of employment, this Bill will mean the employee can be dismissed without reason, explanation, appeal or recourse at any time. Having to accept a fixed-term appointment in the first place the employee cannot even be sure that the term in question will be honoured. A genuine fixed-term appointment as per the ERA is for a specified length of time. At the conclusion of that length of time there is no more work. Therefore, although during the employment period the employee may have demonstrated what a great asset they could be, there is no job to offer. If at the end of a fixed-term appointment the employee is offered more work then it was not a genuine fixed-term appointment in the first place, unless of course the circumstances have changed. This Bill will not assist in either case. While there may be a tiny percentage of employees who get full-time employment from a casual appointment due to the employer ‘trying them out’ ‘safely’ because the Bill was enacted, the vast proportion will be on a ‘merry-go-round’ of job after job. That is only if they are lucky! If they are unlucky they will be dismissed by the employer and then be unable to access any unemployment benefit until after the usual stand down period.
  21. There are other consequences of the 90 day loss of employment rights periods.
  22. As the CTU state in their submission, they have been informed of a student who bought and sold her house during her 90-day period. She found that, because she was on a 90 day period, her bank would not provide her with any access to mortgage finances, including bridging finance.  She subsequently discovered that another three banks had adopted the same policy – namely that no mortgage money can be advanced to anybody who is employed on a 90 day period, regardless of any other factors. Thus even relatively affluent New Zealanders who own their own home will not be able to sell it in order to buy another while employed on a 90 day period, as they are unable to access bridging finance.
  23. Rather than increase labour mobility, as the proponents of this provision apparently intend, this will make people more reluctant to change jobs, especially if they need to move house for a job. They may find they cannot purchase a new place to live for three months after taking the new position.
  24. The provisions will in general induce a reduction in mobility because employees in the tertiary education sector will be at their most vulnerable when changing jobs and it will increase their reluctance to move. This will not be in the best interests for academic careers in New Zealand and may lead to many academics leaving New Zealand for better job security overseas.
  25. Another aspect of reduction in mobility is for immigrants. Many immigrants will be reluctant to undertake the considerable risk and upheaval to come to New Zealand if they are aware their new employment will be subject to a 90-day trial.
  26. A significant proportion of tertiary education sector staff are recruited from overseas.  New Zealand employers may find that their opportunity to recruit excellent candidates is limited, as individuals will be unwilling to risk relocating here with such uncertainty around their continued employment.
  27. We imagine that the 90 day period may also have an impact on an individual’s application for a work visa.
  28. TEU members’ comments in this area included:
  29. Coming from Europe, I would have never risked coming to a country where I could have been fired for no reasons less than 90 days after starting. This bill will decrease the number of skilled migrants to New Zealand and make them to choose safer countries in terms of employees right. Since salaries are lower than in Australia, New Zealand has to demonstrate better working conditions than other countries to attract or retain skilled employees.
  30. I could have been fired for no reasons less than 90 days after starting. This bill will decrease the number of skilled migrants to New Zealand and make them to choose safer countries in terms of employees right. Since salaries are lower than in Australia, New Zealand has to demonstrate better working conditions than other countries to attract or retain skilled employees.
  31. I may be looking for a new job as a result of this restructuring, and it will be more stressful if I know that I can be dismissed without reason during the first 90 days.New migrants who are already struggling to get jobs in line with qualifications and experience may find the 90 day trial rule resulting in temporary jobs to fill vacancies or organizational needs during busy periods with the risk of being fired.  Cultural workplace differences may result in unfair termination without giving the new recruit adequate time to learn and settle down and no proper redressal systems may weaken the ‘good faith” practice.
  32. The 90-day probation possibility for staff employed at our institution would be a major disincentive for academic staff to move themselves and their families across the world to work at any of New Zealand’s universities.  The probation period and its inherent risk of losing employment after a short time will also limit the opportunities for me to consider other job opportunities.  It would not be a wise decision for me to make at this time of rising unemployment to risk beginning another job and then losing my family’s livelihood without proper procedural processes and reasons.
  33. I am concerned also for the future of the tertiary education sector in New Zealand under the proposed 90-day provision.  We rely heavily on attracting world-class academics from overseas universities.  But who would uproot their whole family and move half way round the world when there’s the chance of being sacked without reason within the first 90 days?  That’s not a risk any sensible person would take.
  34. Immigrants with skills in high demand may be able to negotiate the provision out of their employment agreement – if they are aware of the provision and its significance, which the above evidence shows cannot be assumed to be the case. However less skilled immigrants may be unable to negotiate this. For many, their continued residence in New Zealand is completely dependent on their continuing employment with a particular employer. For those 90 days they will be even more than usually vulnerable to pressure and unreasonable demands.
  35. The Bill will expose groups already disadvantaged in the labour market to greater disadvantage and more precarious work arrangements.  They will add to the discrimination faced by women, Māori and Pacific employees, and other vulnerable employees. Much better ways must be found to promote the employment of disadvantaged groups because removing employment rights that provide protection and advocacy will not achieve this.
  36. Women are more likely to have broken employment patterns and change jobs more often because of parental leave and child care and other caring responsibilities. Extending 90 day periods to all workplaces will mean women employees have more precarious employment periods across their employment history, which will increase the number of times that women can be dismissed without protection from unfair dismissal protections.
  37. Women constitute over half of the unionised workforce in New Zealand now. Restricting access to unions is a gender issue. Collective bargaining improves the wages and condition of women employees and improves gender equality in the workforce. Restricting access by women to their union restricts the right of women union members to secure advice and support when they want it and will make it harder for women to join a union.

