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“Tea Breaks” and the New Employment Relations Act

Employers will be pleased with changes to employment law. The Employment Relations Bill 2013 has just been passed into law by a 62 – 58 vote, as the first enactment of the new Parliament.

cup of teaMedia coverage of the changes includes headlines such as “Law change to take away tea breaks” and “Thousands of workers take part in tea break protest”, thus narrowing the scope of attention with regard to the Bill to this one issue. But there are other notable changes which paint a greater picture. These include changes to flexible working arrangements, collective bargaining, and strikes. The amendments come into force on the 7 March 2015. 

Meal and Rest Breaks
Employers now have more flexibility with regard to rest and meal breaks. They can impose certain restrictions on an employee’s breaks where it is reasonable and necessary having regard to the nature of the employee’s work. This removes the strict prescription of when employees must be given breaks from the previous Act. Additionally, where the employer and employee cannot agree on the timing or duration of the employee’s breaks, the employer may specify reasonable times and durations. Where breaks are not provided, the compensatory measures must be reasonable and may involve the employee being provided with time off work.

Although the ‘tea-breaks’ issue has garnered significant media attention, the impact of the changes in this area may have been overstated. For example, the standard for restricting meal-breaks is where it is “reasonable and necessary having regard to the nature of the employee’s work”. This sets a high threshold rather than a blanket rule allowing employers to do as they wish, which is how some have misinterpreted it. Employers should be wary of applying this discretion too widely as it is likely to be appropriate only in a small number of workplaces and will probably not be suitable for most employees. Employers who neglect to provide adequate breaks will still be liable for legal sanctions. The then Labour Minister Simon Bridges has said in relation to the ‘rest breaks’ debacle, “This is really just about a bit more flexibility and a bit less prescription in the workplace”.

Flexible Working Arrangements
The changes extend the right to request flexible work arrangements to all employees (not just those with caring responsibilities). It also enables employees to request flexible working arrangements right from the beginning of their employment (rather than after 6 months). Employees can make an unlimited number of requests for flexible working arrangements (instead of just once in 12 months). Employers have only one month as opposed to three to consider requests for such arrangements.

The changes in the area of ‘flexible working arrangements’ are ‘pro-employee’ and mean flexible arrangements are increasingly attainable for individuals. This aspect of the Act should not be overlooked despite the comparatively disproportionate benefit employers will receive on the whole.

Collective Bargaining
Firstly, there will no longer be an obligation on parties to collective bargaining to conclude a collective agreement. Either party (in reality the employer,) will be able to make an application to the Employment Relations Authority which can then declare that bargaining has been concluded, provided parties have acted in good faith. Secondly, the Act has removed what is referred to as the “30 day rule”. This means that employers will no longer be required to offer new employees the same terms and conditions of employment as contained in the collective agreement that would apply if the employee was a member of a union. Instead they can offer individual terms and conditions that are more or less than those in the collective agreement.

The changes to collective bargaining have largely stayed off the radar of mainstream media or have been mentioned in the wake of the ‘tea-break issue’. However, they are the most significant changes. They further decrease the power of unions, which in turn is likely to lead to a further decline of union membership. There has been a resounding outcry from unions regarding the changes, saying that the implementation of this Bill contradicts the Government’s spoken wish for wages to increase. However, for employers this change will enable them to make their businesses more effective and profitable as individuals must become more attractive in order to be successful employees.

All strikes must now be notified in advance by writing. Employers are able to make proportionate deductions from the wages and salaries of employees who are partially on strike.

The new Act has been pitched as necessary in order to make the labour market more flexible and balanced so that businesses will grow while the rights of employees are protected. Overall this articulated purpose has resulted in an undeniably employer-friendly Act, which will increase the dominance of the employer in employment relations. In practicality, the changes will most likely not change employment in a marked way, but in certain situations the increased wriggle-room might prove invaluable to employers.