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The Employment Relations Act for employers
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The Employment Relations Act for employers

If you are a business owner employing staff you have certain obligations to meet under the  Employment Relations Act. These obligations stand regardless of whether you hire one employee part-time for two hours per day, or have multiple employees on full-time contracts.

The Employment Relations Act is the legislative foundation of all relationships between employees and employers in New Zealand.

On this page:

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Why does the Act exist?

The Employment Relations Act covers a range of topics including:

  • Recruiting, and selecting the right candidate for the job.
  • Writing employment agreements.
  • Trial and probation periods.
  • Union membership.
  • Workplace training and development.

The object of the Act is to maintain fair and productive relationships between employers and their employees.

It achieves this by promoting the notion of ‘good faith’ workplace relations based on:

  • recognising that employment relationships must be built on mutual trust and confidence as well as certain legislative or legal protections
  • understanding that there is a degree of inequality of power in employment relationships that needs to be mutually understood
  • respecting the integrity of individual choice
  • promoting mediation as the primary problem-solving mechanism – reducing the need for judicial intervention.

Find out more about good faith relationships.

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Employment agreements

Every employee in New Zealand must have a written employment agreement that is agreed upon and signed by an employee before they start work. Employment agreements come in a variety of shapes and sizes depending on the job description, but there are certain mandatory clauses that every employment agreement must contain by law.

Under the Act, there are two types of employment agreements that cover all employees, regardless of profession or industry. These are individual employment agreements and collective agreements.

Individual agreements

Individual employment agreements are negotiated directly between an individual and their employer, and bind only those parties.
This means as an employer, you negotiate the terms of individual contracts with each employee directly.

Find out more about the mandatory clauses you need to include in individual employment agreements.

Collective agreements

Collective agreements are negotiated between a registered union and an employer on behalf of employees. A collective agreement is only relevant and legally binding for employees who are members of a union.

This means that multiple employees can have identical contracts depending on their role within the business. For example, your administration staff could have the same conditions set out in their collective agreements based on the outcome of union–employer negotiations (known as collective bargaining).

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Using the Employment Agreement Builder

The Department of Labour has developed the Employment Agreement Builder – a free-to-use online tool that can help you write employment agreements for employees. It clearly shows what clauses are compulsory, which clauses reflect minimum legal requirements, and what clauses are voluntary.

If you want to check that your existing employment agreements meet the requirements, the Department of Labour has compiled an online employment agreement portal for employers.

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What do I need to know about unions?

A union is an organisation that supports its membership by advocating on their behalf.

The Act grants employees freedom to join unions and bargain collectively without discrimination.

There are many different types of unions in New Zealand, representing all kinds of employees across multiple sectors.

Quick points:

  • Employees have a right to choose whether or not to join a union, or to resign from a union.
  • An employer cannot influence an employee’s decision to join a union. You cannot threaten or make life difficult for an employee who chooses to join a union, or discriminate against employing someone because of union membership.
  • Any group of employees can set up and officially register as a union, providing there are at least 15 members.

What you must do:

  • Allow unions to represent their members in relation to any matter involving the members’ collective employment interests.
  • Allow unions to assist a member on individual employment issues where the member authorises the union to do so.
  • Allow a union to access your workplace if union members, or prospective members, work there. However, union representatives must seek your permission beforehand, which you cannot unreasonably withhold. Find out more about union workplace access.
  • Both you and the union must agree on a time for union meetings that suits both of you. The union must give you at least 14 days’ notice of the date and time of any union meeting. You must allow union members to attend at least two union meetings of up to two hours each, every year. If the meeting is held during normal work hours, you must pay your employees as usual.
  • You cannot deduct wages or salaries from employees who attend workplace discussions with union representatives.
  • Your employees can require you to deduct union fees from their wages and pay them to a union.

Find out more about Unions and Collective bargaining.

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Find out more about the Act

The Department of Labour has made it easy to find out about how the Act applies to different facets of employment by providing a range of free resources on a variety of subjects.
Find out more about how the Act applies to:

Last updated 6 May 2013
In association with:
Ministry of Business Innovation and Employment
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