4       Trial Periods and the Benefit System

  1. Trial periods will have profound implications for those on social security benefits and employees who are beneficiaries between jobs. There are only very limited circumstances in which the stand down period to an unemployment benefit can be waived.
  2. The extension of this law to all workplaces means that almost all employees who are dismissed during a 90 day trial period will face a two week benefit stand down. Even if an employee is on a trial period which is terminated after moving from other work, he or she will still face a social security stand-down of at least one week and usually two weeks.
  3. Trial periods will create stress and economic hardship for beneficiaries as a result of the recent legislative changes to the Social Security Act that introduce work testing for Domestic Purposes and Sickness Beneficiaries. Beneficiaries are in no place to negotiate a trial period out of the employment agreement. There is no “choice” under the trial period law, as is claimed, if the only option a beneficiary has is to take up a job with a 90 day trial period or otherwise lose their benefit.
  4. Beneficiary advocates fear an increase in employees facing the 13 week stand-down, given that 22 percent of trial periods in the Department of Labour survey were dismissed during the trial period.
  5. If a Work and Income case manager believes that a person on a trial period has been dismissed for misconduct, or left work voluntarily, they will ultimately face a 13 week disqualification period without the ability to challenge the validity of the dismissal (and the consequent stand down) through an unjustifiable dismissal claim.  The former is unable to test who was at fault because of his or her loss of personal grievance rights. He or she may be unable to challenge the decision of the case manager because of lack of evidence.

5       Young Employees

  1. Trial periods will not provide opportunities for young employees – they will just increase disadvantage for vulnerable young employees in New Zealand. Young people entering the workforce are at a clear disadvantage and this disadvantage will be intensified by the ability to dismiss within the first 90 days of employment.
  2. The recent report by the Human Rights Commission found that New Zealand youth are going into their first jobs under-prepared and concluded that they will be unfairly hit by the extension of the 90 day trial period.
  3. The 2010 Labour Department research confirmed the lack of knowledge that people had about trial employment periods. Young people are at even greater disadvantage given their inexperience, the greater inequality that they face in the employment relationship and their greater vulnerability to exploitation.
  4. Given the record high rates of unemployment among young people, and the lack of any evidence to show that this will increase employment, it is an extraordinary response for the Government to expose young people to a greater degree of vulnerable employment and also potentially repeated periods of unemployment.

6.      Other Vulnerable Employees

  1. This Bill introduces the likelihood that certain groups of vulnerable employees will be targeted for jobs without employment rights within their first 90 days if the intention is to provide more jobs for people who do not currently have job opportunities.
  2. The TEU supports the CTU Runanga’s fears that Māori will face greater insecurity with the Bill removing existing employee protections. Māori employees are more likely to be in the unskilled and semi skilled workforce and have a greater rate of unemployment. It is probable that they will face more trial periods. Te Runanga considers this Bill is a deliberate attack on the rights and job security of Māori.
  3. The TEU strongly opposes these trials as a breach of fundamental employment rights with no redeeming features. They are bad policy making with disastrous effects for many people.

