Wilson Margaret: Employment Relations Law Reform Bill — First Reading 
Wilson Margaret: Employment Relations Law Reform Bill — First Reading 
[Volume:614;Page:10666] 
Hon MARGARET WILSON (Minister of Labour) 
: 
 I move  
That the Employment Relations Law Reform Bill be now read a first time. 
 I propose that this bill be referred to the Transport and Industrial Relations Committee with an instruction to the committee to present its final report within 6 months. As promised this Government has reviewed the Employment Relations Act. The review showed the Act is working well but could be improved. This bill addresses those areas where the Act can be strengthened to achieve better its key objectives of promoting good faith collective bargaining and the effective resolution of employment relations. The bill also provides protective measures for employees affected by the sale transfer and contracting-out of businesses. Finally it updates the equal pay legislation to reflect the changes made to the employment relations framework. 
The review of the Act showed uncertainty exists over the good-faith obligation and when and how it applies. The lack of penalties for breaches of good faith also encouraged some parties to flout their good-faith obligations. The bill therefore clarifies what good faith is in a broader concept than the common-law obligations of mutual trust and confidence and that addressing the inequality of power in employment relationships goes beyond focusing on bargaining power alone. It also confirms that good faith applies to individual bargaining situations and that there must be genuine negotiations over individual employment agreements. Stronger incentives for parties to act in good faith are provided by the introduction of penalties and remedies for serious and sustained breaches of good faith. 
The legislative incentives for the settlement of collective agreements have been relatively weak and unions have faced significant practical barriers in organising employees collectively to effect an agreement. This bill seeks to reduce those barriers while still preserving the freedom of individual choice. The bill also directly addresses the issue of free-riding: the practice of employers automatically passing on collectively bargained terms and conditions to employees employed on individual agreements during negotiations. The test will be whether an employer intended to and did in fact undermine the collective bargaining process or outcome. If so it will be a breach of good faith for the employer to pass on the same or similar terms and conditions as those in a collective agreement that is either being bargained for or has been settled. The emphasis is on the bargaining process both individual and collective used by the parties rather than on the outcome of that process. Unions and employers will not be prevented from agreeing that the collective terms and conditions may be passed on to employees employed on individual agreements. 
The bill also provides a new form of assistance to overcome impasses in collective bargaining and facilitate settlement wherever possible. It also makes explicit the principle that collective bargaining should result in a collective agreement unless there is a genuine reason why it should not. The bill will also facilitate the settlement of multi-employer and multi-union collective agreements. Other unions and employers will be able to easily join in existing collective agreement where the original agreement allows that to occur and all parties agree. 
There has also been some uncertainty about the interaction between the personal grievance provisions in the Employment Relations Act and the intent of the Act to balance the interests of fairness to both employers and employees. The bill makes it clear that employers must consider and balance the legitimate interest of employees when making the decision to dismiss someone and the tribunal or court that determines that matter also has to take into account both the actions of the employer and the employee. Overall the test is to be an objective one. This is not a radical revamp of the dismissal law. It draws from existing case law and fits well within good human resources practice. The bill also strengthens the mediation and Employment Relations Authority processes. 
Under the bill special protection will be given to specified groups of employees who are particularly vulnerable in change-of-employer situations and lack effective bargaining power such as cleaners and food service employees. Those employees will have the right to choose to transfer to the new employer on their current terms and conditions of employment. Other employees will also be given protection through the requirement for their employment agreements to contain an employee protection provision. Those provisions will describe what steps the employer will take to protect employees affected by a sale transfer or an initial contracting-out of business. 
The bill also introduces new equal pay provisions to replace both the Government Service Equal Pay Act of 1960 and the Equal Pay Act of 1972. The new provisions will update the law on equal pay and cover both Government and private sector employees. 
This bill introduces a good balance of practical and realistic measures that will strengthen the Employment Relations Act and further promote productive employment relations and practices. I commend the bill to the House.