Understanding Employment Agreements and Good Faith Bargaining in New Zealand

Navigating the intricacies of employment law can be a daunting task for both employers and employees in New Zealand. A fundamental component of this legal landscape is the concept of Employment Agreements and the principle of Good Faith Bargaining. This blog post aims to demystify these concepts, ensuring a clear understanding for all parties involved.

The Cornerstone of Employment Relationships: Employment Agreements

What is an Employment Agreement?

An Employment Agreement in New Zealand is a contract between an employer and an employee that outlines the terms and conditions of employment. This legally binding document covers various aspects such as job duties, salary, working hours, leave entitlements, and termination procedures.

Types of Employment Agreements

There are two primary types of Employment Agreements:

1. Individual Employment Agreements: These are tailored to individual employees and must be negotiated in good faith.
2. Collective Employment Agreements: These are negotiated between a union and an employer (or employers) and apply to all employees who are union members.

Key Components of an Employment Agreement

An effective Employment Agreement should clearly outline:

• Job Description and Duties
• Salary or Wages
• Work Hours and Flexibility
• Leave Entitlements
• Health and Safety Obligations
• Processes for Raising and Resolving Issues

The Principle of Good Faith Bargaining

Understanding Good Faith in the Employment Context

Good Faith Bargaining is a statutory obligation in New Zealand, requiring both employers and employees (or their unions) to engage with each other honestly and constructively.

The Role of Good Faith in Employment Agreements

When negotiating an Employment Agreement, both parties must:

1. Communicate Openly: Share relevant information and be responsive.
2. Be Constructive: Aim for mutually beneficial outcomes.
3. Maintain Confidentiality: Respect sensitive information shared during negotiations.

The Impact of Not Bargaining in Good Faith

Failure to engage in Good Faith Bargaining can lead to legal disputes, eroded trust, and even penalties from the Employment Relations Authority.

Best Practices for Employers and Employees

For Employers

• Clearly communicate expectations and terms in the Employment Agreement.
• Engage in open and honest negotiations with employees or unions.
• Provide employees with sufficient time and information to consider the proposed terms.

For Employees

• Understand your rights and obligations under the Employment Agreement.
• Feel empowered to ask questions and seek clarifications.
• Consider seeking advice from legal experts or union representatives if needed.

Summary

Employment Agreements and Good Faith Bargaining are pivotal in fostering a positive and productive work environment in New Zealand. By adhering to these principles, both employers and employees can establish a foundation of mutual respect and understanding, leading to successful and enduring employment relationships. Remember, a well-negotiated Employment Agreement is not just a legal requirement, but a blueprint for a harmonious and efficient workplace.

Need Advice?

If you need help understanding your employer obligations and what steps you need to take, we suggest chatting to our team of expert lawyers. You can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

---