7.      Test of Justification

  1. The proposed change to the test of justification represents a significant reduction in employees’ rights and a major distortion in the balance of justice in favour of employers.
  2. The primary argument in favour of the changes is based on a misrepresentation of the meaning of fairness. Supporters of the proposal have tried to frame the problem as being that the current law is hard to understand and, as a result, the outcome of a personal grievance is hard to predict. But this is attempted without reference to any particular circumstances. There cannot be one fair outcome irrespective of the facts. Fairness comes by applying core principles to the facts of the case.
  3. Equally the current law is not hard to understand: what would a fair and reasonable employer have done? It is plain English that everyone can comprehend. One key consequence of the proposed change will be a necessary protracted period of litigation to establish the real scope of what a reasonable employer “could” do.
  4. The change of the word “would” to “could” looks like a minor change, but it radically alters the focus of the law. There will be a range of processes and responses demonstrated by employers in a personal grievance situation. In focusing on what a reasonable employer would do, the court looks towards the middle of that range. A change to could will mean the courts look at the fringes of that range and try to establish the extremities of reasonableness.  Instead of considering “a fair and reasonable employer”, the Authority or Court must consider “a fair and reasonable employer operating as close as possible to unacceptable conduct but not breaching the law”.
  5. This runs counter to the very idea of reasonableness and establishing a common ground. The reality is that the shift from “would” to “could” is a diminution of rights, again, without any policy rationale. It is a deliberate lowering of the type of standard expected of New Zealand employers and therefore diminishes and dilutes rights.
  6. The Government’s focus has been on the employer’s ability to dismiss employees but this Bill extends this gravely lowered threshold measure of reasonableness to all employer actions – not just dismissal but any action that may have caused the unfair disadvantage.
  7. This unwarranted reduction in rights is further compounded by the flawed attempt in Clause 14 to codify the terms of natural justice in an employment relations setting. The exercise is poorly executed and an invitation for repeated and wasteful litigation. Perhaps a codification might have some advantages, but this is woefully incomplete and confusing in its use of language and will lead to substantial ongoing litigation to clarify its meaning.
  8. In any case, the idea of natural justice is not limited or specific to employment law. It applies across all law – whether that be criminal or commercial or constitutional.  That universality renders its delineation here pointless. Natural justice exists without needing to be enacted by a legislator. Thus the proposed new Section 103A(3) is a hollow gesture designed to pander to a subset of employers who seek tick-box justice in  preference to real fairness.
  9. Those components that are included are equally flawed. For example the new Section 103A (3)(a) makes investigation of an allegation conditional on, “having regard to the resources available to the employer”. Investigation cannot be deemed sufficient at a lesser or even variable levels because of the relative size of a business. The right must be universal. Would small employers would be happy to receive justice in proportion to the size of their businesses?
  10. It is wrong and naive to change the test of misconduct investigations which hitherto has been a right to a “full and fair” investigation to a requirement that the matter be “sufficiently” investigated. Although case law may eventually establish that the concepts are interchangeable, the core question is “why make the change”?  The changes proposed result not in employer certainty, but uncertainty and litigation.
  11. The insertion of the term “allegation” in the new Section 103A (3)(a) also further warps the purpose of personal grievance provisions. Personal grievances are, as it should be, currently about employees’ concerns about unfair employers’ actions. This Bill will change the starting point to first “allegations against an employee” and then investigation of those allegations. There is no actual statement that the process should start from the validity of the employer’s actions.
  12. Concepts such as “sufficiently investigated”; “the allegations”; “raised the concern”; “genuinely considered” and so on will only have clear meaning when the Employment Court gives them that; and much litigation water will need to flow under the bridge in the meantime causing financial costs and uncertainty.
  13. The subsection deals with concepts such as “the allegations” and “the employer’s concerns” as if these matters are identical and interchangeable; and appears to entirely overlook the fact that many dismissals (or even most) are not related to misconduct or performance but assertions that the position is redundant.
  14. The provision which states the Authority “may” consider other factors is scarcely helpful (proposed subs103A(4)).  The Authority must be required to consider other factors if that is necessary to reach a fair result.
  15. The final inanity of Clause 14 is demonstrated by the new Section 103A(5). In asserting that the Authority or court cannot find an action unjustified solely because of minor technical details it addresses an entirely non-existent problem.
  16. There is no concern about the Authority dismissing a grievance because the employer only committed a minor or technical breach which did not result in the probability that the employee was treated unfairly.  That happens now under the current law.  The suggestion that minor or technical breaches result in remedies under the current regime is fanciful and fictional.
  17. The TEU experience is that dismissals are very rarely held to be unjustified for minor or technical reasons under current practice.  The only result of the proposed change will be much wasteful litigation on what “minor or technical” means.
  18. Overall the failed attempt to demarcate natural justice in an employment relations context is more confusing, uses new concepts and wording, and will only create grounds for increased litigation.

8.      Removing reinstatement as the primary remedy

  1. The TEU is fundamentally opposed to Clauses 13 and 15 of this Bill, which propose removing reinstatement as the primary remedy in an unfair dismissal.
  2. It is impossible to overestimate the importance that a job can have to an employee. Not just in terms of financial security and economic wellbeing, but to their emotional wellbeing, personal motivation and sense of worth.  In an unfair dismissal case, the second that reinstatement is removed as the first solution, the law has started to lose sight of what is important.
  3. Effectively this change will make wrong-doing by employers cheaper and less risky. This incentivising of bad behaviour can only have negative consequences in the workplace.  As Judge Travis recently noted in his ruling on Horton v Fonterra Cooperative Group Ltd, “to routinely award compensation instead of reinstatement would be to create a system of licensing unjustified dismissal”.
  4. The introduction of new grounds that the Authority or Court may provide for reinstatement, “if it is practicable and reasonable to do so” provides far too much scope for employers to place spurious barriers in the way of reinstatement.
  5. It is an open invitation for employers to move immediately following the dismissal to employ someone in the dismissed employee’s place. They can then claim that it is not “practicable and reasonable” to reinstate.
  6. Removal of reinstatement as a right will inevitably undermine the idea of interim reinstatement. Interim reinstatement is a key tool in trying to maintain employment relationships. There is a clear correlation between minimising a disconnection from the workplace and the relative success in repairing that employment relationship over time.
  7. Removal of reinstatement will also have the effect of significantly reducing the value of settlements. The current requirement that employers must first address the option of reinstatement forces them to face the real cost of their unjustified behaviour. When there is no pathway back to the workplace for a wronged employee, there is much less pressure on an employer if they simply wish to wash their hands of that. There are many dismissals that are so egregious and blameworthy that only a claim for reinstatement gives a possibility of justice.

9.      Cross examination in the Authority

  1. The TEU fully supports the CTU submission in this area.

10.    Prioritisation of cases that have been to mediation

  1. The TEU fully supports the CTU submission in this area.

11.    Mediation without representation

  1. The TEU believes that Clause 20 of this Bill, which will provide for mediation to proceed without representation seriously undermines the role that a union member has to representation via their representative.  This is one of the key reasons employees join unions and this is their expectation, in any personal grievance or employment relation problem, where mediation is being used.


  • This Bill will not deliver what it proposes: to provide more flexibility, greater choice, and ensure a balance of fairness for both employers and employees in the principal Act while improving its overall operation and efficiency. These changes will allow for employment problems to be resolved more quickly, reduce costs, support more efficient, effective, and flexible processes around ending the employment relationship, and help restore the confidence of all parties in the personal grievance system and the employment institutions. It is also intended that by assisting employment relationship problems to be resolved more quickly the negative impact of these problems on workplace productivity will be reduced.
  • In fact this Bill will reduce the flexibility of the labour market and remove choice by making the prospect of changing jobs too risky for many employees.
  • It will swing the balance of fairness even further away from employees towards employers by creating precarious employment periods where employees will have no access to employment rights.
  • It will create more litigation around union access rights, around communication during the bargaining, around the contradiction between the requirements of good faith and the 90 day period, and the test of justification.
  • It will increase the vulnerability of women employees, Māori employees, Pacific employees, young employees, disabled employees and older employees.
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